INF10003 Business Scenario Report PDF

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INF10003 Assignment 2 Business Scenario Report - Top Deal Motors...

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Swinburne Online Teaching Period 3, 2020 INF10003 Introduction to Business Information Systems Assignment 2: Business Scenario Report

Top Deal Auto

(****** 2020) Due Date: 4 January 2021 Date Submitted: 31 December 2020 Word Count: 2136 words

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Executive Summary Top Deal Auto is a reputable, family-owned business that has been in operation for almost fifty years. They required a comprehensive business analysis and assistance with strategic planning to grow their company into the future. The business is looking to potentially capitalise on interstate customer enquiries and develop sales outside of their local area.

In part A, this report focused primarily on identifying the customer; their strengths, weaknesses, threats and opportunities and how internal and external forces are affecting the business. Sales data provided by the business was analysed and trends identified.

In part B of the report, using design principles and web usability guidelines, a new website was created for Top Deal Auto. The new website is a minimalist design which showcases their inventory and allows users to book a test drive without having to contact the dealership directly. Recommendations for further enhancements using various customer engagement tools were also made.

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Table of contents 1.0 Introduction…………………...……………………………………………………………………4 2.0 Part A: Business Analysis 2.1 Industry Background……….……………………………………………………………..5 2.2 Customer Identification….………………………………………………………………..6 2.3 SWOT Analysis……….….………………………………………………………………..6 2.4 Porter’s Five Forces….….………………………………………………………………..7 2.5 Excel Tasks (see Appendix 1).…………………………………………………………15 2.6 Identify Trends…….….….………………………………………………………………..8 3.0 Part B: Information Portal Design 3.1 Prototype Pages (see Appendix 2)…………………………………………………….18 3.2 Design Principles………………………………………………………………………….9 3.3 Web Usability Guidelines…………………………………….…………………………10 3.4 Customer Engagement Tools ………………………………………………………….10 4.0 Conclusion………………………………………………………………………………………..12 5.0 Reference List…..………………………………………………………………………………..13 Appendix 1: Excel Spreadsheet tasks.…………….………………………………………………15 Appendix 2: Prototype Pages………..………………………………………….………………….18

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1.0 Introduction Top Deal Auto is a used vehicle dealership that has three locations in Melbourne, in the South, East and West. It is a second-generation family owned business which has been in operation for almost fifty years. The owners of the business have identified that they need to develop their online presence and expand the business to interstate customers. The purpose of this report is to analyse the business and assist the business owners with strategic planning for growing their business. This will be done by examining internal and external factors through a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis (Speth 2016, p. 5), and by using Porter’s five forces model to formulate a competitive strategy (Moore & Vargas 2017, p. 22). Subsequently, this report will analyse certain sales data from Top Deal Auto and identify relevant trends. Top Deal Auto will then be provided with options for possible upgrades to their company website.

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2.0 Part A: Business Analysis 2.1 Industry Background In 1901, Australia’s first petrol driven car was built (Compare the market c. 2020) and thus began a long history of motor vehicles being manufactured and sold in this country. Harley Tarrant was a pioneer in the Australian motor vehicle industry, with The Tarrant Motor and Engineering Co becoming the first dealership in Australia, located in Melbourne, Victoria. According to Alston (2019), Tarrant had the exclusive on petrol motor cars, however, it was not long before the Ford Model T became direct competition. Tarrant quickly closed down the production of the Tarrant Motor Car and acquired the first Ford franchise in the country. From 1908 through to 1927, the Model T sold over 15 million units, and the Australian motor vehicle industry was born. Over the past five years, the motor vehicle industry has faced volatile conditions for dealers, resulting in a revenue decrease of 1.5% (Yeoh 2020). Yeoh also states that the bushfires from 2019/2020 and of course COVID-19 have affected new car passenger sales in a detrimental way (2020, p 9). Despite COVID-19 causing supply chain issues and a decline in demand for vehicle sales (Yeoh 2020), the future of vehicle sales in Australia looks optimistic. Revenue for the industry is forecast to grow over the next five years, with new car sales likely to be a driving force in this growth. While passenger vehicle manufacturing has drawn to a close in Australia, a reduction on import tariffs has allowed smaller and cheaper imported vehicles into the market (Yeoh 2020).

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2.2 Customer Identification Top Deal Auto prides itself on its customer experience. They attract customers seeking a dealer with an outstanding reputation in an industry that has become synonymous with dishonesty and a lack of integrity. Their dealerships are conveniently located in the South, East, and West of Melbourne, giving them the ability to service almost all metropolitan Melbourne customers. Top Deal Auto’s primary value proposition is their transparent sales process, which allows a customer to cancel the sale at any point. Top Deal Auto is focused on providing quality in all aspects of their business, from the full customer experience to the product they sell. 2.3 SWOT Analysis STRENGTHS • Top Deal Auto is a family-owned business. • They have an established customer base with over 100,000 vehicles sold to date. • They have been operating for almost fifty years. • They have locations in three areas of Melbourne. • They believe their staff to be one of their biggest assets.

WEAKNESSES • They rely heavily on their existing customer base and need to expand into new markets. • Their company vision allows customer to cancel orders at any point. • Their website is basic and not interactive. • They have no interface for mobile devices.

OPPORTUNITIES • Top Deal Auto is frequently fielding enquiries from interstate buyers, so there could be potential to expand their customer base interstate. • Online selling and advertising grows in popularity year upon year (Feller 2020) so having an interactive website could provide many more sales opportunities.

THREATS • There is a global vehicle shortage, due to production and supply chain slowdowns as a result of COVID-19 which will affect stock levels (Guthrie 2020). • Customers are hesitant to purchase a used vehicle online without inspecting or test-driving the product, so expanding interstate would need to 6

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be through a bricks and mortar model. This is risky in the current economic climate.

Post COVID-19, used vehicle prices have seen a historic bounce with car prices up 11.2% from April to May (Brisson 2020). Demand for used vehicles is increasing as there is a shortage of imported new cars (Ahmed 2020).

2.4 Porter’s Five Forces Force Threat of new competitors

Review and evidence •

• •

Threat of substitutes

• •

Bargaining power of suppliers

•

• •

Strength level

Medium Industry growth rates over the past five years have declined for automotive dealers and are not expected to grow within the next five years (Yeoh 2020), so new entrants would find the current climate discouraging. Finding a suitable site with the right amount of exposure would be limited in a saturated Melbourne market. There are significantly high start up costs in setting up a new dealership. Inventory alone would be a multi million dollar investment, and with current used vehicle prices at an all time high (Brisson 2020), this could be a preventative factor for a new competitor. Low If consumers are looking to purchase a used vehicle, there are not a lot of suitable substitutes on the market currently. The new car market could be a possible threat in the current post COVID-19 climate as new car pricing is controlled by manufacturers and used cars prices are controlled by the buyers. Medium A lot of used vehicle stock comes from auction houses. Pickles Motor Vehicles are reporting a 35 percent decrease in available stock, alongside a price increase of 30 percent (Guthrie 2020). Direct purchases are down as private sellers are taking advantage of the current high prices. Volume of traded vehicles should remain steady.

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Bargaining power of consumers

•

Due to the current stock shortage of both new and used vehicles in Australia (Ahmed 2020), consumer bargaining power is low.

Low

Rivalry among existing competitors

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Top Deal has an excellent reputation and has been in business for almost fifty years. They have an established loyal customer base and local business support. Customers can go from business to business, but it is nearly impossible to find the exact same car at another dealer.

Medium

•

2.5 Excel Tasks (see Appendix 1) 2.6 Identify Trends Trend 1: Toyota is the biggest selling brand for Top Deal Auto for June 2019. 68 of the 255 units sold were Toyota, which is almost 27% of the total sales for the month. This is in line with national statistics, which indicate Toyota is the biggest selling brand for over 17 consecutive years in Australia (Budget Direct c. 2020). Top Deal would be best served by ensuring they are keeping their stock levels of Toyota at a premium. Trend 2: Utility vehicles have the highest gross profit per unit. Toyota Hilux, Nissan Navara, Holden Colorado and Ford Ranger are the models that have the highest amount of gross profit, in that order. Based on the data, customers are willing to spend higher amounts on a utility vehicle. Top Deal Auto should look at increasing their advertised prices on these models, in order to capitalise on this trend. Trend 3: The provided graph, along with the sales data for June, indicates that activity levels within the dealership peak in conjunction with the three main sales events that Top Deal Auto runs during the year. Top Deal Auto could look at adding further sales events into their calendar in order to increase activity at other times. 8

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3.0 Part B: Information Portal Design 3.1 Prototype Pages (see Appendix 2) 3.2 Design Principles Visibility: by keeping the webpage minimalist, this helps showcase the information that is available to the customer. It is clear just by looking at the interface what the customers options are and how they will best interact with them. Dark background with white font makes the home page visually appealing. There is no clutter on the websites home page, only the essential information is included and the banner is designed to invite customers to want to see more. Consistency: when a customer clicks through to the inventory page of Top Deal Auto’s website, consistency has very clearly been taken into consideration. Each vehicle listed for sale has the same clear layout and the same information available at a glance. This allows users to compare inventory with minimal effort. Clicking the ‘enquire now’ button will take a customer to the same page every time. Similar looking things will produce the same output consistently. Consistency has been taken into consideration with both visual aspects and usability features, note that the banner and company information is identical on every page. Constraints: it is vital for Top Deal Auto to capture relevant data from a customer that is interested in test driving or purchasing a vehicle. The ‘book your test drive’ page of their website has been set up with constraints that ensure all information is entered. The submit button will remain shaded until all fields are completed.

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3.3 Web Usability Guidelines Match between system and the real world: Top Deal Auto has refrained from using industry jargon or language on their website. According to Kaley (2018), it is important that users can understand the language and also the meaning of words without having to look them up in a search engine. Top Deal Auto has been very careful to use terms that all visitors to their website can clearly understand. Consistency and standards: it is important when designing a webpage that things are made as easy for the user as possible. Reducing learning for the user by keeping elements consistent throughout the site is paramount to improve the user experience (Wong, 2020). Top Deal Auto has maintained the banner throughout all pages of their website and kept their inventory page consistent. Aesthetic and minimalist design: Top Deal Auto has kept their website minimalist and clean. The use of a dark background with clear white font makes all information readable and aesthetically pleasing to the user. The home page is not cluttered, with only one large image drawing the user’s attention. The inventory page is repetitive and has all relevant information visible and more information available at the click of a button.

3.4 Customer Engagement Tools Top Deal Auto could improve their company website by adding in customer engagement tools. The dealership stated that they were looking to develop more of an online presence and customer engagement tools will help them increase their competitive advantage.

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Interactive map: Top Deal Auto has three locations that service metropolitan Melbourne. An interactive map that helps the customer locate their nearest showroom could be advantageous. A link through to Google Maps with driving directions could be useful to customers who wish to visit a particular site where the vehicle they are interested in is located. Their website notes on each inventory listing where the vehicle is located but this could take the customer engagement to the next level. Social media: Top Deal Auto has Facebook and Instagram pages where customer experiences are shared, along with promotions and the ‘car of the week’ for each location. Giving customers the ability to click through to the social media pages from their website would increase visibility and engagement with customers. Strand (2018) noted that seventy five percent of car buyers look to social media and review sites before selecting a dealership to visit. Customer help: Buying a vehicle is a large purchasing decision and it seems feasible that customers would like some help along the way. Top Deal Auto has already considered this by adding a ‘book your test drive’ form to their website; however, this could be taken one step further by adding in a live chat or chat bot feature. Customers with access to sales staff via their phone or computer keyboard could help influence their purchasing decision and build up rapport with a sales consultant before they even arrive at the dealership.

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4.0 Conclusion The main purpose of this report was to analyse the business and assist with strategic planning in order to grow into new markets. Based on said analysis, the following recommendations are made: •

Top Deal Auto should complete a full overhaul of their website, perhaps employing an IT specialist or outsourcing their website to an external provider. They should ensure that their inventory is linked to their advertised vehicles so that data available to customers is always current. Adding a live chat option to their website would also be beneficial.

•

They should focus their inventory on keeping utility vehicles, in particular Toyota Hilux, in stock at all times. Advertised prices have potential to be increased.

•

They could benefit from an additional site, perhaps in the Northern suburbs of Melbourne as that is the only quadrant they do not currently have a showroom.

•

Due to interstate enquiries, they should look at offering an online purchasing experience with freight to service buyers that are not local.

Top Deal Auto is well-established and possesses clear foundations for a successful business. This report has shown that with some fine-tuning of their online presence and strategy, they will be able to truly maximise their efficiency and profitability.

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5.0 Reference List Ahmed, T 2020, Global Slowdown in Car Trade Fuels Stock Shortages, Datium Insights, 16 July 2020, viewed 28 December 2020, . Alston, J 2019, ‘The story of Australia’s first car’, Drive, 20 June, viewed 21 December 2020, . Brisson, M 2020, Australian Used-Vehicle Prices Rebound Quickly in June, Moody’s Analytics, June 2020, viewed 25 December 2020, . Budget Direct c. 2020. Australian car sales statistics 2020, viewed 29 December 2020,

Chapman, W 2020, Online Car Classifieds in Australia, IBISWorld, OD4085. Compare the Market c. 2020. A complete guide to the history of Australian car manufacturing, viewed 20 December 2020, . Feller, D 2020, Online Shopping in Australia, IBISWorld, X0004. Guthrie, S 2020, Used car listings are drying up as demand soars, Car Advice, 10 December 2020, viewed 28 December 2020, .

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Kaley, A 2018, Match Between the System and the Real World: The 2nd Usability Heuristic Explained, Nielson Norman Group, 1 July 2018, viewed 30 December 2020, . Larkin, S, 2020, image, personal collection. Moore, C & Vargas, N 2017, Introduction to Business Information Systems, Pearson Australia, Melbourne, Victoria. Speth, C 2016, The SWOT Analysis, 50minutes.com, eBook Central (ProQuest). Strand, J 2018, 5 Important Social Media Statistics Auto Dealers Need to Embrace, Medium. 28 May 2018, viewed 30 December 2020, . Wong, E 2020, Principle of Consistency and Standards in User Interface Design, Interact Design Foundation, 30 July 2020, viewed 30 December 2020, . Yeoh, Y 2020, Motor vehicle dealers in Australia, IBISWorld, G3911. Yeoh, Y 2020, Automotive Industry in Australia, IBISWorld, X0014.

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Appendix 1: Excel spreadsheet tasks

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Appendix 2: Prototype Pages

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