Case 5-2: North Country Auto- Teaching Notes

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Case 5-2: North Country Auto- teaching notes (case facts in red) Internal Environment – key facts about the Company • North Country Auto is a: Franchised dealer & factory authorized service centre– 3 manufacturers (SAAB, Ford, VW) o Began operations in 1968 o 5 departments (new car sales, used car sales, service, body, and parts) o Situated in upstate NY- pop. 20,000, served two nearby towns of 4,000 people as well as rural areas covering a 20 mile radius • George Liddy & Andrew Jones – equal share ownership in the corporation and involvement in operations (Mr. Jones one of the founders), Mr. Liddy (since 1988)(front end), Mr. Jones (back end)) External Environment – 5 forces – Threat of New Entrants –HIGH/LOW o…show more content…
Back End – Differentiation – the placement of additional services (for convenience/to build on customer loyalty) for instance, warranty, trade-ins, service etc, small upstate New York town serving approx. 24,000 word will get out fast therefore they must maintain their quality customer service. ****another Interesting (and acceptable) Point of View: • because of the control of the Franchisors (SAAB, VW, Ford) the low cost/differentiation strategy could in large part be out of North Country’s control Identification of K SFs –Maintenance of a profitable “back end” to generate cash flow– determined to maintain a profitable back end as a hedge against depressed sales and lower margins. Alternative sources of cash flow were crucial in the industry. • Delivering quality customer service – because competition is fierce, need customer loyalty • Reputation – small rural areas, low population (20,000 + 8,000 etc..) • The ability to “make deals” – vehicle sales • Maintaining a consistent skilled workforce/quality parts/quality end product – to maintain the franchise agreements with Ford, SAAB, & VW and retraining costs could triple when one service technician quit • Inventory Turnover – must keep in line with industry averages (too costly otherwise) Management Control Systems – Responsibility Centre Allocation/Transfer

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