MBA 5240: Sanger Automotive Companies
Problem Sanger Automotive Companies, Inc. is one of the most successful auto dealers in the United State. In September 2011, the executives met a problem that whether or not to pursue an exclusive franchise for a plug-in hybrid electric vehicle. Plug-in hybrid electric vehicles were in the embryonic stage of the product life cycle. This decision is a complicate one which the executive must find the sufficient evidence to support.
SWOT Analysis Strengths | Weaknesses | * The company is one of the most successful auto dealers * No incremental cost for dealership land or construction was necessary * Fisker’s engine for the vehicle is excellent and is defines as “Uncompromised
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But what should be considered seriously is that at this high price and the competition of the other three franchise dealer, could the company gain the adequate market share of the hybrid vehicles. The most well-known PHEVs are Chevrolet Volt and its price is only $41000. The other point should be considered is though the market area is the wealthiest in the U.S., how much willing do they have to purchase a high price hybrid-electric car and really to buy. The third question is the delivery date and the back-out rate. How to shorten the delivery date and reduce the back-out rate, could the company negotiate with the Fisker Automotive Inc to get better conditions?
Alternatives Alternatives | Pros | Cons | profits | Do nothing | * No extra fee * No risk | * Losing an opportunity to place itself at the forefront of marketing a luxury plug-in electric vehicle * Lose the opportunity to add reputation * Losing the increasing market of hybrid plug-in electric vehicleSee Exhibit 1 | | Purchase the franchise | Exhibit 1 is the annual growth forecasting Exhibit 2 is the sales forecasting at different price | Low price =96000 | * Low price can efficiently
As the gas price is rising up to 140 cents per litre in Canada, many people switch their vehicle to gasoline-electric hybrid car to gain savings from the better fuel efficiency. Many potential consumers for hybrid vehicle and hybrid vehicle owners think that the hybrid system is worth the extra penny due to better fuel economy. However, the realistic is that it has higher maintenance despite of its outstanding fuel economy figures. In fact, the hybrids cause more environmental damage than conventional petro powered vehicles and there are better alternatives. Therefore, hybrids should not be on consumers’ shopping list due to a numerous negative facts that consumers are unaware of.
The U.S. electric passenger car industry in 2011 was described as being in its infancy, because it is still a new concept to buyers. However there are signs of growth from 2011-2015. Buyers do not consider the car because of price, travel range and vehicle size, along with other secondary concerns.
“We can break our dependence on oil…and become the first country to have one million electric vehicles on the road by 2015,” President Obama said in his January 2011 State of the Union address (Institute for Energy Research 1). While this may sound promising, the practicality and merit in achieving this goal remains unclear. Auto manufacturers have been working on plans for electric cars for years, especially the three largest companies in the US: Chevrolet, Chrysler, and Ford. These companies have been hoping that the development of electric cars would create a sort of lifestyle change for consumers, both weaning the U.S. off of its dependence on foreign oil and breathing life into the market for auto sales at the same time. Electric cars are often sold as zero emissions, but technically that is only true once they are charged and in terms of their tailpipe emissions. After all, they have to get their energy from somewhere and, more often than not, the electricity used for charging is supplied by traditional coal fired power plants. The real question then is whether the source and amount of energy required to build and supply an electric car with power is actually cleaner and more economical than a traditional combustion automobile. As it turns out, the answer is both unexpected and fairly complicated. In order to assess whether the use of
The purpose of this journal is to compare the old technologies (combustion engines) to the new (electric engines) and have proper laws/regulations. The article explains in great depth how Tesla sells privately to clients. This article is challenging to comprehend, it is written for an educated person. It is relevant with marketing because it explains who the crowd Tesla sells their cars to. The downside of the article is the complex vocabulary.
Electric cars over the last several years have been a controversial topic. Companies have ran into issues regarding the batteries, pricing, and clearly competition with gas fueled vehicles. I noticed Tesla Motors a few years ago and instantly fell in love with their electric vehicles. Tesla managed to keep a very clean look with a sports car feel to their vehicles, and they are currently working on their new battery which is expected to last much longer. The price of their vehicles at the moment are priced higher than most average families can afford, but Tesla announced they are releasing a more affordable vehicle in 2017. Throughout the existence of Tesla they have made it clear they will not settle with just making vehicles that are in compliance with the laws set in place, their company will strive to make the best vehicles they can.
A major concern that contributes to such a broad estimate of units sold is the buyer behavior for the product type. Current individual purchasers of electric vehicles tend to come from household that live in suburban locations with a warmer climate, own two or more cars, and have a household income exceeding $100,000. From this Sanger can feel more at ease with these predictions because the market he will be serving fits this demographic perfectly, so if increases in units sold did occur they would be more probable to take place at Sangers dealership if he signs with Fisker.
Problem Statement: Disruptors of domestic and international competitors are expanding upon the alternative fuel vehicle market and can offer a wider variety of products ranging from hybrid, plug-in hybrid, and fully electric vehicles due to the access to more resources available to them.
At a first glance, electric vehicles create a facade showing off the newest innovation in efficient and environmentally friendly vehicles. Yet, behind the masks that these manufacturers hide behind, there is a vault that holds all the funds they have essentially scammed the smartest consumers out of. Have you ever questioned the production procedure involved in the creation of these glorified pieces of sheet metal? Never! Who cares, right? A simple Wikipedia search exposes the fraud used by manufacturers. Most electric vehicles share the same facility as their gas counterparts. Prioritizing the safety of our planet, alternative energy sources have been identified and have been put into effect. It’s name? Oil.
Electric cars impose a serious risk on the oil and gas industry. The extent by which this market succeeds reciprocally defines the extent by which the oil and gas industry deteriorates. As with all forms of technology, there comes a point in time where one form of technology no longer appears to be useful in comparison with an applicable alternative. The current inhibitors of electric car adoption are the price of batteries and vehicle performance. With that being said, battery prices dropped over 30% just last year and are expected to continue dropping. Projections estimate that 35% of cars will have a plug by 20401. However, even in the next few years, companies such as Tesla, Chevrolet, and Nissan plan to offer electric cars on the market at an affordable price. The question then becomes: when the oil and gas market will be displaced by the electric market? If both markets produce a vehicle of similar price and quality, then it is reasonable to assume that a customer will choose the option that is more eco-friendly. The moral issue still remains: should the vehicles of tomorrow be fueled by gasoline or are viable options readily available and acceptable?
In this article “Why the Gasoline Engine Isn’t Going Away Any Time Soon,” Joseph B. White states that alternative energy cars could be the start of a revolution in the automaker world, however, complications interfere with the outcome. Although the author suggests different ideas on alternative vehicles, he contradicts himself numerous times while also lacking credibility of any sources.
Unpopular brand: Fisker automotive Karma sedan is not well known in the auto market as compared to other luxury brand such as BMW, Lexus etc. This will create skepticism among potential consumers who are willing to purchase an electric car. Pricing of electric vehicles: It is widely believed that the prices of electric vehicles are relative high and consumers are only willing to pay lesser than the suggested manufacturer retail selling price which means that Sanger Automotive will be restricted on its profit margin. Consumer Response/Knowledge: Majority of potential electric vehicle buyers are not well informed about the technicalities of the vehicles regarding the distance it can travel
In the article, “ Why the Gasoline Engine Isn’t Going Away Anytime Soon,” Joseph B. White writes about the reality of the old school, yet productive ways how the internal-combustion engine is going to stay in the competitive market. While at the same time he describes the change for the industry is coming just at a gradual slow pace. For years environmentalists and energy saving specialists could not accomplish what high oil prices did in just a couple years. Changing the game of auto makers focus to make improvements to their engines. The idea of changing from oil to electricity is possible but there is few chances of it succeeding until the future. The author states that cars powerful enough to serve more than one function are the basic need
Jason of Golden Fleece fame was on the run for his life. Multiple other Argonauts, jealous of Jason’s glory and riches, had chased him away from his home and family, and he was trying to get away from their fury, hatred, and most of all their murderous jealousy. All he had was a small dagger and a broken spear shaft to stay alive in an unforgiving land filled with angry Argonaut conspirators. Jason had previously disappeared in the night when his friend and fellow Argonaut, Orpheus, had warned him of his dire plight. Now, Jason was alone on the rocks by the seashore, waiting for the dark to grow so he could travel once more.
Even the “Greener” gasoline hybrid Toyota Prius can only manage 53 miles per gallon. If you are only running on gasoline, the best you can get in a vehicle is 42 miles per gallon. Yet even with the hybrid technology available today, the consumer only sees a marginal return on the upfront higher cost. The cost to replace a hybrid battery pack runs up to $7,000. This adds up to approximately zero cost savings over the life of the vehicle. This is why incentives from the government are offered and why hybrid cars and trucks only appeal to some people’s conscience and not their wallets. For example, Volkswagen’s Diesel models all range from 40-46 miles per gallon. I do not call into question that a hybrid vehicle is more fuel efficient than a non-hybrid vehicle because that is nonsense, but I do think diesel engines are superior to gasoline hybrids in fuel economy and usefulness. I intend to prove the value and affordability of the Diesel engine versus the gasoline hybrid engine.
We design, develop, manufacture and sell high-performance fully electric vehicles and advanced electric vehicle powertrain components. We have established our own network of sales and service centers and Supercharger stations globally thus creating a unique business model in the automobile industry. We