Case Study: Express Oil Change

Question 5                                                                                                              (10 marks)

CASE STUDY

Express Oil Change

Express Oil Change and Service Centers outperform the industry significantly in terms of customer transactions per day and store sales, for a host of reasons. The key to our success is to be more convenient and provide a better overall experience for the customer.

In terms of customer convenience, Express Oil Change is faster than most of our competitors—we do a ten-minute oil change, using a process made possible by our patented equipment, while the customer stays in the car. Mothers with kids in car seats especially enjoy this feature.

We also do mechanical work that other quick lube businesses don’t do. We change and rotate tires, do brake repairs, air conditioning, tune ups, and others. There is no appointment necessary for many mechanical services like tire rotation and balancing, and checking brakes. So, overall, we are more convenient than most of our competitors.

Each of Express Oil Change franchises has owner-equity to ensure that the latest technology is installed and utilized on every site

In terms of staffing our stores, full-time workers are all that we employ. Full-time workers are better trained and typically have less turnover. They therefore have more experience and do better quality work. We think incentives are very important. We use a payroll system that provides incentives to the store staff on how many cars are serviced each day and on the total sales of the store, rather than on increasing the average transactions by selling the customer items they did not come in for, which is what most of the industry does.

We don’t sell customers things they don’t yet need, like air filters and radiator flushes. We focus on building trust, by acting with integrity, to get the customer to come back and build the daily car count.

The placement of our outlets is another key factor. We place our stores in A-caliber retail locations. These are locations that may cost more than our competitors are willing or able to pay. We get what we pay for though; we have approximately 41% higher sales per store than the industry average.

Required:

Apply a Resource-Based View of the firm by integrating the P.R.O.F.I.T. model with the VRIO / VRHN model, to determine in which areas the firm has Relative Strengths or Weaknesses.

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