The Carwash Company: A Business Growth Strategy Case Study

Company Overview - Analyzing Carwash Company's Market and Operations

• Legal structure: Since 2009, the car wash company is offering smart and eco-friendly car cleaning services; the company has reached cleaning 2,000,000 cars, and also successfully saved around 350 million liters of water from being used to clean cars. The company is located in nearly all the convenient locations in the best-known areas of retail destinations in the UK (The carwash company, 2022). The company's current financial report submitted in 2021, states it has total liabilities of £126,234.00 with working capital of £62,017.00.
• Business description: The car wash company is a full-service car wash company that provides facilities like fully automatic 120-foot tunned, high-pressure wand self-service bays, vacuum stations, complete automatic fragrance, carpet shampoo machines, and many more facilities. Given attaining a certain position as the best car wash specialist, the company is also offering premium car products at stores.
• Business aims and objectives: The car wash company has a tagline that states Better, Cleaner, Smarter, and Brighter. The company's main objective is to generate high sales revenue in comparison to its competitors in the first year of operation. Companies believe that their initial customer base is substantially increasing as the community is getting more aware of the existence of the car wash company, and its excellent reputation in providing services (The Carwash Company, 2022). The aim of the company over the next 5 years is to reach a target of saving 1 billion liters of water.

Product and service offerings

• Types of products and services offered: The Carwash Company is the market leader in the field of hand car washing and valeting business. It is an eco-friendly car washing company which is located across the UK and Ireland (Eisenbeiss et. al. 2015). The company is offering three packages which are platinum, gold, and silver, all three packages offer different services like
  
  • Platinum package – this offers deep cleaning of the car from inside and outside of the car. The package offers cleaning of the car with all the premium products, which makes the car sparkle from the outside, and full fixing and repairing of the internal body of the car from engine testing to oil changing and setting new parts.
  • Gold package – In this package, the company offers what an auto part of a car wants from re-engineering to setting up whole new parts as required by the car.
  • Silver package – this packaging company offers cleaning services on the outside of the car, it includes washing the car with premium products and sanitized polishing which makes the car new and shiny from the outside.

• Core USPs: The main USP of the company is its eco-friendly car cleaning technology, this technology helps the company to save water, and the company has been successful in saving 350 million liters of water. The main USPs for the product and service of the company are quality, services, and product of the company which are specialized in car detailing, with a range of services like sanitizing to polishing company focuses on providing the feeling of driving a new brand car to its customers.

Competitive and market analysis

• Market size: There are recently 32.7 million passenger cars present in the UK. The carwash market size is valued at USD 35.49 Billion in the year 2021 and is further projected to attain goals of USD 46.73 million in the upcoming year at an increasing CAGR of 3.1% from the year 2022 to 2030. The market size of the carwash company is very big as it is one of the most popular car wash companies in the UK market. It has reached all local areas there are no other car wash facilities available within the target market, which is further defined as the 3.5-mile radius from the location of the carwash company. The company covers several other areas like Ireland, Scotland, North, Midlands, South, London, and Wales.
• Market segmentation: It is an extremely useful marketing tool that is very popular in the business world and for making a business plan market segmentation is very essential. Differentiating based on types of business helps the company to need and demand of the customers. The company's market segmentation is done based on owners' wants and setting the target market. Market segmentation helps the company to increase its customer loyalty, attract new customers, and focus on particular services to its customers, and the major role is to stay ahead of its competition.

SWOT/PESTEL analysis

Porters Model

Business strategy/marketing and sales plan

• Marketing mix: The marketing plan includes four important elements known as the 4Ps, which are product, price, place, and promotion (Jardine et. al. 2021). The marketing plan of the company helps the company to understand the needs and requirements of the customers and maintain its position in the market. The 4 Ps of the carwash company as part of its marketing plan are as follows:

• Growth strategy: A growth strategy is an important part of an organization's plan from overcoming current and upcoming challenges to understanding the goals for the expansion of the company. The growth strategy of the carwash company is as follows:
  
  • The use of proper marketing tools helps the company promotes its product and services and also makes its work more efficient.
  • Evaluating marketing strategies applied by the company, whether they are performing well, and providing forecasted results. With help of evaluation of marketing strategies companies can find out loopholes in their growth strategy.
  • The company always looks forward to being creative and offering unique services to its customer, with the company also active in saving water and promoting the proper use of available resources.

Operating plan

The operation plan of the company includes details related to operational hours, and it also includes how the business runs daily. The operational plan includes everyday short-term processes comprised of all the tasks included in the car wash business which serves customers, obtaining supplies, cleaning equipment, etc.

• Physical location: Physical location is the most important part of every business; it is a crucial determinant that affects the business. Selecting a perfect spot for business is a very important task, in the case of the carwash company; the location is very convenient and easily approachable to its customers. The carwash company has covered all the attractive localities in different countries as it is a franchise business.
• Physical resources required: Physical resources which can be called business equipment are one of the most important for every business same in the case of the carwash company. The important physical resources which are been used by the company and which are required are:
  
  • Cleaning tools which are part of operating equipment – these are the equipment and fitting including all independent portable and physical resources which are used for cleaning the car inside and outside properly. This physical resource includes cleaning tools that are used for preparing the yard in which the car is being parked for the wash.
  • Office furniture and business equipment – a self-service facility, which is equipped with an automatic machine, used in car washing (Sain et. al. 2017). All the kits and furniture used in the business are also part of the physical resources used by the company like a computer, printers for printing bills, and much other equipment.
  • Warehouse and large garage for storing all the equipment spare parts, tires, wires, brake shoes, machines, etc. which are inserted in the cars. And garage in which all the work is done like washing the cars, changing spare parts, etc.
• Suppliers/direct material required: Direct material is those supplies and material which is consumed during the manufacturing of a product, and which is also directly identified with a particular product. In the case of the carwash company, direct material required is equipment, labor, machinery, etc. These materials are very important throughout the process of car washing and automation, the revenue generated by the company, its total sales, variable cost, and direct cost all are affected by the direct material and suppliers of the company (Zhassandykyzy et. al. 2017) In this, the suppliers refers to those entities or individual who supplies raw material or says equipment's which are required in the repairing, car wash, cleaning and restoring the car is supplied to The carwash company.
• Breakeven analysis: A break-even analysis is a financial calculation that weighs the costs of the business, and its service in comparison to the unit sold price determining the point at which the company will break even. This analysis helps the company to look after its investment whether the investment done by the company is paying for the investment value or not, or paying more or less to the applicable investment (Bösch et. al. 2018). The break-even analysis of the company shows that the company is getting as much return as the company has invested in its centers including all the equipment and material which are being used.

Financial plan

Income statements

use my discount

Balance sheet

Cashflow statement

Ratio analysis

• Current ratio: – current assets / current liability = 28083/ 40391 = 0.69
• Debt ratio: – current liability / total equity = 40391/65129 = 0.62

Conclusion

Based on the very traditional numbers that were employed in the financial calculation, which will also help in meeting the demand of the anticipated sales objectives and goals. Currently, the car wash company is not going through any kind of change that affects the sales of the company, but the company needs to keep an eye on the unforeseen changes in the market. The other most important part is that the company needs to focus on competition as it has been seen that the company does not have any direct competition, the company is focused on offering the best price for its services to customers. The company needs to keep an eye on external factors that affect the company like government, political, and technological change.

Recommendation

There is a lot of new technology is being emerged in the industry of car wash business. There are various new and exciting application and process available that helps in better work quality and improve the work performance of the company.

Critically review to the business plan in the role of a potential investor

The expected annual return of the company depends on the investment available or arranged. This annual return also depends on the number of investors; a minimal number of investors are the most appealing option. The company is expecting a minimum investment of $50000 and each investor will receive a yearly return which will be based on the invested amount and which will be further negotiated.

Conclusion

According to the report, it is suggested that the carwash company needs to focus more on improving their technical skills and adopt new technology for improving their work and for the better results which Company needs to focus on are the following points:

• The company needs to focus on eliminating unscheduled repairs
• Work on reducing the operating cost to quite minimum
• Need to focus on improving washing consistency
• And the most important factor which needs the focus of the company is the marketing strategies of the company.
• Work on increasing customer loyalty and frequency.

Reference

1. Bösch, P.M., Becker, F., Becker, H. and Axhausen, K.W., 2018. Cost-based analysis of autonomous mobility services. Transport Policy, 64, pp.76-91.
2. Eisenbeiss, M., Wilken, R., Skiera, B. and Cornelissen, M., 2015. What makes deal-of-the-day promotions really effective? The interplay of discount and time constraint with product type. International Journal of Research in Marketing, 32(4), pp.387-397.
3. Jardine, A., Trautrims, A. and Gardner, A., 2021. Far from clean: Labour exploitation in the UK’s hand car wash sector. In Base of the Pyramid Markets in Affluent Countries: Innovation and Challenges to Sustainability (pp. 144-168). Routledge.
4. Sain, M., Kang, Y.J. and Lee, H.J., 2017, February. Survey on security in Internet of Things: State of the art and challenges. In 2017 19th International conference on advanced communication technology (ICACT) (pp. 699-704). IEEE.
5. The Carwash company, 2022. The Car Wash Company. (Online). :<https://www.linkedin.com/company/the-car-wash-company/about/>.(Accessed on 16/1/2023).
6. The Carwash company, 2022. The Carwash company. (Online). :<https://carwashcompany.org/>. (Accessed on 17/1/2023).
7. Wapshott, R. and Mallett, O., 2015. Managing human resources in small and medium-sized enterprises: entrepreneurship and the employment relationship. Routledge.
8. Zhang, C., Leng, M. and Zhou, L., 2020. Developing strategies of social enterprises explained using Porter's five forces analysis model: Taking mental challenged car wash as an example. International Journal of Organizational Innovation (Online), 12(3), pp.50-64.
9. Zhassandykyzy, M., Aripovich, T.A., Wójcik, W., Kalizhanova, A. and Gromaszek, K., 2017. Water recycling automation of car wash with cleaning channel and changeable adsorptive plate holders. Przegl?d Elektrotechniczny, 93(5), pp.144-147.