Assignment 2: Colins Car Detailing

A report submitted to
Dr. Rohini Patel

In partial fulfillment of the requirements of the course

Written Analysis and Communication-1

By
Alok Kumar Singh
Section C
Roll No. 155010
On
July 31st, 2015

Letter of Transmittal

Mr. Colin Ford

Managing Director
Colins Car Detailing
West Vancouver
British Columbia
July 31, 2015

Dear Mr. Ford,

With reference to our conversation, Please find the report recommending the course of action
that CCD should take under current conditions. Comprehensive analysis of all possible options
has been done before arriving at the recommendation.
I hope you find the report satisfactory.

Thanks
Sincerely,
Alok Kumar Singh
British Columbias Sauder School Business
Email:alokkumar.singh.2015@iimu.ac.in
1

One Page Report Summary

Situation AnalysisColins Car Detailing has a loyal customer base of 150 and is doing well as of now. Since the summer season is
approaching, demand for car detailing will increase. Mr. Ford had to manage funds for tuition and other expenses for
first year. Mr. Ford is willing to have varied work experience for which he has an option to go for paid summer
internship. Mr. Ford has options to expand his business though franchising or through introduction of cut polishing as
a service. Partnership with golf club is also an option that he is looking for. Winding down CCD for few months and
going for paid summer internship is one other option which will add value to his work experience and expertise.
Options:Option 1: Wind down CCD and go for summer Internship.
Option 2: Continue Develop franchising program for CCD.
Option 3: Partnership with golf course.
Option 4: Include cut polishing and expand other services as well.
Criteria:1)
2)
3)
4)

To accomplish varied work experience

To manage funds for college education and personal expenses
Entrepreneurship and working for his own.
To expand CCD Services and attracting new customers.

Evaluation of options:Option 1: Winding down CCD is feasible and pragmatic since it does not incur any surplus cost. Through
internship he may arrange for funds and expenses.
Option 2: Developing franchise for CCD does not seem to be a good option considering the value of CCD as a brand.
Option 3: Partnership with golf club may result in loss of existing customers. Time constraint for club car detailing
would demand team expansion.
Option 4: Adding cut polishing to his services will result in extra expenses and charges hike for detailing may lead to
loss of customer base.

Recommendation- Mr. Ford is recommended to wind down CCD for a window of few months and go for internship.
This will allow him to manage funds for tuition and other expenses as well. He may continue with CCD operations
post internship.
Action Plan- Mr. Ford will have to send letter to existing customers informing about the winding down. He will have to
make arrangements for internship.

Situation Analysis:Colins Car Detailing is a four year old firm offering services of car detailing in West Vancouver,
British Columbia. CCD followed certain work ethics which were critical for the success of the
company. During the starting days of its business, CCD offered services of vehicle washing,
vacuuming and waxing.
By the time CCD came into existence, Canadian Car Industry was influenced by economic
fluctuations. . Car detailing was a disproportionate seasonal business in Canada. There was
comparatively higher demand of car detailing among people in summer months as compared to
that in winter months. Growing environmental awareness and laws laid by municipalities were
few other factors which acted as catalyst for increase in the demand for car detailing.
CCD used to detail one to three vehicles in a day and it took three to five hours for a person to
complete detailing. CCD has a customer base of 150. Charges for one time service ranged
between $80 to $120 and CCD used to make a profit margin of 35% per car. CCDs business was
run in the familys home and the detailing material was procured from a local auto parts
distributor at discounted price.
Car detailing market in West Vancouver had two major customers. Aristocrat owners of
expensive vehicles formed the first set of costumers whereas the other set of customers were
those who were preparing their vehicles for resale. Rods exotic Auto Spa, Blitz Auto Spa and
Park Royal Hand Wash were the main competitors in the market. Detailing charges in Rods
exotic Spa ranged between $350 and $450 and they targeted affluent customers. Blitzs Auto
charged $295 to $395 for car detailing and was well for its promotional offers. Park Royal Hand
Wash offered good quality and quick cleaning and charged $29.95 for service. There was a stiff
competition in the car detaining market.
Mr. Ford had thoughts of expanding the business through developing franchise or through
partnership with golf course. Introduction of cut polish would cost him investment of $1750.
3

Going for partnership with golf club was also a tough call since it involved time constraint of 2
hours and 20 minutes for detailing. Developing franchise for CCD was not pragmatic
considering the brand CCD.

Problem Statement:What measures Mr. Ford should take to ensure the best interest of CCD taking into account his
career and studies?
Options to be considered:
Option 1: Wind down CCD and go for summer Internship.
Option 2: Develop franchising program for CCD.
Option 3: Partnership with golf course.
Option 4: Include cut polishing and expand other services as well.
Criteria for evaluation:
Following criteria are jotted down in their order of priority:

To accomplish varied work experience and expertise.

Managing funds for college education and personal expenses
Entrepreneurship and working for his own.
Expanding CCD Services and attracting new customers.

Evaluations of options:
Option 1: Wind down CCD and go for summer internship
Pursuing summer internship will act a catalyst for Mr. Fords career. The offer of internship that
he is having will pay him the same amount as he earned during the last summers, running CCD.
Moreover, this will add to his work experience as well. Since CCD functions at his family home,
its feasible to wind it down for the time he pursues the internship. Post internship, Mr. Ford may
continue with CCD.
Option 2: Develop franchising program for CCD.
4

Mr. Ford may develop franchising program for CCD by selling the rights to use CCDs name.
He may get a monthly royalty for that with a share of franchisees monthly sale. But knocking
out a deal for franchising is not feasible. CCD is not that big a brand for which someone would
franchise. Moreover, growth of a franchise business depends on the person in charge. So this
option would not be good to opt for.
Option 3: Partnership with golf course.
Mr. Ford may form a partnership with the green fees golf club for advertisement purposes which
may attract additional customers. But attracting customers from golf club is not an easy task to
accomplish. Moreover, there would be a time constraint of two hours to complete the car
detailing for those customers. In that case he will have to prioritize the golf club customers over
his existing customer base. This may result in reduction as well as dissatisfaction for existing
customer base.
Option 4: Include cut polishing and expand other services of CCD.
Mr. Ford may include cut polishing as an expansion of the services. It requires certain clinical
skills and Mr. Colin is the only one who has that expertise. Any damage during cut polishing is
irreversible. Moreover, rotary buffer needed for cut polishing cost $250 and an additional
insurance coverage costing $1500 had to be purchased. Charges for full detain will have to be
increased by 25 percent.
See Exhibit 1
Recommendation:Taking into account all the options, Mr. Ford is recommended to wind down CCD and go for
summer internship. Post internship, he may continue with the CCD operations. Since the CCD
business is run from the family house, winding down for a window of few months is totally
feasible and pragmatic. He will retain all the inventories of CCD. Moreover, going for summer
internship will add to his expertise and work experience. Since he will be getting stipend during
internship, he may manage funds for tuition and other expenses as well. Therefore option 1
would ensure the best interest for his career as well as CCD.
Action Plan:
5

To wind down CCD for a window of few months, Mr. Ford is hereby suggested to send out
letters to his existing customers informing them about the decision of winding down and
thanking them for their business. Mr. Ford will have to make arrangements to keep the existing
inventories in place so that they may be used once he returns after the summers. Mr. Ford is
suggested to make necessary arrangements for the internship as well.

Exhibit 1
Item
Charges for detailing with cut polishing

Cost ($)

125

No. of customers opting for cut polishing

30

Profit per car

35

Total Profit (20)

1050

Rotary Buffer

-250
-1500

Insurance Cover
-1750
Total Expenses for cut polishing
Net Loss

-700