Module 3 – Client Interview Sharan Raj Keertipatti Venugopala Folakemi Odunfa Bhavishya Bhat Vedant Johar Royce Gaw School: Course: Couse Code: Professor: Business Name: Date: Fanshawe College Integrated Business Consultancy MGMT-6142 Professor Shahin Pardhan Find Right and Valuable (FRV) Business Solutions January 24, 2022 Client Interview Company: Sport Motors Auto Sales Inc. (Sport Motors) Interviewee: Mohammad Al Kaissy Interview Date: January 21, 2022, 10:00 hrs. Company Introduction 1. Can you give us a brief background about your Company - objectives, vision, mission? Sport Motors Auto Sales Inc. commenced business operations in 2011. It is currently located at 1080 Oxford Street, East London, Ontario. It was established by my father, Nazar Al Kaissy for the main purpose of buying and selling pre-owned vehicles. Even before the conception of Sport Motors, we were already in the business of auto sales albeit outside London Ontario; as such, we are quite knowledgeable about the business. Our main objective is to provide excellent customer service to our clients whilst providing them with one or more vehicles that meet their unique needs. Based on our experience in the market, we are familiar with the process of walking our clients through the rudiments of purchasing a vehicle, detailing and even after sale services; and this is irrespective of the client being a first-time car owner or a long-time car buyer. 2. Can you give us a brief operation and marketing overview? We typically source our vehicles through end of lease transactions with dealerships. On very few occasions, we purchase privately from end users although we try not to engage in these sorts of transactions very often as such vehicles often come with a plethora of problems. Once the vehicles come in, we detail the interior and exterior; making sure all items are in good working order and its “showroom ready”. We take pictures for marketing purposes; focusing on different angles and positions, as we believe that most of the clients’ questions can be answered through the pictures taken. We then certify the vehicle and proceed to our sales platform, uploading the pictures to our website and other media platforms such as www.autotrader.ca. I am directly responsible for online client engagement and I am proud to say that at least 70% of all our online enquiries translate into sales. Upon purchase of vehicles, we help to obtain all necessary documentation particularly the Carfax report showing a comprehensive history of the vehicles such as accidents, damages, safety recalls and money owed. 3. Where do you see Sport Motors in the next ten years? What other opportunities is the company looking into? What constraints can affect your accomplishment of this vision? We plan to open another branch in London, but we are currently experiencing some setbacks such as: • Shortage of vehicle supply as a result of the shutdown of car production factories; this has greatly affected our inventory. • Another issue is the current high property prices in London and our ability to secure a financially viable property in a strategic location that would cater to our target market. • Expansion would require additional costs such as taking on new employees; costs that we are not ready to take on at this time. 1 4. How do you define business success? For us, we can only define success through our sales output; making sure that our numbers are higher than the previous year. 5. What are your biggest strengths and weaknesses as a business? Our biggest strength is our excellent customer service. We are proud to say that our service is unparalleled and there are not many companies in London that have the commitment to provide excellent service as we do. We have a lot of satisfied clients who in turn refer their friends to us. We are very detailed and meticulous in dealing with our clients. We are also very transparent in our transactions. Weaknesses: we find it hard delegating responsibilities to other people outside the family (i.e. myself, my dad and my brother); and when we eventually do, we tend to micro-manage due to the lack of trust that anyone else can be as meticulous or dedicated as any of us. The flipside of this is lack of work life balance for us. We are so ingrained in the daily operations of the company that we are unable to focus on business development and other aspects of the company. Organisational Structure 1. What is the ownership structure of your business? Sport Motors is owned by my father. However, my father alongside myself and my brother are all jointly involved in managing the affairs of the business. 2. How do you run the business successfully as a family to ensure sustainability? It is not easy running a business with family members; however, we realized the importance of the following very early in the business: • Learning to separate our emotions from the business. • Working together towards a common goal which is to make sound decisions for the benefit of the company. • Willingness to sacrifice time and comfort, such as the absence of fixed resumption and closing times. This is particularly so when you realize that you are working for yourself and not for anyone else, and also that no matter how much you delegate, no one can be as meticulous and diligent on the job as you can. 3. How are decisions made as a family-run business? My father has always been the decision-maker of Sport Motors. However, we his sons have also been empowered to make decisions that align with the company’s best interest while simply carrying my dad along on such decisions. My brother and I have, over the decade, learnt the ropes of the business and because we all have the same common goal, it makes things easier. 2 4. How many employees do you have? What are their positions? Are there any reporting lines/structures? Do you have an organogram? Besides myself, my brother and my father, we have five other employees. we all perform the following duties: Job description Responsibility Service department Nazar Al Kaissy (Father) Car detailing and interiors, taking car pictures, selecting, and uploading. Mustafa Al Kaissy (Brother) Car wash Employee/reports to brother Secretarial matters Employee/reports to dad Attending to phone calls, sending and responding to emails and online enquiries, settling invoices Mohammad Al Kaissy (Myself) We do not have a formal organogram or structure; everyone knows their job, and we have not had any situation with erring employees not living up to expectations. 5. Do you recruit externally? If so, how is the recruitment process done? Yes, we recruit externally by posting on www.indeed.com and other similar online job sites. However, our employees have been with us for quite a while; and with the constraints of the pandemic, it has not been necessary to recruit in recent times. Market Industry 1. Who are your direct and indirect competitors? Do they have an edge over you? What has Sport Motors done about it? Our direct competitors are the other 2nd hand car dealers in and around London, and our indirect competitors are private sellers on Facebook Marketplace, www.kijiji.com and so forth. We believe that we have an edge over them as we have clear pictures and descriptions for each car in our inventory. What you see is what you get, and there are no surprises after the purchase. We have all the safety checks and Carfax ready when the customer checks out any car in our inventory. 2. What makes Sport Motors different from its competitors? What is its competitive advantage? We at Sport Motors take great pride in delivering vehicles in excellent condition. You can drive and not worry about any unpleasant surprises that may arise when you buy from elsewhere. We have also received numerous referrals from our past clients that have been satisfied with our services, and I believe this trust and loyalty is our most significant competitive advantage. 3 3. It is believed that the demand for used cars has been on a rapid rise in London due to the increase of international students alongside other factors. Is this the case for Sport Motors as well? International Students are our customers for sure, but we cater to anyone and everyone that is in the market looking to buy a car. The number of international students coming to London has impacted our sales, but they are not the most significant portion of our sales. 4. How does the economic and political environment affect the business? The political factors do not impact our business on a large scale. Since our business was deemed an essential business even during the pandemic, we could keep our business open and running through these times. The economic factors do play a role as the United States dollar (USD) rate is higher than Canadian dollar (CAD), so more people from the United States come to buy cars from here and take them back to the United States. 5. Of the enormous challenges Sport Motors faced, is inventory management part of them? Is it sometimes tough to get cars to sell? What other challenges do you experience? Yes, inventory is currently a challenge because we would usually have an inventory of 100+ cars but now have about 50 cars in our inventory. We are constantly looking to add more to that and exploring more channels to find suitable cars that we can buy. Selling cars depends on the type of customer’s budget that they are willing to spend on a car. Some have a larger budget than others. The only problem that most customers impose is why two similar cars are priced differently, and we make our best effort to explain the reason behind the difference in price. Pandemic Crisis 1. How has the pandemic impacted your business? Pandemic has affected our business to some significant extent, and the following are the reasons: • Pre-covid, we had 100+ cars, and now we barely have 50-60 odd cars in our stock. This sharp decline is due to automobile factories remaining shut for an extended period worldwide and the scarcity of micro-chips for consumer automobiles. • People lost their jobs in the pandemic, which adversely affected their intent and ability to spend their money on expensive purchases such as automobiles. Hence, sales of our business have been directly affected. • During the pandemic, our business was classified as “essential business” during the lockdown. Hence, despite poor sales, there was no relaxation or a rebate from the provincial government, and we still had to pay our taxes (property and business). • We want to expand our business by opening another branch of Sport Motors. Still, the everincreasing cost of renting or buying a property, utility, taxes, etc., has undoubtedly put the expansion plan on hold. • With the cost of a new vehicle and a used vehicle becoming almost equal, not enough people are showing keen interest in buying used cars. 4 2. What changes were made to the business to overcome the pandemic? Are there existing challenges? Due to the pandemic, the following changes were made to the business: • Reduction in advertising cost. • Business hours reduced. • The opportunity to hire new staff to create efficiency at work is on hold to save costs. • The existing challenge is to be able to manage and run the business with a limited team and other fixed costs. • To meet the inventory levels of the pre-covid era and keep the sales of the company afloat. Ancillary 1. What key performance indicators (KPI) your company uses to determine and achieve its set targets? We do not have a formally established KPI in our company; we generally focus on sales figures and compare them from the previous month’s and last year’s performance. We are a very manageable company because we only have five employees aside from our family members. We closely coordinate and communicate our instructions to ensure everyone is doing their assigned tasks and responsibilities. 2. What are the revenue and cost drivers of the company? How does it change from every season? The primary revenue stream for us is car sales, and our service station is more of an add-on for customer satisfaction from services like oil change, safety checks and car detailing. Our cost drivers include rent, advertising, manpower and utilities. The sales are slow during winters as very few prefer buying. Car sales are higher during summers as people want to take their cars and explore and travel with their friends and family during this time of the year. Group Observations and Conclusions During our interview, we observed that our client is facing a severe sales issue due to a lack of inventory and lack of an adequate number of employees. Mr. Kaissy somewhat feels that this is primarily due to pandemic and lockdown worldwide, and the situation within the industry is going to remain such like for at least another one more year. However, he is open to the idea of restructuring and redefining the job roles and responsibilities. Mr. Kaissy wants us to come up with measures or ideas that look for the company's long-term sustainability efficiently and run the operations smoothly. 5
