North County Auto Case
George G. Liddy and Andrew Jones own and operate a franchised dealership named North Country Auto in an upstate New York town. The dealership is a factory-authorized service center for Ford, Saab, and Volkswagen, though, industry analysts have estimated that almost half of all dealers would actually make a profit on new car sales for the upcoming year. Mr. Liddy has recently restructured each department so that they operate as independent profit centres. Due to each department’s focus on their individual profit and performance, there has been some friction between departments based on responsibility, transfer pricing, dependability, and goal congruence throughout the company.
Selling automobiles would be considered a single industry firm because it operates in one industry. This concludes that there is a high degree of relatedness and a low extent of diversification. The used and new car departments need to work together when a customer has a trade-in. The parts, service, and body shop departments are dependent on one another for quality and prompt service. The organization’s previous control system had the business work as one, however, the departments were recently individualised for the purpose of maximizing profit, not because they are dissimilar.
Mission: Mr. Liddy is concerned about the car inventory and how it ties up cash, so selling a car at a loss may be a good way to free up cash flow. In this line of business, finding alternate sources of cash flow is crucial. This suggests that North Country Auto is in a harvest mission.
Competitive Advantage: Within North Country Auto, a product differentiation strategy is implemented through their customer services. The “while-you-wait” old change service provides customers with any make of vehicle a unique service dedicated to customers as well as policy work. The company offers a wide range of full services to their consumers.
Identification of Key Success Factors
The company has recently adopted a new control system as a strategy to improve its sales and increase its profit. The new car department, the