Paper Example. Neat Car Wash

Neat Car Wash (NCW) Company will be providing exterior car washing, interior car washing, and detailing services to consumers within the UK. NCW will focus on providing high-quality services at a reasonable and affordable price as a competitive strategy. The company will have the best employees to ensure high-quality services in regards to actual washing and customer service. Best employees will facilitate cost-effectiveness because of low turnovers and decreased HR costs. Primary target groups are individual car owners and leasers, local businesses, and car dealers. NCW will also distribute environment-friendly mobile car wash services to be more reliable and convenient.

Neat Car Wash is uniquely positioned to provide value car users, dealers, and businesses. The company will aim at providing quality, convenience, and cost-saving services to its customers. In achieving the proposition, our services are counter-checked for quality.

2 Market - micro

• What customer pain will your offering resolve?
• Who, precisely, are the customers who have the pain?
• What differentiated benefits does your offering provide?
• What evidence do you have that customers will buy?
• What evidence shows that the target market has potential to grow?
• What other segments could benefit from a related offering?

NCW intends to solve customer issues such as high costs for car maintenance, limited time to drive to car wash stations, effectiveness, and convenient car washing services (Leibling, 2020). Neat Car Wash will segment its market into new car owners (23%), older luxury car owners, sport car owners (3%), lifetime car owners (31%), car dealers, and businesses (Mintel.com, 2020). The business will offer quality mobile washing services at affordable prices to differentiate from the competitors. New car owners are the most consumer segment likely to buy our services as they take great pride in their cars and would frequently require cheaper quality washing services (Leibling, 2020). Older luxury car owners want to feel comfortable driving and want to keep the vehicles in the best shapes and regularly visit our car wash or call for our services. Sports car owners who are young men value their cars and will always require washing services weekly (U.K. Population (2020) - Worldometer, 2020). Car dealers and business would ever want to keep smart cars for good public reputations, and there are likely to be loyal customers. Car ownership in the UK has an average growth rate of 3% annually. 77% of homestead possess cars and 87% of the UK population have permanent car access. Total vehicles in the UK in 2019 was 32.9 million and is expected to grow in 2020 by 2% (UK Hand Car Wash Market - Key Fact, 2020). Thus, car wash customers are expected to increase each year. Another segment to benefit would be motorcycle owners.

3 Market - macro

• How large is the market you are seeking to serve?
• How fast has it grown?
• How fast will it grow in the future?

What trends can you identify that will affect your business e.g. economic, demographic, technological, regulatory There are more than 32 million cars in the UK, with 60% of them washed outside homes (Yurday, 2020). Total washes per year are 110 million. The Car wash industry in the UK is worth $I billion per year (The Car Wash Association CWA - Part of the PRA | PRA, 2020). Neat Car Wash targets to serve 40 percent of the market. For the last six years, the car washing market in the UK has shown a steady growth of 4%. The global cash wash business is expected to grow at a compound annual rate of 3.2% up to 2025 (Car Wash Service Market Size, Share | Industry Report 2019-2025, 2020). The car washing business in the UK is likely to be affected by economic factors, technological and government regulations. The amount spends on cars depends on the economy, when it is healthy people will like to keep their cars neat always and the service done by a specialist other than themselves (Vehicle licensing statistics: January to March 2018, 2020). If new washing equipment is developed, the business will be affected. Also, regulations on the washing industry will influence the NCW operations.

4 Industry – macro

• What industry will you compete in?
• Is it easy or difficult for companies to enter this industry?
• Do suppliers have the power to set terms & conditions?
• Do buyers have the power to set terms & conditions?
• Is it easy or difficult for substitute products to steal your market?
• Is competitive rivalry intense or genteel?

Neat Car Wash operates in Car Wash and Detailing industry. In the UK entering the mobile car wash business, a firm must acquire the right documents and meet legal requirements. Business permits and insurance are needed to run a mobile car wash as well as meeting regulations health and safety standards. Before starting the business, an entrepreneur has to register the business and for self-assessment tax (Yurday, 2020). Further, liability insurance is required as a sign of goodwill, making it difficult to enter the industry. Tools and equipment for car washes suppliers are many; hence suppliers have no power. Consumers have control due to market concentration. It is not easy for my mobile car wash market to be stolen, considering the convenience and time-saving services. There are 50,000 car washes in the UK, making car wash competition intense; however, mobile services rivalry is genteel (Leibling, 2020).

5 Industry – micro

• Do you possess proprietary elements that other firms cannot likely imitate or duplicate?
• Can your business develop and employ superior organizational processes, capabilities or resources?
• In what ways from your customers’ perspective will your offering be better, faster, cheaper etc than competitors?
• Is your business model economically sustainable?
• Can you show you won’t run out of cash quickly?

Neat Car Wash has unique proprietary elements that have value, rare, hard to imitate and able to exploit. The business has both a physical location car wash and provide mobile car wash services, has environment-friendly equipment and provide high-quality services at low costs. NCW has the potential of developing superior capabilities through hiring the best workforce and using environment protecting tools for long term sustainability of the business. The fasters will be faster, quality band cheaper by ensuring employees have the necessary skills and expertise and maintain healthy consumer relationships. Adhering to regelation and low employee turnover reduces operating costs and thus charging lower costs. The business model is economical as operating the car wash would require water, chemicals which are bought in large quantities to enjoy discounts and paying of employees. The average cost cleaning a single car in the UK is $6, with a total cost of $3.80 per car (Yurday, 2020). A profit of $2.20 per car makes the business sustainable and unable to run out of cash (Yurday, 2020).

6 Team – Mission, aspiration, risk propensity

• What’s your entrepreneurial mission?
• What level of aspirations do you have for your entrepreneurial dream?
• What sort of risk are you/are you not willing to take?
• In what ways do your mission, your aspirations or risk propensity add new elements of risk to the venture?

Neat Car Wash mission is providing top-quality washing services to car owners and businesses in the UK. NCW will ensure employees are satisfied for perfect customer service. NCW's aspirations are becoming a premium car wash company, having high-profit margins and acquiring new customer as well as maintaining long-term relations. The present business risk of investing more money for its expansion and risk of losing control by hiring management team. New risks would be unstable cash flows, stiff competition and unable to satisfy the changing consumer expectations.

7 Team

• Can you and your team execute?
• What are the critical success factors in your industry?
• Can you demonstrate that your team can execute on these CSFs?
• Have you identified what CSFs your team is not well prepared to meet?
• What risks do answers to the above questions add to your risk list?

Critical success factors in the car wash industry are quality service, costs and convenience. Neat Car Wash focuses on soliciting customers by providing superior service at lower prices and being convenient. It will be achieved by maintaining the best team, expanding geographical location and working hours for more convenience and reliability (Global Car Washing Services Industry, 2020). The team is well prepared by having the necessary skills and the availability of required resources. NCW has a clear procedure for acquiring and maintaining a strong relationship with customers. The team is prepared to meet the critical industry factors for higher profits and long-run sustainability. The CSFs pose risks of adequate resources and inconvenience.

8 Team – your connections matter

• Who do you and your team know up the value chain?
• Who do you and your team know down the value chain?
• Who do you and your team know amongst competitors and substitutes?
• Where are any key gaps in your team’s connections and how can you fill them?

In UK retailers of car washing equipment and chemicals are numerous, making quick accessibility of the cleaning tools. Some of the significant suppliers include Pearl Car Product Limited, Auto Valet Suppliers, Automotive Cleaning Chemicals, Car Cleaning-UK, Elite Car Care, among others (Shop, 2020). Down the value chain Neat Car Wash target all the private car owners, dealers and businesses. There several car dealers in the UK such as Clive Sutton, Motors.co.uk, Auto park UK Car dealers and CS Cars which imports fleets of cars and can make big consumers of our cleaning services (Top 100 UK Dealer Groups - Motor Trade Insider, 2020). Key competitors include Waves, Autoglyn and Autosmart companies. The team aim at entering partnerships with car dealers and businesses in the UK to provide a car cleaning service to increase sales.

Conclusion

Overall assessment of the opportunity and the risks involved. Most of the car wash business in the UK operate from a physical location with mobile car washes currently emerging. Operating a mobile car wash in a great opportunity as it is more convenient to clients and the entrepreneur. It is well paying and easy to start and is consumer-oriented by saving the time client spends visiting a physical car wash. The opportunity is sustainable as suppliers have no power to set terms and conditions. However, the business face risks of economic, government regulations, competition and changing consumer behaviours.

References

Forecourt Trader. 2020. UK Hand Car Wash Market - Key Fact. [online] Available at: https://forecourttrader.co.uk/analysis/uk-hand-car-wash-market-key-fact/641711.article [Accessed 23 August 2020].

GOV.UK. 2020. Vehicle Licensing Statistics: January To March 2018. [online] Available at: https://www.gov.uk/government/statistics/vehicle-licensing-statistics-january-to-march-2018 [Accessed 23 August 2020].

Grandviewresearch.com. 2020. Car Wash Service Market Size, Share | Industry Report 2019-2025. [online] Available at: https://www.grandviewresearch.com/industry-analysis/car-wash-service-market [Accessed 23 August 2020].

Leibling, D., 2020. [online] Racfoundation.org. Available at: https://www.racfoundation.org/wp-content/uploads/2017/11/car-ownership-in-great-britain-leibling-171008-report.pdf [Accessed 23 August 2020].

Mintel.com, 2020. Global Food and Drink Trends 2020 To 2030. [online] Available at: https://www.mintel.com/global-food-and-drink-trends [Accessed 20 August 2020].