dc.description.abstract | Affected by the relocation of factories, crunching of credit, Double-Card (cash card and credit card) debt crisis, surging in material and oil price, as well as recent global financial crisis, the economy condition in Taiwan was deeply shattered. The automotive market also declined sharply. Local makers tried all their efforts to find effective strategies in order to survive and sustain. Their focus has, therefore, moved from new car sales to after service, which drives stable revenue and is less affected by the fluctuation of economy status. The total revenue of automotive related after service business in Taiwan reached NTD100 billion with parts sales accounts for 70% of it. Since the percentage of profit generated from selling parts against companies’ total profit grows steadily, to develop a strategy that could increase the sales of genuine parts , and to improve the competitive position over various low-priced non-genuine parts, become the biggest challenge for automotive makers.
By providing considerate, heart-touching after service to customers and using value-for-money genuine parts, companies could certainly expand their revenue from after service operation and, to the end, generate substantial profit. Moreover, a good after service helps to improve customer satisfaction as well as brand loyalty and makes customers purchase the same brand next time. In all, after service and new vehicle sales are equally importany and complement to each other.
The following is a study about a well-known automotive dealer : Y company who has been established for 64 years and is a benchmark in automotive industry. It started its business in 1947 by selling automotive parts. The company is worth a study due to its large in scale, after various vertical and horizontal integrations. This study is based on Poter’s Competition Theory model, with analysis in automotive industry,SWOT analysis, Poter’s Five Force Analysis and Hill and Jones’ Strategic Management Theory. Firstly, it identifies the unique capabilities and value of Y company in after service, as well as the direct and in-direct characteristic of genuine parts by interviewing the people in Y organization. Based on the investigation done by comparing genuine and non-genuine parts, we then identify and analyze the advantages and disadvantages of them. By reviewing the resource and capability of this company, we try to identify the core of its competitive advantage. Lastly, suggestions are made for establishing a sustainable competitive advantage by introducing new characteristics of genuine parts.
Through this study, we hope to find a profitable “Blue Ocean Strategy” of genuine parts business and avoid the severe price-only “Red Ocean” competition for the automotive industry.
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