Assume that Midas is deciding whether it should add engine tune-ups to its existing product line. Top management has called you in as a consultant to help it to analyze this opportunity. The first thing the consultant asks you to do is read the Midas and Genoa Ford Feature in this chapter.

  ***** Real World Scenarios: Midas and Genoa Ford, Same Service but Not Competitors*********

A typical Midas shop and the service center at a dealership such as Genoa Ford provide the same service, but are they really competitors? Each has adopted different strategies and tailored their operations to fit those strategies.

Midas is in the automotive repair business. Its strategy is to provide a narrow range of services at low cost. National advertising is used to develop wide geographical coverage. The company is not a full service repair shop, but concentrates on muffler repair, brakes, and shock absorbers. It is successful because it quickly delivers quality services at low cost. How are operations important to Midas?

  1. Limited service requires a limited inventory that allows convenient storage close to where materials are needed to perform operations.
  2. Multiple shops and limited service permit careful engineering of the necessary hand tools and work procedures. These special tools and work procedures make shop employees more efficient. Midas can apply the same tools and methods to a large number of shops, ensuring that initial engineering costs are easily covered.
  3. Because employees have few variations in service, they learn how to perform these jobs more quickly.
  4. Workers’ skill levels and knowledge requirements focus on a limited area of service so they quickly become experts in a particular area.

As part of a Ford dealership, Genoa Ford’s Service Center provides a full line of automotive repairs. In contrast to Midas, this service operation competes without advertising or national appeal. It also has a different operating strategy. In order to maintain the dealership, Genoa Ford must be able to satisfy a wide variety of customer needs. It offers transmission work, body work, engine repairs, and other tasks in addition to working on brakes, shocks, and mufflers as Midas does. Genoa Ford designs its operations to match its objectives.

  1. The facility is adaptable to changing needs. For example, on one day, a single repair stall may be used to wash a new car, repair a door lock, fix an air conditioning leak, or tune an engine.
  2. Genoa Ford has more tools than a specialist like Midas does because Genoa Ford offers a greater variety of jobs.
  3. There is some job specialization among workers. All employees will not be able to do everything, but employees still need a wide range of skills because Genoa Ford does not have enough of one particular job to allow personnel to specialize. Cross-training is necessary.
  4. The workers’ skill levels and pay rates are higher than workers at Midas.
  5. A significant inventory of many different parts is maintained. These parts are physically separated from the repair stalls and controlled by specialists in parts.

As a result of its strategy, Genoa Ford has higher costs and charges higher prices than Midas does for comparable work. When a car needs routine exhaust system work, it can be taken to a national chain such as Midas. Generalists, such as Genoa Ford, can complete more difficult jobs and repair work that is paid for by Ford as part of its new car warrantee program.

Management is concerned about the impact that this new service will have on existing operations. Presently, the company has a policy that customers will not wait longer than 30 minutes for muffler service.  If reaction to the new service is great, the shops may not have the capacity to satisfy demand. Assume that most of the shops are very profitable. In a three- to four-page paper excluding title and reference pages in accordance with APA guidelines as outlined in the Ashford Writing Center. In this paper you must:

  • Discuss the anticipated impacts (both positive and negative) upon operating efficiencies, and recommend solutions to minimize the negative impacts.
  • Discuss whether or not operating practices should be changed to accommodate the tune-ups. Be sure to explain your reasoning.
  • Examine the reasons why input should be gathered from the shop owners.
  • Discuss the type of input that should be gathered.
  • Describe the processes and steps needed to launch this new program.

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