Alternative Courses of Action

- Alternative Courses of Action

ALTERNATIVE 1: Sell the business.

PROS

1. They wouldn’t have to look for potential buyer because Bill Froelich is already interested in buying the company.

2. The financial situation of the company is already deteriorating for the past 18 months. If the situation worsens they could be losing more money or the sale value of the company will continue to decrease. Selling the company will cut further losses.

3. Fuel prices are increasing and car sales industry forecast looks discouraging. They might be better off selling the dealership.

4. The back end office is in a bad shape, they would need financial investment to improve the physical environment as well as quality of service of the employees. If they sellout, they wouldn’t have to shell out more money.

5. Selling gross is shifting from car sales to vehicle servicing. The company cannot capitalize on this because the vehicle servicing department is not doing well.

6. Neither Carol nor any of the other family members is really interested in making a career of running the dealership. There is no longer a need for Carol to resign from her job where she is successful.

CONS

1. The dealership is the legacy of Walter Sullivan. He was able to build up the company to be one of the best known in the metropolitan area. Selling will lose the family’s legacy.

2. Bill Froelich is offering to buy the company at a price represented by a fair valuation of the assets plus goodwill of $250,000, which is lower than what is usually offered. Selling Auto World now means selling at a loss.

3. As per survey results, the front end customers are still quite satisfied with the service of the sales department. The company has competent sales people.

4. Carol can use her expertise in health service management to improve the financial performance of the business. Selling now will lose the opportunity to sell at a higher and fair price in the future.

5. Selling is an act of giving up.

ALTERNATIVE 2: Try to turn the business around.

PROS

1. Carol has an MBA degree and a successful marketing career in the health care services. Knowledge, expertise and wisdom that she gained from these experiences can help turn around their family business.

2. Carol is armed with familiarity with the operations of Sullivan Ford Auto World and the data from CSAT Surveys and sales report can help her identify problem areas and find solutions to these problems.

3. Auto World has technically skilled and competent staff.

4. The business