Part A
Read the case below and answer the questions that follow.
Advantage Transportation Systems
The agenda was full of discussion items for the annual managers meeting held at Advantage Transportation System's (ATS) national headquarters in Detroit. ATS's president and owner, Victorio Fedeli, wanted his ten territorial marketing managers to devise a plan to improve company net profits, which had averaged 5% of sales for the past five years, to the industry average of 8%.
The company specialized in transporting small and medium sized cars from manufacturers to dealers via transport truck, and had become one of the top six national competitors, capturing nine percent of the North America's $450 million per year market. Sales for ATS had increased by an average of 10% annually since it started 13 years earlier, and profits had remained stable. Strong financial results were important to Victorio, who was interested in soon arranging an initial public offering (IPO) of ATS shares to help raise funds for expansion. The company was divided into ten different territories, each managed by a regional marketing director who reported directly to Victorio.
Victorio began the meeting by asking for a report on recent marketing financial results and company sales updates. The new west-coast manager, Alec, indicated that preliminary talks with a large domestic auto manufacturer, regarding an exclusive transportation deal for all of their vehicles, was promising and could lead to a profitable contract in the future. As a former executive at a car manufacturer, Victorio knew that exclusive contracts in the industry were rare, but ATS's high levels of reliability, customer service, and competitive prices should hopefully help make this deal possible.
Victorio began the meeting by asking for a report on recent marketing financial results and company sales updates. The new west-coast manager, Alec, indicated that preliminary talks with a large domestic auto manufacturer, regarding an exclusive transportation deal for all of their vehicles, was promising and could lead to a profitable contract in the future. As a former executive at a car manufacturer, Victorio knew that exclusive contracts in the industry were rare, but ATS's high levels of reliability, customer service, and competitive prices should hopefully help make this deal possible.
Later in the meeting, Lilly, the mid-west's manager, announced that due to the growing popularity of Sport Utility Vehicles (SUVs), ATS lost one customer to a competitor that could transport larger SUV vehicles on its trucks, while ATS trucks could only handle normal cars. Lilly went on to say that a national railway company had also recently lowered its rates for transporting vehicles by 10%, resulting in ATS losing another contract. This recent news surprised Victorio, and to keep his managers motivated he quickly reviewed the financial results for the past two months and reinforced that ATS had sufficient financial strength to handle such loses for now.
At the luncheon break, Victorio was approached by Chantelle, the Chief Financial Officer, who commented: "Victorio, I don't think we should take this news too lightly; short-term results are important, but I'm worried because you know we don't have any long-term plans to deal with problems like these." As Victorio sat and reflected on Chantelle's comments, he leafed through ATS's most recent promotional material and wondered what new initiatives could be put into place to best help ATS succeed in the future.
Q1. Perform the SWOT analysis for ATS.
Q2. Evolve strategies for ATS using the TOWS matrix.
Q3. Using the Importance and Ease of Implementation matrix evolve an implementation plan for ATS.
Part B
Write short notes on the following:
1. Porter's five forces model
2. Porter's generic growth strategies
3. Ansoff's intensive growth strategies
4. Core competencies of a company
5. Competitive advantage of a company