Sanger Automotive Companies Case Solution & Answer

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Sanger Automotive Companies Case SolutionÂ

Projected Sales Volume
Â	2011	2015
HEVs	Â 300,000	Â 500,000
BEVs	Â Â Â Â 30,000	Â Â Â Â 45,000
PHEVs	Â Â Â Â 30,000	Â 200,000

In analyzing the market for electric passenger cars, it is identified that there is a tough competition, as previously there was only one manufacturer however by the year 2012, it is expected that not less than 20 new models from 12 different manufacturers will be competing in the market. Moreover, the manufacturers of HEVs in the market are also focusing on enhancing their models regarding fuel efficiency and improved emission control in order to compete with the other types of electric passenger cars. However, the best part is revealed through a research, which states that when it comes to the purchase of new cars, the customers have the first and the foremost concerned with the brand of the company. Therefore, it could be said that new comers are not entertained so easily.

Central Strategic Issue

The central strategic issue is whether the franchise agreement with Fisker is feasible for the Sanger Automobile Companies or not. The factors that lead to this strategic issue are stated below:

Decision Factors	Uncertainties
-Â Â Â Â Â Â Â Â Â Available Franchise Opportunity	-Â Â Â Â Â Â Â Â Â Emerging Product
-Â Â Â Â Â Â Â Â Â Market Availability	-Â Â Â Â Â Â Â Â Â Unpredictable Market
-Â Â Â Â Â Â Â Â Â Organizational Capability	-Â Â Â Â Â Â Â Â Â Production Issues
-Â Â Â Â Â Â Â Â Â Environmental Friendly	-Â Â Â Â Â Â Â Â Â Environmental Forces
-Â Â Â Â Â Â Â Â Â Distinctive Competency	-Â Â Â Â Â Â Â Â Â Differentiation
-Â Â Â Â Â Â Â Â Â Changes in Marketing Mix	-Â Â Â Â Â Â Â Â Â Marketing Mixed Response

Strategic Alternatives:

The qualitative analysis is given in the appendix 2. The price which is set for Fisker Plug-in Hybrid Electric Vehicle ranges from $96,000 to $106,000. Moreover, the vehicle is projected for households who have income of $ 100,000. It could be said that only 5% of the customers are ready to pay for $55,000 or more. On the other hand, 71% % of the customers have fear of running out of charge while on the road.

Alternative 1:

For the given case, the first alternative would be to Do Nothing Decision.

The advantages and disadvantages of this alternative can be best explained by the statement â€œNO PAIN NO GAINâ€,asbydoing nothing, there wouldbe no risk attached and thereforethere will be no return.

Alternative 2:

The second alternative for the given case is to do franchise agreement with Fisker.

Advantages

The advantages of this strategy are:

Higher prospects of growth as can be seen from the estimated projected sales volume of 2015.
The market is in its infancy stage.
Great opportunity to grab.
One of the first to showcase high electric vehicle in southwest Florida.

Disadvantages

New industry
Lack of knowledge
Investment cost
Unpredictable market
Production issues
Environment issues
Competitor response
Marketing mixed response

Alternative 3:

The third alternative for this case would be not to go with Fiskerâ€™s exclusive franchise agreement but to consider other electric car companies.

By evaluating the above three alternatives from every aspect, qualitative as well as the quantitative,the decision to go for the franchising agreement with Fisker is quite risky and if the company goes with this decision, then the management would be required to do intensive marketing for the product through different channels of marketing. Moreover, a huge risk is attached regarding the customersâ€™ acceptance for the product.

Marketing Mix:

If the company goes with alternative 2, then intensive marketing of the product will be required by the management in order to create awareness of the product in their minds as well remove their any concern. The marketing goals will be: