Business Strategy

Business Strategy

Porter’s Five Forces Model

Force	Asisco Example	Force Strength	Asisco Response
Bargaining Power of Customers	“I want a lower price.”	Low	Asisco has very low prices compared to big business retailers such as AutoZone.
Threat of Substitutions	“I can buy a battery anywhere, why should I buy one from you.”	Medium	Asisco is an authorized Exide Battery distributor. Exide batteries are quality batteries sold at very affordable prices.
Bargaining Power of Suppliers	Extreme price fluctuations due to economy and oil sources	Medium	The general public is aware of the oil situation going on throughout the world, but customers still complain about price changes.
Threat of New Entrants	Big business company opening up (such as AutoZone)	High	Asisco has been in business since 1961 and is under ownership of people that have plethora experience.
Rivalry	Other Small Business Automotive Warehouses	Medium	Asisco has hundreds of loyal customers and offers incentives such as delivery and 3.5% Sales Tax.

Competitive Strategy

Over the fifty-one years of operation, Asisco Automotive has adopted a focused cost approach to their competitive strategy. A focused cost approach means that they have the lowest cost within a certain industry segment. The area that Asisco Automotive is located in has a massive number of mechanic shops, car dealerships, and other automotive type businesses that are in need of a supplier of automotive needs. This location puts Asisco at a great advantage. They sell batteries, oil, anti-freeze, filters, etc. at wholesale prices to these businesses in the general area. These prices are generally the lowest that anyone will be able to find for the quality of the products because of the amount of inventory that Asisco purchases and carries at one time. They adopted this strategy because it was the most reasonable and smartest way to conduct their business and make it flourish.

Value Chains

When researching Asisco Automotive, this value chain describes the activities that are involved in selling and distributing automotive needs and accessories.

In addition to the activities stated in the Value Chain, there multiple support activities that go along with running this business. Asisco must be diligent in managing their inventory to avoid stock outs, and must keep their inventory organized to do so. Moreover, they must keep up with the constantly changing prices of oil and keep customers informed on price changes. Also, marketing and selling products is no easy task; they have to continuously solicit and follow up on soliciting in order to keep new customers buying from them. It is of extreme importance to constantly put their name out so they become the supplier of more and more businesses. Lastly, helping with customer inquiries requires Asisco to make sure their staff is knowledgeable about all the products being sold and able to answer customers if they have questions or concerns about products.

Business Processes

          Asisco Automotive is a small business that is ran very efficiently. There are multiple procedures and processes that are used in order for Asisco to be run smoothly. We looked into the process in which Asisco generates sales and the distribution process. 

          Asisco tries to focus its effort (sales wise) in one major area of New Jersey each day. The salesman goes out and solicits all of the existing customers in a city each day and also attempts to penetrate new markets in the area. When customers place orders, they are called in to the warehouse via cellphone from the salesman. Next, the orders are pulled and waiting for the trucks to return to the warehouse to be loaded for the next day’s deliveries in the area that the salesman has worked.

          Customers also place orders over the phone or via fax or email throughout each day. These orders are also taken into account and are prepared and shipped either same or next day depending on the area and number of orders that have to be shipped. Asisco runs two large box trucks each day and three heavy-duty vans. The box trucks are loaded and sent out with up to 20 orders on them in one general area, while the vans are sent out with 1-8 orders depending on the size and amount of orders that need to be shipped. Each order has to be checked according to the bill before it is sent out.

Information Systems

            The I-Cas system is imperative to Asisco’s day-to-day functions. It keeps track of the past orders and accounts receivables of customers that have credit accounts with Asisco Auto. When a customer gets to a certain limit and has not paid within the 30 or 60 days that they have credit for, Asisco can no longer supply them until they get a payment. This is crucial to keep up on being that Asisco is a small business and does not have the funds to let customers be thousands of dollars in debt without receiving consistent payments. Moreover, this information system keeps track of general inventory. There are hundreds of different filters that Asisco Automotive keeps in stock being a dealer and it is extremely difficult to avoid stock outs without being very persistent with inventory management. They do a physical inventory weekly on their filters, but the I-Cas system reminds management when stock is low on certain filters