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Business studies case study analysis on engen petrol station

Index

Page 1 – Cover page

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Page 2 – Index, executive summary and Part A

Page 3 – Part A and Part B

Page 4 – Part B and reference list

Page – Evidence of primary research and plagiarism check

Executive Summary

I have to choose a petrol station closest to me and conduct a SWOT analysis, a Porter’s Six Forces analysis and develop strategies to overcome issues or improve overall business.

Part A: SWOT Analysis

I’ve chosen Engen Fairways Convenience Centre on Old Mill Way. They have Quickshop, self-service Corner Bakery, Steers Takeout and Woolworths Foodstop attached to them. They are located at an intersection leading to the M4 and as you come off the M4, you could also be coming from Hyper Pick ‘n Pay or from Swapo Road. They’re open 24 hours a day. They also have a carwash, an ATM and a coffee station.

Strengths – 1. The reward programs with thank u with Educon and eBucks with FNB/RMB. When customers fill up their cars at Engen, they can earn points which can be converted into cash and spent at other retails. With thank U, you earn 15cents per litre and can spend that money at CAN, Egars and other stores with Educon. With eBucks, you earn 10cents to R4 per litre, depending on reward level, and you can spend that cash at eBucks Shop, eBucks Travel, Superbalist and more online. You can also spend it at Incredible Connection, Makro and more instore.

2. Strong marketing team. There are several promotions on at the moment until the 28th February 2019. There’s the Big Red Wallet Giveway including buying any 2 certain products for cheaper at the Quickshop and standing a chance to win R25 000 weekly. And another one is the Bite Size Perfection including buying 3 pies from the Corner Bakery and an Appeltizer from the Quickshop for cheaper and saving R4. Steers, one of the big complimentary outlets also has their ritual Wacky Wednesdays, two burgers for the price of one. This ongoing promotion draws in a lot customers/locals every week.

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Weaknesses – 1.Poor service/reputation at the carwash. There is a wide reputation that the carwash service at Engen Fairways isn’t of good quality according to recent reviews online and overall local opinions. For example, when a customer wants their car washed, something to eat and to draw some money, they’re less likely to go to Engen Fairways because of the poor service, and they’d rather go somewhere else close by.

2. High transportation cost of fuel. According to the Automobile Association, the Fuel Levy and Basic Fuel Price has increased making the transportation of fuel very expensive. Engen Fairways Convenience Centre has to always have the financial resources to take care of this expensive.

Threats – 1. A change in customer preference with being environmentally aware. Electric cars are becoming more popular globally and it won’t be long before they’re all here in South Africa. Engen Fairways only has fuel available for cars, they don’t have charging stations needed to run an electric car. This affects a loyal customer who changed to an electric car because they won’t go to Engen anymore but rather somewhere that has charging stations.

2. Competitors close by getting advances and other food oulets. Up Swapo Road there is a Total. They are centralized in a busy area, surrounded by fast food outlets and restaurants close by. They have Mugg n’ Bean on the move and a Café Bonjour along with some parking space and the petrol station. This Total is seen as a threat as it has a few things that Engen on Old Mill Way doesn’t.

Opportunities – 1. Training programs and classes for employees. Training employees further can help them be more efficient in their work and more polite with customers. The car wash workers have said to have a poor reputation and the quality of work isn’t up to standards. The training can help with this.

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2. Economic recovery and political stability. The economy has become more stable now that Cyril Rhamaphosa is President for the ANC. The Rand has strengthened and so the petrol price has decreased.

Part B: Porter’s Analysis

The level of rivalry in the market: The rivalry is high in the petrol station market. Engen is one of the main, big petrol station brands that compete with others like Caltex, Total, Shell and BP. A strategy example to overcome Engen’s competitors is by having better reward programs then other stations. The customers should earn more points at Engen and be able to spend them at more places compared to others.

The availability of substitute products: All other competitors in the petrol station market have similar products so the availability of substitute products is there. A strategic option for Engen to be the number one pick is by analyzing why customers might pick another petrol station. Maybe it’s the cost factor, health issue or convenience issue. Engen can reduce the price of their product/service to make it more appealing. They could do this by having sales and specials where you save more than any other place. Engen can also have more healthy, gluten free, vegan and vegetarian options within Woolworths Food and Quickshop to accommodate customers with those requirements.

Threat of new entrants to the market: There are no new entrants around Engen Fairways at the moment but they should always keep an eye out on the market for any exiting businesses, as they make room for new businesses, and new entrants from small entrepreneurial start ups and large corporates. Engen can keep new entrants out of the market by registering a patent to deter potential new businesses. Huge Capital outlays, building up a petrol station is expensive and requires a lot of capital.

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Power of suppliers: Engen must have a reliable supplier or they are at risk of not being able to provide their service/products. A reliable supplier must deliver fuel/products/food/ingredients on time, of good quality, of correct quantity at a reasonable price. A strategy Engen can use to have a reliable supplier is to build a good relationship with them. Engen must have open communication, prompt payment, prioritize the unloading of the supplier’s trucks and overall nurture the relationship.

Power of buyers: Due to the rivalry being high in the petrol station market, the power is with the buyers. They have many options and Engen has to be better than the other options. A strategy to tackle that is; Engen must always keep the buyers happy so they keep coming back. They can do this by staying up to date with their needs and wants by means of market research and providing the products/services to satisfy those needs and wants. For example, if there are any new trends, better sales elsewhere, better competitions elsewhere, accommodate them and be more convenient.

Power of complimentary products: Engen Fairways have a lot of complimentary products and services that benefit the business daily. The petrol station compliments the Quickshop, Steers and Woolworths Foodstop with filling up your car while grabbing groceries, dinner and a meal on the go. A strategy to improve the complimentary products department would be to get a Mugg n’ Bean so that it complements the petrol station and the ‘on-the-go’ system. Coffee is limited at Engen Fairways. There’s only one self-serving station so Mugg n’ Bean on the go would do really well there in terms of accommodating that want.

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