Situational and Rivalry Analysis, Goods and Services Continuum of Royal Automobile Club - Case Study Example

Situational analysis: Royal Automobile Club Company’s Corporate Profile The Royal Automobile Club (RAC) of Western Australia has approximately over 1.3 million members. This was an organization that was founded in 1905 and it is one of the peak companies in Australia. The company is a monitoring organization in Australia; in fact, it is one of the best monitoring organizations in the country. Royal Automobile Club (RAC) plays a very important role of informing subscribed members of issues that relate to motoring and advocating on behalf of members on a range of motoring and safety issues. In addition, The Royal Automotive Club of Western Australia (RAC) is an organization that is very helpful in the provision of roadside assistance, community safety advocacy motor, home, contents and travel insurance, personal as well as car and travel loans. The provision of roadside assistance to the citizens of Australia is an added advantage that the company has had over the other companies in the same field over time (Smith 271). Just like other several clubs in Australia, the Royal Automobile Club went through evolutions in order to make it a strong organization that could be very vibrant and vocal. It will be worth noting that the RAC was a club that originated from the initial club known as the Automotive Club of Western Australia. The Automotive Club of Western Australia was a club that was initially formed by petit groups of car owners who had big dreams and visions of developing the relations and rapports between the owners of cars and other automobiles in Australia. This was in the year 1905. Therefore, these car owners came up with the club especially for social purposes, for example picnics. Besides, the club was influential in helping the citizens of Australia to overcome the hostile challenges that the communities or individuals that depended on road transport faced. The Royal Automobile Club has its headquarters in Wellington Street, West Perth, in Western Australia. Admittedly, the club was very big thus division into various corporations was very important for the efficient delivery of services to the clients or rather customers. The club is comprised of the Royal Automotive Club of WA, RAC Finance Ltd, RAC Insurance Pty Limited, RAC Security Services Pty Ltd and RAC Travel Services Pty Ltd. Situational Analysis There are six segments of the general environment also known as the macro environment. The segments which include political, economic, social, technological, environmental and legal are assessed through the SLEPT market analysis tool. The name of the tool is an acronym for the various issues that it assesses in the market. There are other tools in the market but SLEPT has its advantages. Some of them are that it addresses several areas of the market environment unlike other tools, it is easily applicable and has a simplified framework and it enables an organization to anticipate impending business threats and thus enact measures and strategies to avoid or minimize their impact. For example, several firms and organizations experience aging of the surrounding population, more women than men in places work, policies and laws implemented by governments and fluctuation of the rates of interests. All these occurrences are most likely to have serious effects on a particular firm or corporation such as RAC. Social The social events in the Australian society have a direct impact on firms in many ways. One of them is trends in fashion and lifestyle that influence demand of goods and services. The other way is the population size, culture, and population composition. Legal The legal situation in any country or region has a direct impact on businesses. For instance, organizations have to access business licenses for their operations. The procedures involved in acquiring such licenses also influence business outcomes. Other legal structures such as tax regimes, excise tax, formation of joint ventures, competition rules, export and importation and others have an impact the operations of RAC. Political In Australia, there are different levels of government, federal/commonwealth, state, territory and local government. The commonwealth government is headed by the president. In most cases, federal systems of governance have devolved functions which make them more readily accessible to the people and businesses. In the unitary system, majority of government services are centralized. State governments and local authorities enact their own state laws applicable in their area of jurisdiction. In the case of RAC, the firm is subject to the federal laws enacted also the state by laws. The devolvement of government functions to the state levels increases access to government services such as licensing. On the other hand, many levels of government increase licensing procedures and fees applicable to businesses. Technological The segments of the macro environment that greatly influence the operations of the RAC of Western Australia are the technological and economic segments. To begin with, the technological segment is the most important organizations such as RAC. The technological segment has helped the managers of RAC to handle certain aspects of the corporation personally. That is to say, the technological segment has provided convenience, accuracy and speed within the organization. All these components put together have led to increased profits for the RAC organization. Most of the operations of the organization such as road and vehicle safety, fuel pricing, road funding transport planning and energy planning have been internet enabled. The organization has done lots of internet marketing and this has greatly promoted it. Technological development in the organization has also helped with the administration tasks within the company. This has helped the RAC administration to focus on their goals rather than on other things which could lead to the fall of the organization. Economic The other macro environment segment with a great influence on the RAC organization is the economic segment. The economic segment has influenced the operations of in several ways. Changes in inflation, interest rates from the World Bank and other financial institutions, and currency exchange rates are among the economic influences. Since one of the roles of the organization is fuel pricing, the fluctuation of the fuel prices has in the recent past destabilized the operations of the organization. In addition, in order to run its operations successfully, the organization has to receive funds in terms of loans and mortgages from financial institutions. Nevertheless, at times, the organization experiences a decline in mortgage and loan applications when the rate of interest is high and an increase when the rate is low. Mortgage and loan applications if successfully completed by the company increases the company’s investments and thus profits are incurred (Adler et al 2007). Competition and rivalry Regarding the microenvironment, it constitutes the forces that determine the intensity of competition and thus attractiveness of a market. There are five forces of competition. They affect an organization, such as RAC’s ability to serve its customers well and incur big profits. The forces of competition are divided into horizontal and vertical competition. One of the most significant forces of competition for the RAC organization is the threat of substitute services from similar organizations. The other significant force of competition for RAC is the established rivals. There are several organizations in Western Australia that have been established and offer similar services that RAC offers. Therefore, the demand for RAC’s services has greatly declined in the recent past. This has decreased profits incurred by the organization. One of the strong competitors of RAC is the Royal Automobile Club of Victoria. The organization offers similar services and thus poses very stiff competition. Strengths The Royal Automobile Club of Western Australia has strengths and weaknesses that must first be looked at and considered in order for the organization to successfully run its operations and services. Among the strengths of the organization, one is that the organization has ready availability of resources that is important in the security of its services. As mentioned earlier, the services offered by RAC include fuel pricing, road funding, road and vehicle safety, transport planning, energy and environment planning. The organization has the necessary resources need to procure these services readily available. This helps it to be consistent in its provision of services thus having a constant and wide customer base for its services (Spiekermann 654). The other strength of the organization is that it offers good and fast transportation system for its services rendered. Since it deals in transport planning, as an organization, it is on the forefront by providing an efficient transport system to the customers. For example, it provides transport for energy such as petroleum and the sort. The transportation system is also enhanced since it is the same organization that emphasizes on road safety and maintenance (Chester 6). The other strength of the company is the availability of ready market for its services. Despite the stiff competition that RAC faces from other organizations, the organization is ranked among the leading organizations that provide road and vehicle safety, fuel pricing, road funding, transport planning, energy and environmental conservation services in Australia. Therefore, many people prefer RAC’s services since it offers services that are efficient and of quality. This has expanded the customer base of the organization in Australia enabling it to incur big profits. Weaknesses One of the weaknesses that the organization has is the inability to cope up with the fluctuation of prices of products such as fuel products in the market as it deals with fuel pricing. World economy changes and this often causes the rising and falling of prices of products. The organization experiences losses when the prices of products go down. The other weakness that the RAC organization has is inability to cope up with the stiff completion from other organizations within Australia. As mentioned earlier, RAC faces competition from organizations such as the Royal Automobile Club of Victoria (RACV). The stiff competition at a greater level may result in closing down of the organization. This is because the cost of production will be high yet there is no demand of services. Goods and Services Continuum For the Royal Automobile Club of Western Australia, the goods and services continuum is evident when there is a pure service provided to customers on one terminal point and pure commodity good on the other terminal point. For example, in this case, the organization provides physical goods such as personal cars, travel loans and homes. On the other hand, the organization also provides services such as providing assistance to customers of maintaining the cars and homes as well as ensuring road safety and safety of the community (Mann 2006). Service Intangibility Service intangibility is the inability of a customer or consumer to assess the value of a service or certain activity through any tangible evidence. For example in the case of the services provided by the RAC organization such as road and vehicle safety, fuel pricing, road funding, transport planning and energy conservation, there is no tangible product that the customer can buy. In other words, among the services provided by the organization, there are no products that the customer can touch physically like in other cases where organizations physically offer tangible goods to the customers. Service heterogeneity Service heterogeneity is the characteristic of services which causes a variance from one service to another. It may also cause a variance of service from one customer to the other. In this case, the RAC organization clearly indicates service heterogeneity. It is evident that the organization offers variant services to the customers from road and vehicle safety to fuel pricing, from road funding to transport planning and from energy conservation to environmental conservation. Service perishability Service perishability is a term that implies that the services that are offered by a particular organization do not have the ability to be stored, returned or resold once they are rendered to a particular customer. Service perishability is evident in the case of the RAC organization since the services that the organization once offered to customers cannot be resold. Service inseparability Service inseparability is the characteristic that services contain that makes it rather impossible to separate the supply of the service from its consumption. In this case, service inseparability is evident since without doubt, the supply of services by the Royal Automobile Club cannot influence the consumption of the services in any way. In addition, the services that the Royal Automobile Club offers are very beneficial to the consumers as they bring new experiences to the customers. For example, when the organization controls the fuel prices, funds roads and ensures road and vehicle safety, there is a new experience brought to the customers that never existed before and that is very beneficial. Works Cited Adler, N., Nash, C. and Pels, E. Infrastructure Pricing: The Case of Airline and High Speed Rail Competition. 11thWorld Conference on Transport Research, Berkeley (2007) Chester, M.V and Horvath, A.P. Environmental assessment of passenger transportation should include infrastructure and supply chains. Environmental Research Letters (2009) 4, 1-8. Mann, M. Step Change Transport Improvements: An Assessment of the Potential for ‘Step Change’ Transport Improvements to Generate Wider Economic Benefits. Annex to the Eddington Transport Study (2006). Smith, Simon. From club to corporation: motor insurance and the rise of AAMI 1933-1999. Melbourne (2002): AAMI. p. 271 Spiekermann, K. and M. Wegener The shrinking continent: new time - space maps of Europe. Environment and Planning B: Planning and Design (1994). 21(6): 653-673 Read More