Martin Hines started a small business selling gas in his hometown 20 years ago. The company started as a trailer and an above ground tank of regular gasoline. A few years later, a small convenience store was built, and three underground tanks were installed. The company is ready to expand again. Mr. Hines would like to double the retail space, add a car wash, increase the number of pumps, and possibly add a service garage.

At present, Hines has averaged annual revenues of $4.2 million over the last 5 years and employs 8 full-time and 12 part-time staff. Newly hired employees receive 3 training shifts with a mentor; however, no formal employee policies or procedures exist. There are two competing gas stations within 1 kilometer of Hines. The company currently has a capacity for four cars at one time (i.e., they have four gas pumps). The majority of their sales revenue comes from fuel sales (approximately 80%) and the majority of the retail store sales comes from cigarette and lottery sales. Major activities performed by the business include the following:

• Purchasing fuel (two grades of unleaded, plus diesel)

• Purchasing, receiving, and stocking inventory in the convenience store

• Making retail store sales

• Making fuel sales (full-serve at low cost)

• Providing customer service (high priority for owner)

• Overnight security (two overnight guards)

  Hines does not currently advertise or promote their business in any significant way. All advertising comes from word of mouth and social media. The station is located 1 km from a somewhat busy highway and has 3 towns of 10,000 or more people within a 20 km radius.

  The company has a bit of an identity crisis in terms of strategy. Hines uses a cost leadership strategy for gasoline sales and are well known for having the lowest gasoline prices in the area. On the other hand, they are also one of the few full-serve gas stations left in their region, which seems fit more with a differentiation strategy. In a way, the company is “stuck in the middle” between two strategies. The owner takes pride in providing a comfortable environment and high levels of customer service to the clientele. Many customers rave about the high level of service they receive and often go out of their way to fill their tanks at Hines.

Required:

1. Prepare a SWOT Analysis for Hines. Provide as least two strengths, weaknesses, opportunities, and threats 

2. Prepare a Balanced Scorecard for Hines. Provide at least 2 items for each of the learning & growth, internal processes, customer satisfaction, and financial perspectives 

3. Referring to Exhibit 2.6, draw a Strategy Map for Hines showing the relational linkages between each of the items specified in Question 2 above 

4.. What recommendation would you make to the company’s owner regarding their competitive strategy being “stuck in the middle”? Provide at least two reasons for your recommendation

Answer rating: 100% (QA)

The solution of the given question is Power The gas station is very cost effective and provides the lowest fuel in the area The gas station has the advantage of being close to the highway and has 3 ci... View the full answer