The current problem for Bling Max Car Wash is installation of new blow-off equipment costing $11,500 that includes risking carwash as equity and paying interest on the loan.
In addition, the owner is aware that his customer base can be reduced if any competitor opens up another carwash nearby. The current situation leaves Bling Max Car wash with costs being 35 percent of the revenues. In addition, there are no nearby carwash facilities, leaving customers with no other option but to visit Bling. Finally, demand remains steady throughout the year, except for 6 percent of the time when it is raining.
The decision of investing in new technology before a competitor enters the local market is the main dilemma of the owner Bernard West. The problem is caused by the opportunity of making the carwash better with new blow-off equipment, but it would require the owner to take out a loan and leave carwash as equity. In addition, the demand is currently steady, but it is because there are no other carwash stores nearby. In case a competitor is opened nearby, it is possible that many customers can switch over and start getting their cars washed elsewhere.
Method of Analysis
Analysis can be done with the use of qualitative methods such as Likert scale to identify customer’s needs and preferences. Likert scale can help in identifying, if the customer will switch to another carwash is open nearby and offers competitive rates. Also, if they would like to use a new blow-off service that would reduce their time in the carwash and provides them with better service. Answers from users of these questions will give the owner usable information to make a purchase decision.