CYCLOPS COMPANY

Cyclops Year 1
Calculated the potential market for repair industry in Perth
Studied the service of Grease monkey for drive-through oil and oil filter change
(5-10 min @US$30)
Initial Investment of $40000
Designed high speed pump (injection) and a secondary pump (drainage) of
engine oil
Rented a double car park bay in a Morley(suburb) service station
Contracted a supplier of major brand oil at $2/litre

Cyclops Year 1
Had a stock of 30+ oil filters purchased @$7 each on average which covered
most of the popular cars
No advertising expense, relied solely on service center customer
Employee 2 trainee engineers from 9 am to 5 pm only on weekdays at $30000
each annually
Entire 4-litre drain-and-fill operations took an average of 8 minutes
Per year car serviced is 8000
Resulted Net profit in Year 1 is $20000 (a 50% ROI)

Year 1 Data Analysis

Investment
Ramp and setup cost
Free standing sign
Computerised cash register
Pump and drum
Syphon and drum
Initial Investment

$ 25,000
$ 3,000
$ 2,000
$ 5,000
$ 5,000
$ 40,000

Expenses
Cost (Oil,Filter)
$
Rent & Overhead $
Salary
$
Total Expense
$

120,000
40,000
60,000
220,000

Year 1 Data Analysis

Sales
Expenses
Net Profit
Winning formula
Initial Investment $40000
Sales $240000
Expenses $220000
Net Profit $20000
50% ROI in one year

$ 240,000
$ 220,000
$ 20,000

Cyclops Strategy for Year 1

Potential market study
Study the service of quick drive-through oil and oil filter change
Low startup investment
Own design of high speed injection and drainage pump
No advertising expense
Stock of most of popular cars oil filters only
Negotiated with oil supplier for oil @$2/litre
Reduction in time of drain-and-fill operations to average of 8 minutes
Lean trainee workforce each@$30000/year

Possible expansion strategies for

Cyclops Company
Expansion Strategies:
Own service chain The pros are direct profit realization, control over
the company, high growth, independent. The Cons are high
investment cost, high advertisement cost among others.
Franchise model The pros are less investment, shared royalty. The
Cons are dependent, less control.
Strategic Alliance The pros are less investment cost, shared revenue.
The Cons are dependent, less control.

Possible strategies for Cyclops

Company
To increase sales and Revenue the possible strategies

can be

implemented:
Advertising
Increase in capacity for the existing facility
Increasing the capacity of service station and then advertising
Further decreasing drain-and-fill operations from 8 minutes
Providing other car related services in the service station
Tie up with retail stores and fast food stores to open their business in
the vicinity of service centers

Ranking
1.
2.
3.
4.
5.

Expansion (Franchise model)

Advertising
Increase in capacity for the existing facility
Further decreasing drain-and-fill operations from 8 minutes
Providing other value added service at the service centers

Ranking Reasons
1. For aggressive expansion and less capital requirement Franchise
model is the best option
2. After having a series of service center advertisement is required to
get attention of the customers
3. As the number of car services goes up increase in capacity for the
existing facility for reducing the waiting time
4. To decrease the turnaround time in service center.
5. Value added service for increasing the revenues and also keeping
the customer engaged