Running head: SWOT ANALYSIS 1

Swot Analysis

Russel J. Mattson

BUS 210

March 20, 2011

Thomas H. Johnson
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Swot Analysis

The company that I choice to do a SWOT analysis on was Southeast Racing Parts; they

are a small North Carolina based auto parts brick and motor and mail order organization. They

want to remain small to offer unprecedented customer attention. Southeast Racing Parts wants to

become the premier destination for entry level and novice racing parts (Bplans.com, 2011).

The company will be an S corporation owned entirely by Tim and Molly Jones. They hope to

get into the growing motorsports market and stand out by focusing on the customer service.

They plan on being active in the racing community and deliver products quickly. The whole

time making sure they work with customers on a personal level (Bplans.com, 2011).

One of the biggest strengths of the company will be the experience that the owners have.

Between the two owners they have 30 years combined experience in racing. Southeast Racing

Parts has hired a CPA to handle the financial side of the company and to give advice on the

business management of Southeast Racing Parts. Since the owners have a lot of experience in

the racing community it will help them with picking what parts to have on hand to sell. They

plan on selling parts that are generic brands while also having the newest cutting edge racing

parts. A good strength to the company will be the goal of constantly looking for the next new

thing in racing parts to offer to their customers. Doing that and making sure that each customer

feels like they are not a number but an important customer will help ensure that Southeast Racing

Parts is successful. They do have distribution channels and sales worked out along with how to

market the company by using a wide range of methods and not counting on one method to do the

job. All of this should help them see a profit from month one.

The first weakness that I see is no human resource experience in the company. The

owners do not have any and plan on worrying about it when the need for human resources comes
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up. The second weakness that I noticed was that Southeast Racing Parts only has enough

inventory on hand to last for three months and the starting cash balance will not be enough

(Bplans.com, 2011). They need to find a way to get enough capitol for six months to a year of

operation. The next thing I saw as a weakness was no training program for new employees and

you really are not sure about how the leadership styles of the two owners. The distribution

channels are going to be a little behind since they will not have any electronic ordering in place

when the company starts out. The ease that customers have from ordering products online might

hurt them.

Opportunities in the racing market are good, over the last decade the market has seen a

25% growth. Last year the sport saw 385,000 people compete in organized auto racing. The

opportunity to sell to everything from parts that hard core stock racers use to parts for go carts

that kid’s race gives Southeast Racing Parts a chance to make sure they have a diverse product

line to sell. This will help them stay completive in the race parts market since they do not need

to focus on just one group. If they are able to train the employees to understand the importance

to treating the customers with the best possible customer service they will be able to stand out

from all the other mail order parts companies that are out there.

One threat to Southeast Racing Parts will be how the other parts companies in the area

react to a new company on the block. They will be setting up the location of the store in the

same area as one of their competitors. They will be charging a little more the larger companies

and counting on the fact that racers will change to them due to the better customer service. They

might be underestimating the other companies and what they feel each companies nice is. If the

other companies feel like Southeast Racing Parts is a treat they could really cut prices and sell

for much cheaper due to the fact they will be selling more then Southeast Racing parts does.
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Overall Southeast Racing Parts seems to have a good plan in place to become a

successful parts company. They will need to stay focused on selling the customer service they

provide and count on that bring the customers in. If they can win over the loyalty of some racers

and get them to place marking stickers on the cars they drive they might be able to get some of

the amateur racers to come in and buy from them also. They will have low over head when they

start and need to find a way to increase the amount of capital they have on hand to keep the

company running till they can build a large customer base. With the racing community growing

they have a good opportunity to get the company off the ground and see a lot of growth in the

first year alone. They need to make sure that they stay ahead of the other parts store to ensure

that they do not get behind on what the race community is looking for in the newest and coolest

parts.
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Reference

Bplans.com. (2011). Auto Parts Store Business Plan. Retrieved from

http://www.bplans.com/auto_repair_service_business_plan/executive_summary_fc.cfm