Delaney Case Analysis

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- RECOMMENDATIONS

Mr. Delaney should get an accurate accounting system for easy decision making. In line with this, the company shall always make sure that proper cost allocation take a big part of the financial statements since it help us identify the profitability of the company. But if he needs a price increase to stay in line with the competitors in the way of profit margin we think he should raise the prices of his service. We don’t think he needs to get rid or lease a portion of his business but he should find a ways to make it profitable.

We recommend continuing the business but increasing the price to be more competitive. He can consider hiring a marketing planner or the like to help him with the business. Coz even if he terminates the business, there will be a minimal change in the expenses of the company since most of the costs were shared cost from different department. The body shop may have low earnings, but the existence of that section there in the business may be one of the reasons why the other departments earn higher income. For a simple reason that it was already instilled to the mind of the people or the consumers that Delaney Motors offers complete package or service to the people, and in that way, with whatever issues their colleagues have, they will never hesitate to offer Delaney Motors. Thus keeping the body shop will give a COMPLETE “positioning” to the consumers that would never want them to visit another shop because they don’t have to. In that way, all they have to do is continue improving their service.