Case Study No. 1- Sammy's Motor Repair Shop: In the Beginning

At age 26, Samuel Bugarin established his motor repair shop along the highway, one kilometer away from

the commercial district of his town. He holds a degree in Mechanical Engineering and just after graduation,

he started working as an apprentice in his uncle's motor repair shop. He prodded his uncle to expand his

business but his advice was not heeded.

He thinks that the motor repair business is growing steadily. He noticed that the new car models are operated

with electronic systems installed in them. Sammy believes that repair and maintenance of the new car models

cannot be served adequately by repair shops existing in the area.

Sammy immersed himself into learning the care and maintenance of electronic installations in cars. He also

acquired the skills necessary for maintaining efficient performance of cars. When he thought he already

possessed the required training, he decided to become a motor repair shop entrepreneur.

Sammy gathered relevant information he thought would be necessary in the preparation of a business plan.

He considered hiring at least five experienced mechanics. He started constructing the building where his

office and service facilities will be housed. He made sure that customers can contact him through the

telephone he installed in his office. In addition, he maintains a hand phone so he can serve those whose cars

get stalled somewhere.

Sammy stuck to his business plan and business was very encouraging during the first three years. On the

fourth year of his operation, a new motor repair shop opened just across the highway from his shop. It was

inevitable that some of his customers would move over to his new competitor. Sammy did not anticipate the

threat now confronting his business. He was already entertaining the idea of putting up another shop at the

other end of the commercial district. But now, it seems that his dream of opening another shop is slowly

drifting away. With the entry of the competitor, he is beginning to lose faith in the usefulness of a business

plan. He is apprehensive and he wants quick advice.

Guide Question:

1. If you were a friend of Sammy, what would you tell him?

2. Is Sammy's situation hopeless?

3. What did Sammy miss regarding his business plan?