Strategic Management at Jiffy Lube

Strategic Management at Jiffy Lube

Jiffy Lube is an American leader in the automobile service industry and they basically operate through franchising operations. "For nearly 3 decades, Jiffy Lube® has been an integral part of the North American driving experience. Wherever you are, whatever vehicle you drive, you'll find nobody does it better then Jiffy Lube®. We're committed to you with fast, quality preventative maintenance service to help preserve the health of your vehicle" (Official Website of Jiffy Lube, 2007). A current thought forwarded by the company's management is that of expanding their business onto an international scale, namely to provide services to the countries in the European Union. In this order of ideas, they have two viable alternatives: a global approach and a multi-country approach, each with advantages and disadvantages.

Global Approach

The primary characteristic of a global approach is that it would address all countries of the globe.

Advantages of a global approach

The main benefits of a global approach are retrieved from the globalized aspect of the operations and could be succinctly presented as follows:

increased access to natural and man-made resources across the globe, including capital, labour force and various technologies, which could all lead to an improvement in the quality of the services offered by the automobile service company throughout the world but also within the United States better possibility to apply the theory of comparative advantages, which states that each country possesses certain resources that make it better qualified to produce a certain type of good, and then exchange it onto the international market to purchase items for which they encounter difficulties in producing; this particular idea could for instance be applied to get cheaper oil from the Middle East or superior technologies from India increased access to international financial resources and the possibility to finance one subsidy with the profits registered by another facility across the globe

Disadvantages of a global approach most of the advantages above are common in the case of manufacturing companies which have an actual product to sell most of the advantages above are common to companies that operate their own subsidies, rather than franchising them; franchising allows a certain level of independence between global facilities and does not always imply that the gains registered by one will be used to finance another facility or even the mother company global operations and the subsequent comparative advantage has the downside of negatively influencing the fruitful facilities, which have to support (including financially) the ones which fail to retrieve the desired outcomes global franchising also has the capacity to negatively influence the U.S. corporation; say for instance that a Jiffy Lube subsidy in France is involved in a scandal; however the managements are different, the scandal will reflect upon the entire corporation, and consequently the American facility

Multi-Country Approach

The advantages and disadvantages of a multi-country approach are rather similar to those of a global approach, with the particularity of reduced numbers of participants. Aside from the already mentioned features, the advantages and disadvantages of a multi-country approach can be summarized as follows:

Advantages of a multi-country approach increased possibility to only select those countries which fit a certain set of demands, such as reduced number of population living below the poverty line, increasing automobile sales or increased standards of living the limited number of partner-countries, carefully selected, can easily consolidate their position and enforce the capabilities of Jiffy Lube

Disadvantages of a multi-country approach reduced diversification and the possibility that most of the partner-countries fail to retrieve the desired outcomes, leaving no alternative facilities to reduce the loss the selected countries could strengthen their position and be accused of monopolistic operations and increased control over resources