1.Concise Overview of The Industry
As for Arthur P, the industry he is about enter is car wash and auto detailing. The operations of the industry including not only clean and wash all kinds of vehicles such as cars, vans and trucks but also polish vehicles to make them be more smooth than normal through professional machines and detergents. In U.S., it consists of four different kinds of washing facilities like full-service washes, exterior conveyor washes, self-service car washes and automatic clean in the bay (Car wash industry statistics and trends, 2017). The development of car wash & detailing has gone through long history and experienced steady climb over the 5 years to current year. According to the data from United States Census Bureau (2018), more than 100,000 car wash machines used in the United States with approximately 6 billion dollars spent by US residents a year in car washing activities. In totally, the number of businesses in US has grown by 1.6% in the current year. According to industry analysis, we can pay attention to the economic condition of this company and its future condition.
2.Porter’s Five Forces Model
This model can help us analyze the competitive conditions which would influence profitability in an industry. As for the rivalry among competing firms, we already know that the car wash and detailing industry has no absolute control by one or more big companies. Therefore, the competition less likely come from rivalries among competing firms. Potential development of substitute products and bargaining power of suppliers are also not as critical as bargaining power of consumers. Moreover, the potential entry of new competitors would be an essential force, because the spend of professional washing machines would be so high that make the start-up cost not affordable for new entries.
3. Industry Forecast
(Car washes revenue in the U.S.2010-2022(n.d.). Retrieved from www.statista.com/forecast.)
According to the statistics from profession institution, we can see that the industry experienced steady growth over the past years and already reached approximately 10 billion dollars revenue in current year. Therefore, we can see a good prospect for development in the future.
4. Foreseeable problems impacting the business and summarization.
The industry is facing with not only critical threats but also opportunities that influence the business. The continually rising prices of gas make consumers more likely use public transportations rather than own cars, which reduce the demand for car wash and auto detailing. However, the rising disposal income of American residents shows good opportunity for the industry, because it means consumers have more disposal money to spend on these services. In summary, the industry has overall good benefits for Arthur P to invest although it also confronts with some threats and obstacles.