In 1991 Brett Davies proposed a strategic business plan to the Royal Automobile Club of Victoria ( RACV – Australia ). The premise of the business plan was to clearly demonstrate the advantages of reducing RACV’s infrastructure whilst simultaneously gaining revenue. In effect, the business plan was the strategic sourcing of a component of RACV’s roadside service.
The vehicle, as we know it today, was the battery service program. Whilst this cost down - revenue up strategy utilised the battery service program, the essence of the plan was based on a service model and not the product itself.
The success of the battery program within Club Assist now provides new business opportunities globally utilizing the same service model with other service lines and/or products.
Building an Innovation Advantage
Since 1992 the success of the RACV has now extended to approximately 70 motoring clubs around the world. The world economy itself has seen significant changes over this period. Globalisation and technology transformations have seen far greater competition within the automotive industry. Hence every motoring club has been placed under additional member and market pressures which, in effect, has made the strategic sourcing benefits even more attractive to clubs.
It is now opportune that Club Assist extends this strategic sourcing model, or “capability sourcing”, through other service and product lines, utilising similar economies of scale and best practice transfers achieved through the battery program.
Internally at Club Assist, the business has grown to a critical mass that demands more growth via innovative new markets. This risk diversity ensures less dependency on any particular product or service offering.
Strategic Sourcing
Motoring clubs have come to realise that greater focus on “capability sourcing” improves their strategic position by reducing costs, streamlining business processes and improving the quality of member service. Finding qualified partners to provide non-core functions allows motoring clubs to enhance their core capabilities in order to drive their competitive advantage in the automotive industry. |