Module Final Paper Final Edits

8/4/2019 Module Final Paper Final Edits

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Managing Resources: Week 7

Final Project Paper

Asbury Automotive Group: In depth financialanalysis

Figure 1: Front Picture (courtesy of Asbury Automotive Group, Inc.)

Inga WillisStudent ID: 15703635

Word Count: 4,493July 22, 2011


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Table of Contents

Executive Summary .41. Accounting Function ....51.1 About Asbury Automotive ..51.2 Key Resources .61.3 Stakeholders..61.4 Corporate Governance ....61.5 Role of Accounting ..61.6 Organization of Accounting .72. Financial Accounting Analysis ...82.1 Financial Statement Analysis ..82.2 General Aspects of the financial Statement..12

2.3 Strategy of ABG...122.4 Competition..122.5 Social and Ethical Responsibility.133. Management Accounting Analysis...133.1 ERP System ...133.2 Budgeting .....143.3 Pricing ......154. Financial Management Analysis...154.1 Financial Management Strategy...154.2 Capital Budgeting.....154.3 Success of the Financial Management System....16

5. SWOT Analysis, Suggestions and Conclusion............16Reference Listing.19

Final Project Paper Inga S. Willis 2


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Index of Tables

Table 1: 8Table 2: 9Table 3: 10Table 4: 10Table 5: 11

Table of Figures

Figure 1: Front PictureFigure 2: Corporate Structure - 6Figure 3: Free Cash Flow Target - 8Figure 4: Dividend Development - 9Figure 5: Detailed Client Ratings- 12Figure 6: Kellys Blue Book- 15Figure 7: Drivers of Gross Profit-17



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1 Executive Summary

This report will provide an overview of ABG with respect to their financial, accounting , andstrategic positioning. Financial statements as of 31 December 2010 as well as previous yearsperformance comparisons have been analyzed in an effort to clearly determine current companyposture and make future recommendations.

In addition to the financial overview, a SWOT analysis and consideration of the Five ForcesModel are discussed with regard to the market positioning of ABG and future outlook.

The financial statements of ABG are dispayed in chapter 3 of this report and are illustrated in thechapters tables.

Recommendations Include:

1. acquire low cost and green brands that are industry leaders in producing battery or hybrid powervehicles.

2. Due to the impact of Tokyos natural disasters, which caused inventories to shrink and impactedthe import of vehicles, it is suggested to diversify the domestic brand portfolio.

3. Explore expanding to international territories4. implement community programs of social responsibility



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1 Accounting function in ABGAbout ABG

Asbury Automotive Group, Inc. (NYSE: ABG), is an automobile retailer headquarteredDuluth, GA, employing roughly 7,000 people throughout the United States of America.Founded in 1995 by a group of investors, the company aggressivelyexpanded its corporate management team in 1999 to move toward broaderretailing platform. The venture, backed by Toronto investment group OnexCorporation, was a means to build a chain of "megadealers," or automobile

retailers (ABG, 2011). Asbury Automotive is not a car dealer, it is an umbrellaretail business housing a diverse portfolio containing new and used cardealerships, service, financing and insurance.

ABGs mission is to merge multiple visions, the industry knowledge ofhundreds of veteran car dealers, the business savvy of world-classautomotive and retailing executives, and aspirations of successful dealerswe'd like to acquire (ABG, 2011).

ABGs objective is to foster further growth by the continued acquisition of multi-locationdealerships in prospering US metropolitan areas. Its ten regional "platforms," or dealership

groups, are locally branded and comprise 120 dealerships in ten states: Arkansas, California,Florida, Georgia, Mississippi, Missouri, North Carolina, Oregon, Virginia, and Texas. ABGdoes not currently have international territories, and each of their regional dealer groups arebranded as individually owned dealerships, catering to their own target markets. Managers aregiven the charge of running the individual dealerships as their own business, encouraged to makedecisions and their customers are considered their own.

There are several competitors within the automotive retail industry, and after an impressivesurvival of the US economic downturn, ABG is currently the 6th largest auto retailer in thecountry. With a major focus on continued downsizing and eliminating less profitable facets ofthe business, ABG maintains a strong focus on dealership acquisitions and centralizing

operations.

The Condensed Corporate Structure is illustrated below:



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Figure 2: Condensed Corporate Structure (ABG, 2011)

The Corporate structure of ABG has undergone a major shift, reducing corporate staff by 25% as

the company has continued to aggressively become more lean in operations. Leanness is abusiness philosophy focused on reducing cost while continuing to improve productperformance. Firms striving to be better, faster, and cheaper than their competitors arecharacteristic of a "lean" enterprise (Comm & Mathaisel, 2000). This adaptation is a snapshot ofmany drastic changes made in a valiant effort to save a sinking ship.

1.1 Key Resources

The key resources of ABE include human capital and the immeasurable contribution of goodwill.Goodwill covers attributes such as the skill of the workforce and the relationship withcustomers (Atrill & Mclaney, 2011). The model of acquisition that ABE has sustained often

purchases dealerships while allowing the seller to maintain the management position of thedealership. This posture ensures that the longstanding customer relationships are maintained andthat each regional business continues the thumbprint of proven best practices. The brand of theproduct portfolio has been strengthened over time and the assurance of quality to customer isparamount. Brand image and the quality of the product, that have been generated internally bythe business (Atrill & Mclaney, 2011), are key resources for ABE as well.

Stakeholders

The key stakeholders for ABG are its customers who seek to purchase new and used qualityvehicles, receive efficient and cost effective service and competitive financing options. ABGsEmployees seek stable employment and contribute the human capital necessary to ensure theperpetuity of the organization. ABGs owners maintain the objective of strong financialpositioning, ensure positive returns on investment and offer optimal stockholder position.Stockholders simply want to receive positive returns on investment. Outside lending institutionsseek to provide lines of credit for expansion, development and system improvements and torepaid based up agreed terms.



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Corporate Governance

Defined as Matters concerned with directing and controlling a company (Atrill & Mclaney, 2011),ABEs Board of Directors adheres to the poicy that corporate governance is to ensure that wemaximize stockholder value in a manner consistent with legal requirements and the higheststandards of integrity (ABE, 2011). The Board has adopted and adheres to corporate governance

best practices, which are continually reviewed in alignment with Delaware law (the state in whereABE is incorporated), the listing standards of the New York Stock Exchange and SEC regulations(ABE, 2011). These guidelines are in line with the authors expectations and the consistentmodification of them are encouraging.

1.4 The Role of Accounting

ABE has a separate financial reporting department. By the retail stores working as independententities, there is a natural separation between corporate financial reporting and managementaccounting. As a result of successful ERP implementation, the financial accounting division is

able to now produce more time sensitive and detailed information to assist managers and VPsmake pertinent decisions based upon current company performance.

The accounting role is now more efficient, in providing the accountants with a snapshot of individual andgroup retailer performance. By moving to a centralized approach, accountants are now able toproduce reports for upper level management based upon financial position. Each stores operatingexpenses and overhead can now be tracked in real time which has greatly improved the accountingefficiency and its role in the firm. ABG underwent a general ledger (GL) conversion in 2010,resulting in all stores being on a common ledger as opposed to the former process which seperatedeach dealership and fragmented informational access.

A more detailed overview of the financial and managerial separation is provided in Chapter _

1.5 Organization of Accounting



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The financial structure is as follows:

Figuere 3: Financial Structure (ABG, 2011)

ABG recognized after the ERP implementation of their current software ADP, that they couldnot only centralize accounting, but in addition billing and payroll could be centralized byadding an additional module. The transition to the ADP system was predicated by thefailure of the Arkona in December of 2008. ABG continued to search for the right fit insoftware choices which landed them with ADP in 2011. The software has successfullystreamlined communication between multiple tiers of the firm and has fully integrated theirsystems.

The recent and effective change to the ADP system should only be changed if ABGs needs are no longereffectively met and all options of module additions have been explored.

2. Finacial Accounting AnalysisThe financial statements of ABG will be assessed and weighed against performance of theorganization.

2.1 Financial Statement as of 31 December 2010 (with comparison of 2008-2009)



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Table 1: Condensed balance sheet of ABG (ABG, 2011)

Figure 4: Illustrates the profitability of ABG from 2008-2001 (ABG, 2011)

As reflected above, in the fiscal year 2008, the automobile industry was crippled as a result ofUS economic downturn and ABGs working capital decreased by 50%. This decrease placedABG in severe financial hardship, and in the 2008 external audit performed by Deloitte andTouche, ABG was found to have a future outlook of going concern.

Going Concern is defined by Deloitte and Touche as the Corporations recurring losses fromoperations, stockholders deficit, and inability to generate sufficient cash flow to meet itsobligations and sustain its operations raise substantial doubt about its ability to continue (ABG,2011).

ABG took the following steps to survive the economic downturn:

Restructured credit facilities

Endured the bankruptcies of GM and Chrysler brands

Sold multiple storesPlaced a hold on all acquisitions

Suspended $29 million in dividend payments

Reduced capital expenditures by 75%

Decreased new inventory by $255 million

Eliminated 1,500 field positions

Reduced corporate staff by 25%



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Relocated headquarters from NYC to Atlanta

Reduced operating expenses by over $100 million

In 2010, working capital increased 13% and as a result, the firm gained more financial flexibilitytoward investments which may include the purchase of additional franchises, buying down

exising debt or buying back exisiting shares of stock. Based upon this increase and investmentoptions ABG in a current financial position of solid growth.

Table 2: Detailed Liabilities (ABG, 2011)

ABG has substantial obligations of debt. As of December 31, 2010, the total debt was $550.7million, including assets held for sale. In addition, ABG has the ability to obtain additional debtto finance acquisitions, purchase of property and capital expenditures which borrowings are

subject to the terms of existing revolving credit facilities (ABG, 2011).



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Table 3: Detailed income (loss) statement (ABG, 2011)

Due to steps taken to ensure a more lean approach to business, net income increased 50% from2009 to 2010. As previously mentioned some of these adjustments included decreasingworkforce and relocating headquarters to Atlanta, Ga. These two modifications along withseveral others ultimately created a net savings of nearly $100 million dollars in operatingexpenses.

Table 4: SGI detailed expenses (ABG, 2011)



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Table 5: Detailed Statement of Cash Flow (ABG, 2011)

ABG was on the cusp of bankruptcy in 2008 with a net income loss of $343.7 million, yet by 2009reflected an increase in net income of 266% placing the company back on solid financial ground.2009 displays a strong performance as well, with an additional 64% increase in net income.

Profitability trends indicate that ABG has made a strong transition to a much leaner, moreefficient firm doing much more with less.

New Vehicle Revenue includes sales of new vehicles and lease transactions arranged by ABGdealerships with third parties. Fixed period lease terms have created a trend of customersreturning to ABG more frequently than non-lease customers. Lease ending vehicles are also anadditional source for the ABG used vehicle inventory. Because leased vehicles typically remainunder manufacturer warranty for the term of lease, ABG generates additional parts and servicerevenue by providing warranty repairs.



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Used Vehicle Revenue includes sales to individual retail customers and the sale of used vehicleinventory to auction. The results of sales are measured by unit volumes and gross profit pervehicle sold. Used vehicle sales have historically had higher gross margin sales than the newvehicle inventory and accounted for 225 of total revenues and 14% of total gross profit for thefiscal year ending on 31, December, 2010.

2.2 General Aspects of the Financial StatementABG is audited quarterly by independent firm Delloitte and Touche. The financial statementsprovide a wholistic view of operations, profits and losses.

2.3 Strategy of ABG

The successful positioning of ABG has been earned through a combination of natural expansionand strategic acquisitions illustrated in the following timeline:

Figure 5: Aquisition trends (AGB, 2011)

The ability to continually acquire dealerships ensures rapid expansion. ABGs leadership is clearthat any expansion must represent existing footprints and brands. In addition, where lessprofitable dealerships have been sold, ABG often retains the property ownership and securesadditional revenue streams from issuing leases (ABG, 2010).

2.4 Competition

Currently ranked as the 6th largest auto retailer in the country, ABG competes amongstvarious strong and diversified brands.

Sonic Automotive- a Fortune 500 company and member of the Russell 2000Index, is among the largest three automotive retailers in the United States.Operating over 100 dealerships spread across 15 states in 26 major



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metropolitan markets. Representing approximately 30 different automotivebrands with the majority of our dealerships being luxury and import brands.

Auto Nation (AN)- the largest automotive retail company in America. With370 dealership franchises in 17 states, AN received the 2002 Global

Shareholder Value Award which recognizes excellence in shareholder valuecreation over one and three-year periods among, manufacturers, suppliersand retailers. In 2007, AN introduced their fuel efficient E-Vehicle programand in 2011, AN stock reached an all time high of $35.76(www.corp.autonation.com).

Penske Automotive Group (PG)- is the second largest publicly tradedautomotive retailer in the United States as measured by total revenue. As ofDecember 31, 2010, PG owned and operated 172 franchises in the UnitedStates and 151 internationally (www.penskeautomotive.com). PG continuesto expand its international territories, strengthening its ability to prosper in

multiple economies.

2.5 Social and Ethical Responsibilities

Aside from the dealership level of operations and adhering to the legal emmissions limits, andthe corporate governance adherance, there is no program in place targeted at communityimprovement or environmental awareness. This is an area that ABG has room for greatimprovement by embracing green initiatives, and establishing a community service platform.

Considering the proven health effects of emmissions, ABG could position itself and the firstGreen automobile retailer agressively providing community initiaves that provide health,

wellness and environmental target programs to its customers communities.

Simple adherance to government and emmission standards does not equate to the level of socialresponsibility embodied by a business powerhouse such as ABG.

Chapter 3: Management Accounting Analysis

3.1 ERP System

Ideally, the enterprise resource planning (ERP) system is provides integrated programmingsupport for manufacturing, finance and accounting, sales and marketing, and human resources.An ERP system helps the different parts of the organization communicate by sharing data,reducing costs, and improving the overall management of business processes.In spite of theirnumerous benefits when successful, at great expense to firms, many ERP systems fail (Aladwani,2001) and ABG was apparently no exception.

The first ERP effort was the Arkona software system in December of 2008, which ABG hopedwould centralize their operation, making them more efficient and cost effective, but proved to be

http://www.penskeautomotive.com/http://www.penskeautomotive.com/


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ineffective in going paperless and communicating between multiple departments. The Arkonasystem was implemented company wide at great expense, yet the glitch- filled transition provedinefficient and incapable of handling company needs. Timing could not have been worse, as2008 was when ABG hit rock bottom. After the firing of the CIO one year later, ABG movedtoward implementing the ADP system under new IT leadership.

Prior to the success of the ADP implementation, each acquisition at first would have its ownindividual accounting system which proved to be problematic because the various systems couldnot communicate nor exchange information. Data was frequently lost as well as time in bridgingthe communication gap, and in essence, the systems were not congruent. In an effort tostreamline and adapt to the struggling US economy and to make reporting a fluid process, ABAswitched to the ADP system in 2011, which allows accounting staff at all levels to uploadmonthly inclusive statements that are accessible to all. In an attempt to centralize billing, ABGtransitioned to a paperless billing system that placed the responsibility with a company wideaccounts payable system in one location. This greatly improved the accuracy of reporting due tothe collective transparency achieved by the transition. An additional issue existed in accountspayable where due to the high number of stores, receiving individual bills from each store was inefficient.Centralization was again the solution, yet an overwhelming number of invoices began flooding the centraloffice. ABG reached out to vendors such as Auto Trader that could provide one consolidated bill for allnational accounts. This improvement was implemented as a result of the accounts payable staff

expressing the need for a streamlined billing approach (ABG, 2011). ADP was even more expensive,yet over time has proven a beneficial investment.

In additon, ADP also centralized payroll systems. The previous system (UltiPro) was a standalone billing system that sent salary information seperately to the corporate office, preventingmaximum efficiency. Hyperion remains the accounting system for corporate office, it is areporting system for upper level use only, and receives and inteprets the information from ADP.

ABG credits successful ERP implementation with migrating them to a common dealermanagement system (30% of stores), implementing a national CRM system(100% of stores), creating the ability to share best practices across stores,re-launching updated, customer focused store websites (95% of stores) andautomating payment processes and bank and inventory reconciliations (ABG,2011).

3.2 Budgeting

After successfuly survivng near fiscal ruin, ABG made adjustments to budgeting proceedures as well.Currently, the majority of budgets utilized are for the advertising arm of the firm. In the retail automotive

business, advertising is critical. ABG takes a flexible budgeting approach towards its advertising needs,which provides organizations with a picture of current expectations as the yearevolves. This is a useful tool to compare changes in performance levels aswell as expectations throughout the year (Halliman, 2006). The ability tomodify the budget as the advertising changes are taken into consideration,comparing actual results against budget expectations are critical to futureplanning and allows an organization to evolve in the moment (Halliman,



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2006). Advertising costs, methods and needs are ever-changing, and theability for ABG to modify and adapt as needed is greatly beneficial.

ABG is not a target based budgeting company. It is not built upon traditionalcontrol budgeting but rather gives branch managers the authority to run,

problem solve and make decisions on their branches (ABG, 2011). UK basedBeyond Budgeting Round research director Jeremy Hope asserts thattraditional target budgeting is archaic and irrelevant in todays world mainlybecause they encourage dysfunctional behavior by encouraging anunethical approach for managers to meet the numbers (Hope, 2003). Someof the organizations now supporting the BBRT are Volvo, Coors and Philips.The beyond budget approach argues that a new model is needed thatempowers front-line management to make decisions in alignment with themodern business world (Hope, 2000). This approach best aligns with ABGsapproach and practices.

Handelsbanken, a Swedish firm in existence since 1972 that successfullyoperates absent an annual budget or target setting agenda. Handelsbankenhas dominated its competition with an approach of Branch Managers notbeing controlled but rather encouraged to take control of their facet of thebusiness (with no target initiatives), higher level managers only interfere indecision making where deemed inarguably necessary, and managers aregiven the freedom to act. The organization has on online informationinterface; available to all group managers (all levels) that measuresproductivity and branch profitability. The culture designed gives individualbranches the ability to own their own customers and the firm repeatedlytops customer service surveys (Hope, 2000).

ABG follows the approach and design of Handelsbanken, in that branch managers within all ten regionshave decision making power, their customers are their own, branches are individually marketed andunless there is an issue that cannot be rectified on the branch level, corporate does not intefere. With thesuccessful ERP implementation of the ADP system, accounting staff on multiple levels have real timeaccess to progress and status, timely reports and manager concerns. Each employee is provided with acomputer and internet access, assisting in the efficient approach of real time reports (ABG, 2011).

3.3 Pricing

Figure 6: Kellys Blue Book



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In 1926, Les Kelley published the first Blue Book of Motor Car Values. He showed factory listprice and cash value on thousands of vehicles. Les Kelley effectively made the Kelley Blue Bookthe authoritative source for car values and is still the most major reference to date(www.kbb.com). Market value, economic trends and marketing impact also play a role inpricing.

Chapter 4: A financial management analysis of the organisation

4.1 Financial Management Strategies

ABGs financial strategy is to consistently become as lean as possible, building a platform of more byusing less. The organization has successfully come from the pit of financial ruin to a top contender. Thereis something to be said for the relentless reconfiguring, downsizing and overhauling that it took to

eliminate the Deloitte and Touche finding that ABG had a future outlook of going concern. It isfurther evident that the benefits of successful ERP imlementation have assisted ABG in findingsolutions and an interface that make it more fiscally efficient.

4.2 Capital Budgeting

Capital allocation is considered and undertaken as follows:ABG invests in business and technology, maintains capital expenditures and IT infrastructureinvestments at approximately $35 million a year. Stock buyback, opportunistically returningvalue to shareholders utilizing board approved $25 million share repurchase authorization andacquisition in existing geographies to maintain targeted brand mix. With this approach ABGsuccessfully made the following capital investments: Invest capital where risk-adjusted returnsare expected to exceed our cost of capital

Generated a $26 million pre-tax gain on the sale of heavy truck business

Sold sub prime consumer loan portfolio Paid down $7 million in mortgage debt Spent $17 million on property lease buy-outs with another $14 million under contract Repurchased $4 million of Asbury common stock

In 2010, ABG made the strategic decision to sell a non- core business andentered an agreement to sell their heavy truck business. The strategy was toredeploy capital into the core automotive retailing business.Will be a pure play super regional automotive rIn addition, ABG acquired five franchises

(Jaguar,Lexus,Porsche,Toyota,andVolvo) with estimated annualized revenuesof $125million. This purchase expanded firm presence in Greenville, SC, amajor and strong market within the existing geographic footprint. As a resultof the Greenville, SC acquisition and Heavy Truck divestiture, Asburyanticipates an increase in annualized pre-tax income from continuingoperations of approximately $2 million (ABG, 2011).

http://www.kbb.com/http://www.kbb.com/


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4.3 Success of the financial management system

Flexible adverising budgets, identying and investing in an effective ERP software system, as well as anon targeted approach to budgeting give ABG a transparent and communicating financial management

platform of success. Further, the commitment to the Lean philosophy identified by Comm & Mathaisel,2000 displays a constant pattern of elimination of non core facets of business as well as reductionof operating expenses. Although it is evident that ABG suffered tremendous financial hardship,what is most notable is the resilience with which the firm rebounded even after their auditordetermined their future unlikely. The impact of the ADP system across all levels and platformsof ABGs organizational structure proves that the ability for a firm to fiscally communicate inreal time on all levels is paramount to success. Overall, the financial system in place appearssound and evolving to suit company growth, demand and needs.

Chapter 5: SWOT analysis, Suggestions and Conclusions

The SWOT analysis of ABG provides insight toward Strengths, Weakenesses, Opportunities and Threats.

In addition, Porters theory of 5 forces are integrated into the analysis as well. Conclusions are drwanbased up upon total report findings and suggestions made based upon conclusions.

Strengths

-This company can endure hardship that would obliterate most businesses-Human capital-felexible budgeting approaches-branch control as opposed to targeted budgeting

Additional Strengths:

Figure 7: Drivers of Gross Profit

As indicated in table 7, parts and service sales accounted for 46% of revenue but for 80% overall grossprofit. Although 54% of revenue was generated from the sale of new vehicles, these sales only represent



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20% of the gross profit. Operations provide a diverse base of revenue which mitigates the fluctuation ofnew car sales volumes. Used vehicle sales, finance and insurance (F&I) and service sales account for 40%of revenue but generated the majority revenue at 80%. These percentages indicate that ABG is not soleydependent upon one facet of its business to generate profit, but rather a combination of services andproduct offerings. This is also a strength.

Weaknesses-The fact that one of AGBs main competitors continues to expand their international footprint and theirgreen initiatives, places ABG behind the innovation curve.-There isnt an advertising angle that seperates ABG from its competitors

Opportunities-Green inventory aquisitions-International aquisitions

Threats:

-Internet auto retailers-Possibility of being bough out-Competitors being more agressive toward international markets-Competitors being more aggressive toward green vehicle acquisitions-Alternative fuel sources-Continued rise in petroleum prices-Buyers moving toward greener vehicles-Buyers moving toward economy cars

Parallell to the SWOT analysis are Michael Porters five competitive forces including rivals, customers,potential entrants and substitute products.

RivalryABG has major rivals that provide the same service, with equal or more resourcesand more expansiveterritories. High Rivalry is known possibly to limit the profitability of an industry and drive downprofits depending upon the intensity of the rivalry. According to Porter, rivalry is particularly destructiveif it gravitates to pricing because price competition transfers profits directly from an industry to itscustomers (Porter, 2008).CustomersABG has establishes customer loyaly and a pattern of repeat buyers, but in economic uncertainty, thatpattern can not be depended upon. Perhaps a further diversification of ABGs mixed brand portfolio toinclude economy cars, which it currently doesnt would give ABG an appeal to less luxury inclinedcustomers.

Potential EntrantsMichael Dell was looking to buy ABG a few years ago and the fact that the entire portfolio can bepurchased places the possibility of entrants at a premium price but ABG could easily become an

aquisition for an investor in the righ position (ABG, 2011). With 120 dealerships in ten states(Arkansas, California, Florida, Georgia, Mississippi, Missouri, North Carolina, Oregon, Virginia,and Texas) ABG has an attractive and proven portfolio. Because automotive retailers areconglomerates, as opposed to single dealerships, the only way that entrants enter as real threats iswith multi franchised dealerships and advertising innovation.



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Substitute Products

Within the luxury brands, quality craftmanship in automobile is honestly a matter of preference. Thestrategic dealership aquisitions of ABG have indeed streengthened their portfolios, yet haventdistinguished them completely from their competitors. Automobile retailers purchase dealerships in

massive quantities and each possess a brand mix to satisfy buyer preference. AMG can be imitated and isbeing imitated by other firms. It is a successful firm yet not one of rareness.

Conclusion and Suggestions:

ABG is a company of enduring qualitites and a financial portfolio that continues to grow. Their approachto a mixed brand, regionally marketed brand portfolio has postured it as a contender. The non targetedapproach to budgeting and strong corporate governance have created a culture that rewards performance,encourages decision making on the dealership level and continues to grow through strategic acquisitionsthat expand exisiting footprints. The investment in a successful and well aligned ERP has not onlyincreased efficiency overall, but it has allowed all facets of the firms accounting levels to share and

exchange information in real time.Due to the consistent rise in fuel prices and increasing emissions regulations, it is suggested that ABGconsider the following in their aquisition strategy: acquire low cost and green brands that are industryleaders in producing battery or hybrid power vehicles. The US Government has mandated that domesticbrands create more fuel efficient vehicles and alternately powered vehicles such as hybrids.

Due to the impact of Tokyos natural disasters, which caused inventories to shrink and impacted theimport of vehicles, it is suggested to diversify the domestic brand portfolio. It is further suggested that inan effort to be more environmentally and socially active, ABG add a social responsibility target to theircorporate governance committees.

One of the keys to success as a business is being able to survive a storm, reinvest in the business,

contribute to the supporting community and change with the times. ABG appears to be well on its way todoing all of the above.

References:

Adel M. Aladwani, A, 2001, Change management strategies for successful ERPImplementation, Business Process Management Journal, 7, 3, pp. 266-275, Business SourcePremier, EBSCOhost, viewed 12 July 2011.

Asbury Automotive Group, inc., 2011. Annual Report 10k. [online] (Updated )Available at:http://www.asburyauto.com [Accessed 22 July 2011].

Autonation Automotive, inc., 2011. Annual Report [online] Available at:www.corp.autonation.com [Accessed 21 July 2011].

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Atrill, P. & McLaney, E. (2011) Finance and accounting for managers.Laureate Online Education custom ed. Harlow, UK: Pearson CustomPublishing.

Barney, JB 1995, 'Looking inside for competitive advantage', Academy of

ManagementExecutive, 9, 4, pp. 49-61, Business Source Premier, EBSCOhost, viewed 17July 2011.

Comm, C, & Mathaisel, D 2000, 'A paradigm for benchmarking lean initiativesfor quality improvement', BENCHMARKING -BRADFORD-, 7, pp. 118-127,British Library Document Supply Centre Inside Serials & ConferenceProceedings, EBSCOhost, viewed 16 July 2011.

Hallinan, E 2006, 'Budgeting and Cost Control', Reeves Journal:

Plumbing, Heating, Cooling, 86, 2, pp. 24-26, Business SourcePremier, EBSCOhost, viewed 4 July 2011.

Hope, J, (2003) 'Hope abandons budgets', New Zealand Management, 50, 11,pp. 10-11, Business Source Premier, EBSCOhost, viewed 8 July 2011.

Hope, J, & Fraser, R (2000), 'beyond budgeting', Strategic Finance, 82, 4, pp.30-35, Business Source Premier, EBSCOhost, viewed 2 July 2011.

Jensen, MC 2003, 'Paying People to Lie: the Truth about the BudgetingProcess', European Financial Management, 9, 3, pp. 379-406, BusinessSource Premier, EBSCOhost, viewed 1 July 2011.

Kellys Blue Book, 2011. [online] Available at: www.kbb.com [Accessed 19July 2011].

Porter, M.E. 2008, The five competitive forces that shape strategy, HarvardBusiness Review, January: 23-41, Business Source Premier, EBSCOhost,viewed 22 July, 2011.

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Module Final Paper Final Edits