WESTERN UNIVERSITY CANADA
IVEY BUSINESS SCHOOL
BUSINESS 2257
COMPREHENSIVE CASE SUMMATIVE ASSIGNMENT
ASSIGNED: Thursday, April 8, 2021
(4 hours)
DEADLINE: Friday, April 9, 2021 at 3pm, Eastern Daylight Time
ACCEPTED UNTIL: Monday, April 12, 2021 at 3pm, Eastern Daylight Time
Instructions:
(1) Include your name, section and student number on your title page.
(2) This is an individual assignment. Communicating with other students is a violation of course and
university regulations.
(3) This is an open book report. Casebooks, readings and OWL resources are permitted.
(4) Calculators permitted.
(5) Dictionaries permitted.
(6) Read and follow the assignment rules on the next page carefully.
Hi-Line Auto Parts
(Cover page + Rules + Case = 16 pages)
Assignment:
As Jason Green, complete all necessary analysis and make whatever decisions required.
RULES FOR THE FINAL SUMMATIVE ASSIGNMENT
BUSINESS 2257 – 2020/21
1. Your entire summative report, including text and exhibits, must be prepared individually, in your own
words, without input or assistance from anyone else. This rule will be actively monitored and aggressively
enforced. Serious and lasting penalties will be issued to any student that violates this rule.
2. Maximum report length: 2,500 words of text in the report body (8.5 x 11inch pages), plus a maximum
of 6 pages of graphic or financial exhibits. All textual pages in the report should be formatted with one-
inch margins on all sides, single-spaced, Times New Roman, 12 point font, in MS Word. The report
should be written concisely and may include bullets. Headings for each new section are required. In
addition, page numbers in the upper right hand corner of each page are required.
• Length Penalty: The penalty for exceeding the word count or exhibit page limit is ten (10) marks out
of 100. Instructors reserve the right to increase this penalty for excessive violations. If the report is not
formatted according to the guidelines, instructors may choose to reformat the report and/or apply the
appropriate deduction.
3. All reports must be typewritten. The document must be submitted in .docx (MS Word) format. Reports
must be submitted as one single document. Use the cut and paste function to merge content if needed. When
submitting on OWL, please ensure your submission follows the required naming convention: Section
Number_Student Last Name_Student First Name i.e. 001_Smith_John
4. The student name, student number, instructor name and section number must be clearly indicated on the
front of the report as a title page. The title page will not be included in the stated page limit. No executive
summary is to be included in the report.
5. The report must be submitted electronically on OWL via the Assignment Submissions (Turnitin) tab by
the deadline of 3:00 p.m. EDT, Friday, April 9, 2021. The deadline applies to all students. Report
submissions will be accepted until 3:00 p.m. EDT on Monday, April 12, 2021 without penalty. You may
upload your report once, anytime between the release date and the acceptance date. You are responsible for
saving and backing up your files and submitting the co
ect file. Late Penalty: Ten (10) marks (out of 100)
will be deducted from the final report grade from any online submission received after 3:00 p.m. EDT,
Monday, April 12 and before 3:00 p.m. EDT, Tuesday, April 13, 2021. Another ten (10) marks will be
deducted for each additional 24-hour period thereafter. Absolutely no extensions.
6. Plagiarism is the submission of work that is in whole or in part someone else’s work, which you claim
as your own. Students must write their final summative assignment in their own words and use their own
exhibits. Plagiarism is a major academic offense (see Scholastic Offence Policy in the Western Academic
Calendar). Refer to the Business 2257 Course Outline for a definition of plagiarism and the course
plagiarism policy. Additionally, collusion is the collaboration with another individual in the preparation of
written work offered for credit. Collusion is regarded like plagiarism and is a major academic offense. The
Business Foundations department takes this policy and its consequences very seriously. Students may not
seek, accept, or provide consultation or advice in the preparation of the final summative report.
7. This case contains all the information that is required for you to complete the assessment. No outside
sources are required. For the purposes of this report, DO NOT CONTACT ANY PERSONS RELATED
TO THE CASE OR INVOLVED WITH THE COMPANY FOR ANY ADDITIONAL INFORMATION.
THIS WILL BE CONSIDERED AN ACADEMIC OFFENCE.
Hi-Line Auto Parts 20018/09 FW FW XXXXXXXXXX
FINAL SUMMATIVE ASSIGNMENT – HI-LINE AUTO PARTS
In April 2020, Jason Green, President of Hi-Line Auto Parts (Hi-line), was assessing his options after a year
of weak financial performance. Hi-line was an automotive warehouse located in Toronto, Ontario that
distributed automotive parts and accessories across Canada.
Green was hoping to retire in the next five years. As such, he was wondering what his exit strategy should
e. With the automotive aftermarket industry moving more online, he thought operating an e-commerce
platform would increase the value of Hi-line if he chose to sell the business upon retirement. Another option
he was considering was utilizing Hi-line’s vacant warehouse space to expand into the industrial rental
market. He thought this opportunity would be a great way to generate a steady income stream, without
equiring much of his time or effort. Green was eager to examine the two options and select the best one
for Hi-line moving forward.
THE INDUSTRY
The Automotive Aftermarket
The automotive aftermarket comprised the automotive services and parts businesses after the initial sale of
a vehicle. Aftermarket parts and accessories were used to replace original equipment manufacturer (OEM)
parts as they aged due to normal wear-and-tear of a vehicle. They were also used to repair vehicles after
damage from collisions. In some cases, aftermarket parts were stronger than OEM parts and could greatly
increase the longevity of both old and used vehicles. The service business (maintenance and repair of
vehicles) generated 45 per cent of total automotive aftermarket revenues, while the retail and wholesale of
vehicle parts and accessories made up the remaining 55 per cent.
The aftermarket supply chain consisted of manufacturers, wholesalers and distributors, retailers, and
independent repair and maintenance shops. Manufacturers in this industry offered very attractive volume
discounts in order to encourage wholesalers and distributors to purchase goods in large quantities.
Aging vehicles were a major trend affecting the automotive aftermarket industry. The average age for on-
oad vehicles had been increasing significantly across the globe. By the year 2022, the average age of a
Canadian passenger vehicle was expected to reach 11.6 years, a 12 per cent increase from 2017. Another
prominent trend affecting the aftermarket industry was e-commerce. Technological advancements were
transforming the market toward digitization, leading to automotive components and parts being sold online.
Hi-Line Auto Parts 20028/09 FW FW XXXXXXXXXX
It was estimated that the Canadian online automotive market would reach over $4.9 billion in revenue by
the end of 2020, up 30 per cent from 2019.1
Auto repair and service shops relied on minor maintenance such as oil changes and emission checks to get
customers in the door. However, the rise in electric vehicles was estimated to eliminate much of the routine
maintenance trips customers made. Unlike gasoline cars, electric vehicles required no oil changes and had
fewer moving parts that could
eak down. According to the Institute of Motor Industry, 97% of active
vehicle mechanics were not suitably qualified to work on electric cars. As such, two thirds of auto repair
and service shops were expected to see a mass decline in sales by 2040.
The GTA Industrial Rental Market
Toronto was the third largest industrial real estate market in North America behind Los Angeles and
Chicago. The GTA’s well-established transportation system and network of highways made it a strategic
location for businesses to operate. This was evident from the average net asking rental rate increasing to an
all-time high of $9.73 per square foot in the second quarter of 2020, up 64 per cent in the last five years.
The GTA was one of five markets in North America where demand outstripped supply substantially. This
imbalance had pushed vacancy rates to historical lows. Properties in the medium-to-small size range (under
20,000 square feet) were the most scarce, with vacancy rates as low as 0.3%.
The Covid-19 global lockdown had caused many sectors, including food and beverage and paper products,
to shift from just-in-time to just-in-case manufacturing strategies. Just-in-time was a management system
where inventory was only produced as required to meet the immediate customer demand. Conversely, just-
in-case was a strategy of maintaining large inventories to reduce the risk of back orders. As more sectors
were expected to switch to the latter strategy, the need for warehousing space was expected to rise.
Additionally, the accelerated adoption of e-commerce in response to Covid-19 had increased demand for
industrial warehousing in the GTA.
HI-LINE AUTO PARTS
History
Hi-line, founded in 1953, was a family owned and operated business. Carl Green, Jason’s father, began his
career in the automotive industry as a sales representative for George Stembler, a Canadian automotive
wholesaler. In the early 1940s, Carl joined the Canadian Armed Forces in World War II. When he was
1 All cu
encies were in CAD dollars unless otherwise stated.
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discharged in 1953, he decided to start his own automotive business. Carl utilized the upstairs space of his
grandparents shoe store, located on Queen Street West in Downtown Toronto and began importing and
selling various automotive parts from global manufacturers.
By 1963, sales had grown rapidly and