AutoZone is the leading auto parts company in the United States. With locations all throughout the United States and some in Mexico, AutoZone has made a significant impact on the auto part industry. However, like many companies, they have experienced environmental changes that have impacted their strategy. The most recent factor that has affected AutoZone’s strategy is a recent plunge of their stock price per share. AutoZone experienced below expectation revenues which caused their stock to fall drastically. The reason for these lower than expectations is merely a change in consumer behavior and the rise of competition. AutoZone’ strategy has to become more focused on in-store customer service and professional services offered by the company.
Naturally, AutoZone lost their focus on helping DIY mechanics with their needs and turned their focus to e-commerce and international structure. Furthermore, AutoZone’s loss of focus, their competitors were using their strategies to focus on in-store services and customers. Also, the new tariffs presented by President Trump will obtain a significant effect on AutoZone’s pricing strategy. Global Tariffs cause havoc for auto part manufacturers because most of their resources are imported. Naturally, if president Trumps Tariffs are put into place, auto part manufacturers will have to raise their prices as the price of resources is increased. Evidently, if auto part manufacturers raise their cost to build the parts, they will also raise their prices they offer to AutoZone. Therefore, in order to meet their profit goals, AutoZone will have to raise their prices which effects their pricing strategy. AutoZone’s strategy needs to focus on promotion and customer service when they are forced to raise their prices. In conclusion, AutoZone is gradually changing their strategy to enhance their market share. Also, AutoZone changed their strategy from focusing on Internet-based operations to focusing on in-store DIY customers. Also, AutoZone regained focus on their customer care operation which is a feature where AutoZone’s employees offer professional help in the store. Naturally, tariffs on steel and aluminum will increase material prices; therefore, AutoZone will need to market heavily to gain a competitive advantage in the industry. AutoZone’s unique factors that affected their strategy are classified as economic and political factors. Strategically, AutoZone has placed themselves in their industry to gain an overall advantage by re-focusing their strategy to a more customer-focused view.
Regarding strategic control, they were faced with determining how to move forward, and with what mix of product offerings? The leadership realized that with shrinking profits and increased competition the status quo would not guarantee long-term survival. Execution via their previously successful marketing channels would be problematic without either some sort of peace offering to dealers and installers, or a total shift in the advertising and sales process. The dealers and installers interacting with the customer were more likely to understand the customers concerns. Unless the company rebuilds their relationship with these front-line sales force, the customer service will suffer and ultimately the brand equity will continue to erode. The idea that the dealer is treated as the most valuable link to the customer and feels completely supported by the supplier, is exactly what enabled Caterpillar to survive in the late 1990’s. (Fites, 1996). Regardless of how the company addresses their root problems, a marketing channel analysis will undoubtedly conclude that both order getting and order servicing expenses will initially increase. In the short-term, the relationships must be rebuilt. In the long-term, they must shift overall strategy to remain profitable. If they elect to maintain their high-end product mix, customer expectations will increase demanding more from
CarMax practices several services including extended service plans, wholesale auction, service and repair, and auto finance. CarMax also attracts the customers through wide-range of selections, low price, and high quality. These activities result the high customer satisfaction which is the most important aspect for its growth. According the case, Austin Ligon, who was the CEO of CarMax until the year of 2006, said that the information system of CarMax is the one of their biggest competitive advantages. The information system provides the inventory demands and helps to keep track on the customer needs and wants through the customers’ online searches. This allows the company to understand the customers’ demands. Even though CarMax has potential to continue its growth, there is a weakness which could be an obstacle for growing. CarMax offers no haggling prices so depends on the customers’ behavior about negotiating, the customers who wants to negotiate will return to other
Gulfstream Aerospace is one of leading corporate jet manufacturers in the world. They have been building jets since the late 50’s and continue to create top of the line aircraft which have become the status symbol of success. With their success comes an extensive company infrastructure and supply chain. First, we will discuss how Gulfstream uses the location to maximize the effectiveness of its supply chain. Then we will look at the business case for Gulfstream’s approach to its supply chain, and in particular, does it make sense to have a car follow supplies while it is on the rail system. Finally, we will look at Gulfstream’s to the “just in time” manufacturing and its strategic approach to choosing locations.
Auto Zone is immune to threats associated with economic downturns. According to AutoZone Incorporation, it has already overcome intense competitions from other auto part businesses. And the company also goes through goods that has a recall that will drop revenues (AutoZone Incorporation, p. 1).
Purchasing a car is one of the biggest and most important decisions that someone will make during their lifetime. Over the past several years, the prices of a vehicle have increased significantly due to the rise of inflation. Economists compare averages of vehicles to calculate and determine the cost of every vehicle that ends up on the car lot. To determine the cost they interpret all the above information and include everything from the cost of making the vehicle to the time of selling it. In the long run, the demand for vehicles is inelastic because they become a necessity for many people. However, in the short run, the demand is elastic because the purchase of a new vehicle can be put off for a while.
Achieving world class business performance is a major challenge in today’s society. Manufacturing companies continue to face increased competition and globalization from its competitors. (1, p. 148). The automotive industry is one of the most volatile manufacturing industries that we have, which was evident in the 2008 – 2010 automotive industry crisis. (2) This global financial downturn served notice to the American automotive manufactures to raise the bar, in order to achieve word class business performance. General Motors, one of the country’s largest automotive manufactures, had to receive a government bailout to survive. During this time many with the corporation asked themselves, if we were a world class business, would we be facing this pending crisis. The answer was a resounding “NO”. General Motors has come out of bankruptcy and is focused on being a world-class business organization.
AutoZone industry is an insignificant market for the automotive industry, however, it is also an automotive aftermarket industry. The industry supply parts and services for customer automobiles to keep them operating for the roads. The business in the automotive aftermarket encompasses all products and services bought for light, medium, and enormous vehicles after the original sale in conjunction with collision repairs, tires, display products, lubricants, accessories, and replacement parts. This also includes the significant tools and equipment to make the repairs to the vehicles (Aftermarket.org, 2012). The automotive replacement parts and accessories in the United States leading distributor is AutoZone. The other components of the industry
The American auto industry is in a crisis, their vehicles are not in demand and they need government bailouts to keep their businesses afloat. American vehicles are not on demand because people want fuel-efficient, the car companies that are not at the point of bankruptcy, longer lasting vehicles, and hybrid cars. The American car companies are at a point of bankruptcy and people don’t want to buy cars from a company that may not be there in a couple of months. The foreign car companies are doing well and they much more dependable now that we are in an economic crisis. American cars are not fuel-efficient, not as long lasting, and don’t make many hybrids, so this affects their business negatively. I got some ideas that will make American car companies be on top of the industry again.
(4) Abel, Ivan, Maali Ashamalla, and Robert Camp. Competitiveness of the US Automotive Industry: Past, Present, and Future. Rep. 2nd ed. Vol. 10. Indiana: American Society for Competitiveness, 2010. Print.
The automotive industry is one of the most important sectors of the economy for every country in the world. It involves a large number of corporations and institutions engaged in the manufacturing process of motor vehicles including designing, developing, manufacturing, marketing, and selling. It contributes to the global economic growth by generating a significant return and creating a ripple effect on supporting the supply chain as well as providing job opportunities for the skilled workers (ACEA, 2016).
Toyota Motor Corporation is one of the largest automakers in the world. At its annual conference in Tokyo on May 8, 2008, the company announced that activities through March 2008 generated a sales figure of $252.7 billion, a new record for the company. However, the company is lowering expectations for the coming year due to a stronger yen, a slowing American economy, and the rising cost of raw materials (Rowley, 2008). If Toyota is to continue increasing its revenue, it must examine its business practice and determine on a course of action to maximize its profit.
Introduction: Toyota Motor Corporation is a very successful automobile manufacturer that is recognized globally. They have continued to obtain and retain a competitive advantage over their counterparts, despite recalls over many years. Regardless of recalls, Toyota has been quick to rectify their shortcomings and continue to lead the automotive industry with their innovative measures. In this essay, I will discuss key internal factors for Toyota. Within those factors will include Toyota’s core competencies, which are what they do really well in comparison to their competition, three of their strength’s, which will include their posture within the automobile market and their heavy focus on research and development, and two of their weaknesses.
According to Investopedia the global competition resulted in less market share for the American car manufactures and caused a threat to company profit results because more foreign brands entered the American market. The total shares for General Motors fell from 28.2% in 2000 to 17.6% by 2014. The American manufactures were struggling to compete against better, more efficiently manufactured products from international companies and lower per-car costs have allowed foreign manufactures to gain bigger portions in the American market. Because their shares dropped so drastically they had to cut down on operating costs, they reduced their workforce by more than 40% eliminating brands and restructured employee compensation to create more effective
AutoEdge is facing crisis since millions of its automobiles has had to be recalled due to product quality issues. Many things should be considered in order to implement a proactive response to rectify the situation. As the research analysis, I have been tasked will helping to rebuild AutoEdge’s reputation as well as to reduce and control operating costs. When making any decision on implementing change within the organization market analysis must look at the market structure of the organization. Market structure is made up of the relationship that exists between buyers, sellers, competition, product differentiation, and ease of entry into and exit from the market. The article “Review of Market Structure” (n.d.) defines market structure as the “microeconomic characteristics of different markets” and include such elements as competition level, high versus low entry barriers, and scale (Review of Market Structure, n.d.) To make the decision the decision to relocate, AutoEdge must analysis and evaluate of market structure. This report will discuss the four different types of market structures: monopoly, oligopoly, monopolistic competition, and pure competition. Additionally, it will outline the type of market structure AutoEdge fits into, how that market structure impacts the level of competition, elasticity of demand, price, and position in the industry.
Innovation is an ever-continuing question in many industries and its players. In order remain competitive; players have to constantly figure out new innovative capabilities. The automobile industry is one where there is many innovation occurring. Innovation can be spotted at different levels of price level, different geographic regions, and different type of vehicles. As automotive industry relies heavily on technology, many of the source and cause of innovation come from technological development. However, this is also much innovation that arises from the administrative portion of an automotive company. This could relate to how cars are sold to the end consumer.