Autozone's Economic Downturns

The organization prides itself on being the first choice for DIY consumers. Making DIY consumers their target audiences as allowed AutoZone to grow to 4,400 retail auto parts stores within the United States and Puerto Rico and an additional 250 locations in Mexico (Parnell, 2014). While the organization is the industry leader, its competitors are also huge corporations and neither of them appear to be slowing down, this includes AutoZone. AutoZone has implemented an internal growth strategy that involves expanding and opening up to 200 more locations per year (Parnell, 2014). While AutoZone has acquired several companies and risen over its competitors, it is important that the organization remain focused on maintaining its #1 spot through internal growth

As AutoZone increasingly establishes more international growth, they will continue to maintain their culture as a company that places the customer first. AutoZone continues to follow and adapt to new customer trends as well as adopting new annual themes that facilitate and promote further success and increased diversity. According to Rhodes, “As we have learned from our predecessors, by taking care of the customer, they will give us many more reasons why they shop with us than we could ever give them ourselves” (AutoZone Inc., 2015, p. 26). The company’s long term pledge has been to always put customers first. Additionally, AutoZone further supports their customers through their two websites, autozone.com and autozonepro.com, which provide tutorials and mechanical advice online to customers and anyone else visiting their site. AutoZone has two key positioning strategies, which are physical location and time. Because

Given the current economic climate, I think the automotive industry is going to be faced with a multitude of economic challenges in the next five years. As an oligopoly market, the auto industry is highly dependent on strategic decision-making, and the demand for dynamic innovation and supply at decreased-cost levels. Competition, possibilities of turning substitutes into compliments, and shifts toward higher demand in services are seemingly leading factors that face the current automotive industry in the immediate future. But first, we should not ignore the political forces at play within the market.

Autozone, the top retailer in the United States has always based its strategy on DIY customers with cars over seven years old (Parnell, 2014). As technology has evolved, cars have become more difficult to work on, hence, a new target market of do-it-for-me is continuing to grow. Sales of 2.3 billion were reported for the second quarter of 2017, and the company cited higher supply chain and shrink costs (Landis, 2017).

AutoZone is not immune to economic downturns. No organization is immune to economic downturns. Because AutoZone is consumer specific, mainly targeting auto owners that have more than 7 years vested, the organization could reap the reward of an economic downturn because consumers will choose to fix their automobile versus purchasing a new automobile (Parnell, 2014).

AutoZone’s strengths are its financial stability that has allowed it become the leading automotive aftermarket retailer. As of May 2016, AutoZone has over $10 billion in sales and over 80,000 employees. Other AutoZone strengths include its over 4,400 locations and its growing numbers (“AutoZone Forbes”, 2016). Also the organization has the ability to provide products for several automobile brands which diversifies its portfolio. Some of AutoZone’s weaknesses includes profitability during a rise in the economy.In the past, it has not met targeted financial goals due to its weakness in commercial repair sales. In 2014, only 17.5% of AutoZone’s 2014 sales were commercial repair, compared to its competitors Advance Auto Parts and O’Reilly Automotive

With the introduction to new technology in the automotive industry, consumers are struggling to maintain and repair their own vehicles. They are relying on professionals in order to complete even minor repairs on their vehicles which forces them to find businesses which not only provides the needed parts but also assist with instruction on how to replace it. The demand for automobile parts is driven by the age and mileage of vehicles in use and generally increases when fewer new cars are sold and older cares are kept on the road, causing the profitability of individuals companies such as AutoZone to depend on inventory management and marketing (Tippie, 2015). For AutoZone, they were able to expand their brand very quickly with a robust financial performance over the years but with competition like The Pep Boys, O’Reilly Automotive and Advance Auto Parts, Inc. they must continue to analyze their strengths against the market in order to stay

AutoZone was a vision from the mind of J.R. “Pitt” Hyde III after receiving his bachelor’s degree in economics. After receiving his degree he joined his grandfather’s wholesale food store Malone & Hyde’s retailing division. Pitt utilized the corporate profiled to identify several industries the wholefood store operated. The company incorporated drug stores, sporting goods stores, and supermarkets to operate in multiple unrelated industries (Parnell, J., 2016).” “Pitt saw a need for a retail automotive parts store to help with upkeep of their vehicle so he created Auto Shack (AutoZone, Inc., 2004 -2017).”

AutoZone has responded to the changes in its macroenviornment through the PEST (political-legal, economic, social, and technological analysis (Parnell, 2008). AutoZone had to face political-legal issues. One issue occurred in 2014 at a meeting when one of the members of its board of directors wanted to convince them to provide further details regarding their political spending. AutoZone’s board of directors responded by wanting its shareholders to vote against it (Meek 2014). AutoZone is actually in a good position due to the economy by to AutoZone being in auto parts industry. In a bad economy, people will most likely not purchase new vehicles. People will more likely keep the car that they already have which will eventually need repairs.

The automotive industry designs, develops, manufactures, markets and sells motor vehicles, and is one of the world’s most important economic divisions by profits. This analysis focuses on the industry, specifically, manufacturers of automobiles. There are five competitors in the StratSim environment: Firm A, B, C, D, and E. Industry sales in the most recent year were 4.3 million units, with expected growth in the next year. Within this industry, there are seven-vehicle classes: Economy, Family, Luxury, Sports, Minivan, Truck, and Utility. There are two new classes with potential – if properly marketed.

Auto Zone has responded positively to the changes in its microenvironment. The company has managed to keep up with the many changes in the economy. Changes in the economy can cause an increase or decrease in gross domestic products. Gross domestic products can affect some industry more than others, especially those in global markets. (Parnell, 2013). “Over the past 15 years the auto industry has shifted from a regional industry to a global industry, as a result of this shift the original equipment supplier base has been pulled in the same direction” (Santucci,1997, p.1) Auto Zone has keep up with changes and shifted into the global industry as well. The company has stores in all 50 states and now has expanded globally into Mexico and Brazil."Expanding

Ever since the 2008 recession US automobile companies have been on a steady downhill slide, but actually you can trace this downward trend even further back than 2008. US car companies have been feeling the heat since as early as the late 1980s when Japanese car companies laid claim to American manufacturing plants . Despite a shot in the arm in sales over the past five years, American firms are still on the decline. This case analysis aims to diagnosis the problem, provide analysis of the problem, and propose a viable solution to the problem from the perspective of the US automobile market share leader, General Motors.

I will be comparing both companies General Motors Company and Ford Motor Company for the past three years. We will be able to see all the trends these two automotive manufacturers have and which one may be better to invest in by looking at the last few year’s ratios and percentages. This will give us a better understanding and the knowledge of who maybe the industry leader and who is the follower. These are both major corporations that strive off customer loyalty and both competing on a global scale to make their mark in the one of the top automotive manufacturers in the world. This analysis will give us an understanding of what lies ahead in the future for these two manufacturers.

There are two key channels what LM uses to deliver value for its customers: the community and the regional microfactories. The community is a core element of LM’s business model and consists of a group of car enthusiasts and designers who communicate mainly on an online platform, but they also meet in person during events organized by LM. Microfactories serve as places for car manufacturing but they mean a lot more for the company. They are places to gather together with the community and to work together with customers whilst assembling. Both key channels are important parts of LM’s marketing strategy and play a prominent role in the customer experience. LM uses mainly these own and direct channels to reach its customers. It raises awareness about its cars using mostly its website. This platform also helps potential customers in evaluating the offerings of LM as community members share their opinion, knowledge and experience there. The purchase, the delivery and the after sales service happen through the channel of microfactories.

The company understands the risks for working with U.S. auto industry especially during the recession in 2008, so they venture out to produce four new business units to minimize it by looking into investing on early-stage opportunities.