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How well is the company's present strategy working?

AutoZone’s present strategy is marketing and merchandising strategy which mainly focus on customer service, “We are dedicated to providing customers with superior service and trustworthy advice as well as quality automotive parts and products at a great value in conveniently located, well-designed stores.” (AutoZone 10K Form page 5, August 2013)

According to Yahoo Finance, O’Reilly Automotive, AutoZone and Advance Auto Parts occupy 98.2% market capacity (Industry Browser-Auto Parts Stores, 2013), therefore here consider the two company as AutoZone’s key competitor. As follows are several performances of AutoZone to analysis its strategy.

• From year 2009 to 2013, AutoZone has opened 961 stores with a growth rate 4.4% annually (AutoZone 10K Form page 8, August 2013) to service various customers and satisfied customers’ special needs.

• By the time of August 31, 2013, AutoZone has employed over 71,000 employees, approximately 59% of whom are full-time.(Baird Equity Research, Dec, 2013)

• AutoZone’s operating profit grows from 1.49 billion in year 2011 to 1.77 billion in 2013 at a annually growth rate 8.97% (AZO Income Statement, 2013), which is much higher than industry average at 5.37% (Industry Browser - Auto Part Store, 2013).

• AutoZone’s net profit margin 12.18% is the highest among the top three company, which AAP is 4.97% and ORLY is 10.06%. (Industry Browser, 2013)

• AutoZone has 14% of the American DIY spare parts market and has grown by around 4% annually for the past ten years---compared to a growth of 2.5% of industry average. Moreover, DIY revenue occupies 85% of AutoZone’s total sales (Zacks Equity Research Report, Dec 2013).

AutoZone’s current performance is stronger than industry average and key rivals indicating AutoZone has a well-conceived and well-executed strategy.

What strategic issues and problems merit front-burner managerial attention?

• DIY market. Even AutoZone...