Carmax

The organization is CarMax that I will be providing a STaR Analysis for a company that had only one store in Richmond, Virginia and now has more than 100 stores across the country. They have sold more than 2 million cars and appraised more than 5 million. CarMax want to continue to live up to their reputation of offering their customer a superior quality new or used car and offers to buy any car whether you buy from them or not This is part of their high standards being practiced. CarMax also provides a work environment to their employees that has them named “One of the best companies to work for”, according to Fortune’s Magazine.

Change in Society

Questions to Ask and how change affects CarMax:

1) What can CarMax do to build on their fundamental principle of integrity? CarMax must monitor their business, operating results, and financial condition. This will let them know what the effect will be to the economy and if there are any potential risks that may require a change in operating strategies (CarMax KMX, 2006).

2) What can CarMax do to promote their strategy to “Make Do with Lower Margins”? When CarMax has to change retail prices for used and new vehicles, this leads to lower sales and margins. This change affects CarMax’s competitors when they see that in order to gain or retain market shares they must reduce their prices for used or new vehicles too. This change may result in a decrease in its sales and profitability. Also having excess inventory would adversely affect the company’s business as well. This happens when CarMax cannot liquidate excess inventory at prices that allow the company to meet its margin targets, so this is causing CarMax to stick to their strategy of making do with low margins and still be able to recover its costs without affecting the company’s profitability ( CarMax KMX, 2006)

3) What impact has used car buying had on consumers despite the economy? CarMax has experienced changes in consumer credit availability,...