AutoZone is not immune to economic downturn. In addition, when there is less money in the marketplace in general, all suffer, even AutoZone. Since consumers need money to buy auto parts. If the company takes its eye off the ball with respect to its center retail operation, it risks ceding ground to its rivals. AutoZone has been expanding at about 5% a year for quite some time. Prior to late 2006 its stock performance has been very mediocre. What really made the difference was its same-store sales growth since 2009. It increased from virtually zero to 5% almost overnight. The reason is because AutoZone is a macroeconomic driven business. AutoZone’s store traffic has benefited enormously from the economic downturn; in touch conditions, people do not buy new cars. …show more content…
Used cars require more maintenance; hence AutoZone’s business gets better. Based on the jump in new vehicle sales, the economy is slowly, but surely recovering. For that reason, I do not see AutoZone’s current growth rate to continue for much longer. AutoZone’s new stores are bound to be in more inferior locations and will be less profitable than before. Hard times typically benefit auto parts retailers like AutoZone. When money gets tight, consumers often steer clear of car dealerships and keep their old cars on the road longer. Drivers who are handy with a wrench tend to fix and maintain their own cars rather take them in for service. These do-it-yourself customers are AutoZone’s core market. AutoZone was one of the top seven stocks during the financial crisis. However, as the economy has started to pick up, more drivers have been lured back to dealer’s show rooms. Rising new car sales are part of the reason why, despite AutoZone’s strong rise the stock has been stuck in
To properly illustrate externalities that may shift the supply and demand curve in the U.S. auto market over the next five years, it is necessary to look at the recent events having affected the U.S. auto industry during the recession and the strides U.S. auto makers have made to recover from near devast...
The automobile industry is one that has constant vicissitudes. Burns Auto Corporation is not exempt from these unexpected changes or shifts in that industry. Many factors drive the automobile market fuel prices, the economy, and family sizes are just a few. This paper will take an in depth look at the current situation at Burns Auto; including the situation, problem definition, end state goals.
In the observation of Sergio Marchionne and the Chrysler group there were many things that needed to change within the organization to make it survive not only the recession but the future in a competitive leading edge automobile industry. There were a couple of observable artifacts, and a Hieracicial framework that may have led Chrysler into bankruptcy. It is still not clear if Chrysler has changed the Vision statement for the organization, but after a review it is clear that it is customer focused. I found it interesting that Mr. Marchionne did not purchase Chrysler, it was a Government agreed merger with Fiat (“Fiat, Chrysler and Sergio Marchionne,” n.d.) Sergio Marchionne was able to change the culture and combine two companies in two countries and managed to boost sales and profit. (Clothier, n.d.)
In the United States, modern car manufacturing has been historically dominated by the American companies including Ford Motor Co., Chrysler Group LLC, and General Motors Co. These three companies, known as the Detroit Three, controlled 95% of the market in the 1950’s and the dominance continued until the beginning of the 21st century. In the 1980’s Japanese auto manufacturers entered the United States, a decade later the Germans, and finally in 2000’s the Koreans. By the end of 2009, the Detroit Three only accounted for 45% of the total U.S. auto market. Another factor that had influence on this was constant fluctuations in gasoline prices and price sensitive consumers. According to the U.S. Department of Energy, gas prices hit record high averaging $3.07 per gallon in May 2007 and kept climbing up to $4.08 in July 2008. As gas prices kept increasing, consumer buying trends have been changing. In 2006 sales for SUVs, pickup trucks, and vans dropped 16%, while the market for compact cars rose by 3%. Unfortunately, the Detroit Three were not prepared for this since their...
Like any organization, AutoZone creates performance evaluations daily, monthly, quarterly, and the annual reporting of the organizations performances are identified in what is known as SWOT analysis. This analysis refers to the strengths and weaknesses the company can address and the opportunities and threats that exist in the given market. The strength and weaknesses are the organizations ways of analyzing internal issues and exploiting strengths while the organization tries to address the weaknesses as it relates to competitors in the industry.
Though used car sales continue to contribute to a bulk of the revenue, a primary reason the company is struggling is because the younger demographic has not been buying cars. This lack of purchasing coupled with the fact that individuals and families are getting more life out of their automobiles is hurting the auto industry as a whole.
During economically difficult times the average person is not seeking to make major purchases such as new automobiles and homes. Financially, they may need to make repairs to what they currently have. In this case, some customers had to take responsibility for their own car repairs or pay an unlicensed technician to do it at minimal costs. With that said, that was the market area that Autozone focused on and it paid off. With that came, do-it-yourself, options (Arnold, 2014). This opened doors for customers to learn to take care
Business has been doing good with an emphasis of selling new cars as the principal business of the dealership
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).
There are many responses that a company can have to troubling economic times. They can first weather the storm and survive. They can back up and get driven out of business, or they can grow. The economy has been in recession for many months. It is the job of our company to identify things that can help businesses to make it through these times and hopefully prosper.
The American auto industry is mainly represented by the Big Three - i.e.: General Motors (GM), Ford, and Chrysler. For more than a century these organizations have been the undiscussed leaders of the industry, but in less than a decade they are facing great difficulties. Globalization, the 2008 crisis, and the rising concern for environmental issues have been seriously challenging the American auto industry, “an important sector of the overall economy. In fact in the United States, the automobile is second only to a house in purchase value for the average American household.” (Gale, 2008)
1)The way of life of owning an auto in late time has changed a great deal in correlation to the twentieth century. The interest for auto in individual design is not restricted to the rich class just. The division has extend so as the situating by the car producers. The business sector of auto is separated into 3 class. So the automakers has changed themselves. The business of auto is not constrained to the U.S., Europe, Japan and South Korea. In late patterns it has been seen that the BRICS nation and North America have indicated potential development in buying auto. Organizations are making techniques by keeping the region and practices saw over the globe.
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.
Kilkenny, S.. (2010). The Future of the U.S. Auto Industry. Network Journal, 17(8), 10-11. Retrieved August 1, 2011, from Entrepreneurship. (Document ID: 2193431391).
The new automobiles, for example, the thunderbird, were more capable for the demands of the customers than the earlier models, such as, Model A and Model T. The newer models were more innovative than the first ones. Manufacturing was getting more advanced and so were the vehicles. The assembly lines were making more than one hundred thousand vehicles. Having the newest car was very popular, which in fact, had a positive impact on the sales of the cars. The Ford Motors was top in its business next to General Motors. However, the U.S. economy still wasn’t at its prime, which meant, companies were struggling. Also, the rises in the price of oil and fuel for the cars had an affect too. The Ford Motor company had to be innovative and produce more fuel efficient vehicles. In 2008, The United States President Bush made a financial assistance to help the automotive corporations, like Ford Motors, so they won’t collapse. Unlike, General Motors, Ford was able to positively increase because in 2009 it increased in sales and market share. After some years to present day, Ford flourished and became very prosperous in the automotive