Cox Automotive Case Study Example

I work for Cox Automotive, which is a subsidiary of media giant Cox Enterprises. Cox Automotive is comprised of numerous companies that primarily service the retail and wholesale automotive industries. Most people have heard of Auto Trader and Kelley Blue Book, we also have 20 other companies that the average consumer is not as familiar with. I work for Manheim Auto Auction, which was established in 1945 as a wholesale vehicle auction (Manheim, n.d.). We have 92 auction locations in North America, and another 30 more around the world. Manheim has sold over 100 million cars since 1945 and currently register just under 7 million cars annually (Manheim, n.d.). The auto auction business is strictly a service related business, and could be categorized

Porter’s five factors include: the intensity of rivalry among incumbents; the threat of new competitors; the threat of substitute products; the bargaining power of the buyers; and the bargaining power of the sellers (Parnell, 2014). The rivalry with competitors in the used vehicle marketplace exhibits a level of intensity based on the age and stage of this industry. In the US, the automotive industry has been in a mature phase of its life cycle for nearly 50 years (Gao, Kaas, Mohr, & Wee, 2016). As the leader in the industry, Manheim Auto Auction must maintain a keen awareness for potential changes in consumer behaviors or disruptive technologies that would be more difficult for us to quickly adapt to. The second factor, the threat of new challengers entering the industry, coincides with the first factor in understanding our competition. There are high barriers to enter the vehicle auction market and Manheim has set the industry standard for buying and selling used vehicles at live auctions and online. The infrastructure required to open a competing auction is quite significant, along with the necessary permits, licenses, and federal requirements there is limited ability for traditional competitors to enter the marketplace. Conversely, this also means that the industry has very high exit

In the past two years, Cox Automotive developed two pioneering programs aimed at fostering innovation throughout the company. StartUP was the first, and it is a 54 hour long think tank session designed to develop leading edge concepts and ideas (Manheim, n.d.). At the conclusion of a StartUP program, there is a chosen winner and the project receives seed money to literally start up the potential new company. This past year the company also hosted two Hackathons held at our corporate offices in Atlanta, GA. Cox Automotive strives to not only, keep its finger on the pulse of social forces, but in fact to create the change. When viewing the potential for new and potentially disruptive products, services, or technology in the automotive industry, countless trends are initiated through new technology and they possess the potential to permanently alter the overall industry (Gao, Kaas, Mohr, & Wee, 2016). From fun little ideas, such as a tinder type phone app for choosing your next vehicle, to a fully autonomous car, the breadth of fresh ideas is