AutoZone Ryan Mullen, Cameron joudi, Jacob Cote, Sam Daggett, Simona Stefanakova

Strategy Introduction

  • Phase I
  • Phase II
  • Phase II
  • Revenue
  • Value
  • Funding
  • Alternative Strategies

Phase I: Aligning with Monro

  • Exclusive Purchase Contract
  • Monro's sales are expecting to increase to $1.14 billion
  • $627 million from labor and parts
  • $62 million will be required for increasing inventory levels

Phase II: Implementing Tire Sales

  • Unmounted tire sales
  • Mounting services provided
  • Not providing tire changing services
  • Referring customers to Monro locations

Remodeling and Equipment Costs

  • Tire mounting equipment: $27 million
  • Cost for remodeling all locations $581.4 million
  • Relocation of inventory $22.5 million
  • Cost of adding tires to inventory $5 million

Phase III: Modify Existing Advertising

  • Adjust current marketing activities
  • Update website and Z-net Catalog

Revenue

  • Generating additional revenue streams
  • Various ranges of possible sales in first 3 years
  • Minimum of $854 million in sales after three years
  • Contract with a recycling company
  • Varying rates per locality

Value

  • Provide value to AutoZone's customers
  • A referral source for customers DIFM
  • Increase in product diversification
  • Tire recycling would provide a CSR component
  • High level of knowledge of AutoZoners

Funding

  • Not increasing debt
  • Reducing the current stock repurchase program in the current year
  • From $1.45 billion to $750 million

Alternative Strategy

  • CSR Based
  • 1.5% of sales towards a nonprofit organization that helps the envrionment
  • Research shows strong numbers for companies committed to positive social and environmental efforts (Nielsen, 2015)
  • Increasing brand image, customer loyalty, and sales
  • 3 out 4 individuals in the Millennial Generation prefer working for companies that implement CSR (Cone, 2009)

References

AutoZone, Inc. (2016). Form 10-K 2016. Retrieved from SEC EDGAR website http://www.sec.gov/edgar.shtml

Boyd, M. (2016, November 07). Monro Muffler Brake: Strong growth visibility, 30% upside. Retrieved from http://seekingalpha.com/article/4020490-monro-muffler-brake-strong-growth-visibility-30-percent-upside

Cone Communications, “Past. Present. Future. The 25th Anniversary of Cause Marketing,” Boston, MA, 2009, at www.coneinc.com

Monro Muffler Brake, Inc. (2016). Form 10-K 2016. Retrieved from SEC EDGAR website http://www.sec.gov/edgar.shtml

Peters, I. (2017a, February). IBISWorld industry report 44131 auto parts stores in the US. Retrieved from http://clients1.ibisworld.com/reports/us/industry/default.aspx?entid=1012

Peters, I. (2017b, February). IBISWorld industry report 44132 tire dealers in the US. Retrieved from http://clients1.ibisworld.com/reports/us/industry/default.aspx?entid=1013

Scrap Tire Recycling. (n.d.). Retrieved March 15, 2017, from http://www.profitablerecycling.com/tirerecycling.htm

Gibbs, A. (2016, November 29). After making $10M in Black Friday sales, Patagonia is donating it all to saving the planet. Retrieved March 21, 2017, from http://www.cnbc.com/2016/11/29/after-making-10m-in-black-friday-sales-patagonia-is-donating-it-all-to-saving-the-planet.html

Nielsen. (2015, November 05). Green Generation: Millennials Say Sustainability Is a Shopping Priority. Retrieved March 20, 2017, from http://www.nielsen.com/us/en/insights/news/2015/green-generation-millennials-say-sustainability-is-a-shopping-priority.html

Nielsen. (2014, June 17). Global Consumers are Willing to Put Their Money Where Their Heart is When it Comes to Goods and Services from Companies Committed to Social Responsibility. Retrieved March 20, 2017, from http://www.nielsen.com/us/en/press-room/2014/global-consumers-are-willing-to-put-their-money-where-their-heart-is.html

Schulte, B. (2014, October 25). Retrieved March 22, 2017, from https://www.washingtonpost.com/business/a-company-that-profits-as-it-pampers-workers/2014/10/22/d3321b34-4818-11e4-b72e-d60a9229cc10_story.html?utm_term=.fd08a56e71b2

Sustainable Brands. (2015, May 27). Study: 81% of Consumers Say They Will Make Personal Sacrifices to Address Social, Environmental Issues. Retrieved February 16, 2017, from http://www.sustainablebrands.com/news_and_views/stakeholder_trends_insights/sustainable_brands/study_81_consumers_say_they_will_make_

Credits:

Created with images by D'oh Boy - "AutoZone" • B. W. Townsend - "rear motorcycle flat tire" • pasa47 - "AutoZone" • zeevveez - "Themes: Unity of Opposites, Background and Foreground" • gianfrancofalcone - "tire repairer tire mounting work" • cogdogblog - "De-Flatted" • 9355 - "recycle reuse recycling" • time_anchor - "local_markets_nlv_auto-zone_signage_1" • Meditations - "agree agreement asian" • daspunkt - "Jenischpark"

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