Autozone, Inc. Titus Pettman, Brett Stovall, Rebekah Dhani, Israel Dominguez, Anne Marie Drablos

Mission and Vision

The mission of AutoZone is to provide quality automotive parts at reasonable prices to "Do-it-for-Me" and "Do-it-yourself" customers alike. AutoZone strives to provide customers with excellent service in-stores and online.

The vision of AutoZone is to become the premier auto parts retailer globally by utilizing store and online mediums.

Internal Assessment

Strengths

  • Positive brand image
  • 16.6% market share

Weaknesses

  • Slow growth in the auto parts store industry
  • 2.9 inventory turnover ratio

External Assessment

Opportunities

  • Online sales expected to grow by $523 billion in the next 5 years
  • Aging car population expected to rise in the next 5 years

Threats

  • Intense competition from other auto part store retailers and online retailers (Amazon)
  • Consolidation of competitors

SWOT Matrix

Alternate Strategies

  • Increase online promotions/clearance in order to deplete dead stock
  • Improve loyalty program in order to ensure customer retention
  • Acquire an IT company in order to bring processes in house and eliminate risk
  • Increase global presence by opening more stores in Brazil

Recommendations

Improve YouTube channel and integrate with product offerings on website

Costs:

  • Set: $110,000
  • Actor: $8,000
  • Video crew: $40,000
  • Social media manager: $168,000
  • Web designer: $160,000
  • Director: $14,000
  • Consulting fee: $1,500,000

Total cost: $2,000,000

Implementation of Strategy

Strategy Benefits

  • Increase in market share
  • Increase in online sales
  • Improved brand awareness
  • Sustaining brand image
  • Combat a decrease in inventory turnover

Financials

EBIT/ EPS Analysis

  • Strategy is best financed through debt
  • Company prioritizes raising earnings per share by buying back stock

ROA without strategy: 12.849%

ROA with strategy: 12.949%

Inventory turnover without strategy: 2.6983

Inventory turnover with strategy: 2.7249

Operating profit without strategy: 15.982%

Operating profit with strategy: 16.104%

NPV

Balanced Scorecard

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