Hi, need to submit a 500 words essay on the topic Chapter 18: CarMax, the Used-Car Superstore: Smooth Ride or a Rocky Road.
The Company apart from use of price wars CarMax ensures that its products are of quality and valuable to its customers. As a result, it has strong competitive advantage with customer retention powers. CarMax acquire its products by ins. As a result it maintains a quality inventory. It ensures that customers are capable of reaching its outlets by constant expansion of its outlets (Debra, 2010).
CarMax has a well-managed inventory system as a competitive advantage. This allows for differentiated brands and different in pricing. It is no ‘haggle’ methods ensure that the customers experience high value of the products. SWOT analysis of CarMax indicates strength of quality products, no haggle pricing and customer satisfaction. The major Weakness of CarMax is its high prices. Several opportunities are seen in CarMax which includes wide expansion, backward supplier integration and better customer services. The major threats facing the organization are political situations, economical changes, high competition in the market and high overhead cost per created new store (Debra, 2010).
Several external forces affects the CarMax includes. political tensions such as September 11 terror attack. The result is shift on attention of people as well as financial system. Economic depression such as the one witnessed in 2007 -2009 period made changes in purchasing power as well as consumption power hence reduced sales of the company. The strikes of natural disasters as well affected the normal operations of the company and financial allocation. Finally, shifts in gas prices made lowered purchases since many could not afford to maintain their cars (Debra, 2010) .
Several internal changes have been observed in the organization, these were mainly brought about by shift in economy. Lean economic times brought about reduction in car inventory to meet the customers demand. Attritions and scheduling were also resultants of recession. CarMax experienced changes in marketing