CARMAX RESEARCH PAPER Harvard Case Solution & Analysis

CARMAX RESEARCH PAPER Case Study Solution

Introduction

The paper attempts to describe the mission and vision statement for CarMax and to assess whether it fulfills the criteria for developing mission and vision statements. The paper also attempts to discuss the enterprise strategy of the company along with the corporate level strategies. The corporate level strategies discuss about the company’s current and future growth prospects. Furthermore, the paper addresses the company’s functional and business level strategies. Moreover, the paper highlights the analysis of the industry in which CarMax is operating through the implementation of Porter’s five forces. It also provides the internal assessment of the company by applying SWOT analysis model.

Mission/Vision Statement

The mission statement of CarMax is to offer its customers with high quality cars at an affordable price, along with providing them the best customer service (Carmax, 2015). The first criterion for developing a mission statement is its key for being informative. The information allows the company to state its objectives and its business activities. The mission statement of CarMax describes that it performs the business of selling cars to its consumers. The second criteria includes being simple. Since the mission statement of CarMax is precise and does not contain too many details, therefore, it is engaging for customers to view the essence of the company (Lamb, Hair, & McDaniel, 2012).

Furthermore, the mission statement needs to be easily recognizable and memorized by a customer. The element of providing high quality cars at affordable prices could allow customers to easily memorize the statement as it fulfills the need of customers. Providing the best services along with quality core products at great prices is achievable which makes it the fourth criteria of the mission statement (Lamb, Hair, & McDaniel, 2012).

Enterprise Strategy

CarMax performs Corporate Social Responsibility through four different segments. These segments include connection with communities, respect for the environment, great place to work for employees, and commitment with its customers. While considering the connection with communities, CarMax Foundation has been built which is working for enriching the lives of its communities and making children healthy. The company ensures to provide children and its community members a better place where they could lead their lives by helping and taking care of each other. The President and CEO of CarMax, Tom Folliard considers employees as their greatest assets and offers comfortable environment in order to increase their productivity and to provide a touch of being a family. Moreover, CarMax provides a strong commitment to its customers by providing low prices with no hidden charges, and with a 5-day money back guarantee (Carmax, 2015).

Corporate Level Strategy

The Corporate-level strategy of CarMax has been based upon four main objectives which include understanding the positioning of CarMax relative to the industry and its competition, understanding the short-term and long-term strategies to continue as a market leader, continuous improvement in its business model, providing support to corporate-level initiatives. The company is monitoring the economic trends which allow understanding of consumers’ behaviors and willingness to purchase used cars. The company has developed plans to evaluate its top competitors and categorize them according to threat levels. Moreover, the company is developing a response to the growing competitive threats which could hamper CarMax’s sales (CarMax, 2013).

CarMax has also planned to develop the list of the major opportunities and challenges which will be faced by the company in next five years and prioritizing those opportunities and challenges on the basis of their importance. Furthermore, the current strategy of the company is based upon empowering its employees and making them decision-oriented so that they could lead the company in future. The company believes in making its associates as leaders (CarMax, 2013).

CARMAX RESEARCH PAPER Harvard Case Solution & Analysis

 

 

Business Level Strategy

The company is aiming for geographical expansion throughout the United States by planning to open 13 auto superstores in the year 2014, whereas, 10 to 15 auto superstores in the next year. The company had delayed the growth for its superstores in 2008 due to economic downturn, while CarMax believes that the current economic stability provides the company with various opportunities to grow through increased auto superstores in the country. In future, the company believes that the driving forces for earning growth shall be vehicle sales unit growth in both the old and the new stores (CarMax, 2013).

Moreover, CarMax also believes that the increased unit sales of its vehicles in superstores would also drive sales for wholesale vehicles and increased CAF income. Therefore, the company believes that in order to fulfill the particular strategies outlines, the company would train new employees and retain its old employees so that there should be no hurdle in its way to success. The target segment of the company includes the people of the United States while largely focusing on the used cars purchasers. Moreover, the company has positioned itself as the auto superstore with a unique selling proposition of offering new and used cars under one roof (CarMax, 2013)......................................

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