AutoZone Case Analysis Management Paper

Using no more than two sentences, describe AutoZone business strategy.

Auto-Zone uses a focus strategy. Focus strategy involves offering specialized services in a niche market. The rapid growth and price insensitivity of the auto parts business enabled AutoZone to focus on offering quality service delivery through superior customer service.

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Characteristics of an effective strategy based on Michael Porter's strategy theory.

AutoZone is indeed aggressive in implementing the focus strategy for growth as it is hell-bent in offering specialized services in a niche market. Companies pursuing the focus strategy ought to understand the nature of the market as well as the unique needs of the customers. Joseph Pitt Hyde III, the manager of AutoZone, noted that the auto parts business was growing rapidly and was price-sensitive. Unfortunately, nobody was doing a superior job of customer service! He identified the niche and embarked on offering quality customer service. Though he never had any do-it-yourself experience, he saw an opportunity and a fortune out of the business. By understanding the dynamics of the market and the unique needs of the clients, AutoZone developed unique low cost and well-specified products in the market. So aggressive was the company that it worked on small margins in addition to being absolutely intact operators.

Guided by discipline, the company touted low prices every day! In efforts to counter competition, the company adopted a focus strategy and built a strong brand loyalty amongst the customers. With only four stores, AutoZone was utterly the first auto parts store with electronic catalogs. To facilitate instant buying of the parts at a low price, AutoZone sought to offer exemplary customer service. The key to making the focus strategy work is ensuring that something extra is added as a result of serving only the market niche. The extra additive to the product contributes towards lowering the costs of production. In 1991 when the company went public, it started copying its store layout and pricing. They diversified their portfolio quickly as none of the competitors would copy their culture. Today AutoZone has 5,000 stores.

To what extent is AutoZone following the five steps of the strategic management process?

As the nation's best auto parts chain, AutoZone is keen to support the strategic management process. First, the auto parts chain company started by setting its vision, mission and goals clearly right from the inception stage. In the mid-1970s, Joseph Pitt Hyde III had a long-term vision and outlook of AutoZone as he delved into researching areas to diversify into. This shows that the company was visionary and focused towards achieving its set objectives. Fortunately, the company had a successful drug chain.

Moreover, the company observed how Checker Auto Parts was growing with auto parts geared to the do-it-yourself market and implemented the idea. It is then that AutoZone started looking at chains indicating the company was determined to follow its vision at all cost. Evidently, the company undertook an in-depth analysis of the opportunities and threats that lay in the market. Joseph Pitt Hyde III observed that the auto parts business was growing rapidly and was not price-sensitive. Nobody was doing a superior job of customer service, and at this instance, AutoZone adopted a focus strategy poised towards offering outstanding customer service at affordable prices. Looking at the future prospects of the company, AutoZone outlined a long-term plan on how to conduct the do-it-yourself errands.

Autozone SWOT Analysis

Strength. One of the greatest strengths of AutoZone is that it is among the first auto parts stores to offer electronic catalogs. No competitor has so far been able to copy AutoZone's store layout and pricing. With 5,000 stores, the company offers excellent customer service and is thus superior in the market.

Weakness. Due to the fact that the company is a big enterprise, it may find it difficult to handle miniature issues which might in fact be of great importance. It took Joseph quite a significant time to figure out how to handle small and big issues.

Opportunity. AutoZone had never ventured into a do-it-yourself business before. Moreover, Joseph Pitt Hyde III did not know how to run the auto parts business. However, he seized the opportunities he spotted and the company has since then become one of the nation's largest retail auto parts chain companies.

Threats. AutoZone faces stiff competition from other enterprises which are hell bent on overthrowing it. AutoZone faces the threat of new entry from new companies that may come up and pursue a strategy which can draw the attention of clients from the AutoZone.

Which of Michael Porter's four competitive strategies is autozone trying to follow?

AutoZone is seeking to adopt a differentiation strategy. The company is being watched closely by the competitors who have taken keen interest in the company's layout and pricing strategies. To shun them off, AutoZone has invested in creating uniquely desirable products and services. To make this strategy work, AutoZone is innovatively coming up with high-quality products and services.

Greatest Lesson learnt regarding strategic management?

The success of AutoZone strategic management lies in strategic planning and creative effort in creating new, effective and efficient strategies to win significant markets. To thrive in the dynamic and competitive market, strategic management is indispensable. Sweat equity is what makes things work. Money is only a small part of the equation for success.

Reference

Eng, D. (2013). Putting AutoZone into Drive.Interview. Fortune (pp. 1718).