Study Sheet Carmax Analysis free essay sample

They reconcile conflicting performance goalsThey combine low cost, high quality(because of checks and 125 points system), etc. xi. They reconfigured value chainSell used cars differently than any other past used car dealer f. What are their competitive advantages xii. Ability to provide high degree of customer satisfaction with the car buying experience xiii. Competitively low prices xiv. Breadth of selection of the most popular makes and models xv. Quality of vehicles xvi. Exclusive information systems xvii. Locations of retail stores 3. Cost Advantage g. Drivers xviii. Economies of scale xix. Economies of learning xx. Production technique xxi. Product design xxii. Input costs xxiii. Capacity utilization xxiv. Residual(other) efficiency 1. All of these are described in the powerpoint, study notes and lecture notes h. Analyzing Costs(SHOW ON SLIDE 15 OF PPT#9) xxv. Determine value chain(done below) xxvi. Establish their relative importance in total cost of product xxvii. Compare costs by activity xxviii. We will write a custom essay sample on Study Sheet Carmax Analysis or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Identify cost drivers xxix. Identify linkages xxx. Identify opportunities for reducing cost 2. Potential ideas on slide 18 of 18 a. Corporate Re-structuring . Plant closures ii. Outsourcing iii. Delayering and cuts in administrative staff b. Business Process Re-engineering iv. Combining several jobs into one v. Steps of a process combined in natural order vi. Minimizing steps, controls, and reconciliation vii. Use case managers as single points of contact viii. Hybrid centralization/decentralization i. Value Chain of CarMax xxxi. Even though the used car industry is extremely competitive and price sensitive, CarMax does well because it has huge economies of scale. With large inventory, the company can spread its operating costs consistently across individual dealerships. CarMax adds value in five categories. xxxii. Acquiring Cars  Ã‚  Most of the cars are acquired through trade ins. This creates a high-quality inventory. CarMax offers a while you wait appraisal and gives you an offer that is valid for seven days. They also acquire cars through dealership relationships such as with auction houses. xxxiii. Managing Inventory  Ã‚  This is the companys real competitive advantage. All inventory goes through a standardized internal inspection process. Cars are separated into CarMax and Valumax categories and sold through channels focusing on different categories of quality and price. xxxiv. Operating Stores  Ã‚  Management policies guarantee a consistent customer experience across the company and inventory is shared nationwide. xxxv. Marketing and Selling  Ã‚  Website searching, no haggle price policy, and inspection guarantee are the key components of the companies value added strategy. xxxvi. Services  Ã‚  The company differentiates itself from smaller dealers by offering financing, appraising, repairs, guarantees and warranties for every sale. xxvii. The process of inspecting and guaranteeing the quality of the cars CarMax re? sells adds considerable value to the companys brand. This type of service is not likely to be found in other dealerships. The amount of resources that go into the value? chain activity of managing and sorting CarMaxs inventory is difficult to implement, and hard to imitate. While CARFAX Reports offer the same assurances of quality, they cannot offer the other benefits such as auto service and repairs, warranties and financing. j. Segmentation xxxviii. Middle and upper middle class xxxix. Fullnest(2), Fullnest(3) l. Fulfiller, strivers and makers 4. Differentiation k. Differentiation of CarMax xli. Car Max wants to differentiate themselves through exceptional customer service xlii. Car Max also wants to create superior efficiencies through use of standardized operating procedures l. Differentiators xliii. No haggle policy xliv. 125 point inspection system xlv. Easy financing xlvi. Repair and reconditioning of vehicles xlvii. Guaranteed quality xlviii. Carmax. com m. CARMAX nature of differentiation- Mostly intangible (unobservable but relating to image, status, exclusivity, etc. Like most dealerships n. Demand Side Differentiation Potential: Look over slide 10 of 19 on PPT#10 o. Supply Side Product Attributes and Positioning: Look over slide 11 of 19 on PPT#10 p. ANALYZING THE VALUE CHAIN xlix. Construct the value chain for the firm(above) and the customer(create) 3. FIRM(ABOVE) 4. CUSTOMER(BELOW) c. A customer  value chain  is a business concept that represents the creation of value for a customer. It is similar to the supply chain, which charts the various stages of production and supply from raw materials to the sale of the final good to the end user. The big difference is that while a supply chain often measures costs, the customer value chain is based on the increase in value to the end user. Another interpretation of a customer value chain puts the emphasis on steps taken to retain existing customers. d. One example of the difference between simple  supply chain analysis  and a customer value chain is delivery of a bed. From a purely supply chain perspective, the delivery is a relatively small factor: it doesnt make any tangible change to the bed itself, and for a large company with its own delivery network, the costs are relatively low. From the customers view, however, the value of the delivery is high. Most customers dont have the facility to transport a bed and without a delivery service; they would be left to choose between the bed being useless to them, spending the time money to hire a self-drive van, or paying a high cost to have a third-party company pick up and transport the bed. l. Identify drivers of uniqueness in each activity li. Select the most promising differentiation variables for the firm lii. Locate linkages between the value chain of the firm and that of the buyer