MGT490 Assignment: Strategic Analysis of AutoZone Case Study

This case study analyzes AutoZone's strategic management, focusing on its growth strategy, application of the strategic management process, and use of SWOT analysis. The student explores AutoZone's competitive position, including its strengths, weaknesses, opportunities, and threats. The analysis examines AutoZone's cost-leadership strategy and its ability to maintain a strong foothold in the auto parts industry. The assignment also highlights the importance of strategic planning in driving organizational value and discusses AutoZone's mission and vision. The student references Kinicki's "Management: A Practical Approach" to support the analysis, providing insights into AutoZone's market position and challenges. The case study concludes with the student's greatest takeaway from the analysis, emphasizing the effectiveness of strategic management.

Running head: CHAPTER 6 CASE STUDY
Chapter 6 Case Study
Name of Student:
Name of the University:
Author note:

1CHAPTER 6 CASE STUDY
1. AutoZone’s strategy.
AutoZone has been able to establish a strong foothold in their niche of auto parts, but they
are no longer the only company in the market. They are looking for ways to become more
competitive in their product line so that they can earn more profit.
2. AutoZone’s strategy for growth.
Michael Porter’s strategy is using a strategy that focuses on growth-dominance. Even
though this is a good strategy to get more capital into the fiscal wing, this strategy cannot last
forever. According to me, Michael will have to change to a more defensive strategy, such as
the one that is retrenchment based, within the next 10 years. This is because it is known that
the auto industry lacks service quality and as the existing growth strategy lives on, there is a
big risk that the quality of service will deteriorate even further.
3. AutoZone and the 5 steps of Strategic-Management Process.
According to the strategic management process, AutoZone seems to be following it step
by step. Hyde was first able to establish the mission and the vision of the company which was
to sell auto parts for people who want to do it themselves, and also provide a new outlook on
how people expected an auto parts store to look like. AutoZone was then able to find out that
they were one of the first few to establish a system such as theirs. When AutoZone went
public, this was Hyde’s grand strategy because that was when the business started getting
more traction and other companies started trying to do the same thing. Hyde was able to
implement the strategy by opening up more stores, which is the reason why they have almost
5000 outlets now. AutoZone is now on the last step of the process where they are maintaining
their strong foothold in this industry.

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4. SWOT Analysis
Strengths:
 Impressive record of
accomplishment that proves the
success of the company. They have
been able to successfully integrate
many tech companies so they can
streamline their operations.
 Successful in developing new
products, very strong product
innovation.
 AutoZone has been able to establish
a strong brand portfolio over the
years.
 AutoZone has been able to build a
very reliable network for distribution
that is enabling them to reach
majority of their prospective
audience.
Weaknesses:
 AutoZone has a gap in their range of
products they sell, this can give rise
to other companies capitalising on
this opportunity.
 The company needs to invest more
in newer technologies since they are
expanding into different
geographies.
 There is a high attrition rate in the
work force and the company is
ending up spending more time in
training new employees than its
competitor brands.
 AutoZone is not able to market their
products properly, even though that
is not affecting their sales, the
product is still lost in its unique
selling proposition.
Opportunities:
 Government’s initiative towards a
green drive gives AutoZone an
Threats:
 The profitability of the company
comes into question when realizing

3CHAPTER 6 CASE STUDY
opportunity to adjust their products
in the same way.
 The overall reduction in the cost of
transportation will allow for lower
shipping prices and this in turn will
reduce the price of AutoZone’s
products, and this will boost their
customer market share.
 AutoZone has been able to make an
entrance into the new emerging
market that is arising due a
government agreement that allows
for new technology to be adopted
and for free trade to occur.
 The economy is experiencing a low
inflation rate; this means this will
increase the stability of the market.
that there is a significant rise in the
minimum wage along with
increasing prices from the Chinese
suppliers.
 Other companies have started selling
cheaper versions of the same
products offered by AutoZone.
 With the company present in
numerous countries, the fluctuation
of the currency rate affects the sales
of the products.
 Even though the company has an
online website, they need to figure
out how to get those customers into
their physical infrastructure since
their supply chain model is
dependent on that as well.
Table 1: SWOT Analysis (Source: Kinicki 2015)
AutoZone is continuing to be profitable, but not at the same rate as it had before it
became a public company. To establish a strong foot hold in the industry, AutoZone will
need to take advantage of all the opportunities that are available to them.
5. AutoZone’s strategy that they are following.

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AutoZone seems to be using the cost-leadership strategy, because for this strategy the
company needs to keep the prices of their products reasonably low as compared to their
competitors in the same line. This enables the company to be able to target a wide market
audience, and for this, the company needs to develop more products and services by cheaper
methods, such as lower cost of production.
6. Greatest takeaway from the case.
The greatest takeaway would be that an efficiently planned strategic management would lead
to the growth in value of an organization. In this case, AutoZone has been able to effectively
follow their plan by clearly developing their mission and planning for the future.

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References:
Kinicki, A. (2015). Management: A Practical Approach. 7th ed. New York: McGraw Hill,
pp.158-187.