Organizational Behavior: A SWOT Analysis of AutoNation Company

This report presents a comprehensive SWOT analysis of AutoNation, examining its organizational behavior within the context of market dynamics and strategic challenges. The analysis delves into AutoNation's strengths, such as its strong distribution network and effective Go-To-Market strategy, while also identifying weaknesses, including gaps in its product range and high employee attrition rates. Opportunities for market development, leveraging core competencies, and adopting diversified pricing strategies are explored, alongside threats such as seasonal product demand and intense competition. The report further incorporates external analysis using Porter's Five Forces and PESTLE frameworks, evaluating factors such as competitor rivalry, supplier power, political regulations, economic trends, social demographics, technological advancements, environmental concerns, and legal provisions. The report aims to provide a holistic understanding of AutoNation's position and strategic considerations in the automotive industry.

Running head: ORGANIZATIONAL BEHAVIOR SWOT ANALYSIS
ORGANIZATIONAL BEHAVIOR SWOT ANALYSIS
Name of the student
Name of the university
Author Note

1ORGANIZATIONAL BEHAVIOR SWOT ANALYSIS
Organizational behavior background
The chosen behavior for the assignment is organizational change. The changes are
mostly related to the alteration in the structure, its strategies, the operational methods and the
process combined with technical advancements and the work or organizational culture. As
per the topic the prospects of any organization is completely dependent on the acceptance or
the changes.
Auto nation started its competition with Car max and since the company starteged
facing tough challenges due to the rise in the sales of highly profitable new cars, the sale of
old or used cars have gradually declined, so in order to mitigate such an issue the
organization restructuring of its entire operations and strategies. In order to achieve such
CEO, Mr. Michael Jackson took the decision to start the business afresh primarily focusing
on the customer behavior, scraping of the remaining used car super stores, focus in the new
car sales along with the improvised customer service. The decision was taken to close down
the rest of the used car stores and begun focusing in the location strategies to help the
business grow.
Gradually the sales in the used car segment begun to grow with the sales of the new
car began to decline due to the gradual plateau in the market division which was one of the
probable outcomes of the financial crisis that struck in the year of 2008. Taking the advantage
of the situation, this crisis was turned towards the beneficial end of the used car business, by
Auto nation. Eventually with the improvement of the critical situation, even though the sales
of the new cars have been boosted yet there was a skeptical perception that prevailed amongst
the people related to the new cars. People began to return the slightly used cars to the
dealership and a new method of low lease with low payment in the car loans. As a result
people have found more valuable way of low mileages, in the off lease cars than the new

2ORGANIZATIONAL BEHAVIOR SWOT ANALYSIS
ones. However, the car manufacturers and the suffered tremendous setbacks, who did not fore
see this shift, although this shift was predicted and understood by Mr. Jackson, who took full
measures to use this situation in the advantages working on full scale upon the technological
advantages as well as reducing the hassles of buying a new car. So basically, the organization
worked itself based on the customer centric methods, along with the strategic reforms and
challenging the crisis with full focus by channeling the resources to the full capacity.
However, the organization is primed in keeping on improvising the organizational culture
focusing on the diversity management to understand the waves of ideological differentiation
amongst the employees, thus enhancing the work culture. However, the organizational culture
is different for the next dealership can keeps on changing, therefore it is extremely difficult to
analyze the predictability of any particular pattern of work culture that prevails within the
entire Auto nation business. Auto nation currently employees over 25000 employees across
the nation, in over 300 store front, so it would be difficult to lay a verdict on the exact
prevailing work culture, though it can be assumed with the circumstantial evidences, that the
company does focus on the employment patterns along with the diversity management within
its dealerships.

3ORGANIZATIONAL BEHAVIOR SWOT ANALYSIS
Internal analysis of AutoNation

4ORGANIZATIONAL BEHAVIOR SWOT ANALYSIS
Strengths
 AutoNation has one of the strongest
distribution networks that has been
built over years of operations that was
extremely reliable and dependable in
its character, which is influential in
turn for the company to flourish in the
highly growing and competitive
automobile market (Borman, 2014)
 AutoNation has a triumphant Go-To-
Market (GTM) strategy plan that has
successfully helped the company
reach its customers thus helping it
build a strong competitive advantage
over the other companies. The
company armed with such a strategic
plan has clear blueprint of the entire
logistics operation of the organization
(Kim & Mauborgne, 2014)
 AutoNation is thriving in the
execution of newer projects and
improvising older ones to
successfully generate revenue as well
as keep the flow of cash in the
Weakness
 The rising gaps in the product range
offered by the company as well as the
lack of choice gives the competitors to
land a strong foothold in the competition
 Higher investment is considerably
necessary in terms of newer inventions
based on the scale of expansion and
growth
 The unsuccessful attempts to create a
diversified work environment in the
firms is one of the biggest weakness
 The inability to tackle and manage the
challenges that came from the newer
entrants in the market segment that
resulted in the loss of market positioning
 The limited scope of success of
AutoNation to move into other segments
apart from automobiles, in other words
the limited success outside the core
business activities
 The higher attrition rates of AutoNation
is one of the major weakness since it
spends more than the other companies in

5ORGANIZATIONAL BEHAVIOR SWOT ANALYSIS
business uninterrupted and free, thus
enabling the company to generate a
good return in the capital expenditure
(Brigham & Ehrhardt, 2013)
 With company having a strong flow
in the cash, the company is venerable
to the reception of diverse resources
that is in turn instrumental for the
carrying out of newer projects, thus
favoring the organizational expansion
(Brigham & Houston, 2012)
 The automation of the organizational
activities has brought a consistency in
the quality of the products that are
being offered by the company. This in
turn has helped the company to
balance itself, up and down based on
the market situations as well as the
customer requirements (Goetsch &
Davis, 2014)
 The successful and the well
maintained track record of the
product inventions as well as the
integration of the complementary
firms through merging and
terms of training the employees

6ORGANIZATIONAL BEHAVIOR SWOT ANALYSIS
acquisition to helped the company to
advance both technically and
financially (Vazirani & Mohapatra,
2012)

7ORGANIZATIONAL BEHAVIOR SWOT ANALYSIS
Opportunities
 The market development would
highly favor the market dilution of the
competitive advantages and help
AutoNation perform better in
comparison to the other companies
(Kotler, 2012)
 The core competencies can facilitate
the success of the other production
fields (Kinicki & Kreitner, 2012)
 The new and improvised technology
provides AutoNation an opportunity
to practice the diversified pricing
strategy
 The lower inflation rate can help
AutoNation bring more stability in
the market and help in offering
credibility to the customers with a
low interest rate
 The lowering of the cost of
transportation can help AutoNation
bring down the cost of the products
that are being offered thus providing
an opportunity for the company to
Threats
 The demand some of the highly
anticipated products are seasonal in
nature and any unlikely event in the peak
duration can affect the business
 The rising raw materials cost can pose an
eminent threat to the company’s
profitability
 New legal regulations can pose a threat
to the existing products
 Intense competition from the other
companies can pose a grave threat to the
company
 Newer technological inventions by the
competitors disrupt the business of the
company and is a consistent threat to the
company

8ORGANIZATIONAL BEHAVIOR SWOT ANALYSIS
flourish
 The newer environmental policies,
technologies and the opportunities
would help AutoNation to perform
and represent itself to gain a greater
market share in the newer product
segments

9ORGANIZATIONAL BEHAVIOR SWOT ANALYSIS
External analysis
The external analysis of the company has been done with reference to the Porter 5
forces model.

10ORGANIZATIONAL BEHAVIOR SWOT ANALYSIS
Competitor Rivalry
The intense rivalry from the existing top players
in the automobile industry such as the Penske
Automotive Group and Sonic Automotive group
can possibly bring down the company’s
profitability as well as the profitability of the
industry as a whole.
Supplier Power
Above all the company purchase s the raw
material from the various suppliers. Since
suppliers stand in the most advantageous
position, they can lend a tough negotiation
competition to extract a higher from AutoNation.
The overall impact of the supplier bargaining
power can thus lower the effective profitability of
the company.
Buyer Power
The customers are often demanding at times, who
probably wish to buy the best offering in the
minimum price. The bargaining pressure from the
customer can lend a huge load on the profitability
margin of AutoNation, in the end. The smaller
yet powerful customer base of AutoNation is a
possible threat for obtaining the products in a
lower price (Dent & Whitehead, 2013).
Threat of substitution
With a new product that has been introduced
which meets the customer’s needs can affect
sustainability of the company, for example,
electric cars can be a threat to the fuel operating
vehicles. In this manner competition from the

11ORGANIZATIONAL BEHAVIOR SWOT ANALYSIS
substitutes can definitely disrupt the business of
AutoNation in a certain manner.
Threat of new Entry
The new entrants in the automotive dealership
industry bring newer inventions and strategies
that can put a lot of pressure on AutoNation,
forcing it to lower its existing profitability
parameters. In order to manage this additional
competition, it is necessary for AutoNation to
manage these challenges and effectively
barricade its competitive advantages.
External environmental factors analysis
The external factors that directly or indirectly influence AutoNation has been done
with the help of PESTLE analysis. The factors that are crucial and influences AutoNation
have been identified and briefly cited.