CARMAX CASE STUDY
Carmax Case Study Submitted by Ernest Hopkins Prepared for
Professor Patty Murphy
MNGT 5650 / Management & Strategy
Fall 2 2014
November 5, 2014
CERTIFICATE OF AUTHORSHIP: I certify that I am the author. I have cited all sources from which I used data, ideas, or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.
Signature Ernest Hopkins November 5, 2014
CarMax History
Historically there have been three choices when purchasing a used car. First, you may negotiate with the usual car dealership. This brought many challenges, such as small inventory and limited inventory. Additionally, you had to worry about the limited financial options and their suspicious reputations. Next, you could visit the new car dealers but their main objective will be to sell you used cars. Therefore, they will also have a limited supply of used cars. Lastly, you could buy or sell privately. This sort of purchasing can bring many headaches while receiving little on return.
Advantages
CarMax, founded in 1993, was created to provide an enhanced option for both purchasing and selling a used vehicle. Their advantages were small; no haggle costing, large selections, enhanced funding options and a sales team dedicated to work with potential clients. Also, they would also make a strong bid on any vehicle they were presented with. They were able to this because they were not dependent on consumers selling to them; their main interest was the consumer buying one from them. CarMax sudden rise to the top almost came down very quickly. Due the recession that the country was experiencing, the demand for cars of any sort dropped. This could have damaged CarMax sales immediately.
Recovering
Thankfully, for having a strong business model and incorporating a strong management team they were able to withstand an extremely tough economic stage with limited damage. Earnings
Professor Patty Murphy
MNGT 5650 / Management & Strategy
Fall 2 2014
November 5, 2014
CERTIFICATE OF AUTHORSHIP: I certify that I am the author. I have cited all sources from which I used data, ideas, or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.
Signature Ernest Hopkins November 5, 2014
CarMax History
Historically there have been three choices when purchasing a used car. First, you may negotiate with the usual car dealership. This brought many challenges, such as small inventory and limited inventory. Additionally, you had to worry about the limited financial options and their suspicious reputations. Next, you could visit the new car dealers but their main objective will be to sell you used cars. Therefore, they will also have a limited supply of used cars. Lastly, you could buy or sell privately. This sort of purchasing can bring many headaches while receiving little on return.
Advantages
CarMax, founded in 1993, was created to provide an enhanced option for both purchasing and selling a used vehicle. Their advantages were small; no haggle costing, large selections, enhanced funding options and a sales team dedicated to work with potential clients. Also, they would also make a strong bid on any vehicle they were presented with. They were able to this because they were not dependent on consumers selling to them; their main interest was the consumer buying one from them. CarMax sudden rise to the top almost came down very quickly. Due the recession that the country was experiencing, the demand for cars of any sort dropped. This could have damaged CarMax sales immediately.
Recovering
Thankfully, for having a strong business model and incorporating a strong management team they were able to withstand an extremely tough economic stage with limited damage. Earnings