Please review the SW/OT matrix developed from the SWOT analysis that was uploaded into the dropbox. The first strategic alternative developed utilizing the SW/OT matrix is for AutoZone to launch a focus marketing effort to target the commercial auto repair market, and utilize all retail locations as pick up spots for commercial repair business needs. Parnell (2014) points out that not all AutoZone locations currently participate in the commercial repair program. However, I would argue that this it is necessary for all locations to participate as it will greatly increase the convenience to this potential high growth market. The commercial auto repair industry is a huge market and AutoZone has yet to fully tap the potential for growth in this
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This alternative takes into consideration the weakness of having a high debt level for growth and the opportunity of financing debt at historically low levels. AutoZone’s high growth rate was able to be realized in large part to huge debt level incurred by the company (Abbott, 2016). After the Great Recession, interest rates have remained persistently low as an attempt to stimulate economic activity. This allowed AutoZone to take on large amounts of debt at historically low cost. I would suggest AutoZone refinance any short term debt to long term debt in order to provide a more financially stable outlook in the future. There may however be costs associated with refinancing that outweigh any benefits. If those specifics were available, it may change this …show more content…
This alternative addresses weaknesses involving current debt levels and increases flexibility to some degree as the companies physical locations would be decreased and cash flow could be diverted elsewhere to higher performing locations or strategies. This retrenchment strategy does not appear to be in line with current corporate growth strategies and may harm other alternatives that I would argue should be taken. For instance, closing retail locations that would greatly serve untapped commercial services may harm the commercial expansion strategy. These current poor performing locations may be in areas where do-it-yourself consumers are not as prevalent due to varying industries or income in the area, but it may be a location where commercial repair businesses are booming. Therefore, I would not recommend this
This alternative takes into consideration the weakness of having a high debt level for growth and the opportunity of financing debt at historically low levels. AutoZone’s high growth rate was able to be realized in large part to huge debt level incurred by the company (Abbott, 2016). After the Great Recession, interest rates have remained persistently low as an attempt to stimulate economic activity. This allowed AutoZone to take on large amounts of debt at historically low cost. I would suggest AutoZone refinance any short term debt to long term debt in order to provide a more financially stable outlook in the future. There may however be costs associated with refinancing that outweigh any benefits. If those specifics were available, it may change this …show more content…
This alternative addresses weaknesses involving current debt levels and increases flexibility to some degree as the companies physical locations would be decreased and cash flow could be diverted elsewhere to higher performing locations or strategies. This retrenchment strategy does not appear to be in line with current corporate growth strategies and may harm other alternatives that I would argue should be taken. For instance, closing retail locations that would greatly serve untapped commercial services may harm the commercial expansion strategy. These current poor performing locations may be in areas where do-it-yourself consumers are not as prevalent due to varying industries or income in the area, but it may be a location where commercial repair businesses are booming. Therefore, I would not recommend this