About AutoZone Company

AutoZone is a company that sells car components and is based in the United States. It was founded in 1979, and its headquarters are in Memphis, Tennessee. Duralast Gold, Duralast, Valucraft, and Duralast Platinum are some of the private label labels. The corporation operates stores in the United States, Brazil, Puerto Rico, and Mexico. In 2016, the company earned $2.06 billion in earnings (2016 Annual report, 2016). The management has planned to grow its popularity in the Brazilian industry, which means that the firm wants to increase the interest of current customers while still acquiring new ones. According to our annual report, the company opened 42 stores in Mexico in the last fiscal year increasing the total number of stores in the country to 483. However, we only opened one more store in Brazil making the total number of outlets in the country eight. This number is very low, considering the fact that the organization is a leader in the American market (2016 Annual report, 2016).

Strategy

The management has come up with a strategy to ensure that we penetrate the Brazilian market with more vigour that before. There are three main elements of the plan:

First, the company will invest more money in advertising. The management has discovered that we spend less energy compared to other companies. This is very dangerous since it gives our rivals the ability to become more popular among our clients. We will carry out advertising in various ways. The management will make an effort to increase the number of TV and radio commercials regarding our products. Brochures and newspaper ads are also important. Billboards are also a good way of advertising especially along highways that experience traffic congestion where drivers read billboards to pass time. Social media advertising is also very popular today. Many successful companies have popular social media pages where the staff communicates with the clients directly; this is a good method of carrying out surveys on customer satisfaction as well as areas that we need to improve on.

Second, we will offer discounts depending on the number of purchases that a client makes. We need to reward our customers for their loyalty so that they feel appreciated. There has been a suggestion among the board members that clients get a 10% discount after every five purchases; this move may seem risky in the short term. However, in the long run, it will foster a bonding relationship between the company and the existing clients as well as attract new ones.

Finally, the firm seeks to increase its online sales. Currently, the team that has been given this responsibility is not performing its duties accordingly. Companies worldwide are getting more online sales every year; however, this is not the case in our organization. The management will replace the existing staff in this department and employ workers that are more enthusiastic about the job. We expect a significant rise in the number of online sales in the next fiscal year. When clients buy their products online, we will make sure that they receive them within three to four business days. Home delivery of items is also viable in secure neighborhoods at an extra fee.

Cost of Strategy Implementation

Activity

Daily Cost

Monthly Cost

Annual Cost

Advertising

$60,000

$1,800,000

$21,600,000

Home Delivery Expenses

$30,000

$900,000

$10,800,000

Total

$90,000

$2,700,000

$32,400,000

Financial Gains

Activity

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Totals

Online Sales ($)

5,000,000

7,000,000

8,000,000

10.000,000

30,000,000

Discounted Sales ($)

10,000,000

13,000,000

17,000,000

30,000,000

70,000,000

Totals

15,000,000

20,000,000

25,000,000

40,000,000

100,000,000

Sources of Funding

One, the company could ask for a bank loan and pay it at a fixed interest over a long period (Platt, 2017). The interest should not be so much that the company makes very little profits from the loan. The firm has solid financial records, has been operational for many years and has enough assets that the bank can take possession of in case we default in payment. The shareholders of the company also have a good credit record hence we qualify for the loan.

Two, the firm can also utilize angel investors (Nicol, 2016). These are wealthy individuals who fund a business in exchange for ownership equity or convertible debt. Angel investors require a lot of transparency from the organization so that their money is put into proper use. We will provide them with our quarterly reports and a list of the challenges faced during implementation of the strategy.

Three, we can also apply for government funding. This field is competitive; however, we make a lot of profit annually and pay large amounts of taxes thus we can be considered for the funding. We also employ many Americans therefore contributing to the growth of the economy (Nicol, 2016).

Conclusion

AutoZone is one of the market leaders in the supply of automotives and accessories in the USA. It also has branches in Puerto Rico, Mexico and Brazil; however, the firm has very little presence in the Brazilian market. We only have a few stores compared to the other three countries of operation. We have therefore decided to concentrate on ways of gaining more clients in Brazil and increasing the loyalty of the existing ones. In order to achieve this, we will allocate more funds to advertising, provide discounts after a certain number of purchases and install measures to increase our online sales.

References

2016 Annual report. (2016). AutoZone.

Nicol, T. L. (2016). 4 Funding Sources. Entrepreneur.

Platt, R. (2017). Business Finance: 6 Sources of Finance for a Business. Angel Finance.