CarMax transformed the used car buying experience back in the 1990s with its
no- haggle car prices that allow the customer to focus on other features (such
as fuel economy, safety features, entertainment package, and so on) of the
auto. Today, CarMax is the largest used car retailer in the United States with
173 used car stores and an aggressive growth plan that calls for the opening
of more than a dozen new stores each year. During the fiscal year ended
February 28, 2017, total revenue was $15.9 billion from the retail sale of just
over 1 million used cars. CarMax continues to revolutionize car buying
through consumer insights and customer-focused technology innovations
that further distance CarMax from its competitors. Since 90 percent of used
car buyers start their search online, CarMax built a Web site search platform
similar to the highly effective “Amazon product description” design with which
most consumers are familiar. CarMax has a centralized vehicle inventory
system with information on over 50,000 CarMax Quality Certified vehicles. Its
customers can search through this inventory using their mobile devices or
portable or desktop computers. Consumers may even request that CarMax
transfer the car of their choice to a store near them and, indeed, nearly 30
percent of the cars it sells are transferred for this reason. CarMax launched a
new online financing app to enable customers to get prequalified for a loan
prior to visiting a store. This app helps move the customer further along the
sales process and provides a faster in-store shopping experience. It has been
received well by customers and contributes to increased leads, which CarMax
believes generates incremental sales. When a customer arrives to sell his or
her car, a CarMax associate armed with a mobile device can evaluate the
vehicle in real-time without ever leaving the customer or the vehicle. The
associate has access to all the information needed to provide an accurate
appraisal via a mobile app. This creates a positive initial experience both for
the customer and the associate. CarMax associates use their mobile devices
and the same app to appraise vehicles at off-site auto auctions. This enables
them to buy the best cars at the best prices so that CarMax can make them
available to its customers. CarMax customers interested in getting an appraisal
value for their vehicle can also submit their vehicle information online without
having to come to a store.
CarMax plans to add an app to support a loyalty program for car owners. This
will help them maintain and replace auto parts and obtain roadside assistance.
There will also be a wallet-like feature where customers can store their vehicle
ID number and insurance information.
CarMax has a strong program for onboarding information system new hires.
Once new software developers arrive at CarMax, they attend Information
Technology Academy. This academy is an eight-week program designed to
jump-start their CarMax career. Here they learn about the primary
technologies and tools as well as the software development process used at
CarMax, thus laying a strong foundation for success in their new role. They
also visit CarMax stores to observe first hand, different business processes and
learn how CarMax information systems support employees and customers
alike. This experience helps them to appreciate how their contributions will
have a direct and significant impact on the organization’s ongoing success. At
the end of the eight-week program, each graduate is assigned to a product
team matching their skill set, interests, and aptitude. CarMax fuels the
innovation process by creating multi-functional product teams consisting of
up to 10 people including a product manager, lead software developer, and
people from quality assurance and user design. The team is challenged to go
after business objectives and key results such as how many leads they
generate or how many prospect-to-customer conversions they deliver. It’s up
to them to determine the best solution for each customer to meet their goals.
Every two weeks, the product teams conduct open houses that anyone can
attend. A team member presents what the product team has accomplished
against its business objectives. CarMax senior managers, including an
occasional board of directors’ member, regularly attend these open houses.
A. INTRODUCTION
1. Identify the key problems and issues in the case study
2. Formulate and include a thesis statement, summarizing the outcome
of your analysis in one or two sentences
B. CONTEXT
3. Provide background information, relevant facts and the most
important issues.
4. Demonstrate that you have researched the problems in this case
study.
C. Alternatives
5. Outline possible alternatives (not necessarily all of them).
6. Explain why alternatives were rejected
D. Proposed Solution
7. Provide one specific and realistic solution
8. Explain why this solution was chosen
9. Support the solution with solid evidence
Concepts from class (text readings, discussion, lectures)
Outside Research
E. Recommendations
10. Determine and discuss specific strategies for implementing the
proposed solution
11. If applicable, recommend further action to resolve some of the issues
