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Homework answers / question archive / AutoNation, the largest chain of car dealers in the United States,is no exception
AutoNation, the largest chain of car dealers in the United States,is no exception. With over R19 billion in annual revenue, AutoNation is the leading seller of automobiles in the country. The company has 257 dealerships in 16 states and sells four percent of all new cars AutoNation, the largest chain of car dealers in the United States, is no exception. With over R19 billion in annual revenue, AutoNation is the leading seller of automobiles in the country. The company has 257 dealerships in 16 states and sells four percent of all new cars plant. It has become imperative for the sold in the United States. But it, too, has excessive inventory that it can't easily sell. Why don't auto manufacturers try harder to produce the car models and options customers actually want? One reason is that their manufacturing processes are not set up to do so and have been geared toward optimizing the efficiency of the production manufacturers to keep their plants running regardless of demand to pay for the rising costs of employee healthcare and pensions. Furthermore, auto workers must be paid most of their salaries regardless of whether they are working, so the manufacturers want them working all the time. Pushing out factory friendly vehicles keeps revenue streams flowing because the automakers are paid as soon as the cars ship to the dealers. These days, with so many options available for cars, this manufacturing strategy makes less sense. For example, a dealer in Florida may get stuck with four-wheel drive SUVs that, while in demand in climates that see regular snowfall, have little appeal to drivers in the Sunshine State. Similarly, a mid-priced car that is so loaded with options that it reaches luxury prices will be passed over in favor of the better car.AutoNation is now applying these principles of market intelligence to auto manufacturing. By mining consumer data, Jackson wants to pinpoint the few configurations of each vehicle among thousands of possible variations that are most popular with buyers. That way, the manufacturers can focus on building these vehicles in the numbers that the data dictate.Ford, GM, and Chrysler have all expressed their support for Jackson's attempts to integrate customer data with auto manufacturing processes. Mark LaNeve, head of North American sales and marketing for GM, suggested that his company might collaborate with Jackson on the creation of a predictive modelling system to bring production in line with consumer demand. At the same time, LaNeve is not overly concerned about inventory levels and does not think that the industry is in crisis. Jackson may still have a lot of campaigning to do before market intelligence and auto manufacturing truly co-exist
1.1 Why is AutoNation having a problem with its inventory?
Why is this also a problem for auto manufacturers such as GM, Ford, and Chrysler?
How is this problem impacting the business performance of AutoNation and of the auto manufacturers?
1.2 What pieces of data does AutoNation need to determine which cars to stock in each of its dealerships?
How can it obtain these data?
What is AutoNation's solution to its problem?
What obstacles must AutoNation overcome to implement its solution?
How effective will the solution be?
1.3 List and describe four competitive strategies enabled by information systems that firms can pursue
