Erica Civis

1. Erica Civis

2. Company History 1991: The Concept of CarMax was founded by Circuit City Inc. 1993: 1996: 1997: 2002: 2004: 2005: 2009: Opened the first CarMax store in Richmond, VA. Home office: 12800 Tuckahoe Creek Parkway, Richmond VA. 23238 Announced rollout plan to open 80-90 superstores by 2001 Completed Initial Public Offering Became independent company Debut in Fortune 500 at #435 Ranked one of the 100 best companies to work for Celebrated 100th store opening

3. Current Standing • Operates 103 Superstores • In 26 States • In 46 Metropolitan markets • Ranked one of the “100 Best Companies to Work For” for 6 consecutive years • Nation’s largest retailer of used cars • President & CEO: Tom Folliard • Total Employees: 13,439 • 10,196 hourly and salary • 3,243 commission based • No international employees • No unionized employees

4. Products And Services Purchase and recondition used vehicles Sell new and used vehicles Provide customer financing of vehicle purchases Sell extended service plans Offer guaranteed asset protection Appraise and purchase vehicles directly from consumers Provide vehicle repair services

5. Sales By Product

6. Business Strategy -Tom Folliard, President & CEO Source: Annual Report (10-K Form) “To revolutionize the automotive retailing market by addressing the major sources of customer dissatisfaction with traditional automotive retailers and to maximize operating efficiencies through the use of standardized operating procedures and store formats enhanced by sophisticated, proprietary management information systems”

7. Business Strategy Mission Statement “To provide our customers great quality cars at great prices with exceptional customer service.” • Business Strategy • Differentiation • CarMax wants to differentiate themselves through exceptional customer service • CarMax also wants to create superior efficiencies through the use of standardized operating procedures

8. Corporate Strategy Growth Strategy • Internal Growth • Prior to 2010 CarMax has opened new stores at an annual rate of 15% for several consecutive years • Opened 33 new stores from 1993-2000 • Opened 25 new stores from 2002-2005 • Opened 3 new stores thus far in 2010 • CarMax expects to grow 15%-20% per year • Expects to open 3 new stores in 2011 • Expects to open 3-5 new stores in 2012 • Expects to open 5-10 new stores in 2013

9. HR Strategy • Talent management and development as a core competency • Begins with orientation • Training • Through a variety of internal and external sources • Career planning • Path for employees as they move within the organization • Performance management • Assessing how well employees perform their jobs

10. Competitive Advantages Ability to provide a high degree of customer satisfaction with the car buying experience Competitively low prices Breadth of selection of the most popular makes and models Quality of vehicles Proprietary information systems Locations of retail stores

11. Comparative HR Metrics

12. Organizational System/Architecture

13. HR System/Architecture

14. Stock Performance (5 years) Source: Bigcharts.com

15. Financial Statistics Source: Annual Report 10-K Form

16. Financial Statistics

17. Training CarMax was named top training company by Training Magazine for 3 consecutive years Source: cnnmoney.com

18. Training Reconditioning & Mechanical Technicians • Completed 62 hours of training in 2009 • Attend in house and vendor sponsored training • Develop skills in performing repairs on diverse makes and models • Update technicians on current diagnostic, repair, and maintenance techniques Office Associates • Complete 3 to 6 month on the job certification process • Fully cross trained in all functional areas of the business • Complete competency based training

19. Training Buyers • Complete 6 to 18 month apprenticeship • Supervised by experienced buyer • Assists with the appraisal of 1,000+ cars before making their first independent purchase Sales Associates/Managers • Complete 4 week on-boarding process • Partnered with a mentor • combines self paced online training with shadowing and role playing • Sales Assoc. completed 102 training hrs. in 2009 • Store Managers completed 147 training hrs. in 2009

20. Training Programs • Selling skills training • Building employee confidence • Connecting with the customer • Listening techniques • Persuasion techniques • Customer Satisfaction Surveys • Provides constructive feedback to employees on how to improve interactions with customers

21. SWOT Analysis Strengths: Offers a full range of service: including auto finance, service and repair, and wholesale auction Pitches no-haggle prices, low hassle trade ins, and a wide selection of used vehicles Sophisticated technology allows the company to provide real time inventory lists to customers Appeals to those shopping for good deals not just brand loyalty All cars must pass a Certified Quality Inspection of the engine, transmission, and all other major systems

22. SWOT Analysis Weaknesses • Do not negotiate prices • Accounts for only 2% of the sales within the automotive industry • New car sales are governed by the terms of the sales, service & dealer agreements-which imposes restrictions such as inventory levels • Since CarMax retains confidential customer information, the company is vulnerable to security breaches, programming or human error, computer viruses, or misplaced/lost data

23. SWOT Analysis Opportunities Company plans to grow 15%-20% per year Due to the economical recession, the demand for used cars has increased over the past several years CarMax survey shows that shoppers are likely to buy used for their next vehicle purchase As CarMax becomes more reputable, they can begin to negotiate contracts with automobile manufacturers with whom they do not yet have a relationship

24. SWOT Analysis Threats • Vulnerable to economic conditions such as credit availability, interest rates, and discretionary spending • Operate in a highly competitive business that includes thousands of publically and privately owned new and used car dealers • Supply of used vehicles is influenced by the number of vehicles in operation; the rate of new vehicle sales; the number of used vehicles sold/remarketed through retail channels • Adverse conditions affecting one or more automotive manufacturers could impact our results of operations. 

25. The Future of CarMax • Sales have continued to increase, even during the recession • Company’s performance may soon exceed that of its major competitors • Stock performance has been relatively stable • Customer satisfaction is very high • May increase word-of-mouth sales • Employee satisfaction is very high • May increase long term commitment

26. References • Annual Report for AutoNation. (2010, February 17). 10-K Form, 9, 20, 27-33. Retrieved September 10, 2010 from http://sec.gov/Archives/edgar/data/350698/000119312510033229/d10k.htm • Annual Report for CarMax. (2010, April 27). 10-K Form, 4-15, 18-26, 33-34, 43. Retrieved September 10, 2010 from http://sec.gov/Archives/edgar/data/1170010/000117001010000032/tenk.htm • Annual Report for Penske Automotive Group, Inc. (2010, February 24). 10-K Form, 6, 14, 29. Retrieved September 10, 2010 from http://sec.gov/Archives/edgar/data/1019849/000095012310016429/c96591e10vk.htm • CarMax Named to Training Magazine's Top 125 [Press Release]. (2010, February 12). Retrieved October 1, 2010, from http://www.tradingmarkets.com/.site/news/Stock%20News/2174996/ • CarMax to Join S&P 500. (2010, June 23). Wall Street Journal - Eastern Edition, p. C5. Retrieved from Business Source Complete database. • Colquitt, J. A., LePine, J. A., & Wesson, M. J. (2009). Organizational Behavior: Improving Performance and Commitment in the Workplace. Boston, MA: McGraw-Hill. • Corporate Governance- Board of Directors. (n.d.). Retrieved October 12, 2101, from http://phx.corporate-ir.net/phoenix.zhtml?c=125417&p=irol-govboard • Dess, G. G., Lumpkin, G. T., & Eisner, A. B. (2010). Differentiation. In Strategic Management: Creating Competitive Advantages (5e ed., p. 165). New York, NY: McGraw-Hill.

27. References • Glowicki, J. (n.d.). Ins and Outs of CarMax. Retrieved November 26, 2010, from Consumer Guide Automotive website: http://consumerguideauto.howstuffworks.com/industry-insider-carmax-cga.htm • Hughes, R. (2010, June 23). CarMax: Strengths, Weaknesses, Opportunities, Threats. In The Motly Fool. Retrieved September 10, 2010, from http://www.fool.com/investing/general/2010/06/23/carmax-strengths-weaknesses-opportunities-threats.aspx • Mathis, R. L., & Jackson, J. H. (2008). Human Resource Management (12th ed.). China: South-Western CENGAGE Learning. • Ramage, S. (2010, October 12). Training techniques at CarMax. Interview with Training Manager at CarMax presented via Telephone Conference. • Sawyers, A. (2008). CarMax Plans More Stores. Automotive News, 82(6302), 46. Retrieved from Business Source Complete Database. • Shoppers likely to buy used for their next vehicle purchase, According to CarMax survey [News Release]. (2010, March 23). Retrieved September 10, 2010 from http://phx.corporate-ir.net/phoenix.zhtml?c=125417&p=irol-newsArticle&ID=1404973&highlight= • The CarMax Timeline. (n.d.). Retrieved October 1, 2010, from http://www.carmax.com/enus/company-info/about-us-timeline.html • Ward's AutoWorld. (2010, February 1). Would You Buy a Used Car From These Guys. Retrieved November 26, 2010, from http://wardsautoworld.com/ar/auto_buy_used_car_3/ • Wernle, B. (1997). Slow-growth CarMax opts for marathon race. Automotive News, 71(57070), 56. Retrieved from Business Source Complete Database.