Autozone Industry Analysis - Essay Example

The auto industry is one of the largest and most profitable industries in the world. There are over one billion vehicles worldwide and in the United States there are approximately 240 million cars (Tencer, 2011). These vehicles often breakdown and require maintenance. Due to the massive amount of vehicles in the United States there is a huge demand for auto parts. One of the biggest players in the auto parts industry is AutoZone. AutoZone has been in business for over 30 years. The organization was founded in 1979.

The company is committed to providing the best parts, prices and customer service in the automotive aftermarket industry (Autozoneinc, 2012). The company believes in the value of providing great service in order to increase its customer retention rate. Based on Pareto’s 80/20 rule firms obtain 80% of their business from 20% of their customers (Hafner, 2001). AutoZone is a publicly traded company sold in the New York Stock Exchange under the symbol AZO. The stock as of August 3, 2012 was selling at a price of $360.33 (Yahoo).

The firm began to sell its stocks in the open market in 1991. The market capitalization of the company is $13.71 billion. Market capitalization is calculated by dividing total stocks outstanding by market price. The company is a member of the Fortune 500. The fact that AutoZone is a publicly traded company gives this firm an advantage in this industry due to the fact that the company always has the option of releasing a secondary stock offering to raise capital. The auto parts industry is extremely fragmented with thousands of independent auto parts stores across the nation.

AutoZone has grown a lot since its inception 33 years ago. The company today is the market leader in the auto parts industry in the United States of America. The corporate headquarters of AutoZone are located at 123 S. Front St. Memphis, TN 38103 (Ecorporateoffices, 2012). The auto parts chain