Corporate Strategy Final Project

Assignment Requirements:
Carvana: An e-commerce platform for buying and selling used cars.
1. Automotive Retail: Specializing in used cars, leveraging an innovative e-commerce platform.

2. E-commerce: As a digital-first company, it exemplifies the shift towards online retailing in traditionally brick-and-mortar sectors.
3. Logistics and Supply Chain: Managing the transportation and distribution of vehicles nationwide through its network.
Carvana: An e-commerce platform for buying and selling
used cars and part of following industries
Automotive Retail: Specializing in used cars, leveraging an

innovative e-commerce platform.
E-commerce: As a digital-first company, it exemplifies the shift

towards online retailing in traditionally brick-and-mortar sectors.
Logistics and Supply Chain: Managing the transportation and

distribution of vehicles nationwide through its network.
PESTLE Analysis of Carvana’s Business
Political Economic Social Technological Legal Environmental
Affected by Inflation and Aligns with the

Leverages AI- Compliance
automotive and interest rates shift to online
driven pricing, with state- Focus on EV
e-commerce challenge shopping;
data analytics, specific car inventory and
regulations, consumer emphasizes
and advanced sales laws and logistics
consumer purchasing convenience
logistics for consumer efficiency to
protection laws, power; through home
efficiency and protection reduce
and operational delivery and
customer regulations is environmental
environmental efficiencies seamless
satisfaction. critical. impact.
standards. drive resilience. experiences.
Carvana 5 Forces Opportunities
● Enhance barriers to entry

● Strengthen customer loyalty
● Secure supplier contracts
● Reduce substitutes impact
● Compete efficiently
Carvana Current Strategy
● Seamless online platform

● Unique car vending machine attracts attention
● Competitive pricing
● Financing options to further drive revenue
● Home delivery and return policy
● Transparency in pricing builds trust
VRIO Analysis
VALUE - highly RARITY - not
valuable rare
- Customers can purchase vehicles - Online platform for automobiles are
seamlessly from their homes not rare
- Car Vending Machines are rare in
- Transparent pricing policies and financing
the industry
options increase customer loyalty and - Unique pick-up experience
credibility
VRIO
Require infrastructure integration - Well-organized to leverage the
of logistics, financing, and customer- resources effectively
centric policy make competitors
difficult to replicate quickly Seamless integration of inventory
management, online transactions, and
Online platform & pricing transparency are customer service contribute to capture
easy to copy value
IMITABILITY - moderate ORGANIZATION - well

difficulty organized
Value Chain Analysis
Inbound Logistics Operations Outbound Logistics Marketing & Sales Services
PRIMARY ACTIVITIES
• Sourcing from auctions, • 150-point inspection • Car Vending Machines • Transparent pricing, no • 7-day return policy
individual sellers, and process for all vehicles for unique pickup hidden fees, easy • Limited warranty on all
dealerships • Fully online platform that experience financing options vehicles
• Maintains a large and reduces operational costs • Nationwide logistics • User-friendly website and • Trade-in services for
diverse inventory with • ‘Carvana Certified’ quality network for delivery app with 360-degree customer’s existing
Customer Value
tracking system assurance process images vehicles
• Easy-to-use financing
options
HR & Finance & Legal :
SUPPORTING ACTIVITIES
* Compliance with automotive industry regulations and consumer protection laws
Technology :
* Proprietary software development (Carli)
* AI and machine learning for inventory optimization and pricing
Procurement :
*Strategic partnerships with vehicle suppliers and auction houses
*Contracts with third-party logistics providers for delivery capacity
Strategic Recommendation 1:
Vertically Integrate upstream on the Supply Chain for used vehicles
Threat to Inimitability:
● Lower Power of Suppliers enable easier prevalence of competitors
● Reduced barrier to entry for online-car shopping Companies
Plan of Action:
● Formally negotiate exclusive fleet & rental purchase agreements
● Purchase smaller, strategically located Auction Platforms
● Increase marketing and incentives for DTC used-car purchases
Further expand in-house vehicle delivery fleet & services
Benefits to Value and Organization:

● Passes “Better off test” and provides synergy between divisions
● Online vehicle sales hinge on availability & costs of delivery
● Carvana differentiates itself through a premier delivery experience
Plan of Action:
● Continue fleet expansion to achieve 100% Carvana Logistics
● Acquire vehicle logistics companies
● Contract out unused capacity during low-volume periods
Horizontally integrate by offering rentals & lease to buy options
● Passes “Better off test”

● Dynamically price inventory to increase revenues
● Provides Synergy from marketing between sales, rentals and leases
Plan of Action:

Corporate Strategy Final Project

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Assignment Requirements:

Carvana: An e-commerce platform for buying and selling used cars.

1. Automotive Retail: Specializing in used cars, leveraging an innovative e-commerce platform.

Automotive Retail: Specializing in used cars, leveraging an

E-commerce: As a digital-first company, it exemplifies the shift

Logistics and Supply Chain: Managing the transportation and

Political Economic Social Technological Legal Environmental

Affected by Inflation and Aligns with the

● Enhance barriers to entry

● Seamless online platform

IMITABILITY - moderate ORGANIZATION - well

dealerships • Fully online platform that experience financing options vehicles

tracking system assurance process images vehicles

HR & Finance & Legal :

Benefits to Value and Organization:

● Passes “Better off test”

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