The O’Reilly Auto Parts is an auto part retailer that operates more than 5000 stores in all the states (O’Reilly Auto Parts, 2018). The company serves two types of markets. The first is the do-it-for-me auto repair shops where the company is responsible for fixing the customers cars. The second type of market is the do-it-yourself customers that are mainly for people who prefer the repair service and fixing of their cars. The do-it-for-me service levels are higher than the do-it-yourself services. This is because when it is the do-it-for-me service, the spare parts are readily available in the store since there is a wide variety to choose from. Unlike the do-it-for-me, the do-it-yourself service is hard to find the parts needed and may take some time to get the accurate spare part. In addition, it has a just-in-time service whereby they deliver the parts needed 30 minutes before the required time for the commercial customers. Its distribution rate is what makes it different from other auto part industries. Primarily, the distribution network provides barriers from the competitors of the do-it-for-me services. High service performance should not always come at the cost of high inventory levels, and O’Reilly Auto Parts makes sure that doesn’t happen. The inventory optimization and the warehouse automation ensure that high level services do not come at a high cost for the consumers.
One of the major strengths of O’Reilly Auto Parts is that it is an evolving firm. The firm is evolving fast in tandem with the recent technological developments. Better features and technologies are used to offer repair services for cars and other automobiles. Also, the company manufactures auto spares that have special features (Banker, 2011). This has helped it contribute a lot to growth and development. Since it is a big part of the automobile industry, it has, therefore, helped in the improvement of peoples’ lives. The auto parts are among the most important aspects to vehicle owners. As such, with the technological advancement, the company is ensured of translating this to a likely competitive advantage in the market.
The second major strength of O’Reilly Auto Parts is that its distribution is available locally for many users due to many stores that the company operates in different states (O’Reilly Auto Parts, 2018). As such, this makes it different from other auto spares companies operating in the United States. in this regard, the company’s products and services are accessible to many people. Having outlets in various states also opens up the company to the larger global market for auto spares (Coppola ; Lippert, 2017). This has earned it a large market share making it prominent in the world. The delivery of the parts is done in time which makes many commercial consumers like O’Reilly Auto Parts Company.
The third strength of O’Reilly Auto Parts is that it provides a wide range of products and accessories such as chemicals, spare parts, fluids and repair services (O’Reilly Auto Parts, 2018). Therefore, when a customer visits an O’Reilly Auto Part shop, they receive a whole package of auto spares products and services. Many customers prefer stores where they do not have to buy one product in one place and another product in another place. Therefore, the variety of products makes it preferable to the majority of customers. Also, O’Reilly has managed to build a strong brand over the years (Cress, 2018). This is a strength to the company because people are always in search of the best brand. One advantage of a strong brand is that most people believe that prominent brands offer quality products and services. Therefore, its strong brand makes it reliable and credible which earns the organization loyalty from customers.
One of the major weaknesses of the O’Reilly Auto Parts is the consumer bargaining power. The automobile industry is quite competitive (Baweja, n.d). This is because of the high profits that attract new entrants. Also, there is free entry and exit in the market. As a result, the industry has many competitors and substitutes (Nasdaq, 2018). The opportunity for many automotive parts’ companies offering a variety of goods and services as well as the competition between them has given the customers the strength to decide on what they specifically want. The needs of the customers must be considered thus, they have the bargaining power. As such, this implies the availability of close substitutes and competitors can affect prices because customers have alternatives. They can opt for a substitute product or supplier if they feel the prices being charged by other suppliers are high.
Another weakness of the O’Reilly Auto Parts is the demand forecasting. Unlike any other business, it is hard to forecast the demand on the spare parts. In essence, this type of business is not only about how much, but it is also about when (Baweja, n.d.). Spare parts can be required after a long time, but they can also be required at the end of any day. Thus, this makes it hard to forecast the behavior and quantity of spare parts that are required at a certain time. Some spare parts can be needed at any time while others take a long time to get their orders. Hence, this becomes a weakness to the company since it is hard to tell the number of spare parts needed.
One of the major opportunities of O’Reilly Auto Parts is its ability to expand the market. Due to its strong balance sheets, proven quality of business and growth of the company, the market of the company can be expanded beyond borders (Banker, 2011). Essentially, there are prospective clients that may need the company’s products in most parts of the world (Cress, 2018). Therefore, the company can venture into other foreign countries through a joint venture, franchising, or exporting.
Another opportunity is that the other direct competitors may be slow to adopt the new technology that O’Reilly Auto Parts has adopted in the recent past. Due to its high growth rate, the company has expanded its technology in all its processes and service delivery (Cress, 2018). Thus, this makes it hard for the competitor companies to catch up because unlike the O’Reilly Auto Parts, their experience in the automobile industry is low (Banker, 2011).
One of the threats facing O’Reilly Auto Parts Company is the rising competition from other automotive companies. The automobile industry has grown immeasurably in the recent past hence the increase in demand has led to an increase in the numbers of players in the industry (Baweja, n.d). As a result, competition is high among companies such as Auto Zone and Advance Auto Parts Inc. (Nasdaq, 2018). Additionally, another threat is the slow economic growth rate over the period. In essence, when the economic growth is either diminishing or fluctuating, it is hard to tell when the demand is high. Similarly, it is hard for the company to enlarge its marketing. Slow economic growth rate affects an array of aspects such as the transportation of the spare parts may be delayed (Coppola & Lippert, 2017). Also, production and manufacturing of the spare parts tend to go slow due to the slow rate of understanding the technology needed for the whole process