SWOT Analysis- Carvana Company

SWOT Analysis- Carvana Company

Carvana Company is an online US-based used car dealer headquartered in Phoenix, Arizona. The company aims to revolutionize how consumers purchase cars online by improving customer experiences. The company provides consumers with innovative solutions through which customers may purchase, sell, or obtain financing for specific car models. The company deals in over 55,000 cars, providing customers with a streamlined shopping experience. Carvana is a Fortune 300 company, allowing next-day delivery for customer orders in 300 locations across the US (Carvana). By operating an online model, Carvana Company seeks to leverage technology to facilitate consumers’ access to its products.

SWOT Analysis

Strengths

As a top industry leader, Carvana has several strengths that ensure that it maintains its industry leadership position. The strengths not only help the company protect its primary market but also help it to penetrate new markets. One of the company’s strengths is its highly skilled and trained workforce. The company provides regular training and learning programs that play a key role in helping its workforce improve customer interaction. With a dedicated budget for training, there is much more the company can achieve by maintaining highly skilled trainees. Also, Carvana has maintained a strong dealer community over time. The company’s dealers actively participate in its operations, including training agents and marketing its product catalog. Besides, product innovation is core to the company’s success as it continually innovates new products that fulfill customer needs. Another strength is the relatively high returns occasioned by prudent marketing policies (Berger 9).

Weaknesses

One of Carvana’s weaknesses is that the company has a weak research and development portfolio. Although Carvana exceeds the average expenditure that companies in the industry spend on research and development, it still lags when compared to significant industry players making more due to their innovative products. Also, Carvana has a high day sales inventory, implying that it takes more time for the company to actualize purchases. Such a weakness disadvantages the company since it has to incur extra operational costs to cater to increased costs such as yard fees. Also, the fact that the company rents most of its property means that it incurs more rent costs. The case would have been different if the company owned its premises.

Opportunities 

One of the current opportunities for Carvana Company is to leverage the internet and expand its audience. With the increased internet penetration, the company can increase sales by exploiting internet-enabled advertising (Berger 7). One such strategy is to use augmented reality marketing since most car customers are likely to be attracted by better car images and features navigation. Also, there is an opportunity in social media marketing. With the increased social media users, Carvana can leverage the high engagement levels on Facebook, Instagram, and Twitter to promote its products and get customer feedback.

Threats

One of the threats facing Carvana is the emerging industry technologies. Companies that develop these new technological solutions may eat into Carvana’s market share if the company does not invent. Also, government policy is a potential threat. Specifically, the increasing isolationism by the US government will likely attract similar reactions from other foreign governments. Isolation trade policies will lock Carvana from foreign markets, which the company partly relies on.

Reflection

I was initially skeptical about purchasing a car online, given the risks. However, after conducting research, I realized that making a purchase through a dealer is safe. I settled on Carvana, having realized that the company has an extensive dealership network. The purchase went well, and I still use the car.

Works Cited

Berger, Roland. The Online Boom in Used-Car Sales. 2019, www.rolandberger.com/publications/publication_pdf/roland_berger_used_car_market.pdf. Accessed 1 May 2023.

Carvana. “Carvana Brings the New Way to Buy a Car® to 300th Market.” Investors.carvana.com, 4 Aug. 2021, https://investors.carvana.com/news-releases/2021/08-04-2021-120024595#:~:text=Carvana%20now%20offers%20as%2Dsoon. Accessed 1 May 2023

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Please research a company not used in any class example and elaborate on their SWOT analysis.  This response should be between 1-2 pages in length.

Please provide what each category represents for the company you chose followed by a brief synopsis of your own personal usage of their product/service.