CarMax has established itself in the market by providing an unrivaled customer experience. Its piece is also competitive, and that should keep the company profitable. It is also positive to note that the company is one of the largest operators in the country and a positive position.
The financial position of the company in the next three years is dependent on certain factors. The first one is establishing the online wholesale action in response to the impacts of COVID 19. The decision to move to take auction online will positively improve the company's financial position because sales will increase. According to Duch-Brown et al. (2017), online distribution channels have a market expansion effect by unlocking new consumers that the business may need to maintain financial growth. The move may reduce the traditional sales, but that cannot be compared to the gains it will bring to the CarMax Company. Most importantly, going online will help the company maintain its competitive edge because it operates in a market segment with fierce competitors who also have an online presence.
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Secondly, risk management and adjustment will also influence the company's financial position in the next three years and many more to come. From the report, the company has identified potential risks that they have to think about. The most obvious one is the economic impact of the COVID 19. They have also mentioned the change in the capital and credit market that can affect the business. Management of these risks is key in achieving the value maximization goals while also monitoring competitors' behavior (Li & Wang, 2019). In a nutshell, the plan to establish online retain will attract more consumers for the company. The appropriate response to risks will also determine if the company will maintain its competitive edge and profitability.
References
Duch-Brown, N., Grzybowski, L., Romahn, A., & Verboven, F. (2017). The impact of online sales on consumers and firms. Evidence from consumer electronics. International Journal of Industrial Organization , 52 , 30-62.
Li, L., & Wang, Z. (2019). How does capital structure change product-market competitiveness? Evidence from Chinese firms. PloS one , 14 (2), e0210618.
