Key Strategies of Carvana 

Carvana 

Introduction

Ranking as the 2nd largest online used car retailer in the United States, Carvana is a North American online car dealer company with its headquarters situated on the coast of Tempe, Arizona. The company is ranked in the 290th position on the 2022 Fortune 500 list. The company entered the public space in the year 2017 and started the sale of its stock in the New York Stock Exchange market under the ticker symbol, CVNA. Carvana is recognized as one of the fastest-growing digital car dealers in North America, as well as the world at large. The company was founded in the year 2012, approximately, 10 years ago. Research has it that when the company was listed on the Fortune 500 list, it was known to be one of the youngest firms to be integrated into the list. As of 2021, the company has a total number of 21, 000 employees in its workforce. And in the same year, the company recorded a total sum of 12.8 Billion USD as its gross revenue. The company recorded the sale of over 240, 000 vehicles in the year 2020 and recorded an annual revenue amounting to a total sum of $5.587 Billion USD, which makes the company ranks as the 2nd largest digital used-vehicle retailer in the United States. The company places its product in more than 300 markets all over the country. One could, however, be taken by surprise as to how the company manages to achieve incredibly in that it was only established 12 years ago, however, it is imperative to note that there are certainly key drivers that had contributed to ensuring the company achieve its goals and objectives, these key drivers could also be called the company’s key strategies. In this piece, you will be shown these key strategies and how they resonate with the company’s current status.  

Carvana’s Transition at a Glance 

First, before delving to address the key portion of this piece which is to reveal the company’s key strategies, it would be ideal to have an idea of how the company has transited time since its inception. Thus, this section will address the major events the company had witnessed in recent times in the succeeding lines below. 

In 2012, the company was founded by three individuals, Ben Huston, Ernest Garcia III, and Ryan Keeton. The company secured its initial funding from Drive Time, a used car dealer and finance firm. 

In the year 2013, the company launched its own version of a vehicle vending machine. And in the year 2015, the company launched a complete automatic coin-operated version of its earlier launched vending machine. The record has it that the company controls a total number of 32 vehicle vending machines in the United States by the month of May 2022. 

In the year 2017, in a bid to expand its analytical tools as well as vehicle data, Carvana bought Calypso, an automotive startup company. And in the year 2018, the company spent a total sum of $22 Million USD in a bid to seal an acquisition deal with Mark Cuban. 

Between the years 2019 and 2020, Carvana witnessed an increased spike in its revenue as customers turned to online car retailers sequel to the outbreak of Covid-19, a trend in favor of the company in that it’s a fully-online car retailer. However, in the year 2020, March the company came up with a strategy in a bid to subsidize the effect of Covid-19 by launching a touchless pick-up and delivery. 

In the year 2022, May 10, The Wall Street Journal released a publication announcing Carvana’s intention to retrench up to 12% of its staff amounting to a total number of 25, 000 workers as a result of its relatively low-paced business growth. 

Key Strategies of Carvana 

As the major portion of this piece centers around addressing the key strategies of Carvana, the 2nd largest retail car dealer in the United State, this section would comprehensively address these key strategies in detail.   

Streamlined and Less-fatigue Purchasing Process 

Carvana has built a digital database system that has drastically streamlined the stress associated with purchases and selection of its products. From anywhere across the globe consumers can log into this system and make purchases with relative ease. Customers can compare and contrast several of their product choices as long as they like until they are satisfied with their choice of preference.    

Acquisitions 

Several top companies are known to leverage this strategy, and Carvana’s case is no exception, the company leverage merging with companies in order to expand its business operations. For instance, in the year 2017, in a bid to expand its analytical tools as well as vehicle data, Carvana bought Calypso, an automotive startup company. And in the year 2018, the company spent a total sum of $22 Million USD in a bid to seal an acquisition deal with Mark Cuban. 

Leveraging Innovative Approach 

Another astounding strategy responsible for the company’s growth is its commitment to innovation, Carvana builds a system that positions the company for innovative development which enables the company to thrive in the business world, hence ranking drastically high amongst its contemporaries. The evidence of this strategy is apparent in the company’s history. For example, in the year 2013, the company launched its own version of a vehicle vending machine. And in the year 2015, the company launched a complete automatic coin-operated version of its earlier launched vending machine. 

Efficient Chain of Distribution 

One of the key strategies also working for the company is its uninterrupted chain of distributive style. Carvana develops a system that ensures customers are delivered goods in a swift and timely manner. This system also works even in the face of the global pandemic. Typically, according to the company’s record, in the year 2020, March the company came up with a strategy in a bid to subsidize the quarantine effect of Covid-19 by launching a touchless pick-up and delivery to ensure its customers experience an advanced distribution method. 

Inclusiveness and Diversity

Carvana believes everyone regardless of their age, sex, culture, background, economic status, or any other basis used in segregation – has something positive to offer the company The company’s policy embraces and emphasizes diversity and inclusion and to a great degree recognizes it as a pivotal factor used in developing and sustaining a successful firm. The company’s philosophy is not only tied to recruiting the best talent for itself but by extension helps create a seamless and free workplace and platform where everyone can express their talents, voice their opinion, and can be heard. This strategy, however, pointed to the fact that the company runs a bottom-up management system.    

Corporate Ethics and Compliance:  

Carvana’s control and compliance strategy act as one of the key drivers of the company’s growth and operational efficiency. The strategy is a shared value across all the business segments of the company and it helps the company. While ethics represents the company’s values and norms that help the business in achieving its goals and objectives, compliance on the other hand sees to it that these ethics are implemented and expressed by every member of the firm, in which both (ethics and compliance) handshake to breed corporate brilliancy and efficiency.    

Leveraging Team-working  

Teamwork is a strong bond that has held the company since its inception. Across all its affiliates and business segments, teamwork and oneness is evident in the company’s day-to-day activities to this end, the company is able to leverage this strategy in creating a formidable force to help build and improve the company’s overall operations while the same time, achieving it corporate goal and objectives.  

Leveraging Price Transparency 

One of the key drivers responding to the company’s growth, especially in the area of its increasing customer base. Carvana has a platform that lets consumers compare and contrast the prices and milage of its cars without living their comfort zone. This strategy is a win-win for both the company and the customer. The customers; do not have to deal with irate salespeople and have enough made their best and select purchases. And for the company; Carvana would spend less in hiring salespersons, and additionally, the strategy also gets customers to make more purchases, 

Conclusion 

Basically, this piece has been able to justify its core aspect by extensively revealing the key strategies utilized by Carvana which are considered robust strategies that technically work to add positive values to its important stakeholders, which include, its investors, employees, its customers. For investors, it is in its commitment to reward them with increased dividends; for employees, it is its commitment to ensuring they are happy working for the company by availing them tons of benefits and perks; for customers, it is in its commitment to avail their high-quality products and a memorable and delightful service experience while at the same time operating in an optimal way to cut its operational cost as well as overall expenses without compromising its services and product quality.