Competitive Analytics at CarMax CarMax has transferred data analytics into a competitive advantage. It has utilized analytics to help streamline its processes and enhance the information transfer efficiency within the organization. The goal of this exercise is to illustrate a sustainable competitive advantage. The ability of Carmax to create a competitive advantage through its information systems is discussed, as well as the value created from its analytics and how that is leveraged within the firm. This activity is important because it explores how companies can turn capabilities into competitive advantages. Read the case below and answer the questions that follow. Recognizing the value of data and developing methods to mine and exploit the data has matured, and using data analytics is imperative to remain competitive. The auto business is changing and as margins in new cars have dropped and length of ownership extends, dealers are challenged to find ways to maintain profits. The proliferation of analytics in the used- vehicle market has led to margin compression that demands dealers know the intricacies of their data, and data about the market. Consider CarMax, the largest U.S. retailer of used cars, as an example of how competitive analytics looks in practice. In fiscal year 2018, CarMax appraised 2.2 million vehicles in its stores and purchased 1.1 million at its auctions and stores. They compile a vast amount of data and using their proprietary algorithms drive inventory management and pricing decisions. This allows the company to quickly adjust inventory in real time to align with customer demands, wants, and needs in each store nationwide. Data analytics allow CarMax to be nimble and extremely responsive to the market in a targeted way. The car business is no longer a local game-consumers often search for a specific car and are willing to buy a car located a thousand miles away. When you combine that with a compelling service offering, no haggle prices, and proven quality guaranteed by its 125-point inspection, you have a power player. Data alone cannot create a sustainable competitive advantage; the ability to integrate various value chain activities is essential to sustainability. With so much pressure on profits, velocity of inventory is not enough to remain viableyou have to achieve excellence in forecasting. CarMax realized they were sitting on a trove of customer data about where customers live, their interests, and cars they already own, and this data is key to building a predictive model. The company was data-rich but the data wasn't accessibleit was like a swamp. CarMax is able to make recommendations based on past visits, driving history, and geography, but importantly, the recommendations and insights have to be offered at the right point in the customer's journey. Ninety percent of customers start their journey online, and 60 percent of that traffic is mobile. There has been a huge disconnect between the online and retail experiencethe key to success and profitability is integrating the experience. Customer support includes text, email, and phone support that allows the buyer to tailor the buying experience to their needs and schedule. This cross-channel retail strategy is the outcome of the many years of inversing p.US decisions. This allows the company to quickly adjust inventory in real time to align with customer demands, wants, and needs in each store nationwide. Data analytics allow CarMax to be nimble and extremely responsive to the market in a targeted way. The car business is no longer a local game-consumers often search for a specific car and are willing to buy a car located a thousand miles away. When you combine that with a compelling service offering, no haggle prices, and proven quality guaranteed by its 125-point inspection, you have a power player. Data alone cannot create a sustainable competitive advantage; the ability to integrate various value chain activities is essential to sustainability. With so much pressure on profits, velocity of inventory is not enough to remain viableyou have to achieve excellence in forecasting. CarMax realized they were sitting on a trove of customer data about where customers live, their interests, and cars they already own, and this data is key to building a predictive model. The company was data-rich but the data wasn't accessibleit was like a swamp. CarMax is able to make recommendations based on past visits, driving history, and geography, but importantly, the recommendations and insights have to be offered at the right point in the customer's journey. Ninety percent of customers start their journey online, and 60 percent of that traffic is mobile. There has been a huge disconnect between the online and retail experiencethe key to success and profitability is integrating the experience. Customer support includes text, email, and phone support that allows the buyer to tailor the buying experience to their needs and schedule. This cross-channel retail strategy is the outcome of the many years of inversing in data strategy and tech talent. The fully integrated experience is anticipated to roll out nationwide in February 2020. Sources: Kiron, D. & Shockley, R. 2011. Creating business value with analytics. MIT Sloan Management Review, 51(1): 57-63; Felberbaum, M. 2012. CEO: CarMax focused on customer experience. Bloomberg BusinessWeek, June 25: np. Try to provide separate answer(s) for each of the questions below. These questions are meant to serve as a thinking guideline for case analysis. This is not a graded assignment. Thinking about and answering following questions will help you better realize the most important factors that you need to focus on, analyze, and understand in this case study, which in turn will improve your learning from the case and your performance in a series of graded questions which will be presented to you later. You will receive explanation feedback after submitting your answers. Make sure to review those explanation(s). A) How has the use of data analytics evolved in recent years? B) What did the case mention as CarMax's urgent need to build a more durable competitive advantage? C) What types of information is CarMax assessing with its data analytics? D) What benefits have the use of competitive analytics provided to CarMax