The business cycle that has dominated entrepreneur Wayne Huizenga’s business life is defined by his ability to see the future…and do something about it. His willingness to adjust his strategy reflects the philosophy of Prussian General von Moltke; “Strategy”, he explained, “changes at the first engagement with the enemy”.
Stated another way, the ability to change is essential to success. Huizenga’s success is marked by his willingness to adjust strategy as the market requires.
Mr. Huizenga took his original business enterprise, a small Florida waste hauling company, from one truck in 1971 to the largest waste disposal company in the world in just ten years .
Taking proceeds from that success, he invested in the future of pre-recorded TV entertainment with a concept called Blockbuster Video. Soon Blockbuster was opening a new store every 17 hours, going from a $7 million dollar business with 19 stores to a $4 billion enterprise with 3,700 stores. But he saw change coming in the form of on-demand TV and computer streaming video. It was time for a new strategy.
With $8.4 billion from the sale of Blockbuster to Viacom, Huizenga now set his sights on reinventing the retail automobile business. As Hall of Fame inductee (2015) J. D. Power preached in his Dealer Roundtables, change was coming and dealers, manufacturers and bankers better get ready for it. He envisioned an increasing concentration of multi-brand dealer “chains” that could greatly impact the traditional franchisor/franchisee relationships.
Huizenga saw that too. Once again, there would be strategy shifts as he ventured into uncharted waters.
Launching a chain of mega-used car retailing centers called AutoNation and acquiring CarChoice was step one. These superstores offered warranted pre-owned vehicles sold and serviced as though as though they were new. There would be a national inventory of pre-owned cars that could be moved from store to store as demand shifted.
But there was a hitch. The new car manufacturers didn’t make it easy for AutoNation to buy low mileage off-lease vehicles at their auctions. Strategy was adjusted and Huizenga bought six car rental companies, a great source of late model pre-owned vehicles and an important customer to the manufacturers. He also saw there was real opportunity in the new car business, and the acquisition of franchises was accelerated.
The benefits were twofold. First, profits were maximized by cost reductions through rationalization of “back room” service s invisible to the consumer. Second, the additional dealerships delivered a source of late model used cars to feed the thriving pre-owned business.
Mr. Huizenga retired from AutoNation in 2002..
Today, AutoNation is America’s largest automobile retailer, with over 370 new vehicle franchises. There are over 60 thousand cars in inventory and a work force of 27 thousand employees. AutoNation’s 10 millionth sale was recorded in 2015.
Once again, Mr. Huizenga’s vision and entrepreneurial instincts have been proven correct.