Advance Auto Parts 2007 Annual Report Download - page 5

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I am honored to have joined the Advance Auto Parts team, a company that for 75
years has been built on strong values while delivering great value to its customers.
Our company’s foundation is rooted in an honest, helpful and friendly personality.
Now it is time to take that personality to the next level. I am realistic about the road
ahead and encouraged about what I am learning.
Where are we? Our Retail and Commercial customers have told us they want parts availability, parts quality and trusted
brands, convenient locations and quick parts delivery, and knowledgeable in-store help. Our recent year 2010 store format
focus, versus a customer focus, has us playing catch-up on parts availability, parts knowledge and cost structure. Our largest
opportunity is driving top line sales growth by focusing on what matters most to our customers.
Where are we going? In order to turn around our business, we must begin with a focus on the customer. We must embrace
a customer acceleration culture and strategy. We must embrace a turnaround mentality in terms of speed, simplicity, and
prioritization. Our strategy is a simple focus on people, our customers and our Team Members. Specifically, the Customer
Acceleration strategy targets the retail and commercial customer needs. The customers’ needs will require us to prioritize
Availability Excellence (parts and solutions), Superior Experience (Team Member knowledge and delivery needs) and
Returns per Member (a relentless focus on increasing our profit per Team Member).
There is evidence that our parts availability enhancements to date are beginning to positively impact our commercial business.
The streamlining of the cost structure that we undertook in 2007 is beginning to pay dividends as well. However, simplification
of our store operating model, the transformation of our supply chain and structuring our organization around the customer
are all in the initial stages. These are also focused on our largest opportunity which is top line sales growth.
Our view of 2008 is that the customer and the related macroeconomic trends will continue to be volatile. The economic
environment is what it is. While we do not like it, we are focused on maximizing what we can control while improving our
business model for the future. We are focusing on simple ways to build our top and bottom line. Specifically, we are growing
our commercial business and building the sales productivity of our inventory and sales floor while simultaneously taking
costs and work out that are not adding value to our customer experience.
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