O'Reilly Auto Parts 2000 Annual Report Download - page 10

Our Unique Dual Market Strategy is
FUELED to service do-it-yourself and
professional installer customers!
Successfully balancing the complex
needs of both DIY and professional installer
customers isn’t easy, as many of our
competitors have discovered. With eight
consecutive years of record revenues and
earnings for our shareholders, we may
have made it look simple, but there is a
lot of history behind our accomplishments.
Now in our 44th year of operation, we
began selling to professional installers in
1957. From the mid-1960s to the mid-1970s
we grew from one store to 15 stores, slowly
learning the strategies needed to serve DIY
customers while continuing to develop
professional installer business. In 1986,
we entered the large metropolitan markets.
From the mid-1980s through 1997 we
derived approximately 50% of our product
sales from our DIY customers and approxi-
mately 50% from our professional installer
customers. With the 1998 acquisition of
Hi-Lo Automotive, Inc. (189 stores, with
approximately 65% of sales from DIY
customers and approximately 35% from
professional installer customers) our
traditional 50/50 blend of business
changed. For 2000, approximately 57%
of sales were from DIY customers and
approximately 43% from professional
installer customers. As a result of our
historical success in executing our
dual market strategy and more than
100 full-time sales representatives
dedicated solely to calling upon and selling
to professional installer customers, we
believe we will increase the former Hi-Lo
stores’ sales to the O’Reilly pre-acquisition
level of approximately 50/50 DIY and
professional installer customers.
But why do we put so much emphasis on
serving a dual market? We believe targeting
both types of customers allows us to operate
profitably in both large markets and less
densely populated geographic areas which
typically attract fewer competitors. This
strategy also enables us to target a larger
base of consumers of automotive aftermarket
parts and capitalize on our existing retail and
distribution infrastructure. It enhances service
levels to our DIY customers by offering a
broad selection of stock keeping units
(“SKUs”) and the extensive product
knowledge required by professional installers.
The bottom line is that the dual market
strategy – as executed by O’Reilly – is
highly effective.
At O’Reilly … Our No. 1 priority
is customer satisfaction.
Giving superior service. Giving extensive
product selection. Giving competitive pricing.
2000 AR
8
DUAL MARKET STRATEGY
2000 ANNUAL REPORT
Fueled
Fueled
Fueled