Carsales.com.au Business Model Analysis

This assignment examines the business model of Carsales.com.au, a leading Australian automotive marketplace. It analyzes how the company's adoption of advanced online technologies and strategic product development contributed to its growth and market success. The analysis also considers the broader context of consumer trends in the automotive industry and the evolving digital landscape.

Running head: INTRODUCTION TO MANAGEMENT
Introduction to Management
Name of the Student:
Name of the University:
Author Note:

1INTRODUCTION TO MANAGEMENT
Table of Contents
Introduction:....................................................................................................................................2
1. How is Strategic Management as Illustrated by the Case Study?...............................................2
2. What Competitive Advantage of Carsales.com.au Achieved? How Can it Maintain that
Competitive Advantage as other Companies Tries to Imitate and Replicate its Success?..............5
3. Do you Think Success of carsales.com.au is due to External or Internal Factors or both?
Explain.............................................................................................................................................8
4. How might SWOT Analysis be Helpful to Greg Roebuck as carsales.com.au continues to
grow?.............................................................................................................................................11
Conclusion:....................................................................................................................................13
References:....................................................................................................................................14

2INTRODUCTION TO MANAGEMENT
Introduction:
The report aims to introduce management based on a case study on carsales.com .au that
is presently the largest online motorcycle, marine and automotive classifieds available in
Australia (carsales.com.au 2018). The report begins with a discussion on the concept of strategic
management illustrated by the case study. There is also discussion about competitive advantage
of carsales.com.au. The report also put forward discussion on how the company ruled in
presence of the competitors. There is also discussion on the factors that led to the success of the
company. The report also shows how SWOT analysis might help Gred Roeback in continuing its
car sales growth.

3INTRODUCTION TO MANAGEMENT
1. How is Strategic Management as Illustrated by the Case Study?
Strategic Management refers to the plans developed by the manager in developing the
strategies of an organization (Hill, Jones and Schilling 2014). Organizational strategies refer to
the plans that help in executing the goals of an organization. Strategic management also helps in
determining how the organization will compete successfully and thereby satisfy and attract its
customers. The importance of strategic management lies in the fact that it can helps the
organization in making a difference with its performance. The strategic management process also
helps organizations in coping with uncertainty. Strategic management also enables diverse and
complex parts of the organization to work in unison towards the organizational goals. Strategic
management is not just important for business organizations but it is also important for hospitals,
social agencies, educational institutions and government agencies (Robbins et al. 2016)
The strategic management involves a six-step process that involves planning,
implementation and evaluation (Eden and Ackermann 2013). The initial four steps involve the
process of planning thereby implying that evaluation and implementation holds equal
importance. The best of the strategies can fail if the managers fail to implement or evaluate them
properly (Wheelen et al. 2017). Strategies needs formulation at all levels in an organization that
includes competitive, corporate and functional.
Step 1: Identification of Mission, Goals and Strategies of the Organization:
Step 2: Performing External Analysis:
Step 3: Performing Internal Analysis:
Step 4: Formulation of Strategies:

4INTRODUCTION TO MANAGEMENT
Step 5: Implementation of Strategies:
Step 6: Evaluation of Results:
Following the steps of strategic management Carsales.com.au commenced into the
online-classified business of automotive in the year 1996. The company is the first mover in the
industry and claims the highest position as far as sales transaction is concerned. The website not
only represents the trading market for the cars but also trucks, boats, caravans, bikes, equipment,
machinery and accessories(Hammond 2013). The revenue model of the company is also
effective since the website of the company charges a fee from each of the sellers for listing the
vehicle until sold. In addition, the website also charged for a space for advertising. More
recently, the company has charged a fee for sharing information and data to the dealers.
Carsales.com.au has followed the first four steps of strategic management quite well. This has
also ensured the company to divide the offerings of the advertisements in two categories that
included display advertising and classified advertising. The implementation of the classified
advertising served as a major revenue source from the private sellers and the dealer customers.
The procedure goes as if when a dealer or a private seller places an advertisement for specific
vehicle for a particular price, the advertisement in the classified form appears on the online
website of carsales.com.au. On the other hand, display advertising is primarily for the corporate
customers that include automotive manufacturers, importers, insurance companies and financiers
(Marsoof 2013). These advertisements are however available for specific time and fee. These
advertisements included promotional deals for newer vehicle and helped in total revenue
generation of about 86 percent.

5INTRODUCTION TO MANAGEMENT
2. What Competitive Advantage of Carsales.com.au Achieved? How Can it Maintain that
Competitive Advantage as other Companies Tries to Imitate and Replicate its Success?
Competitive advantages refer to the conditions that allow an organization or a country in
producing a service or good at a comparatively lower price or in an attractive manner to the
customers (Scardamaglia 2013). Such conditions allow productive entities in generating superior
margins or more sales than its competitors generate.
Businesses must adopt a Blue Ocean Strategy in order to be successful in an uncontested
market that is ripe for growth. The blue ocean strategy refers to the creation of new uncontested
market place for a company by making the competitors irrelevant and ensures creation of newer
consumer value through decrease in cost (Kim and Mauborgne 2014). These strategic moves by
Carsales.com.au lead to the creation of value innovation thereby giving it a competitive
advantage. This helps in creation of powerful leaps for both the buyers and business thereby
unleashing newer demand and outdating the rivals. Implementation of Blue Ocean can be
through the development of unique selling points adopted by the company. The first unique
selling point of the company focuses on achieving a sale and not the creation of an advertising
avenue. This ensured application of robust, efficient and sophisticated technologies that clearly
enabled people in generating sales. Carsales.com.au had automotive software that determined the
future opportunities of the business. The characteristics of the technology adopted by the
company include:
 A robust range of online platforms
 Functionality related to intuitive and accurate search
 Effective and Quick creation of online advertisements

6INTRODUCTION TO MANAGEMENT
 Detailed information and data for enhanced selling and buying experience
 Instant connectivity between the sellers and the buyers
The company carsales.com.au maintained its competitive advantage by making a
business choice for online trading of classified thereby ensuring complete handling of the
business via digital/online channels. The site operated on a sector where there already existed a
market developed by traditional channels and established agents (carsales.com.au 2018). The
traditional business however acted as a support for the company until the online channel became
sustainable. The carsales.com.au has attained success that has led to the extension of its business
to the other affiliated sites meant for selling bikes, trucks, boats, and caravan and plant
machinery. The company also remains ahead of its competitors in working harder towards
innovation, expansion and diversification. The company also believed in the strategy that online
business has the potential in reaching a greater customer base and it particularly tied to a
specified delivery area or location. With the emergence of globalization and the growth of the e
commerce business, carsales.com.au ensured delivery service in situations where the purchaser
and seller belonged to different geographic locations.
Carsales.com.au maintained its competitive advantage by creating value for the
customers (Saeidi et al 2015). The online platform of the company offers the customers user
friendly and useful online platforms with accurate capabilities for implementing a search.
Further, the company also offers research options that provide detailed features and
specifications for every possible car available in the Australian continent. The site also provides
an obligation free quote for car insurance from the time of the transaction. The prospective
buyers can undertake a comparative analysis of the features and specifications of an ample
number of cars as per their wish. The company also provides the option of getting a valuation for

7INTRODUCTION TO MANAGEMENT
a car that would help in enhancing the car buying experience of customers (West, Ford and
Ibrahim 2015). By applying a minimal fee, the company also allows viewing a car advertisement
by an extensive audience both around Australia and on a global scale.

8INTRODUCTION TO MANAGEMENT
3. Do you Think Success of carsales.com.au is due to External or Internal Factors or both?
Explain.
Internal factors represent factors within company over which it has control. These factors
also influence the approach and the success of the operations undertaken by the company
(Hammond, J.B., 2013). These factors have however acted in favor of carsales.com in ensuring
its successes. The factors include:
Leadership Role:
The role of company leadership is a vital internal factor determining the success of the
company. CEO Gred Roeback has put across an outstanding leadership quality that determined
the success of carsales.com
Being Organizational and Operational:
Carsales.com has always maintained organized and accurate record keeping and avoided
any kind of faultiness in working to avoid any kind of customer disgrace
Strategic Risk
Carsales.com.au has firmly stood up to the challenges posed by the customer demand and
technological innovations by adopting a procedure of posting high quality of online
advertisements.
Innovation

9INTRODUCTION TO MANAGEMENT
The company also helped in establishing an innovative social media strategy for ensuring
business growth. This ensured taking up an initiative for recruiting and training internal staffs for
becoming the community members responsible for managing and updating the social media
portals of the company (Bharadwaj et al. 2013). The company also implemented a related policy
for establishing rules and regulations about using the social media as a part of the business
thereby ensuring that the responses to the posts handled in a dignified and professional manner
without leakage of any confidential information.
External Factors
Carsales.com.au has moved a step ahead into the overseas mark and made its presence
felt in China, Thailand, Malaysia and New Zealand. To thrive in the overseas market,
carsales.com.au had to continually scan the external environment of the competitors and
undertake necessary action for maintaining its competitive advantage (McDonald and Wilson
2016). Other resourceful companies and internet giants however pose threat to the company
whose viability determined by the individual sellers and loyalty of the dealers. The dealers of
carsales.com.au get forced indirectly in adopting the technologies of the company and not
compete in the e market space determined by join them or be left behind approach. Thus, internal
as well as external factors both helped carsales.com.au in becoming one of the largest online
automotive classified of Australia.

10INTRODUCTION TO MANAGEMENT
4. How might SWOT Analysis be Helpful to Greg Roebuck as carsales.com.au continues
to grow?
The acronym SWOT stands for strength, weakness, opportunity and threat. SWOT
analysis of a company helps the consumers in getting the right information in the right format.
This also provides complete and accurate information of the company that helps in retaining
customer base.
Strength
Strength refers to the unique selling points (USPs) adopted of the business. In case of car
sales.com.au, the first selling point referred to the business model adopted by the company where
the CEO offered the sellers a flat fee until they sold the car. The second USP of the company lay
in putting online advertisements and the use of advanced technology that allowed the sellers in
searching for potential cars thereby providing sufficient information. The third USP of
carsales.com.au was usage of innovation for the continuous improvement of the customer
experience and the business.
Weakness
Weakness refers to essentially analyzing any weakness that is prevailing in the company
that prevents the company from reaching the full potential. Carsales.com.au is simply a broker
that provides a platform for the buyers and sellers (Kotler 2015). The model used by
carsales.com.au is nothing unique and is by other online companies working on similar lines.
Although they are unable to reach the scale and complexity adopted by the company however,
they eat away a sizeable portion of the potential customers of the company.

11INTRODUCTION TO MANAGEMENT
Opportunities
Opportunities refer to the external analysis that determines what lies ahead of the
business. Tracking the opportunities immensely helps the company in not only setting the growth
plans but also understanding the business environment and the political and economic issues. In
this context, the business choice of carsales.com.au in online trading of classified has been
beneficial for the company since everything right for gathering information to purchase can be
handled online. Moreover, the online site created by the company operates in larger arena with a
greater exposure created by the traditional channels and established agents.
Threats
Threats refer to the external and internal analysis that the company in terms of possible
threats likes the government policies, economic conditions, markets, trade unions and
competition. Carsales.com.au faces the waves of the economic crisis that has gripped the world
since the around the year 2007 and has been playing a dampening effect in almost all the
industries.
The strength, weakness, opportunities and threats (SWOT) analysis ensures various
benefits to the business since it helps in providing a clear view of the strengths of the company
thereby allowing carsales.com.au to further focus on them in meeting the business objectives.
The analysis also focuses on the weakness thereby providing an opportunity in reversing them
(Grant 2016). Through the analysis, one gets a closer picture of the opportunities that lies ahead
of the company. This can be used in drafting the strategic plans for growth of the company.
Through the analysis the possible threats in the business is identified and accordingly the
changes in the growth plans and business policies made. This also ensures undertaking

12INTRODUCTION TO MANAGEMENT
alternative, supplementary and contingency plans. However, one of the major benefits of
conducting a SWOT analysis lies in the fact that in helps in the creation of converting and
matching strategy. Thus, the analysis helps the company in employing a strategy that matches the
opportunities and strengths and employ them in converting the threats and weakness into further
opportunities and strengths. The analysis helps in providing motivation and necessary
momentum for getting on with the business plans in spite of all the odds.

13INTRODUCTION TO MANAGEMENT
Conclusion:
The report ends by focusing and analyzing a case study based on carsales.com.au. In
recent times, consumer choices related to the automotive products are gradually looking for
online options. Based on this trend, carsales.com.au adopted a business model that led to growth
and recognition. The business model adopted however included advanced online technologies,
development of new product and stronger growth potential for the future.

14INTRODUCTION TO MANAGEMENT
References:
Anderson, N., Potocnik, K. and Zhou, J., 2014. Innovation and creativity in organizations: A
state-of-the-science review, prospective commentary, and guiding framework. Journal of
Management, 40(5), pp.1297-1333.
Bharadwaj, A., El Sawy, O., Pavlou, P. and Venkatraman, N., 2013. Digital business strategy:
toward a next generation of insights.
carsales.com.au.2018.AboutUs-carsales.com.au.[online]Availableat:
https://www.carsales.com.au/sell-my-car [Accessed 28 Jan. 2018].
Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management.
Sage.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Hammond, J.B., 2013. An Examination of The Carsales. com. au's Business Model and Its
Sustainability. The International Technology Management Review, 3(4), pp.230-236.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
Kim, W.C. and Mauborgne, R.A., 2014. Blue ocean strategy, expanded edition: How to create
uncontested market space and make the competition irrelevant. Harvard business review Press.
Kotler, P., 2015. Framework for marketing management. Pearson Education.

15INTRODUCTION TO MANAGEMENT
Marsoof, A., 2013. Google's AdWords stands victorious down under. Journal of Intellectual
Property Law & Practice, 8(6), pp.444-445.
McDonald, M. and Wilson, H., 2016. Marketing Plans: How to prepare them, how to profit from
them. John Wiley & Sons.
Robbins, SP, DeCenzo, D, Coulter, M & Woods, M, 2016, Mangement: The Essentials, 3rd edn,
Pearson, Melbourbe.
Saeidi, S.P., Sofian, S., Saeidi, P., Saeidi, S.P. and Saaeidi, S.A., 2015. How does corporate
social responsibility contribute to firm financial performance? The mediating role of competitive
advantage, reputation, and customer satisfaction. Journal of Business Research, 68(2), pp.341-
350.
Scardamaglia, A., 2013. Misleading and deceptive conduct and the internet: Lessons and
loopholes in Google Inc v Australian Competition and Consumer Commission.
West, D.C., Ford, J. and Ibrahim, E., 2015. Strategic marketing: creating competitive advantage.
Oxford University Press, USA.
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management
and business policy. pearson.