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Introduction to Strategic Management of Carsales

   

Added on  2020-05-16

11 Pages2580 Words284 Views
Leadership Management
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Running head: INTRODUCTION TO MANAGEMENTIntroduction to managementName of the student:Name of the University:Author note:
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1INTRODUCTION TO MANAGEMENTQuestion 1: How is strategic management illustrated by this case study?Answer:Strategic management refers to the process of identifying and implementing the goals andobjectives of an organization by the senior management on behalf of the actual owners whilekeeping into consideration the available resources and the organizational environment. The givencase study mentions the success story of carsales.com.au. The case study mentions thedevelopment of the goals and objectives of the organization by Greg Roebuck, the CEO ofcarsales.com.au,in its initial days. The major strategic management decisions taken by Roebuck included developing asuperior business model as compared to the rival organizations. For this purpose, theorganization emphasized upon offering the sellers free online advertisement till the time theircars were sold. This made the organization’s activities different from the traditional newspaperadvertisements as the newspapers took money from the sellers for placing their advertisementswithout bothering whether the sellers would obtain benefits from the advertisements or not (Hill,Jones and Schilling 2014). The second major strategic management decision taken by Roebuck included utilizingspecial technology for creating quick and more affective advertisements for the sellers. Theorganization aimed at providing detailed and appropriate information to the customers, whichthey were unable to obtain through newspaper advertisements (Wheelen et al. 2017). This wasthe boldest strategic management decision taken by Roebuck as internet was not much popularback in those days and building up a business entirely based upon internet was very risky in thelate 1990 s.
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2INTRODUCTION TO MANAGEMENTThe third major strategic management decision taken by Roebuck was utilizinginnovation for constant improvement of the business along with enhancing the customerexperience. The innovations mainly involved enabling the customers to view carsales.com.au ontheir mobile phones and using the internet for communicating with the customers. Theorganization aimed at utilizing the best technologies in order to stay ahead of the competitors.The long- term strategic management plan of the organization was to emphasize upon theautomotive products while considering the scope for diversification into new products, marketsand locations (Rothaermel 2015). The above mentioned goals and objectives of the organization were a part of strategicmanagement of the organization as the goals and objectives were set by the CEO ofcarsales.com.au, Greg Roebuck on behalf of the owners of the organization, which provided thenecessary direction to the organization. The objectives were formulated and the strategies wereformed to achieve those objectives along with the proper allocation of the resources forachieving those objectives (Barney and Hesterly 2015). The strategic management decision wastaken in a highly complex environment as the business model was based upon internet, whichwas not popular in those days.
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3INTRODUCTION TO MANAGEMENTQuestion 2: What competitive advantage has carsales.com.au achieved? How can itmaintain that competitive advantage as other companies try to imitate and replicate itssuccess?Answer:The major competitive advantage, which carsales.com.au has achieved is objectives andhas been successful in becoming the market leader. The organization has been successful incrushing its competitors and creating its strong market presence. More than 80% of thecustomers, who search for cars online visit carsales.com.au. The organization has created apositive feedback loop, which has enabled the organization to reach greater heights. Theorganization was the first mover in online car sales industry and has created its own goodwill.The website not only enables the trading of cars but also enables trading of boats, bikes, trucks,and machineries. Initially, the organization did not charge any amount from the sellers until theircars were sold (Peteraf, Gamble and Thompson 2014). This was one of the major strategies toattract the sellers to list their cars on the website of carsales.com.au instead of placingadvertisements in newspapers, which involved incurrence of huge costs. However, later on theorganization charged a very minimal amount from the sellers for listing and advertising their carson the website. The organization has divided its online advertisement offerings into two parts namelydisplay advertisement and classified advertisement. The major revenue generated by theorganization comes from the classified advertising wherein the seller places an advertisement onthe website for a particular vehicle. This advertisement appears on the organization’s website andthe buyers can easily view them (Baker and Saren 2016). On the other hand, the display
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