Carsales: Business Strategy, Competitive Advantage, and SWOT Analysis

This report provides a comprehensive analysis of Carsales, focusing on its strategic management approach, competitive advantages, and SWOT analysis. The report begins by examining Carsales' strategic management, highlighting how the company strategically evaluated market factors and implemented strategies to achieve a competitive edge in the online car advertising market. It then delves into the development and sustainability of Carsales' competitive advantage, emphasizing its use of differential and focus strategies, innovative technology, and first-mover advantage. The reasons for Carsales' success are explored, emphasizing the interplay of internal and external factors, including the strategic use of the internet and the company's ability to meet customer needs. Finally, the report presents a detailed SWOT analysis of Carsales, outlining its strengths, weaknesses, opportunities, and threats, demonstrating how the company can leverage its strengths and mitigate risks to achieve continued growth and market leadership. This analysis provides valuable insights into Carsales' business model and strategic decisions.

Running Head: Introduction to Management
Introduction to Management

Introduction to Management 1
Contents
Introduction.................................................................................................................................................1
Answer to the case study question..............................................................................................................1
1. Strategic Management Approach of Carsales..................................................................................1
2. Development and sustainability of competitive advantage gained by Carsales..............................2
3. Reason for success of Carsales........................................................................................................3
4. Helpful SWOT Analysis in the grow of Carsales...............................................................................4
Conclusion...................................................................................................................................................5
References...................................................................................................................................................6

Introduction to Management 2
Introduction
The purpose of this task is to provide a brief overview of the success story of the company
Carsales; the organization took a major step to initiate their business online. CEO Greg Roebuck
took a major decision of innovating the business and using different strategies in the field of
internet. Further, the company analyzed the market and then implemented strategies for the
success by risking their business. The risk successfully helped the company to grow in the target
market. The below mentioned answers talk about the activities of business which helped them to
survive.

Introduction to Management 3
Answer to the case study question
1. Strategic Management Approach of Carsales
Strategic management refers to the process of implementing and formulating activities in
the management in such a way that competence is achieved by the organization. The
strategic management approach in an organization helps them to consider the external
and internal environments and implement goals in such a way that the organization earns
a competitive advantage. Further talking about the case study, it shall be noted that
Carsales is a company which was founded with a small motive to provide the car ads in a
more classified manner. The organization strategically evaluated all the factors affecting
the growth of the company and which can help them to sustain in the market. With this
process, they created a goal for the organization that competes with the largest competitor
present in the industry and list 3000 cars in the website of the company (Robbins, et. al.,
2016).
Further, in order to satisfy the goal, the management analyzed the market feature which
can help them or act as a barrier to their growth. Internet was not accessible by all at that
time, and the company majorly focused on developing the business online. This analysis
helped the company to gain information about the competitors prevailing in the market
and the internal and external factor which can help in the sustainability of the business.
Afterwards, CEO Greg initiated strategy formulation under which they formed the
strategies to review the information gleaned from the crux of the analysis (Carsales
2018). This step of the company helped them to determine the resources and strategies
which they shall use to reach the defined goal of the organization. So, under strategy
formulation, the initial strategy which the company decided was to innovate the business
practices of the company by implementing technological process under them. The
strategic formulation of the company reflected three aspects which they wanted to include
in their business process that is, development and improvement of quantity, quality and
consistency of information in the classified. So, in order to change the ways of posting
ads on newspaper, the company formulated strategies (Hill, Jones, and Schilling 2014).
While considering all the above mentioned aspects, the company created strategies which
were implemented successfully. CEO Greg analyzed the business opportunities and
efficiently worked on them to create identification in the market. The management then
created unique selling points in their business which helped to consistently make use of
all the available resources and change the phase of classified ads in the market. These
attributes of the company were successfully utilized by to promote success for the
business. The first USP of the company was their business model; the model of the
company motivated them to carry on their business activities on the internet. Until that
time, very few people used the services of internet so the company targeted the particular
section of the market that was using the internet. Further, they promoted their activities

Introduction to Management 4
and added an attractive feature in the classification of ads like flat fee till the purchase of
car by the customer which helped them to grow rapidly (Goetsch, and Davis 2014).
Other USP of the company that is using specialized technology to create high-quality ads
helped them to create distinctiveness in the market. As no company present in the market
was using the internet to post ads due to which the company gained the first mover
advantage in the market and succeed as well. The third USP of the company which was
to use innovation so as to continuously provide customer a better experience while
working with them helped Carsales to fulfill the goals as well. Also, the third USP helped
the company in long-term planning and sustainability of the business (Ginter, Duncan,
and Swayne 2018).
2. Development and sustainability of competitive advantage gained by
Carsales
Competitive advantage refers to the process of gaining an advantage over the competitors
in present in the market. An organization can create competitive advantage by providing
satisfying products and services to the customer present in the market. Further, it shall be
noted that it is easy for an organization to gain competitive advantage in the market it is
more important for them to maintain sustainability in the competitive advantage gained
by the company. Sustainable competitive advantage helps an organization to create own
way in the market maintain a fixed position as well. Further competitive advantage can
be gained by focusing on three aspects that are, cost leadership, focus, differentiation and
differentiation (Wheelen, and Hunger 2017).
Cost leadership refers to the ability of a business to introduce their product in the market
with low cost or the cost less than what the competitors are offering. Low cost will
increase the level of profit for the company and will also increase the level of satisfaction
for the customers as well. Further differential strategy refers to the process of
differentiating the products and services offered by the company in the market. This
aspect attracts the customers towards the high quality, innovative and attractive products
and services in the market. Lastly, the focus strategy refers aims to initiate their focus on
a particular segment of the market not everyone (Grefrath, Wagner, and Stermann 2017.).
This strategy is applied when the company or customer do not enough resources to target
the whole market so they target a particular segment.
The company Carsales used the differential focus strategy to gain the competitive
advantage in the target market. With the differential strategy the company implied
differential qualities in the services which they serve in the market and with the focus
strategy, they only targeted the people who use the internet in their lifestyle. The
company earned value in the market by adequately providing quality services to the
customers present in the market. The company used innovative technology to attract the
customers in their market due to which people started using internet using their website
as well. Apart from that, the company also gained the first mover advantage in the market
(Schaltegger, Burritt, and Petersen 2017).

Introduction to Management 5
Nowadays many organization try to replicate the business process which was used by
Carsales in the market, but the company can still maintain their identified position in the
market. Carsales can maintain their image in market by expanding their business and
regularly providing quality services to the customers. The company is diversifying their
business into new channels, markets, and geographic regions. Expansions will the help to
gain fixed position in the market, as Carsales hold goodwill so they will not face
difficulty in diversifying their business (West, Ford, and Ibrahim 2015). Also, the
management continuously focuses on new opportunities present in the market and
monitors them so as to improve their current position. Further the organization also
repeatedly aims to create a benchmark against their competitions which will easily show
the customers the value of both companies in the market. Thus in this way, the Carsales
continuously tries to use new technology and serve their customers in a better way to gain
sustainable competitive advantage (Moriarty, et. al., 2014).
3. Reason for success of Carsales
The fact shall be noted that no organization can gain success in the market just because of
the sources present in the internal market or external prevailing factors. Both factors
together help the company gain competitive advantage. Like, if the company aims to use
the internet to promote the services and the customers present in the external market do
not use the internet then even if the company would try to provide the best of their
services; still, they won't be able to make sales. Thus, it is said that both the factors
together create success for the company in the market (Grant 2016).
Similarly, in the case of Carsales, the company earned competitive advantage with the
use of both available sources in the market. Internal sources helped the company in such
a way that it helped them to implement and formulate strategies according to their goals
and objectives. Also, the employees (human resource) supported the CEO in
implementing their goal into success. The employees provided quality services along
with internet services due to which the customer got attracted in the market. Further
talking about external services it shall be noted that the company gained the first mover
advantage in the market. Apart from that segment of customers using internet helped
them to increase their sales and initiate success in the target market (Lewandowski 2016).
Thus, in this way both the services together initiated sustainability of the company in the
market. Further external factors like, internet and interest of customers on the internet
helped them to raise the interest of target customers and promotes sales; due to which
subsequently the company earned profit in the market (Grant and Grant 2016).
4. Helpful SWOT Analysis in the grow of Carsales
SWOT analysis of Carsales is discussed below:
Strength: The major strength of the company was differentiation in the services provided
by them. As till that time no company was providing car sales ads on the internet, due to

Introduction to Management 6
which the company gained the first mover advantage as well. Further technology and
innovation acted as strength for the company to reach the target customers.
Weakness: Weakness of the company is increasing competition in the market. The threat
of new entrants in the market can affect the current position of Carsales in the market
(Aguirre, et al., 2015).
Opportunities: The Company has the opportunity to grow their business in the
international market. As Carsales has now earned a reputed position in the domestic so
the company gains the opportunity to target the customers in international market
increase sales as well. Introduction of new products can also help Carsales to grow
rapidly. The company can promote other vehicles also apart from the car, like boat,
motorbikes etc. This will increase the target market for the company and the customers as
well.
Threat: The biggest threat to the company is the threat of replication of their business.
Now days emerging business can replicate their business model and increase their sales
in the market. Further rapidly growing technology can also act threat for the company. It
can make the activities of the company inefficient (Hsu and Pann 2017).
The SWOT analysis helps an organization to understand both internal and external factor
affecting the growth of the company in the global market. So, the SWOT analysis of Carsales
will help Greg to look after the strengths of the company and apply them properly in the
management to attain growth. Further, the threat and weakness will help Greg to evaluate the
ways in which he can save the company from these risks. SWOT in an internal as well as
external analysis, so it will tell the company about the internal factor which can adequately use
and areas where they need to focus. And it also tells about the external aspect which can act as an
opportunity for the company to sustain their competitive advantage in the market. The threats
will help the company to analyze the growing competition in the market. Thus, in this way,
SWOT analysis will become helpful for the company to grow in the market (Sadhasivam, and
Priya 2015).
Conclusion
Thus in the limelight of above mentioned events, the fact that shall be noted is that the Carsales
has successfully made use of all the available resources and capabilities to increase its success in
the external environment. The aforementioned task talks about the success of the company and
its reason and strategic implementation which they used to gain success. It also explains the
SWOT analysis which the CEO can use to promote their product in the market.

Introduction to Management 7
References
Aguirre, E., Mahr, D., Grewal, D., de Ruyter, K. and Wetzels, M., 2015. Unraveling the
personalization paradox: The effect of information collection and trust-building strategies on
online advertisement effectiveness. Journal of Retailing, 91(1), pp.34-49.
Carsales., 2018. Our Company. Viewed on January 23, 2018 from <
https://www.carsales.com.au/carsales-info/about-carsales>
Ginter, P.M., Duncan, J. and Swayne, L.E., 2018. The Strategic Management of Healthcare
Organizations. John Wiley & Sons.
Goetsch, D.L. and Davis, S.B., 2014. Quality management for organizational excellence.
Upper Saddle River, NJ: pearson.
Grant, R.M., 2016 Grant, R.M., 2016. How smart, connected products are transforming
companies. Harvard Business Review, 93(10), pp.96-114.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley &
Sons.
Grefrath, C., Wagner, D. and Stermann, S., 2017. Products and Services in a Sustainable
World. In Value Networks in Manufacturing (pp. 65-72). Springer International Publishing.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an
integrated approach. Cengage Learning.
Hsu, J.L. and Pann, J.H., 2017. Subsequent Reaction to Online Advertisement
Disturbance. International Journal of Business Administration and Management
Research, 3(3), pp.1-6.
Lewandowski, M., 2016. Designing the business models for circular economy—Towards the
conceptual framework. Sustainability, 8(1), p.43.
Moriarty, S., Mitchell, N.D., Wells, W.D., Crawford, R., Brennan, L. and Spence-Stone, R.,
2014. Advertising: Principles and practice. Pearson Australia.
Robbins, S P., DeCenzo, D., Coulter, M & Woods, W., 2016. Management: The Essentials,
3rd edn, Melbourne, Pearson, Viewed on January 29, 2018 from https://revel.pearson.com
Sadhasivam, P. and Priya, A.N., 2015. A Literature Review on the Impact of Television
Advertising Vs. Online Advertisement among Consumers. International Journal, 3(10).
Schaltegger, S., Burritt, R. and Petersen, H., 2017. An introduction to corporate
environmental management: Striving for sustainability. Routledge.

Introduction to Management 8
West, D.C., Ford, J. and Ibrahim, E., 2015. Strategic marketing: creating competitive
advantage. 3rd edn, (pp. 28-218). US, Oxford University Press.
Wheelen, T.L. and Hunger, J.D., 2017. Strategic management and business policy. pearson.