Carsales: SWOT Analysis and Growth Strategies Report

This report provides a comprehensive analysis of Carsales, an Australian automotive classifieds company. It begins by examining Carsales' strategic approach, highlighting how the company leveraged online advertising to gain a foothold in the market, create unique selling points, and establish a competitive advantage. The report then delves into the competitive advantages Carsales has earned, particularly its differential focus strategy, and discusses how the company can sustain this advantage through market expansion and benchmarking. Furthermore, the report explores the internal and external factors that have influenced Carsales' success, emphasizing the importance of aligning these factors to achieve market recognition. Finally, the report concludes with a SWOT analysis of Carsales, outlining the company's strengths, weaknesses, opportunities, and threats, and how these elements have contributed to its growth and market position.

Running Head: Introduction of Management
Introduction of
Management

Introduction of Management 1
Contents
Introduction.................................................................................................................................................1
Answers.......................................................................................................................................................1
1. Strategic approach of Carsales........................................................................................................1
2. Competitive advantage earned by Carsales.....................................................................................2
3. Internal and external factors affecting success of Carsales.............................................................4
4. Growth of Carsales through SWOT Analysis....................................................................................5
Conclusion...................................................................................................................................................6
References...................................................................................................................................................7

Introduction of Management 2
Introduction
The purpose of this task to provide a brief overview of the activities of the company Carsales
initiated to gain success in the target market. Carsales is one of largest automotive, motorcycle
and marine classifieds company in Australia. The below mentioned details answers the questions
of the given in case study.
Answers
1. Strategic approach of Carsales
Strategic management approach refers to the approach under which an organization implements
and formulates action plan formed by the management in such a way that the company gains
success. This type of approach helps an organization to evaluate and assess both internal and
external factor and mold them in such a way that efficiency is achieved for the company.
Carsales adequately created and implied the strategic management approach in their business
process so as to achieve success in the target market (Robbins, et. al., 2016).
Relating it to the case study, it shall be noted that the organization Carsales was originated with a
motive to make car sales classified ad online. The CEO of the company noticed that all the ads
for the selling of motor vehicles were made on newspapers like The Trading Post etc. but Greg
wanted to sell all these cars through online ads. So, with that motive, he founded the organization
Carsales which helped people to post ads online on internet. Adding to it he also strategically
created goals and vision which assisted the company in implementing the strategic approach in
the business. The organization analyzed the factors which can strategically affect the growth of
the company in a positive way and how the management can initiate it in their process (Peppard,
and Ward 2016). Further, the goal which the company developed was to compete with the
biggest firm present in industry of car sale classified ads; apart from this, the company also
aimed to post ads of approx. 3000 cars on their website. But the company received acceptance
and profits from the market more than they actually expected (Fennis, and Stroebe 2015).
After creating the vision and mission for the company, the management started the role of
evaluation of market feature which the company can use to satisfy the business activities

Introduction of Management 3
implemented by them. The fact that came to know that internet was not prevalent at that time and
very few people used the internet; so the company aimed to target that small segment of the
market only (Bart, Stephen, and Sarvary 2014). The company also targeted to increase the
satisfaction level of the customers in such a way that people do not prefer another organization
after using the services of their organization. The activities of the company were initiated with a
motive to simply improve quality, quantity, and consistency in the information provided for car
ads. With this motive, the organization then strategically developed three unique selling points of
the organization on the basis of which they will gain competence in the target market (Pearlson,
Saunders, and Galletta 2016).
First USP was the implementation of the innovative business model used by them. Looking
forward to the opportunities which the company can gain by shifting their business online, the
model explained that, the company shall post the classified ads online. This improved model
helped both, customers and company to gain an advantage. Also, the organization initiated flat
fee. Flat fee model refers to the process under which the customer will pay a fee for the ads only
when a person buys the car through their website. This process improved the authenticity and
trust of customers on the activities of the company (Dudin, et. al., 2015). Also, it helped the
company to create a differential position in the market. Second USP of the company tells about
the technical specification available to them which they can use to create high-quality ads that
can help people to search for the cars according to their requirement. This can increase the
satisfaction level of customers as well. Lastly, the third USP is the implementation of innovation
in the business activities so as to increase the satisfaction level of the customers. This process of
the company helped them in maintaining sustainability in the business along with attainment of
competitive edge in the target market. Thus, with the initiation of all such strategic activities, the
company adequately fulfilled the vision of the organization which subsequently implemented the
strategic approach in the business (Frow, et. al., 2015).
2. Competitive advantage earned by Carsales
Competitive advantage refers to the activities of gaining appreciation in the target market.
Competitive advantage can be gained by an organization by successfully satisfying services to
the customers present in the market; also, it is not easy for a company to gain a competitive
advantage in the target market. The organizations shall now focus on sustaining the competitive

Introduction of Management 4
advantage gained in the target market. Further sustainability in the competitive advantage helps
an organization to create their space in the target market and sustain that image in the market.
Advantage by an organization can be achieved by focusing on three major aspects namely cost
leadership, focus, and differentiation. An organization can easily attain leadership by
implementing these aspects in the process (Pisano 2015).
Cost leadership refers to the process of presenting the product and services in the market at low
costs as compared to the cost which the competitors are offering. Low costs of the products and
services will help the company to increase the satisfaction level of the customer at they will
provide optimum services at low prices which subsequently increase the interest of customers in
the activities of the company. Focus refers to the strategy of maintaining the focus on a particular
activity of the company. This activity helps the company to provide effectiveness in their process
by focusing on a specific function of the organization. Lastly, the differentiation process helps
the company to create differentiation in the products and services offered by the company
(Nonaka, and Toyama 2015).
Further talking about the activities initiated by the company it shall be noted that in order to gain
a competitive advantage in the target market Carsales used the differential focus strategy. Under
differential strategy, Carsales provided differential capabilities in the services which they provide
in the market. And under the focus strategy, Carsales laid stress on the target market and people
who were using the internet at that time. This strategy implication helped the company to
adequately focus on the right people and provide the right type of services to them. Due to this
strategy, Carsales gained customer satisfaction and competitive edge in the target market as well
(Carsales 2018).
After attaining competitive advantage, it is important for an organization to maintain that
competence as well. So, with respect to that, the management needs to sustain the competitive
advantage which they have earned in the market. As the company has used a differentiated
model which can be replicated by other competitors in the market to earn profits. This can act as
a threat to the organization as it can reduce the uniqueness of the company in the market. So, the
company shall maintain their sustainability by expanding their activities in the international
external market. Connecting to which, the company is aiming to diversify their business in
different channels, markets, and geographical boundaries (Hinterhuber, and Liozu 2014). This

Introduction of Management 5
expansion process will help the company to promote their activities in the different market create
a brand image as well. Resulting in which, imitation or replication of model will not hamper the
growth of the company. Lastly, it shall be noted that the organization is consistently aiming to
create benchmark in the market against their competitors which will help the customers to
compare the activities of all the organizations and then chose the best company for them. Thus,
in this way, Carsales has created competitive advantage in the market and it can sustain them as
well (Hoban, and Bucklin 2015).
3. Internal and external factors affecting success of Carsales
An organization can gain success in the target market only if both the external and internal factor
co-operates the activities of the company. Relating to it, the company Carsales used both of its
internal and external resources adequately to earn an identified reputation in the target market. If
both the factors (internal and external) work together then only an organization can earn
competitive edge in the market. Supposing, if a company is aiming to target a large segment of
the market but the products which are being promoted by the company do not hold a large
customer base in the market still the company is targeting the whole market. So, the company
will not gain appreciation in the market because the internal and external factors of the company
do match with each other. So, it shall be noted that the company Carsales adequately used both
the factors to gain an advantage in the market. The company used the internal sources in such a
way that they developed technology and motivated their employees in formulation and
implementation of organization objective (Austin, and Pisano 2017).
The management of the company effectively and efficiently worked in such a way that it helped
the company gain recognition in the market. Further, the management adequately targeted the
people as well, whom they wanted to provide their business activities. Selection of correct target
market helped the company gain success in the external market. Moreover, the external market
assisted the company in its growth in such a way that with the boom in the use of internet people
started using the site as well. As people got attracted to the internet, due to which they started
using the services provided on the internet as well. Additionally, it shall be concluded that if the
company Carsales would have initiated their services and expanded in the external market but
the market did not adopt the growth of technology, then the company would have faced failure in

Introduction of Management 6
their process. Or if the company would have initiated risky approach or premium cost approach
then they would not have enjoyed success in the market (Wagner III, and Hollenbeck 2014).
4. Growth of Carsales through SWOT Analysis
SWOT analysis of Carsales
Strength: Strength of Carsales is that the company is capable enough to hold up to the
technological implementation present in the market. The company also used the innovative
model to initiate changes in the business process and gain success. The company also gained
first-mover advantage as it implemented the innovative model and implementation techniques in
their business.
Weakness: The biggest weakness of the company is threat of replication of the business model.
Although the company is initiating expansion activities the replication of business model of
Carsales can poorly impact the activities of the company (Low, and Ho 2016).
Opportunities: Carsales earned the opportunity in the market to expand their business in
different parts of the world. Apart from that, the company has the opportunity to expand their
business in different department of vehicles as well. This will provide more income to the
company.
Threat: The threat to the company is the increasing competition in the target market. New
entrants are entering the market so they can decrease the competitive advantage earned by the
company (Carsales 2018).
The SWOT Analysis explains the internal and external capabilities of an organization which can
use to succeed in the global market. SWOT analysis helped Carsales the CEO use their strengths
and apply them to the opportunities in a way that the company can earn success in the market.
Besides, the threat and weakness will help the company to understand the issues and mitigate
them to sustain in the target market. Strengths and weakness are a part of the internal analysis
and threats and opportunities are a part of external analysis. Thus this type of analysis tells the
management about both the environments which can affect the activities of the company. So, in
this way SWOT will help Greg to progress in the external environment (Armstrong, et. al.,
2015).

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Conclusion
Thus, in the limelight of above-mentioned events, the fact that shall be noted is that it important
for an organization to correctly identify resources and capabilities and work on them is such a
way that they gain competitive advantage.

Introduction of Management 8
References
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Austin, R.D. and Pisano, G.P., 2017. Neurodiversity as a Competitive Advantage. Harvard
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Bart, Y., Stephen, A.T. and Sarvary, M., 2014. Which products are best suited to mobile
advertising? A field study of mobile display advertising effects on consumer attitudes and
intentions. Journal of Marketing Research, 51(3), pp.270-285.
Carsales., 2018. Our Company. Viewed on January 23, 2018 from <
https://www.carsales.com.au/carsales-info/about-carsales>
Dudin, M.N., Kucuri, G.N., Fedorova, I.J.E., Dzusova, S.S. and Namitulina, A.Z., 2015. The
innovative business model canvas in the system of effective budgeting.
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Palgrave Macmillan UK.

Introduction of Management 9
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