BUS104 - Strategic Management Analysis of Carsales.com.au Case Study

This case study examines the strategic management principles applied by Carsales.com.au, highlighting its unique selling proposition and business model that facilitated growth in the e-commerce sector for automotive trading. The analysis covers the strategic management process, emphasizing the importance of planning, execution, and evaluation. It identifies Carsales.com.au's competitive advantages, including its innovative business model, use of technology for creating high-quality ads, and continuous innovation. The study also assesses the internal and external factors contributing to the company's success, such as strengths in quality and consistency, and external technological advancements. Furthermore, it explores how SWOT analysis can assist Carsales.com.au in sustaining growth by leveraging strengths, addressing weaknesses, capitalizing on opportunities, and mitigating threats. The document is contributed by a student and available on Desklib, a platform offering study tools and resources.

Assessment Task 2
(Case Study)
1

1. How is strategic management illustrated by this case study?
The strategic management is referred to as the formulation as well as the execution of the
major goals and objectives of the various initiatives adopted by the company in order to attain
a large market share on behalf of the stakeholders. In regards to the case scenario of
“Carsales.com.au”, the company is having the unique selling proposition and business model
which has helped in the growth and development of the company in the near future. In the
late stages of the 90’s the cars were used to sell and purchase through the classified
advertisements and there were only a limited amount of information is available to the users.
With the introduction of carsales.com.au which is an e-commerce trading platform for the
trading of the motorcycle, automotive, boats, and many others. The strategic management
leads to involving all management functions which includes the planning, organising,
directing, staffing, controlling and many others. The company has used the innovative
strategic or business model and framework which has helped in making more amounts of
profits for the company (Hill, et. al., 2014).
Significance of Strategic Management
 The use of strategic management has led to making more money for the company
carsales.com.au.
 It is significant for formulating of the unique selling point for the company so that it is
helpful for carsales.com.au to stand out in front of its various competitors.
 It helps in leading to a game changer for the carsales.com.au as the strategic
management consists of various phases that generate advertising revenue for the company
(Hill, et. al., 2014).
Strategic Management Process
It comprises of the six-phases through which the organisation passes in order to be successful
in the market force. It contains the steps such as planning, execution to its end evaluation.
The practicing of such strategic management process helps in gaining the competitive
position for the company. The carsales.com.au uses such strategic management phases in its
structure which is explained below with the help of a diagrammatic representation that is as
follows:
2

Figure 1: The Strategic Management Process
Source: (Robbins, et. al., 2016)
The six steps in the SMP (Strategic Management Process) are:
i. Determining of the organisation’s current goals, objectives, vision, mission, strategies,
and others of the company.
ii. Performing of an external analysis which includes of all factors that externally impact
on the growth and performance of the company (Zott, et. al., 2011).
iii. Internal analysis of the company’s strengths, weakness, opportunities and threats and
also assessing the internal core competencies and resources of the company required to
challenge with the external impact.
iv. Formulating of the strategies according to the respective needs and wants of the
customers matching with the organisation’s vision (Robbins, et. al., 2016).
v. Implementing of Strategies in which the best strategy is selected and opted which
address best to the respective and issue and concern of the organisation.
vi. Evaluating the results and monitoring on a regular basis so that there are fewer
chances of repetitive mistakes and threats to the company.
Hence, in such a way the company has designed and used for the strategic management to be
successful in the market and gain competitiveness (David, 2011).
3

2. What competitive advantage has carsales.com.au achieved? How can it maintain
that competitive advantage as other companies try to imitate and replicate its success?
The company carsales.com.au has made such strategies and USP (Unique Selling Point)
which have led to gaining of the competitive advantage for them. Yes, the company is able to
achieve the competitive advantage in the market. The Unique Selling Point which has helped
in leading to competitiveness has been explained below (Freeman, 2010). Grey has made use
of three USPs in its business operations through which it attracts a large number of buyers
and sellers.
 The unique business model of the company which has replaced of the traditionally
used method of classified advertisements. Earlier the system of trading post newspaper is
mostly used by the sellers and buyers in which the money is given by seller for the classified
advertisements. On the contrary, the carsales.com.au focused and emphasised on a flat fee
system in which until the product is sold the company does not charge anything for it.
 Another, most significant tool for gaining of a competitive advantage by the company
is using of the modern and specialised technology in order to create the supreme quality ads
for the sellers so that maximum number of customers get attracted towards the seller’s
offering. The technology is used for exploring the products in quicker format. However, this
is targeted to that sought of customers who are using the internet and online platform. The
team of Grey or carsales.com.au use to collect pictures and information of the cars from their
dealers and thereafter, create creative online ads for the dealers. Hence, providing the
customers right information, at the right time and place is a major concern for this USP of
carsales.com.au.
 The last USP of carsales.com.au is that the company is using the innovative and
modern tools for the continuous in their business operations and also to gain a high customer
experience. Keep innovating something new every day is highly focused on the company so
that effective decision and long-term planning can be made (Wheelen and Hunger, 2011). For
example – The social media, online websites and others have been used for communication
the long-term business strategy.
For maintaining the competitive advantage over the competitors
4

The use of the online trading system is an emerging phenomenon in this current era where the
level of competition is also getting higher. In order to maintain and sustain the same level and
competitiveness there are certain measures which the company must focus on which are:
 Investing more amounts of funds and resources on innovation and invention of some
new tools and technologies.
 Diversifying into new business channels where there is a great scope and a large
market share is available.
 Entering into different economies or geographies and using the new and updated
technologies for remaining competitive is another which can be measure adopted by the
company.
5

3. Do you think the success of carsales.com.au is due to external or internal factors
or both? Explain.
Yes, the success of carsales.com.au is due to both of the internal as well as external factors.
The business environment is influenced by both the factors and it is important for any of the
company tops consider both of these factors in order to sustain in the competitive market. The
company matches its internal strength or weakness with the external opportunities and threats
are the key indicators of the success of any company. In respect to the respective case study,
the company carsales.com.au has used their internal factors in terms of its strengths like
quality, superiority, consistency, and others which are matched against its external threats.
The description of both the internal and external factors used by the company is as follows:
Internal Analysis
The internal assessment helps in defining the internal goals and objectives of the company so
as to meet the external requirements. The company has used the USP’s in order to achieve
competitive advantage and benefit in the market and business environment. These UPS’s has
helped the carsales.com.au in increasing their market share, customer base, and profitability.
It has also enabled carsales.com.au in diversifying among various distinctive channels as well
as geographies which have led to the creation of the new opportunities for the business.
However, there are certain internal factors which are affecting the success and growth of
carsales.com.au that are as follows:
 The changing behavior and attitude of the individuals
 New and revised organisational strategy which leads to resisting among the
organisational personnel (Aithal, 2016).
 Changes or variations taking place within the working style or pattern of the
workforce.
 New tools and equipment used by the company and the lack of expertise knowledge
against it.
External Analysis
6

The external analysis referred in this case scenario is subject to the technology used by the
company in creating the innovative advertisements and attracting buyers through these
creative ads. The technology used by the company helps in creating a benchmark for them
and also monitors over the overseas functioning of the organisation. In the industry of e-
commerce, the technology plays an essential role without of which the company is not able to
sustain in the economy. The technological impact directly impacts on the sales and
profitability of the company as the customers want the right information at the right place and
time. With the development of various economies and countries, the use of communication
mode has also been enhanced that leads to the urgency of adapting modern and upgraded
technology (Srdjevic, et. al., 2012). The external factors are also influencing the smooth
functioning of the organisation and which are described as follows:
 Changing and varying needs as well as demands of the customers that defers
according to the time frame.
 Establishment of new governmental or political policies, rules, laws, and others also
impact on the success of the company.
 The economic changes for example – recession, depression, inflation, exercise duty
and many others of Australia is impacting of the functioning of carsales.com.au.
7

4. How might SWOT analysis be helpful to Greg Roebuck as carsales.com.au
continues to grow?
The SWOT (Strengths, Weakness, Opportunities, and Threats) is defined as the very useful
and vital tool for assessing the internal core competencies in respect of the external
opportunities and threats. With the help of this analysis, the company is able to understand
the factors which are impacting on its business functioning. It is a powerful tool or technique
that is used by most of the companies. In carsales.com.au the company has also benefitted
from the technique (Helms and Nixon, 2010). With the SWOT analysis, the company is able
to make its unique selling proposition and various strategies relating to it. The internal
analysis helps in defining of the important information related to the particular organisational
capabilities as well as resources. The resources consist of the physical, human, financial or
intangible resources.
Grey, who is the founder of carsales.com.au, has done a market analysis that is aimed at
protecting and growth of organisation dealings and also of their automotive products. There
are various benefits of SWOT analysis for the carsales.com.au which are stated below:
 It is helpful in developing, manufacturing as well as delivery of the products and
services of carsales.com.au to their customers.
 It leads to enhancing and increasing the internal capabilities, skills, talent, and
abilities of the individuals. This directs ineffective and efficient working of the organisation.
 It highlights the core competencies of the organisation and uses them as the
organisational weapons (Hitt, et. al., 2012).
 Helps in understanding the business in a better and more appropriate form. As it
involves of formulating of strategies that are addressing of weakness of the company.
 This is also useful in developing such business goals as well as strategies which are
aimed at achieving the organisational goals and objectives.
There are various other benefits of the SWOT analysis that can lead the organisation in many
of the other ways. The use of such technique helps in gaining the market share and
8

competitive position among the competitors (Helms and Nixon, 2010). The SWOT analysis
of carsales.com.au is shown below:
Strengths Weakness
 Quality product
 Favourable condition
 Flexible online trading
 Creative advertisements
 USPs
 Consistency
 Organisational culture
 Human resource
 A limited number of buyers as the
study are a constraint to those individuals
which are using the online platform or social
media or internet.
 The online web is the only source of
trading for carsales.com.au.
Opportunities Threats
 Catering to a large market segment
and the non-users of the internet.
 Diversifying market opportunities
such as new geographies, new channels,
market and others so that more amounts of
revenues can be generated by the company in
the long-term.
 Setting up of benchmarks so that the
rivalry firms do not match it accordingly.
 Increasing number of competition in
the marketplace within the e-commerce.
 A large number of rivalry companies
taking place in the environment and thereby,
impacting on the growth of the company.
 Rapid changes and variations taking
place in the technologies used by the
company (Hitt, et. al., 2012).
9

References
Aithal, P.S., 2016. Study on ABCD analysis technique for business models, business
strategies, operating concepts & business systems. Browser Download This Paper.
David, F.R., 2011. Strategic management: Concepts and cases. Peaeson/Prentice Hall.
Freeman, R.E., 2010. Strategic management: A stakeholder approach. Cambridge university
press.
Helms, M.M. and Nixon, J., 2010. Exploring SWOT analysis–where are we now? A review
of academic research from the last decade. Journal of strategy and management, 3(3),
pp.215-251.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an
integrated approach. Cengage Learning.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2012. Strategic management cases:
competitiveness and globalization. Cengage Learning.
Robbins, S.P., DeCenzo, D.A., Coulter, M.K., and Woods, M., 2016. Management: The
Essential, 3rd edn, Pearson, Melbourne.
Srdjevic, Z., Bajcetic, R. and Srdjevic, B., 2012. Identifying the criteria set for multicriteria
decision making based on SWOT/PESTLE analysis: a case study of reconstructing a water
intake structure. Water resources management, 26(12), pp.3379-3393.
Wheelen, T.L. and Hunger, J.D., 2011. Concepts in strategic management and business
policy. Pearson Education India.
Zott, C., Amit, R. and Massa, L., 2011. The business model: recent developments and future
research. Journal of management, 37(4), pp.1019-1042.
10