Strategic Management Analysis: Carsales.com.au Case Study Report

This report provides a comprehensive analysis of the strategic management employed by carsales.com.au, focusing on its success as a market leader in online car sales. The report examines the strategic decisions made by CEO Greg Roebuck, including the development of a superior business model, the utilization of technology for effective advertising, and the emphasis on innovation to enhance customer experience. It delves into the competitive advantages achieved by carsales.com.au, such as its first-mover advantage and positive feedback loop, and discusses strategies to maintain this advantage in a competitive market. The report also evaluates the influence of both internal and external factors on the company's success, highlighting the importance of the internet's growing popularity. Furthermore, it explores the application of SWOT analysis as a strategic tool for continued growth and market positioning. The report concludes by emphasizing the need for carsales.com.au to sustain both cost and differentiation advantages to remain competitive.

Running head: INTRODUCTION TO MANAGEMENT
Introduction to management
Name of the student:
Name of the University:
Author note:

1INTRODUCTION TO MANAGEMENT
Question 1: How is strategic management illustrated by this case study?
Answer:
Strategic management refers to the process of identifying and implementing the goals and
objectives of an organization by the senior management on behalf of the actual owners while
keeping into consideration the available resources and the organizational environment. The given
case study mentions the success story of carsales.com.au. The case study mentions the
development of the goals and objectives of the organization by Greg Roebuck, the CEO of
carsales.com.au,in its initial days.
The major strategic management decisions taken by Roebuck included developing a
superior business model as compared to the rival organizations. For this purpose, the
organization emphasized upon offering the sellers free online advertisement till the time their
cars were sold. This made the organization’s activities different from the traditional newspaper
advertisements as the newspapers took money from the sellers for placing their advertisements
without 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 utilizing
special technology for creating quick and more affective advertisements for the sellers. The
organization aimed at providing detailed and appropriate information to the customers, which
they were unable to obtain through newspaper advertisements (Wheelen et al. 2017). This was
the boldest strategic management decision taken by Roebuck as internet was not much popular
back in those days and building up a business entirely based upon internet was very risky in the
late 1990 s.

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The third major strategic management decision taken by Roebuck was utilizing
innovation for constant improvement of the business along with enhancing the customer
experience. The innovations mainly involved enabling the customers to view carsales.com.au on
their mobile phones and using the internet for communicating with the customers. The
organization 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 the
automotive products while considering the scope for diversification into new products, markets
and locations (Rothaermel 2015).
The above mentioned goals and objectives of the organization were a part of strategic
management of the organization as the goals and objectives were set by the CEO of
carsales.com.au, Greg Roebuck on behalf of the owners of the organization, which provided the
necessary direction to the organization. The objectives were formulated and the strategies were
formed to achieve those objectives along with the proper allocation of the resources for
achieving those objectives (Barney and Hesterly 2015). The strategic management decision was
taken in a highly complex environment as the business model was based upon internet, which
was not popular in those days.

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Question 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?
Answer:
The major competitive advantage, which carsales.com.au has achieved is objectives and
has been successful in becoming the market leader. The organization has been successful in
crushing its competitors and creating its strong market presence. More than 80% of the
customers, who search for cars online visit carsales.com.au. The organization has created a
positive feedback loop, which has enabled the organization to reach greater heights. The
organization 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 their
cars were sold (Peteraf, Gamble and Thompson 2014). This was one of the major strategies to
attract the sellers to list their cars on the website of carsales.com.au instead of placing
advertisements in newspapers, which involved incurrence of huge costs. However, later on the
organization charged a very minimal amount from the sellers for listing and advertising their cars
on the website.
The organization has divided its online advertisement offerings into two parts namely
display advertisement and classified advertisement. The major revenue generated by the
organization comes from the classified advertising wherein the seller places an advertisement on
the website for a particular vehicle. This advertisement appears on the organization’s website and
the buyers can easily view them (Baker and Saren 2016). On the other hand, the display

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advertising involves customers such as importers, automobile manufacturers, insurance
organizations and financers. These advertisements are aimed towards providing vehicle
promotional deals for a specific period of time.
Carsales can maintain its competitive advantage while others attempt to imitate its
success by emphasizing more upon innovation. Innovation can help the organization to
differentiate itself from the rival organizations. Establishing proper communication with the
customers enables the organizations to create a long- term positive brand image. Therefore,
Carsales must also ensure that there is proper communication with the customers and it must also
carefully handle all the complaints and grievances of the buyers and the sellers. The organization
must become customer centric in order to sustain in the long- run. It is necessary for the
organization to ensure a positive organizational culture in order to ascertain that the employees
of the organization are satisfied and aim towards increasing the customer satisfaction along with
increasing the overall efficiency of the organization (Kumar and Pansari 2016).
An organization can obtain competitive advantage in two ways namely cost advantage
and differentiation advantage. Cost advantage refers to the situation wherein the organization is
able to reduce its expenses and provide its products and services at a lower cost as compared to
the other similar organizations. On the other hand, differentiation advantage refers to the
situation wherein the organizations provide better products and services as compared to the rival
organizations (Marcus and Cohen 2017). Therefore, Carsales shall have to maintain both cost
and differentiation advantage in order to remain ahead of the competitors in the long- run.

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Question 3: Do you think the success of carsales.com.au is due to external or internal
factors or both? Explain.
Answer:
Internal factors refer to the factors within an organization that affect the business
operations and the organizations have control over those factors. On the contrary, external
factors refer to those factors that are present outside an organization and the organizations do not
have much control on those factors (Armstrong et al. 2015). In case of carsales.com.au, both the
internal and external factors resulted in the success of the organization. However, the internal
factors played a more vital role in the success of the organization.
The innovative business idea and the special offerings provided by the organization led to
the success of the organization. The organization was the first in the market to provide the sellers
and buyers of the cars to buy and sell and buy cars online. The organization changed the views of
the people and made online sale and purchase of cars popular. However, the organization took a
great risk as internet was not that popular during those days and not much people knew how to
access internet. Therefore, the organization provided attractive offers to the sellers in order to
post an advertisement of their cars on the portal of carsales.com.au. Initially, the internal
strategies of the organization made the way to success and later on the positive external
environment resulted in the success of the organization (Child 2015).
Initially, as a part of its internal strategy, the organization offered the sellers the
opportunity to list their cars free of cost on the website until the cars were sold. The organization
charged a minimal amount from the sellers only after their cars were sold. Later on, when the
organization gained popularity, it began charging some amount from the sellers for placing

6INTRODUCTION TO MANAGEMENT
advertisements for their cars and listing them. The organization always charged lower costs for
placing advertisements as compared to the newspapers and magazines and provided a wider
reach. The major external factor that led to the success of the organization was that internet
started gaining popularity and with the passing years, a large number of populations across
Australia had an access to the internet. Internet provided a massive opportunity to the
organization to flourish in the upcoming years (Walker 2014). Within the span of a few years,
the organization became the best online site for selling and purchasing cars and other vehicles.
The business decisions taken by the management of the organization and the strategies
formulated by the top management helped the organization to become successful. The positive
socio- economical and technological changes especially the rise in the trend of using internet
helped the organization to become successful. Initially, the organization faced several issues as
the business was entirely based upon internet and internet was not popular in those days.
However, with the sudden increase in the popularity of internet after the year 2001, the
organization was able to successfully establish itself as the best organization in its field (Burke
2017). Therefore, it can be stated that both the internal and external factors led to the success of
carsales.com.au.

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Question 4: How might SWOT analysis be helpful to Greg Roebuck as carsales.com.au
continues to grow?
Answer:
SWOT analysis refers to the analysis of the strengths, weaknesses, opportunities and
threats of an organization, which enables strategic planning. SWOT analysis is an extremely
useful tool when an organization aims at taking advantage of a new opportunity or implementing
a different or new technology. SWOT analysis also enables the organizations to respond
appropriately to the new trends and deal with the competitors. SWOT analysis enables the
organizations to determine the areas in which it has been performing well so that it can further
improve its strengths. This also involves determining the weaknesses of an organization such that
it can take appropriate measures to minimize the weaknesses. SWOT analysis enables the
organizations to determine the business opportunities such as changes in the consumer trends or
changes in the market. Additionally, SWOT analysis also enables the organizations to determine
the threats present in the external environment such that they become aware about the potential
threats and prevent them. Therefore, SWOT analysis enables the organizations to evaluate their
internal strengths and weaknesses along with external threats and opportunities (Shabanova et al.
2015).
SWOT analysis might be useful to Greg Roebuck as carsales.com.au continues to grow
because the organization has already reached its maturity and the growth rate has declined. The
organization is a well- established and well- known brand in the market. However, the entry of
several similar organizations that offer more or less similar services has increased the threats for
the organization. SWOT analysis shall enable the organization to determine its competitors and

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evaluate their strategies in order to form a better strategy. SWOT analysis shall enable Greg
Roebuck to determine the major strengths of the organization, which have contributed in the
success of the organization along with the major weaknesses, which have been the major
challenge for the organization. This shall enable the organization to formulate the strategies
while keeping into consideration its strengths and minimizing its weaknesses. SWOT analysis
shall help the organization to identify the changes in the consumer needs, market trends,
technological changes and other changes so that it can determine both opportunities and threats.
Exploring the opportunities shall enable the organization to grow further and expand its business
operations while identifying the threats shall enable the organization to prevent them
(Phadermrod, Crowder and Wills 2016).
Therefore, SWOT analysis shall help carsales.com.au to maintain its position in the
market while simultaneously maintaining its growth pace. This shall enable the organization to
emphasize more upon its internal strengths and minimize its weaknesses. SWOT analysis shall
help the organization to identify its competitors and analyze their business strategies in order to
remain ahead of them (Wheelen et al. 2017). This shall also help the organization to determine
the external factors that might be useful in expanding the business operations and possible threats
that might act as a barrier in the organization’s success.

9INTRODUCTION TO MANAGEMENT
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