The report aims to introduce management based on a case study on carsales.com .au that is presently the largest online motorcycle, marine and automotive classifieds available in Australia (carsales.com.au 2018). The report begins with a discussion on the concept of strategic management illustrated by the case study. There is also discussion about competitive advantage of carsales.com.au. The report also put forward discussion on how the company ruled in presence of the competitors. There is also discussion on the factors that led to the success of the company. The report also shows how SWOT analysis might help Gred Roeback in continuing its car sales growth.
1. Strategic Management refers to the plans developed by the manager in developing the strategies of an organization (Hill, Jones and Schilling 2014). Organizational strategies refer to the plans that help in executing the goals of an organization. Strategic management also helps in determining how the organization will compete successfully and thereby satisfy and attract its customers. The importance of strategic management lies in the fact that it can helps the organization in making a difference with its performance. The strategic management process also helps organizations in coping with uncertainty. Strategic management also enables diverse and complex parts of the organization to work in unison towards the organizational goals. Strategic management is not just important for business organizations but it is also important for hospitals, social agencies, educational institutions and government agencies (Robbins et al. 2016)
The strategic management involves a six-step process that involves planning, implementation and evaluation (Eden and Ackermann 2013). The initial four steps involve the process of planning thereby implying that evaluation and implementation holds equal importance. The best of the strategies can fail if the managers fail to implement or evaluate them properly (Wheelen et al. 2017). Strategies needs formulation at all levels in an organization that includes competitive, corporate and functional.
Step 1: Identification of Mission, Goals and Strategies of the Organization:
Step 2: Performing External Analysis:
Step 3: Performing Internal Analysis:
Step 4: Formulation of Strategies:
Step 5: Implementation of Strategies:
Step 6: Evaluation of Results:
Following the steps of strategic management Carsales.com.au commenced into the online-classified business of automotive in the year 1996. The company is the first mover in the industry and claims the highest position as far as sales transaction is concerned. The website not only represents the trading market for the cars but also trucks, boats, caravans, bikes, equipment, machinery and accessories(Hammond 2013). The revenue model of the company is also effective since the website of the company charges a fee from each of the sellers for listing the vehicle until sold. In addition, the website also charged for a space for advertising. More recently, the company has charged a fee for sharing information and data to the dealers. Carsales.com.au has followed the first four steps of strategic management quite well. This has also ensured the company to divide the offerings of the advertisements in two categories that included display advertising and classified advertising. The implementation of the classified advertising served as a major revenue source from the private sellers and the dealer customers. The procedure goes as if when a dealer or a private seller places an advertisement for specific vehicle for a particular price, the advertisement in the classified form appears on the online website of carsales.com.au. On the other hand, display advertising is primarily for the corporate customers that include automotive manufacturers, importers, insurance companies and financiers (Marsoof 2013). These advertisements are however available for specific time and fee. These advertisements included promotional deals for newer vehicle and helped in total revenue generation of about 86 percent.
2. Competitive advantages refer to the conditions that allow an organization or a country in producing a service or good at a comparatively lower price or in an attractive manner to the customers (Scardamaglia 2013). Such conditions allow productive entities in generating superior margins or more sales than its competitors generate.
Businesses must adopt a Blue Ocean Strategy in order to be successful in an uncontested market that is ripe for growth. The blue ocean strategy refers to the creation of new uncontested market place for a company by making the competitors irrelevant and ensures creation of newer consumer value through decrease in cost (Kim and Mauborgne 2014). These strategic moves by Carsales.com.au lead to the creation of value innovation thereby giving it a competitive advantage. This helps in creation of powerful leaps for both the buyers and business thereby unleashing newer demand and outdating the rivals. Implementation of Blue Ocean can be through the development of unique selling points adopted by the company. The first unique selling point of the company focuses on achieving a sale and not the creation of an advertising avenue. This ensured application of robust, efficient and sophisticated technologies that clearly enabled people in generating sales. Carsales.com.au had automotive software that determined the future opportunities of the business. The characteristics of the technology adopted by the company include:
The company carsales.com.au maintained its competitive advantage by making a business choice for online trading of classified thereby ensuring complete handling of the business via digital/online channels. The site operated on a sector where there already existed a market developed by traditional channels and established agents (carsales.com.au 2018). The traditional business however acted as a support for the company until the online channel became sustainable. The carsales.com.au has attained success that has led to the extension of its business to the other affiliated sites meant for selling bikes, trucks, boats, and caravan and plant machinery. The company also remains ahead of its competitors in working harder towards innovation, expansion and diversification. The company also believed in the strategy that online business has the potential in reaching a greater customer base and it particularly tied to a specified delivery area or location. With the emergence of globalization and the growth of the e commerce business, carsales.com.au ensured delivery service in situations where the purchaser and seller belonged to different geographic locations.
Carsales.com.au maintained its competitive advantage by creating value for the customers (Saeidi et al 2015). The online platform of the company offers the customers user friendly and useful online platforms with accurate capabilities for implementing a search. Further, the company also offers research options that provide detailed features and specifications for every possible car available in the Australian continent. The site also provides an obligation free quote for car insurance from the time of the transaction. The prospective buyers can undertake a comparative analysis of the features and specifications of an ample number of cars as per their wish. The company also provides the option of getting a valuation for a car that would help in enhancing the car buying experience of customers (West, Ford and Ibrahim 2015). By applying a minimal fee, the company also allows viewing a car advertisement by an extensive audience both around Australia and on a global scale.
3. Internal factors represent factors within company over which it has control. These factors also influence the approach and the success of the operations undertaken by the company (Hammond, J.B., 2013). These factors have however acted in favor of carsales.com in ensuring its successes. The factors include:
The role of company leadership is a vital internal factor determining the success of the company. CEO Gred Roeback has put across an outstanding leadership quality that determined the success of carsales.com
Carsales.com has always maintained organized and accurate record keeping and avoided any kind of faultiness in working to avoid any kind of customer disgrace
Carsales.com.au has firmly stood up tothe challenges posed by the customer demand and technological innovations by adopting a procedure of posting high quality of online advertisements.
The company also helped in establishing an innovative social media strategy for ensuring business growth. This ensured taking up an initiative for recruiting and training internal staffs for becoming the community members responsible for managing and updating the social media portals of the company (Bharadwaj et al. 2013). The company also implemented a related policy for establishing rules and regulations about using the social media as a part of the business thereby ensuring that the responses to the posts handled in a dignified and professional manner without leakage of any confidential information.
Carsales.com.au has moved a step ahead into the overseas mark and made its presence felt in China, Thailand, Malaysia and New Zealand. To thrive in the overseas market, carsales.com.au had to continually scan the external environment of the competitors and undertake necessary action for maintaining its competitive advantage (McDonald and Wilson 2016). Other resourceful companies and internet giants however pose threat to the company whose viability determined by the individual sellers and loyalty of the dealers. The dealers of carsales.com.au get forced indirectly in adopting the technologies of the company and not compete in the e market space determined by join them or be left behind approach. Thus, internal as well as external factors both helped carsales.com.au in becoming one of the largest online automotive classified of Australia.
4. The acronym SWOT stands for strength, weakness, opportunity and threat. SWOT analysis of a company helps the consumers in getting the right information in the right format. This also provides complete and accurate information of the company that helps in retaining customer base.
Strength refers to the unique selling points (USPs) adopted of the business. In case of car sales.com.au, the first selling point referred to the business model adopted by the company where the CEO offered the sellers a flat fee until they sold the car. The second USP of the company lay in putting online advertisements and the use of advanced technology that allowed the sellers in searching for potential cars thereby providing sufficient information. The third USP of carsales.com.au was usage of innovation for the continuous improvement of the customer experience and the business.
Weakness refers to essentially analyzing any weakness that is prevailing in the company that prevents the company from reaching the full potential. Carsales.com.au is simply a broker that provides a platform for the buyers and sellers (Kotler 2015). The model used by carsales.com.au is nothing unique and is by other online companies working on similar lines. Although they are unable to reach the scale and complexity adopted by the company however, they eat away a sizeable portion of the potential customers of the company.
Opportunities refer to the external analysis that determines what lies ahead of the business. Tracking the opportunities immensely helps the company in not only setting the growth plans but also understanding the business environment and the political and economic issues. In this context, the business choice of carsales.com.au in online trading of classified has been beneficial for the company since everything right for gathering information to purchase can be handled online. Moreover, the online site created by the company operates in larger arena with a greater exposure created by the traditional channels and established agents.
Threats refer to the external and internal analysis that the company in terms of possible threats likes the government policies, economic conditions, markets, trade unions and competition. Carsales.com.au faces the waves of the economic crisis that has gripped the world since the around the year 2007 and has been playing a dampening effect in almost all the industries.
The strength, weakness, opportunities and threats (SWOT) analysis ensures various benefits to the business since it helps in providing a clear view of the strengths of the company thereby allowing carsales.com.au to further focus on them in meeting the business objectives. The analysis also focuses on the weakness thereby providing an opportunity in reversing them (Grant 2016). Through the analysis, one gets a closer picture of the opportunities that lies ahead of the company. This can be used in drafting the strategic plans for growth of the company. Through the analysis the possible threats in the business is identified and accordingly the changes in the growth plans and business policies made. This also ensures undertaking alternative, supplementary and contingency plans. However, one of the major benefits of conducting a SWOT analysis lies in the fact that in helps in the creation of converting and matching strategy. Thus, the analysis helps the company in employing a strategy that matches the opportunities and strengths and employ them in converting the threats and weakness into further opportunities and strengths. The analysis helps in providing motivation and necessary momentum for getting on with the business plans in spite of all the odds.
Conclusion:
The report ends by focusing and analyzing a case study based on carsales.com.au. In recent times, consumer choices related to the automotive products are gradually looking for online options. Based on this trend, carsales.com.au adopted a business model that led to growth and recognition. The business model adopted however included advanced online technologies, development of new product and stronger growth potential for the future.
References:
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