Strategic Management Activities Of Carsales: Competitive Advantage Essay.

Discusses strategic management, competitive advantage and industry analysis concepts; including explicit comprehension of these key management concepts. This is achieved using a moderate range of credible secondary sources.

Strategic Management Approach of Carsales

The present scenario talks about the strategic management activities used by Carsales to initiate success in their business. Further, the task explains the competitive advantage gained by the company in the target market. Below-mentioned answers explain the activities of the company in the external market.

Strategic management refers to the activities implemented by an organization according to their goals and plans prepared for the achievement and success of the organization. Strategic management approach helps an organization to achieve success in the competitive market. This approach is implied in the business process of Carsales due to which they achieved success in the market. This process increased the effectiveness and efficiency of the organization which helped them to increase the returns for the organization (Jeon, et al., 2016).

The case study ‘A Stand-Out Success’ talks about how the company Carsales used the strategic approach for the success of the business; the company was introduced with an aim to change the method of selling cars through classified ads. The CEO of the Greg Roebuck innovated the idea to sell the cars by posting the ads online. In that time The Trading Post was the only famous newspaper which was frequently used by people to post ads for the cars and look for car ads in market. Being the lonely source for online ad posting, the CEO of Carsales looked it as an opportunity to enter the target market and make money. Thus company Carsales was originated in the year 1997 with an innovative idea to post ads on their online website (Robbins, et. al., 2016). The management then developed vision and mission. The aim of the company was to improve the quality, quantity and customer satisfaction in the market. This helped them to increase the number of customers in the market as well. The strategic vision statement helped the company to tell people about the objective of the company in the target market. Apart from that, the company developed the vision to compete with the biggest firm posting ads of cars in the market and post ads for 3000 cars on their website as well. Afterwards, the strategic approach helped the company to implement the vision of the organization in their business process (Fleisch, Weinberger, and Wortmann 2015).

Considering to the fact that very few people used internet at that time acted as a risk for the company but then Carsales targeted the right people who actually used internet on daily basis. This helped them to adequately provide the services in the market. The approach of the company was strategically implemented in the external environment by initiating unique selling points in the regular activities of the organization. First USP of the company was successful application of the business model in the organization. The business model has formulated in such a way that it assisted the vision and mission of the organization. Greg adequately looked at the opportunities and used them in the business to shift the focus of customers towards the online car ad posting process (Martins, Rindova, and Greenbaum 2015). The model of the company explained the innovative technology which they used in their process to increase customer satisfaction. The second USP was the technology which they used in their process to create high-quality ads in the market. With the use of such technology the CEO was able to implement his idea in their business process. Further generation technological implementation in the market where no organization aimed to develop their business the use of internet also helped the organization to gain the first mover advantage which assisted them in future when competitors entered in the market. The last and third USP which Carsales initiated in their process was the use of innovation in every activity which they perform in the market. This process differentiated every step of the company in the market due to which sustainability was a created in the market, also the management aimed to create sustainability in their activities which displayed their vision to run in the long run. Thus, in this way the company utilized their USP to create implementation of strategic activities in the market (Christensen, Raynor, and McDonald 2015).

Competitive Advantage Gained by Carsales

Competitive advantage refers to the processes which are implemented by the organization in a way to promote the company in the external market gain success over the competition. With the attainment of competitive advantage, an organization can easily increase their customer base in the market. This type of advantage is earned in the market by adequately satisfying customers through their services in the market. Competitive advantage helps a company to rise above the competition in the market. But the fact shall also be noted that it is not easy for an organization to gain competitive advantage in the market (Schaltegger, and Wagner 2017).

Further talking about the company Carsales, it shall be understood that the company adequately attained competitive advantage in the market due to which they successfully implemented technological implementation in the market as well. Further advantage by an organization can be achieved by focus on three major activities in the business that are cost leadership, focus, and differentiation. Cost leadership refers to the process of initiation of activities in the market which differentiate the company to the basis of prices of products and services provided by the company. Under this process, the company provides services to customer at minimal rates due to which customers gain greater level of satisfaction as they receive services at low cost as compared to other services provided by the competitors in the market (Lewandowski 2016). Focus strategy refers to the process of focusing on only one process of the company to achieve success in the market. Under this activity, the organization aims to increase the efficiency of the company by concentrating on single functions only and that function helps the company to gain a competitive advantage in the market. Lastly, the differentiation strategy helps the attain differentiation in their products and services to as to gain differentiation in the market as well. Under the differentiation process, the management serves the products and services differently in the market which gain competitive advantage in the market. As the customers see that the company provides differential products and services in the market due to which they get attracted towards the company and subsequently the company gains an advantage in the market (Font, Garay, and Jones 2016).

Carsales used both differentiation and focus strategy to gain the advantage in the market. Differentiation strategy was used in such a way that Carsales provide services differently with the use of innovation due to which they gained reputation in the target market. Furthermore talking about focus, it shall be noted that company adequately focused on the target market selection they targeted the people will prefer the services of the company. Thus in this way the company gained competitive advantage in the market, but it shall be noted that sustainability of competitive advantage is more important than creation of advantage. So, the company shall initiate following activities to sustain their advantage in the market (Tukker, and Tischner 2017).

• Expansion of business structure in international market.
• Differentiation in the business model so that it cannot be replicated.
• Sustainability in implementing innovation in the technological activities of the company.

SWOT Analysis of Carsales

With the use these activities, the company can initiate sustainability of their position in the target market (Carayannis, Sindakis, and Walter 2015). 

Carsales achieved success in the market with the use of both internal and external attributes present in the market. Internal factors include human resource, raw material, innovation, and technology present with the company etc. and external factors include social media presence in the market, increasing use of internet in the market. Further, it shall also be noted that target market is one of the most important aspects which helped the company to grow (Castelli, and Sianesi 2015). At that time very few people used the internet in the entire market due to which the company specifically targeted the people who were interested in the services of the company. So, in this way, right people attained the services of the company realized that they are different from other service provider companies present in the market. Resulting to which Carsales earned success in the market (Li, et. al., 2017).

Internal factors assisted Carsales in such a way that the human resources adequately applied the innovative business model and created efficiency in the market. Due to differentiated services of the customer customers got attracted to them and used their services as well. Without the implementation of the model innovation, the company was unable to create differentiation in the market. Lastly, with the increasing number of people using internet on daily basis, the management received the opportunity to promote the services in the market and successfully increase the customer base as well. Thus, it shall be noted that both the factors assisted the company in its growth (Shatat 2015).

SWOT analysis helps an organization to analyze and evaluate the internal as well as external feature of the market and mold the business activities accordingly so as to earn revenue in the market. The Strengths and weakness are a part of internal analysis of the company which tells about the capabilities of an organization. This information which helps the CEO Greg Roebuck to efficiently use their strengths and work on their weakness so that they management can increase the profits in the market. Further, the opportunities and threats form a part of external analysis of the market for the company Carsales. This states the opportunities which the company can utilize to increase the competitive advantage of the company in the market. Threats tell about the external risk which the company can face in the market, Thus it will help the CEO to analyze the market adequately and initiate activities which can successfully run in their market without facing any barrier (Saebi, and Foss 2015).

Concluding, SWOT Analysis will surely help the CEO to grow their business in long run. The analysis critically tells about the good and bad feature of the market and the company, so this will assist the CEO in taking decisions actively. Also now in future Greg will take decisions that reflect the strengths of the company and reduce and mitigate the risks associated with the activities of the company. The SWOT Analysis of the company is explained below:

Strengths: First mover advantage is the biggest strength of Carsales in the market. When Carsales implemented the idea of selling cars through online ads, at that time no organization was running in the same field. Due to which the organization gained identification in the market. Also use of innovative technology is the strength of the company as it makes them efficient in the target market.  

Weakness: The Company is more reliable on domestic market which reduces the scope of expansion in the market, and subsequently reduces the international customer base as well. Any change in the domestic market will directly affect the activities of the company as both are directly connected (Zott, and Amit 2015).

Opportunities: Opportunities which Carsales gained is expansion in the international markets. Initially, the company had a small target market under which they successfully sustained. But now as the company has resources and capabilities so they can am to expand in different parts of the world as well.  

Threats: The threat which Carsales have is the threat of imitation of the business model of the company. As the market strategy and objective is different from other due to which the company used a different model of success. Thus, imitation of that model can act as a threat to the company (Carsales 2018).

Conclusion

Thus, in the limelight of above-mentioned events, it shall be noted that the company Carsales has adequately sustained its activities in the market with the use of innovation in their business model. The company utilized all the available resource to provide services in the market.

References

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Robbins, S P., DeCenzo, D., Coulter, M & Woods, W., 2016. Management: The Essentials, 3rd edn, Pearson, Melbourne, Viewed from https://revel.pearson.com

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