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3112IBA Management Strategy and Decision Making

Added on - 19 Feb 2020

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INDUSTRY ANALYSIS:AUSTRALIAN REAL ESTATEGroup Report• Dr Campbell Fraser3112IBA Management Strategy and Decision MakingGroup 4: CallumCarmont, Ripjeet Brar, Jayde Lee and TeaganBrownIndex1.0Introduction2.0External Analysis: Five Forces Analysis2.1Threat of New Entrants2.2Threat of Substitutes2.3Bargaining Power of Buyers2.4Bargaining Power of Suppliers2.5Competitive Rivalry3.0Internal Analysis:4.0Strategic Analysis: Gap Analysis
5.0Conclusion6.0Strategic Recommendations6.16.27.0References1.0IntroductionThe Australian real estate industry has shown strong economic growth. The propertysector has been impacted by the lower interest rates. The lower value of Australian dollar willpositively impact the investment decision on real estate (Mani, Raymond Choo & Mubarak2014).Like any other industry, the Australian real estate industry can be analysed on basis ofPorter’s five forces- Threat of new entrants, threat of substitutes, bargaining power ofsuppliers, bargaining power of buyers and competitive rivalry. The Australian real estatemarket has been non-uniform. The trends reflected in the real estate market vary widelyacross cities and regions. One of the key issues that the real estate industry in Australia hasfaced is the affordability. The price of the houses in comparison to the average income ofpeople was really high. However recent years have shown investment from the foreignmarket (Brounen & Koning, 2013).Foreign investment from China has been observed in theAustralian real estate market (Gauder, Houssard & Orsmond, 2014).Immigration has alsoaffected the housing affordability especially in popular cities like Sydney, Melbourne andPerth. Australia demonstrates a diverse cultural background. People from places like theUnited Kindom, Europe, Middle East and Asian countries have migrated to Australia for thepurpose of study and work. The country has a fine education system and competitive workculture which has boosted immigration and has affected the affordability issue of theAustralian real estate market. The policy of the Federal Government to introduce subsidies toboost fertility has also affected the real estate market. However, the Australian real estatemarket has shown a steady growth in recent years (Crowe et al., 2013).2.0External Analysis: Five Forces AnalysisThe external factors influencing the real estate industry and the competitive forces present within itcan effectively be analyzed through use of Porter’s five forces model. In recent years the industry hasstruck a balance of consistent industry competitiveness driven by sustained uncertainty throughout theglobal economic climate andstrong industry growth easing rivalry amongst firms (MarketLine,2017).2.1Threat of New Entrants: ModerateThe high cost and significant capital demanded of new entrants to the market means small scaleentrants are better placed for success (MarketLine, 2017). Another factor that impedes entrants to themarket is Government regulation and policy which is regulated by the various State and TerritoryGovernments. New entrants specifically, need to consider the common entry standards which outlinethe training, licenses and for each different state or territory (Reality Bytes, 2009).2.2Threat of Substitutes: Low
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