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3112IBA Management Strategy and Decision Making

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Added on  2020-02-19

3112IBA Management Strategy and Decision Making

   Added on 2020-02-19

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INDUSTRY ANALYSIS:AUSTRALIAN REAL ESTATEGroup Report • Dr Campbell Fraser3112IBA Management Strategy and Decision Making Group 4: CallumCarmont, Ripjeet Brar, Jayde Lee and TeaganBrownIndex1.0Introduction 2.0 External Analysis: Five Forces Analysis 2.1Threat of New Entrants 2.2Threat of Substitutes 2.3Bargaining Power of Buyers 2.4Bargaining Power of Suppliers2.5Competitive Rivalry 3.0Internal Analysis: 4.0Strategic Analysis: Gap Analysis
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5.0Conclusion 6.0Strategic Recommendations 6.16.27.0References 1.0Introduction The Australian real estate industry has shown strong economic growth. The property sector 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 & Mubarak 2014). Like any other industry, the Australian real estate industry can be analysed on basis of Porter’s five forces- Threat of new entrants, threat of substitutes, bargaining power of suppliers, bargaining power of buyers and competitive rivalry. The Australian real estate market has been non-uniform. The trends reflected in the real estate market vary widely across cities and regions. One of the key issues that the real estate industry in Australia has faced is the affordability. The price of the houses in comparison to the average income of people was really high. However recent years have shown investment from the foreign market (Brounen & Koning, 2013). Foreign investment from China has been observed in the Australian real estate market (Gauder, Houssard & Orsmond, 2014). Immigration has also affected the housing affordability especially in popular cities like Sydney, Melbourne and Perth. Australia demonstrates a diverse cultural background. People from places like the United Kindom, Europe, Middle East and Asian countries have migrated to Australia for the purpose of study and work. The country has a fine education system and competitive work culture which has boosted immigration and has affected the affordability issue of the Australian real estate market. The policy of the Federal Government to introduce subsidies to boost fertility has also affected the real estate market. However, the Australian real estate market has shown a steady growth in recent years (Crowe et al., 2013).2.0 External Analysis: Five Forces AnalysisThe external factors influencing the real estate industry and the competitive forces present within it can effectively be analyzed through use of Porter’s five forces model. In recent years the industry has struck a balance of consistent industry competitiveness driven by sustained uncertainty throughout theglobal economic climate and strong 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 scale entrants are better placed for success (MarketLine, 2017). Another factor that impedes entrants to the market is Government regulation and policy which is regulated by the various State and Territory Governments. New entrants specifically, need to consider the common entry standards which outline the training, licenses and for each different state or territory (Reality Bytes, 2009).2.2Threat of Substitutes: Low
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