SWOT Analysis for a Real Estate Business

This assignment tasks you with conducting a comprehensive SWOT analysis for a hypothetical real estate business. You will need to identify internal strengths and weaknesses as well as external opportunities and threats that could influence the success of this venture. The analysis should provide valuable insights into potential challenges and advantages, guiding strategic decision-making for launching and growing the real estate business.

Running Head: Plan & Plot Interior and Construction Pvt. Ltd.
Business Management

Plan & Plot Interior and Construction Pvt. Ltd.
Table of Contents
Introduction................................................................................................................................2
Plot and plan interior and construction pvt. ltd. (P & P)............................................................3
Porter’s five forces.....................................................................................................................5
SWOT Analysis.........................................................................................................................7
The strength and weakness of internal and external sources of environment............................7
Conclusion..................................................................................................................................8
References..................................................................................................................................8
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Plan & Plot Interior and Construction Pvt. Ltd.
Introduction
The report is at the view of selecting the real estate company hypothetically and the
steps involved in its opening will be elucidated. The company selected is Plan & Plot Interior
and Construction Pvt. Ltd. (P & P). Basically the company deals in the house construction
and along with it providing the interior decoration at the relatively low cost to initially
establish the business. Thereafter the internal and external analysis of business environment
has been done to gain the market knowledge and the level of competition that prevails.
First of all the assumed business has been selected and the steps involved in the
accomplishment of business process are examined with the help of its 7 steps. Secondly the
external environment has been studied through the Porter’s 5 forces model to evaluate the
market condition and thereafter the internal environment was also researched using the
SWOT tool where the strengths and lacks of the internal business are gained so that required
changes could be incorporated. Lastly, the strengths and weakness of the internal and external
tool has been investigated to mark its authentication and predicting the future strategies.
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Plan & Plot Interior and Construction Pvt. Ltd.
Plot and plan interior and construction pvt. ltd. (P & P)
The company that has been selected for start-up is the Plot and Plan Interior and
Construction Pvt. Ltd. The company deals in constructing the plans for building the houses,
apartments and deals with the housing agencies. It mainly deals with the housing
constructions along with the interior designing of the homes. Overall, the business deals with
constructing and decorating the houses. It also undertakes the activities of repairing and
renovating the plan of house by efficiently utilising the spaces and turning it out into the
modern houses. Exporting of services is also supported through the online provision of
services by constructing the group of freelancers who renders there services to foreign clients
as well. This created the job opportunity as well as spread the business in overseas market
without much investment of capital. To set up the business and implement the ideas the set up
need to be designed and there is a set procedure which is to be followed to start-up the
business successfully and with the entire authentication (Mintzer, 2009). These steps are
elucidated as under:
 Market research: First of all to start a business the market research has to be done.
For that the core market should be analysed and use of the products and services need
to be evaluated. It is necessary to know whether the services provided are in demand
in the market or are they one of its own kind and likely to enhance the demand in the
near future. The market survey is essential with respect to know whether the services
are already existent in the market or is it covering the niche market. Market research
also includes the study in terms of average income that the competitors are able to
generate. While researching upon the market the competitors must also be figured out
and there moves must be monitored and accordingly the launch is to be made (Houzz,
2013).
 Financial requirements: Finance is the blood of any business, as the body stops
functioning without the blood similar is the case with the business. It could not
survive for long period of time without the adequate fund. To start the business huge
amount of capital requirement is necessary and plans are made to arrange the finance
and what sources of funding need to be used. The financial aspect also depends upon
the size of the business, if the business is at the major scale the requirements of
finance is according to it. If investors are invited then marketing plan has to be
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Plan & Plot Interior and Construction Pvt. Ltd.
designed in order to attract the investors to invest their values in the business (Bienert
& Santovito, 2017).
 Hiring the legal advisor: The legal advisor is another crucial element that plays a
vital role in opening up of the business. The correct legal advisor helps in constructing
the best and reliable paperwork which supports the business in an efficient manner.
Also the good legal advisor always tries to protect and favour the company with their
knowledge and practices. Attorneys helps in drafting the authentic contract, review
the lease criteria, selects the best structure for business and construct the better
business plan. The adequate manner to appoint the attorney is either through the
referrals or by adopting the networking criteria (Kelly, 2016).
 Hiring the accountant: The selection of best accountant is essential enough to design
and advice about the best ownership option to opt for. The accountant assists the
attorney in rendering the advices to owner. The financial books are recorded by the
accountants like bookkeeping and auditing the financial affairs that the company
undergo. It is the duty of the accountant to advice owner in terms of the reserve policy
as how to maintain the reserve and what will be the best essential manner to utilise the
reserve in an effective manner. Accountant also assists the organisation in dealing
with the tax affairs of the company and how these taxes could be paid so that entire
payment has been made and tax saving is also enjoyed without any evasion (Tsui,
Zhang & Chen, 2017).
 Deciding the structure of business: By the structure of business it is meant that
which type of ownership will be selected. Is the business setup a sole-proprietorship?
Is the business favouring partnership? Initiating a corporation is also a thoughtful
option but requires a lot more investment in its establishment. Even the limited
liability corporation (LLP) could be adopted. Every business has its own choices and
liabilities along with the liabilities there taxes and other paper work involved in
choosing any type of business as accordingly the legal authorities and dealing takes
place. The attorney and accountant assists in making the decision and drawing out the
valuable and suitable solution beneficial for the business and its further development
in the market area.
 Deciding the name of business: For every business its name is the foremost thing
that strikes the mind of the partners, competitors, investors and other stakeholders.
The company’s name is the initial identity of the business. At the time of registration
the name of the company is enrolled. It is the principle of conducting the business that
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Plan & Plot Interior and Construction Pvt. Ltd.
a business is the artificial person and it comprises of its separate legal entity. Also the
attention should be paid on selecting the best business name. There are certain
properties that need to be kept in mind while deciding the business name, the name
selected should not be similar to the other business as the popularity gets connected
when the similar names are adopted and it is adverse for either of the parties. The
spell check need to be made, the meaning of the name should comprise of certain
meaning or it should be such that the characteristics and nature of the business gets
depicted through the name itself (Yderfält & Roxenhall, 2017).
 Getting all the necessary licenses and permits: The business indulged in the real
estate need to acquire the valid licence and government permit to deal in the
properties and local law of the city or state where the property has been located. The
agents dealing in the real estate have to acquire the required license to precede the
business further in an authentic manner. For that all the category of licenses need to
be researched upon and the suitable category of license has to be adopted for the
flexible and barrier free working is conducted in the future and development could be
ensured (Winfree, Roasentraub & Mills, 2016).
Porter’s five forces
Porter’s 5 forces model is given by Michael Porter who was the professor at Harvard
Business School. The aim of developing this theory is to analyse the external market also
known as the macro environment for the sake of evaluating the market competition that
prevails in the market. Considering the real estate industry the porter’s analysis will assist
in knowing the scenario of market in terms of real estate so that internal functioning could
be made (Xiao & Xu, 2017).
1. Threat to new entrants: Real estate industry is the unique industry and is considered
different from the construction industry. Many entrepreneurs are trying their skills,
knowledge and abilities in the field of real estate to attain the heights by covering the
major market area and attracting consumers. Also the real estate industry highly
contributes in the economy of the country. In the recent times real estate business is
growing up with the high pace and thereby the competition has been increased in
different regions resulting in the political and economic growth simultaneously
(Zhang & Ren, 2006).
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Plan & Plot Interior and Construction Pvt. Ltd.
2. The threat if substitute products: As the real estate industry is in the growing times
the market targeted is changing on the continuous basis. The competition has become
strict as the industry has transferred from public consumption to the private
consumption. The personal consumption ask for varieties and since the competition is
tough and everyone is entering in the similar field as the property business is gaining
hike therefore people are switching to the best dealer and broker. Therefore in order to
stay ahead of the substitutes two attributes have been added to business to grab the
customers’ attention and enjoy two services at a time (Selvaraj & Krishna, 2017).
3. The bargaining power of suppliers: The suppliers play a vital role in conducting the
business as the business is moreover dependent over the suppliers and they might use
the threat of pricing by increasing the rates of the products which bound the buyers to
pay the extra amount and recover it from their buyers or in order to maintain the
market position and stand in the competition firmly the company might deduct the
profit margin. The costing of land is the premier part in the case of real estate
business, since the supply of the lands are limited in number therefore the bargaining
power increases as the provider of land has the high-supply side (Chiu, 2016).
4. The bargaining power of buyers: Buyer could be anybody; it can be an individual,
family, any organisation or the department of government. In order to analyse the
bargaining power of the purchasing behaviour of consumers are analysed. The private
consumption buyer are more conscious now, they are aware enough about the things
happening within the market and could easily compare the prices of and bargain
accordingly. The developer of land renders the large fluctuations rights which directly
affect the relationship and performance of the sales person and the income also gets
affected. When the buyer get to know about the price flexibility within the process of
land acquisition the bargaining power increases. Also the new entrants provide fewer
prices and prefer price flexibility to construct the strong consumer base (Hayness,
Nunnington & Eccles, 2017).
5. The competition between industry and rivals: The competitors are those dealing in
the similar area of work and setting almost the similar pricing strategies to gain
consumer base and retail the consumer so as to increase the consumer loyalty.
Competitors are considered to be the most important part of the business as the
consumers today need the number of options so that consumers could decide
accordingly and with the increased competitor rivalry also increases (Ang et al, 2017).
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Plan & Plot Interior and Construction Pvt. Ltd.
SWOT Analysis
SWOT is the acronym of Strength, Weakness, Opportunity and Strength. It is the
internal analysis also known as micro analysis. It helps in analysing the internal
atmosphere of the company (Xiao, 2016).
 Strength: Strengths of the real estate business Plan and Plot Pvt. Ltd. (P & P)
is that it helps in driving out the individual abilities and the resources are
available in high quality. The individual competencies are well defined in the
real estate business. The real estate team is effective as well as proactive (Li et
al, ).
 Weakness: In the real estate and interior development business there is the
resistance and adaptability of changes i.e. fluctuation in rate takes place. There
occurs the gap in the organisational leadership and motivational problems also
exist within the staff. The process of dealing with the things consists of stress
and difficulty occurs (Jiang et al, 2017).
 Opportunities: The opportunities attached with policies and procedures
initially implement the technology in the very new manner which should be
effective. The competition could be weakened so that fair business is carried
also the international real estate strategy could be adopted to flourish the
business and lead it to new heights (Andres, 2016).
 Threats: The level of risk attached with real estate is very high and the
frequent changes occur in the environment of positioning. The biggest threat
is the changes affecting the preferences of the buyer and the modification
taking place on the legal ground (Lerena, 2016).
The strength and weakness of internal and external sources of environment
Strength
The strength of external sources porter’s five models is that it helps in analysing the
external environment which helps in gaining the knowledge and awareness of the
changing trends and tastes of the consumer. To what extent consumers are able to bargain
and how much price flexibility does the real estate developer provides (Zhao et al, 2016 ).
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Plan & Plot Interior and Construction Pvt. Ltd.
In terms of SWOT analysis it is an internal environment analysis which supports the
internal structure of real estate business. It evaluates the working of business and what
strength and weakness does it comprises of. Also the opportunities and threats are been
seen and how these opportunities could be converted into strengths and the threats to be
taken as challenges (Van & Besthorn, 2017).
Weakness
The weakness of porter’s five models is that the external environment is dynamic in
nature and there are certain factors that could not be predicted and they could be the
political and legal norm that affects the business and at the certain stages due to these
reason even the business come to an end. In the case of real estate the land acquisition by
government is done and on the orders of government the land need to be vacated
(Schaltegger, Burritt and Petersen, 2017).
Weakness in the SWOT analysis is the weakness and threat portion. The weakness of
the business lowers down the goodwill of the business and they are the portion where the
company lacks. It leads to the improvement of the internal structure only and does not pay
any role in rejuvenating the external environment.
Conclusion
The report argues over the construction business. For the sake of assessment the
hypothetical company has been selected, namely, Plan and Plot Interior and Construction
Pvt. Ltd (P & P). The steps of opening up the business has been discussed in the seven
steps which include the generation of ideas till the implementation of idea and starting up
the business and heading towards the development. The business is further been analysed
in the internal and external market using the competitive strategies and tools. For
understanding and evaluating the external environment porter’s 5 forces model has been
selected and in order to analyse the construction and interior designing business SWOT
analysis has been done. At the end both the tools were evaluated on the parameter of
strength and weakness.
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Plan & Plot Interior and Construction Pvt. Ltd.
References
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Affordable Housing Among Homebuyers in Malaysia, In MATEC Web of Conferences, Vol.
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Bienert, S. and Santovito, R., 2017. Drivers and opportunities of sustainability in real estate
development. Routledge Companion to Real Estate Development.
Chiu, D.S.T., 2016. A technology-driven solution to disrupt the residential real estate
industry of existing homes (Doctoral dissertation, Massachusetts Institute of Technology).
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