Elders Real Estate Company: Market Entry Strategy and Analysis
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This paper discusses Elders Real Estate Company's market entry strategy and analysis for their venture into the Peru market. It includes a PESTEL and SWOT analysis, and discusses the trends in the real estate market. The paper also covers the company's background, industry analysis, and considerations before entering the market.
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Elders Real Estate Company1 ELDERS REAL ESTATE COMPANY Name Course Instructor Institutional Affiliation City and state Date
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Elders Real Estate Company2 Executive summary The paper information related to elders real estate in Australia and its new venture into Peru economy. The paper gives the marketing strategy applied by the company to compete well with its customers in the local, regional and global level. There is the market entry into the Peru market and how the company has been operated for the past few years. The company initiation of the state of the art technology has enabled them to fight their position in the marketplace and has made it easy to enter into the markets. The paper also provides two ways of analyzing a market and the company ways of operation using SWOT analysis and PESTEL analysis. The entry of the company into a new market has to be well analyzed to avoid collapse. Therefore the best strategy must be applied. The company has succeeded in providing housing services to a large number of population in Australia and regional area and shifting its focus to global scale will require new strategies. Therefore, the paper will be able to internalize deeply on the strategy for a new entry to a market and the strategy applied. The article shows that it is through the policies that are passed by the government of the two countries that has helped them to engage in business. Therefore, the paper provides on how effectively those policies have been of great importance towards opening room for a new venture and global expansion of the Australian companies. However, the journey to entering a new market is faced with numerous challenges, but the Elders real estate company has been able to conquer through the odds and win the global market. Background ELDERS REAL ESTATEis a company in Australia that deals with a variety of business operations but mainly concentrates on real estates (buying, renting and leasing real estates). The
Elders Real Estate Company3 company was established in the country I n1839 and has expanded to a regional scale and currently to a global level. It has been recognized as the trusted, respected and dominant real estate network across the region. The company is also known for its wide range of employees who are experienced and professionals in providing real estate services to the residents of Australia and its environs. The company is currently operating in close to 300 offices that carry out the operations related to real estates. The company has focused on various strategies to render its services to the customers and has been improving day after the other. To this far it is through innovation and technological advancement that the company can compete on a global scale. The company operates with any assistance from the franchise, whereby it outsources other business firms in different areas to operate on their behalf. The franchise network is estimated to have 120 locations that are strategically targeted. Therefore, this shows the company can give proper services to its customers that are related. The company operates by the future rather than where it started, and this has given it an added advantage to dealing with its problems. The company has faced numerous challenges in its growth path, and that has hindered its straight performance for some years. The company was established on six pillars that help them to achieve their goals. The pillars are people, profitability, wealth, sales and cash. The pillar on people deals with training the staff, managing performance on people and giving sufficient support in management. The vision of the company is to be the leading provider of integrated solutions for acquisition, development, and improvement of the property. The mission of the company is to provide an outstanding level of services and expertise in the real estate. The company operations are guided by five core values of the company that is integrity, accountability, teamwork, customer focus, and innovation.
Elders Real Estate Company4 Through such vision, mission and core values the company can operate in a far much-balanced manner and the trio have helped the company to provide reliable and improved services to their clients. Introduction to the market Investing in real estate is a business but not a profession, despite requiring few competencies to be run through. The main aim of engaging is on making a profit that benefits the investor and does not affect the third party. There are three divisions of engaging in real estate business that is an investment, operation or agency. The investment and operation division require initial capital for an investor to venture in the business while the agency requires no initial capital. The Elders real estate introduced itself to the real estate market through investment division(Markides, 2013). The investment strategy used byELDERS REAL ESTATEwas that of employing capital in acquiring a real estate or interests in permanent ownership. A company might possess enough capital but fail to make entry into a market. That shows there is no magic operation to lead conversion for real estate dealers. Every person looks on making returns on the capitals they invest in a business. There are three ways of conversion in real estate that are applied by investors, dealers, and agents. They are unknown to contact, contact to warm lead and lead to client/buyer.ELDERS REAL ESTATEapplied two of the above strategies to introduce itself into the market that are unknown to contact and contact to warm lead(Axelsson and Easton, 2016). The unknown to contact is the use of referrals to people who do not have any information regarding the business. It uses newsletter signup and automated email campaigns to reach those destinies.
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Elders Real Estate Company5 The use of contacts to warm leads is through turning the contacts you already possess into warm leads to make the first sales.ELDERS REAL ESTATEused this strategy to reach their contacts and inform them of their services. The contacts are nurtured for a period and then were involved in direct marketing of the company to other potential buyers. Therefore, through the use of these various strategiesELDERS REAL ESTATEwas able to venture into the market and sell its products to the customers(Zhao et al., 2012). The company also expanded from the local level to regional and then to a global scale. Trends in the market For every market that is growing, some changes are expected to occur. The real estate market has been faced with tremendous trends that are changing the ways of operation, and that is making the industry to have a new outlook. The trends are many, and some are in the way of operation, technology, and the people(Gorgenländer, 2010). The trends are: a)A-REIT – Reflection on value Most of the companies dealing with real estate business are experiencing corporatization trend. Most of the construction companies owned by the government have been released to the public control. Such a strategy will make the market to experience a lot of competition from the corporatized firms. b)Development of Western Sydney A town that had remained in poor condition for decades is now experiencing a transition in the past five years. The shift has motivated entry of more contractors and construction firms in the industry. The region is becoming a new hub for the construction business.
Elders Real Estate Company6 c)Cyber in real estate Technology start-ups and advancement have minimized the barriers to entry to real estate. Smart building by use of advanced technologies such as internet of things (IoT), cloud and mobility, have been on the rise(Stewart and Yermo, 2012). The use of cyber in real estate is also attached to some risks that require strategies to protect the value of the technology. d)Embrace robotics and cognitive automation The real estate development is making use of robots and cognitive automation. The robots are making work easier thus delivering significantly. The productivity in real estate has been improved and a high level of dealing with inefficiencies and errors thus producing standard buildings (Halik, 2012). e)Reimagine talent and culture The previous building have been using learned skills. However, there are challenges where people are now using their abilities in constructions to come up with the digital and standard building (Preece, Chong, Golizadeh, and Rogers, 2015). The use of talent and sticking to the established culture has made numerous changes in the real estate business. Company’s industry in the country ELDERS REAL ESTATEis categorized in the Rental, hiring and Real estate service industry. It is classified in this industry since it offers housing services to the residents of the country. The industry has experienced a small in the previous years due to lack of consideration. However, after the opening of the trade between Peru and Australia, this has seen some growth in the industry(Eriksson et al., 2015). Peru requires a lot of investors in the construction due to its high
Elders Real Estate Company7 demand of house. Therefore, the rental, hiring and real estate services have used this opportunity to expand to a tremendous scale. Considerations before entering the market. ELDERS REAL ESTATEhas planned to enter into the Peru market of construction. The company has to put various factors into considerations before entering the market(Sleuwaegen and Onkelinx, 2014). The elements are: a)The challenges being experienced currently in the market and what are the existing solutions to such problems. b)The innovative ways that the company will utilize in the industry to ensure that the venture well in the market. c)The cost required to start up the investment and whether it will be easy to raise the same. d)The level of competition in the market and if the company will get room to enter the market or the market is already flooded. e)The investor must consider if their product will offer some form of solution to the existing problem to a specific set of consumers. f)The payback period of the investment should also be put into consideration and how this might affect the performance of the company. g)Another consideration is the existence of the workforce, and the technology to be applied in the investment and whether there is a personnel that can be able to handle such technology with minimal challenges.
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Elders Real Estate Company8 Country’s analysis. The chapter aims at giving an overview of the Peru market in the real estate market.ELDERS REAL ESTATE COMPANYhas to conduct a more in-depth analysis of the market, political analysis, economy of the country, and the prevailing environment that can support such type of business. The chapter will start by analyzing the type of business, is it a product or service that will be offered. It will also analyze the best location of the company in the foreign country (Johanson and Mattsson, 2015). The analysis will enable the company to understand the level of competition it will face, the challenges to encounter and come up with the best strategy to enter into the new market. The analysis will make use of the PESTEL analysis tool to understand the environment of the country. The PESTEL analysis consists of political, economic and socio- cultural factors which bring about macro-environment of the state(Bakan and Doğan, 2012). The second part focuses on Peru real estate market with the help of SWOT analysis. The two ways of analysis will provide adequate information related to the company’s target market. PESTEL Analysis The Elders PESTEL analysis is an essential tool for management to analyze the market development of any business. PESTEL stands for political, economic, social, and technological factors. All these factors affect the performance of a company. Political analysis The country is a Latin America best performing economies where the head of the state as president. Peru is a constitutional democratic republic that practices a multi-party system guided by its constitution last reviewed in 1993. With the democratic system being applied it is more likely that a higher central economy over autonomy is present forELDERS REAL ESTATE
Elders Real Estate Company9 COMPANYin its venture into the market(Gonzalez-Vicente, 2012). In the past one decade, the government initiated a new reform that was geared to create a peaceful environment for foreign investment. The government has made collaboration and opened links with many countries across the globe to allow their people to operate businesses in the state. The policy serves as good news toELDERS REAL ESTATE COMPANY. The government has also created an incentive zone to allow and promote FDI to flow into the country and stimulate the level of foreign investment. The political stability in the country serves as an opportunity to Elders Real Estate Company. The policies formulated by the government are strengths to the company that will be utilized to enable the company to make a triumphant entry into the market. The country has made a broad effort in ensuring that they are members of the World Trade Organizations (WTO). Such efforts have assured that the country is relentlessly getting in touch in global integration(Alali and Romero, 2012). Therefore,ELDERS REAL ESTATE COMPANYhas the privilege of engaging in business in Peru. Economic factors Peru is a developing country that has engaged in global business, and that has a future of becoming a developed nation. The country economy has been swaying for an extended period, thus experiencing economic instability. The economy has changed in a manner towards growth due to the country’s involvement in global business(Zhang and London, 2013). The policies put forth by the government to encourage foreign investors into the country is a long-term strategy to open the way for the country’s development.
Elders Real Estate Company10 The country is involved in various agreement with other countries to economic development. ELDERS REAL ESTATE COMPANYis making its way into Peru market, and the entry will be faced with minimal obstruction due to the trade agreement between Peru and Australia. The country highly depends on external experts in construction since it lacks expertise in the field of construction and conducting real estate business(Klee, 2018). Therefore, Elders real estate will be able to bring new technology, skills and economic development to Peru state. The company has the advantage of facing minimal competition since few companies are involved in the construction and housing industry. It can enter the country with fewer restrictions (Weisheng, Liu, Hongdi, and Zhongbin, 2013). It is the role of the executive managers to decide whether to enter into the market or not depending on the results of the analysis. Socio-cultural factors Peru is a developing and improving country in the past five years. However, it is regarded as a quite developed and urbanized in the present days. The level of poverty has reported having decreased in recent years compared to the 1980’s period. The urbanization has called for building development in the country(Blume and DI Miceli, 2013). There is a room now for ELDERS REAL ESTATE COMPANYto venture into construction business in the country. Therefore, there is an opportunity of finding a source of market for its services. The country has a diverse religious population the economy of the country is on a boom state, and the country is making the necessary steps for encountering and promoting development(Solanes, 2013). Presently, the government is not much affiliated to religious matters since it does not determine the religion for its citizens but give them freedom of worship. With such connection, the government has created room for the citizens of Vietnam to enter into the country and extend
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Elders Real Estate Company11 their worship practice in their country. The SWOT analysis shows that the state has various social-cultural weaknesses such as unskilled workforce, poor infrastructure(Wang and Zhou, 2015). The strengths are cheap and huge workforce, fast-growing exports and constant growth. Technological factors The country is experiencing changes in the use of technology. With the global integration in the country, it has brought about the exchange of skills, knowledge and new technology. The country has obtained new technology that can be useful in the construction and real estate business. The foreign companies do not require to transfer the technologies from their countries but instead can utilize the locally available technology to perform their functions(Ramamurti, 2012). The government has agreed with the developed countries to transfer their technology to Peru. Such transfer of technology ensures that the country investors, as well as a foreign investor, are likely to incur the minimal cost in acquiring the required technology. The country has allowed the use of robotic machines in performing the complicated duties in construction, and this promotes the foreign investors such asELDERS REAL ESTATE COMPANYto venture into the Peruvian market(Cogman et al., 2015). SWOT Analysis An analysis using SWOT analysis performed on the country market provided various issues that could be followed to give knowledge to Elders real estate Company on how to venture into the market. The SWOT analysis comprises the weaknesses, strengths, opportunities, and threats experienced in the Peruvian market. The weaknesses are unskilled workforce, poor infrastructure, incomplete market organization, weak competitiveness and reduced use of the capital available in the country (Casadesus, and Ricart, 2010).
Elders Real Estate Company12 The strengths in the Peruvian market are cheap and huge workforce, political stability, favorable business policies and a strategic position where it has an open door to the Asian countries. There are opportunities that ELDERS REAL ESTATE COMPANY can utilize to make its entry to the market possible. The chances are the policies that are allowing foreign investors to invest in the Peru market. Another opportunity lying unexploited is the lack of new investment(Eichholtz, Kok and Quigley, 2013). However, some threats are causing the entry into the new market impossible. The threats are harsh competition, legal trade disputes, unskilled workforce and vulnerability to existing companies. Strategy employed The company has to use a standard approach to gain entry into the Peruvian market. The strategy to be applied by the company is the use of internationalization strategy. Through internationalization, there is the use of the porter’s generic strategies. According to Porter, he showed the success of a firm depends on how it positions itself in the market. The victory is categorized into two ways that are cost advantage and differentiation.ELDERS REAL ESTATE COMPANYhas a low-cost advantage (Kauškale, and Geipele, 2017). Its entry into the Peru construction market is simple and not comprised of bureaucracies since the government has initiated the necessary policies between the two governments. Cost leadership is an advantage toELDERSREAL ESTATE COMPANYsince it has been in existence for an extended period. The company had accumulated a lot of profit for the past years when it held its operation on the local and regional levels. Therefore, the cost leadership can help the company to achieve its position in the Peruvian market(Chung, 2016). The company can also gain an advantage in using differentiation-based focus strategy to venture into the market.
Elders Real Estate Company13 The company has acquired technological advancement that can be useful in creating a differentiated service and product that can outdo those of their competitors. Despite using the differentiated focus strategy that might give the company an added advantage over its rival, there is an existence of fear and some risks as a result of using such an approach. The risks need to be eliminated to ensure that the company gains access to the market of the country. Some of the risks that are experienced by the use of focused, differentiated strategy are limited opportunities for growth, risks of decline, and changes in the existing policies and imitation. Diamond model. According to Porter, he designed the diamond theory of national advantage where the model is described as a model that helps in understanding the competitive position of a country. The country that is having a competitive edge is a nation that possesses certain things that the other countries lack (Haynes, and Nunnington, 2010). The government of Australia has the power of negotiating for their companies thus improving their country’s negotiation position. TheELDERS REAL ESTATE COMPANYcan make use of the transnational strategy to make its entry to the Peruvian market. The multinational approach is possible since the company has been involved in the regional operation and is well articulated with the ways of operating in the regional level (Lu et al., 2013). The company can use that to be referred to the global scale and venture in the Peruvian market. Recommendation It is recommendable that the government makes all the policies and agreements clear to ensure that the investors from its country do not face a hard time as they enter the Peruvian market. The
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Elders Real Estate Company14 individual investors need to conduct a more in-depth analysis of the market to understand the market of Peru before they enter into business. It is the role of the managers to get a consultation from market experts regarding the investment. Conclusion Conclusively, the growth in the Peruvian market is an opening root for the Australian companies to venture into business in Peru. The companies that want to engage in business in Peru need to adhere to the necessary policies to ensure that their entry is smooth and nothing hinders their performance. The Australian company can collaborate with the existing companies in Peru to do strong business and enable its entry into the market perfect.
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