Opportunity Analysis for Student Assignment

Opportunity Analysis for
Student Home Australia
Word Count: 1489
7003MKT Marketing Foundations
7003MKT Opportunity Analysis Page 0

Table of Contents
Table of Contents.................................................................................................................... 1
Introduction to the Company...................................................................................................... 2
Company Description and Problem Statement................................................................2
Company Analysis.......................................................................................................2
Market Situation..................................................................................................................... 3
Market Overview................................................................................................................. 3
Macro Environment Analysis.................................................................................................. 4
Political Analysis.........................................................................................................4
Economic Analysis.......................................................................................................4
Social Analysis...........................................................................................................5
Technological Analysis..................................................................................................5
Legal Analysis............................................................................................................5
Micro Environment Analysis................................................................................................... 6
Competitor Analysis.....................................................................................................6
Competitive market Summary..........................................................................................7
Consumer Analysis......................................................................................................9
Collaborator Analysis..................................................................................................11
SWOT Analysis........................................................................................................12
Marketing Initiative............................................................................................................... 13
Reference List...................................................................................................................... 14
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Introduction to the Company
Company Description and Problem Statement
The Student Home is a new company that relies on online websites and mobile device
application to provide international students in Australia with targeted housing rental
information and accommodation options. Student Home is launched to create an ideal
accommodation solution for international students living in foreign country to accelerate their
integration into local life. Studying abroad can bring international students benefits of
economic and social status, however, language barriers and lack of understanding of local
cultures make them face a series of difficulties and pressures in finding an ideal
accommodation to stay (Duangpracha, 2012). Therefore, the primary purpose of Student
Home is to help international freshmen easily find a satisfactory “new home” when they set
foot on the land of Australia, while relieving part of their anxiety.
Company Analysis
As a ubiquitous phenomenon, international students face a variety of challenges when renting
an accommodation in Australia, such as language barriers, traffic conditions, location and
prices (Duangpracha, 2012). This would also affect their academic performance to some
extent. Due to the lack of university student apartment traditions similar to other countries,
international students in Australia are more inclined to rely on the service of private rental
agencies (Burke, 2015). However, at current stage, rental agencies do not have specific
service for international student group, or there is no comprehensive housing option. This
would provide favorable market conditions for the launch of Student Home.
Unlike other rental agencies, Student Home is first committed to solving the housing
problems for international students who are new to Australia, and based on this, the company
would be gradually developed into a rental information integration platform for international
students. The key advantage of this project is that it collects information on housing that
meets the special requirements of international students and provides an advertising platform
for shared accommodation to reduce their economic expenditures.
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Market Situation
Market Overview
The export of educational resources has become a significant way to create economic value in
the Australian higher education industry. Quality educational resources attract hundreds of
thousands of international students to Australia every year. According to Studies in Australia
(2019), in 2017, approximately 780,000 international students registered for study courses in
Australia, while half of them, about 350,000 enrolled in higher education courses. Such a
huge number still has an upward trend. More specifically, regarding international students
enrolling in higher education, the data from Parliament of Australia (2019) shows that about
400,000 places were enrolled in 2018, which increased about 14% compared to the previous
year. The huge international student population has also brought considerable economic
benefits. The value of international education in 2018 has contributed to Australian overall
economy from $28.1 billion in 2017 to $32.4 billion (Parliament of Australia, 2019).
Prosperous international student input would bring huge market potential and customer
groups to Student Home.
(Parliament of Australia, 2019)
At the same time, Australian strong hospitality industry has also increased the feasibility of
implementing Student Home rental platform. Relying on the existing well-established
hospitality system and large number of vacant rooms, the rental industry is impacting the
traditional hotel and real estate industries, and contributed $1 billion to Australian economy
in 2018 (The Real Estate Conversation, 2019). Specific data also reveals its strong growth
momentum. Short-term rental industry in Australia increased by almost 50% in 2019
compared to the same phase, with more than 30,000 homes being rented (Ryan, 2019).
Positive market capacity provides an information base for Student Home to find housing that
meets the needs of international students.
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Macro Environment Analysis
PESTL analysis is a framework used by organizations in formulating an overall strategic
development plan, it identifies potential impact factors of the external environment in which
organizations implement projects (Christodoulou & Cullinane, 2019). Given that Student
Home is based in the field of accommodation rental and regards international students as its
main target customers, this section will focus on analyzing the potential impact factors of the
macro market for the project implementation.
Table 1 – PESTL analysis
Political Analysis
Simplification of
Australian student
visa
A visa is a prerequisite for international students to enter Australia.
For student visas, the Australian government started a simplified
student visa review policy in 2014, reducing the original five
assessments to three and shortening the period for funding
certification (Parliament of Australia, 2016).
Broadening the
scope of application
for student visa
On the basis of simplifying the student visa application process,
according to Parliament of Australia (2016), the Australian Federal
Government (AFG) will widen the applicable population of student
visas from 2015. This will further attract more international students.
Tightening of
foreign exchange
control in student
exporting countries
Strict foreign exchange policies in some countries could have a
negative impact on the education industry in Australia. Taking China
as an example, the NDRC issued a statement on restricting foreign
exchange transactions in 2016, which strictly restricted the amount
of foreign currency exchanges by individuals (HoganLovells, 2017).
Tax deductions for
the housing rental
industry
As a stimulus measure, the AFG will exempt up to 10% of capital
gains tax (CGT) for qualified housing rental providers from 2018,
which increases the potential CGT incentives up to 60% (Australian
Taxation Office, 2019). This will help the rapid expansion of the
industry.
Economic Analysis
Global economic
growth slowdown
The growth of the global economy in 2019 shows a slowest pace of
only 3% since the subprime crisis, while global GDP is expected to
decline by about 1% in 2020 (Gopinath, 2019). Economic tensions
will limit long-term spending on education by families, potentially
affecting the number of international students in Australia.
High exchange rate
of AUD
Compared with major education exporting countries, the high
exchange rate of AUD has severely affected the education cost of
international students, which has also increased the cost burden of
living in Australia (Schultheis, 2015).
Housing rents rise
Despite average house price reductions of around 5% in 2018,
Australia's rental prices show a general upward trend (Kelly, 2019).
It seems not a bad thing. Prices directly reflect market demand, and
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once there is oversupply, rent price will gradually fall (Kelly, 2019).
Social Analysis
Australians tend to
rent rather than buy
directly
Investors may shift focus from real estate development to rental
housing construction. Financial burdens change the way Australians
live and make renting a preference, data show that about 40% of
people are keen to rent and more than 60% consider it a long-term
choice (TREC, 2018)
Australians value
higher education
The survey shows that about 80% of Australians feel that university
education is vital to work and life, and they believe that university
life and certification will add value to future work and competition
(UNIVETSITIES AUSTRALIA, 2018). This public opinion will
inject booster into Australian education.
Racial
discrimination
erodes rights of
international
students
Racism threatens international students. A survey of the Melbourne
area revealed that about 50% of international students believe they
are at risk of racial discrimination (VOA News, 2010). More
seriously, attacks and murders against international students have
continued to occur, and some students have been killed in such
incidents (Graycar, 2010).
Technological Analysis
Digital technology
applied to
Australian education
With the development of digital technology, the Australian
education model is more efficient. Students could use digital tools to
obtain educational resources and have the opportunity to complete
courses online (Department of Industry, Innovation and Science,
2018).
Smart mobile
services increase
commute
convenience: Uber
In the face of underdeveloped public transport in Australia, ride-
hailing software such as Uber uses ridesharing to make up for this
deficiency (Deloitte, 2016). This will ease the dependence on private
cars and increase the range of accommodation options.
Social media
changes marketing
model
The rise of social media has provided enterprises with a huge space
for advertising through online sharing and information interaction,
and it has provided enterprises with a low-cost platform to attract
customers and operate businesses (Queensland Government, 2016).
This will help promote the information of Student Home.
Legal Analysis
Strict laws on
international student
visas
The EDUCATION SERVICES FOR OVERSEAS STUDENT ACT
2000 (ESOS ACT) sets out a strict code of conduct for international
students in Australia (UNIVERSITIES AUSTRALIA, n.d.).
International students must strictly abide by the use of funds and
registration requirements in order to maintain the student visa.
Neutral Tenant
Regarding the leasing industry, the establishment of laws in all
Australian states is neutral, owners (agents) and tenants are both
protected by states’ Residential Tenancy ACTs
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Protection Law (GlobalPropertyGuide, 2006). This legislation is conducive to
protecting the legitimate rights of Student Home in the future
operation.
The Consumer Law
supervises the entire
service
Products and services provided to consumers in Australia must
comply with Australian Consumer Law (ACL). Regarding leases,
ACL includes consumer protection clauses that protect consumers'
legitimate rights and interests when using lease services (Consumer
Action Law Centre, 2014).
Micro Environment Analysis
Competitor Analysis
The prosperity of market economy has flooded profitable industries with competitors. Direct
competition occurs when there are two or more companies providing similar products or
services for the same market, the focus of competition will then be on fighting for potential
market share (Rouse, 2015). For the leasing industry that Student Home will enter, three
major competitors are identified, which are Airbnb, Domain and Flatmates respectively.
Their business scope and target customer group are similar to Student Home.
By evaluating the operations and developments of these three companies, this section will
present the similarities (POS) and differences (POD) of Student Home among the three
companies.
POS: Media and distribution channels
These three companies generally attract target groups through various channels of advertising
and sponsorship, and rely on online platforms to complete transactions (Stead & Thach,
2019; Domain Group, 2019; Wischusen, 2016). This is similar to the future marketing model
and respected trading methods of the Student Home. And the target market of Flatmates
matches Student Home to some extent.
Airbnb—POD: More specific tenant groups and specific room types
Airbnb's main customers are travel and businesspeople seeking short-term rentals, and the
options offered are mostly within a week (Stead et. al., 2019). While Student Home is
focused on international students in Australia and tends to provide long-term stable housing.
Domain—POD: More diverse mix of housing types
Compared with Domain’s scheme of packaging house rental, Student Home aims to provide
more diverse room types to target groups, which giving them more choices.
Flatmates—POD: Broader sources of home rental information
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The scope of housing information on Flatmates relies heavily on the provision of private
publishers (Wischusen, 2016). While Student Home resources will not be limited to this, and
will include rental information for a wider range of property management organizations.
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Competitive market Summary (Table 2)
Competitor Target
Market
Positioning Product Price Promotional Distribution Strength/
Weakness
Airbnb Travelers and
business
people who
looking for
short-term
ideal place to
stay
Homeowner
who have
available
rooms and
want to make
a profit
Diversification
of home types
to meet tenants’
choices
Full
apartment and
house
Private
separate
rooms
Shared rooms
with others
Average $ per
night:
$150 for an
apartment or
house
$59 for a
private room
$39 for a
shared room
TV and travel
magazines advertisings
Propaganda via social
media
Sponsorship to sport
events
Title sponsorship for
travel shows
Tenant's order is
completed via
online payment
Homeowner
completes house
review through
online application
Main Strength
Will attract people who stay
at the destination for a short
time period
Main Weakness
High cost relative to long
lease
Generally, only applicable to
short-term stays and
transitional tenants. Increased
stay time will reduce the
price economy.
(Stead et. al., 2019)
Domain People living
in Australia
Tenants
seeking stable
housing
Real estate
investors
Stable
accommodation
place and
investment
environment
Home sales
information
Leasing of
apartment and
house based
on huge
property
system
Average $ per
week:
Different from
regions:
$385-$550 for
an apartment or
house
Advertising in real
estate magazines
Promotions in
thousands of offline
stores
Title sponsorship in
various fields
Tenants make
decisions online
Sign a contract face
to face through a
domain agent
Housing
information
collected from listed
property companies
by agents
Main Strength
Has stable housing
information, more types of
home for tenants to choose
Main Weakness
Monopoly operation may
lead to higher prices of tent.
A model built for Australians
may not be suitable for
foreign tenants.
(Domain Group, 2019)
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Flatmates Students and
Adults within
Australia who
looking for
accommodatio
n and who
seeking
roommates to
reduce costs
Convenient
platform for
housing
information
release and
collection
Variety of
shared and
whole room
types
(depending on
the publishers)
Entire units or
houses for
leasing
Depends on the
idea of the
information
publisher,
usually below
the market price
Online advertising
Targeted advertising for
social media users
Advertising on the
search engine about the
"rental" keyword
Charging fees for
information
publishers
Provide an
information platform
for buyers and sellers
Renters and tenants
reach an agreement
online and deal in
person
Main Strength
Provides an information
platform for those seeking to
reduce overhead through co-
tenancy
Main Weakness
House types are limited by the
publication of renters
False information may harm
the interests of both parties
(Wischusen, 2016)
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Consumer Analysis
International students in Australia is a huge rental market. The number of international
students enrolled in higher education increased by approximately 50,000 from 2017 to 2018,
reaching nearly 400,000 (Parliament of Australia, 2019). The huge population base and rapid
growth trend have increased the demand for housing rental. The need for accommodation
usually occurs when international students first enter Australia and live in Australia. There
are three main types of accommodation preferred by international students in Australia,
which are homestay, on-campus student apartments and private rental housing respectively
(nib, 2019). Regarding the way of renting, international students still rely on homestays and
student apartments provided by intermediaries. Despite the booming Australian rental market,
unfamiliar language on the rental website makes it difficult for international freshmen to find
an ideal private renter (Karpinski, 2015). And related survey shows that about 70% of
international students (Figure 2) still failed to find stable accommodation before entering
Australia (Kuhne, 2019). In addition, the geographical location of international students’
choices of accommodation is mainly concentrated around Australian institutions of higher
education (Savills, 2018) (Figure 3). For the first-year international students, most of them
might choose homestay or on-campus housing through the communication between education
agent and university officially.
Figure 2:
(Kuhne, 2019)
Figure 3: Main distribution of international student accommodation
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(Savills, 2018)
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Collaborator Analysis
Education agents are potential collaborators for Student Home to acquire target customer
group. The service target of education agents is mainly international students who choose to
study abroad, which is consistent with Student Home. According to the survey of Kuhne
(2019), about 80% of international students choose an education agent to help them plan their
trip (Figure 4). The customer resources held by education agencies are significant for Student
Home to expand the market rapidly.
In addition, private rental properties are significant collaborators for Student Home to gather
collect housing information. Private rental properties hold a large amount of housing data
with the assistant of real estate agents. Reaching a partnership with private rental properties
will be beneficial for Student Home to find specific types of accommodation that meet their
demands.
Figure 4
(Kuhne, 2019)
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SWOT Analysis (Table 3)
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Strengths
Targeted design. Housing infromation
is tailored for international students,
which could increase the transaction
success rate
Multilingual provided. In response to
language barriers, Student Home will
support multiple languages to increase
the accessibility of international students
Stable accommodation. Student homes
will offer long-term stable
accommodation options to reduce the
frequency of international student
moves.
Weaknesses
Brand recognition. In the increasingly
competitive rental market, it's difficult
for Student Home to form a strong
brand reputation in a short time.
Startup funds. The operation of the
platform depends on the improvement
of the overall supply chain, and a large
amount of capital needs to be injected.
Focus on international students only.
Focusing on a narrow target market can
restrict Student Home's lease-based
development model.
Opportunities
Positive policies on higher education.
The relaxation of the study abroad
policy will promote the number of
international students (Parliament of
Australia, 2016).
Tax incentives for Leasing industry.
Home leasing companies will get more
CGT benefits from 2018 (ATO, 2019).
This will increase potential income of
Student Home.
High vacancy of accommodation. The
number of idle homes in Australia is
gradually increasing (Ryan, 2019). This
increases market capacity.
Threats
Tough niche market. Private rental
properties are highly competitive and
are not conducive to occupying a
smaller niche market (TREC, 2019).
Coporation and competition coexist.
Education agents provide temporary
housing programs for approximately
38% of international students (Kuhne,
2019).
Strict laws appy. ACL severely restricts
the way that leasing providers behaves
(CALC, 2014). This may limit the
business scope of Student Home.

Marketing Initiative and Goals
The above analysis summarizes the current status and prospects of the Australian higher
education industry and the rental industry. These data and findings reveal the high potential
demand for leasing companies which aims at international students in Australia.
As a company emerging in this market, Student Home aims to expand its market by
establishing extensive partnerships, and the specific goals are:
1. Establish partnerships with 100 education agencies for international students in Australia
by 2020.
2. Sign agreements of sharing leasing information with 100 private property companies by
2020.
Based on the previous SWOT analysis, corporation is the best way for Student Home to enter
and expand the market at the beginning. Customers and information resources are the two
keys to the survival of Student Home in the market, the rapid access to international student
data and housing information through strategic partnerships could enable Student Home to
avoid potential market threats and make up their internal weaknesses.
Figure 5: Company’s logo
7003MKT Opportunity Analysis Page 14

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