Analyzing WRIT's Strategy: Economics of Organization and Strategy

This report analyzes the strategic choices of Washington Real Investment Trust (WRIT), a commercial real estate agency. It examines WRIT's approach to horizontal and vertical integration, as well as its diversification strategies. The report discusses the objectives of maximizing revenue and profit, and how WRIT has utilized these strategies to achieve sustainable growth. It considers the competitive landscape, including the acquisition of competitors, and the benefits of vertical integration to improve operational efficiency. The report also evaluates diversification and conglomerate strategies, recommending expansion into new geographical locations and the introduction of new products to enhance revenue growth. The analysis is supported by references to relevant economic literature.

Running head: ECONOMICS OF ORGANIZATION AND STRATEGY
Economics of Organization and Strategy
Name of the Student:
Name of the University:
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ECONOMICS OF ORGANIZATION AND STRATEGY
Running head: TAX
Tax
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Contents
Horizontal integration:.....................................................................................................................4
Vertical integration:.........................................................................................................................5
Diversification / conglomerate strategy:..........................................................................................5

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Washington Real Investment Trust (WRIT) is a commercial agency involved in real
estate business in and around the United States of America. WRIT is based in Washington DC
deals in varied kinds of real estate properties with its commitment to derive value for both
investors and customers. A brief discussion on its strategy below will be helpful in understanding
the overall strategy of the real estate giant and how it has managed to integrate its business
activities to achieve its goals and objectives over the years.
Horizontal integration:
The two most important objectives of a commercial organization irrespective of the field of
business it is in are to maximize its revenue and maximize its profit from commercial activities.
In order to achieve that objective an appropriate strategy must be there in place. Horizontal
integration helps an organization to increase its market share in a market by acquiring
competitive business entities ("Selecting Corporate-Level Strategies", 2019).
WRIT has over the years have been successful in maintaining a sustainable growth in its market
share, especially in and around Washington DC. The existing competitors of WRIT include
Urban Investment Partners, McBride Real Estate Services Inc., Preferred Real Estate Investment
and others. The organizational structure of Preferred Real Estate Investment is closest to the
organizational structure of WRIT hence, if it decides to horizontally integrate its business then
acquiring Preferred Real Estate Investment is the best option. However, considering the current
position of WRIT in the market, direct acquisition of its competitors is not expected to yield
significant benefit if the cost of acquisition is considered.
Even in the long run the strategy to horizontally integrate will also not be beneficial to WRIT as
in the long run it would be better for the organization to increase its efficiency in the future.

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Vertical integration:
Vertical integration is certainly one of the most effective strategies available for any organization
to achieve its organizational goals and objectives. Vertical integration is about taking complete
control of indidviauls organizational processes to improve the operational effectiveness and
efficiency. Full control in procurement procedure, issue of raw materials, supply chain,
marketing activities and others are some of the most basis of stages in vertical integration that
helps an organization to improve its performance.
WRIT is currently at an advanced stage of its life cycle and is a well-established name in the real
estate investment sector. The organization at this stage should aspire to improve its operational
efficiency and effectiveness by using forward integration strategy. The organization should
specifically concentrate on improving its procurement procedure as well as its construction
processes. Improving both these will be possible by taking full control of both procurement and
construction department of the organization Forward integration will help the organization to
take full control of both these departments to achieve its organizational objectives in the future
(Herger & McCorriston, 2016).
Diversification / conglomerate strategy:
Diversification is another important and effective strategy that an established business
organization can use to improve its performance in the future and achieve sustainable growth in
the long run. Both maximizing revenue and profit will be possible by optimum use of
diversification strategy.
WRIT at present operates mainly in the Washington DC region thus, introduction of new
business initiatives in different parts of the country would help the company to improve its

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ECONOMICS OF ORGANIZATION AND STRATEGY
performance in the future and maintaining a sustainable growth in the long run. The immediate
strategy to diversify for the organization shall be to introduce new products in the market to
enhance the revenue growth of the organization. In addition in the long run the organization
should look to diversify its business operations by adding new geographical locations to its
existing area of operations ("Economics of Organization", 2019).

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References:
Economics of Organization. (2019). Retrieved 22 August 2019, from
http://saylordotorg.github.io/text_principles-of-managerial-economics/s05-economics-of-
organization.html
Herger, N., & McCorriston, S. (2016). Horizontal, Vertical, and Conglomerate Cross-Border
Acquisitions. IMF Economic Review, 64(2), 319-353. doi: 10.1057/imfer.2015.42
Selecting Corporate-Level Strategies. (2019). Retrieved 22 August 2019, from
https://saylordotorg.github.io/text_mastering-strategic-management/s12-selecting-corporate-
level-stra.html