Elders Real Estate Company: Strategic Market Entry into Peru

This case study delves into Elders Real Estate Company's strategic expansion from Australia into the Peruvian market. It highlights the company's background, its established presence in Australia, and its vision for global growth. The analysis includes the marketing strategies employed by Elders to compete effectively, emphasizing the role of technological innovation and franchising. It explores market entry strategies, such as leveraging referrals and nurturing leads. Furthermore, the study incorporates PESTEL and SWOT analyses to assess the Peruvian market environment, considering political, economic, socio-cultural, technological, environmental, and legal factors, alongside the company's strengths, weaknesses, opportunities, and threats. Ultimately, the case study aims to provide insights into the challenges and opportunities associated with international market entry in the real estate sector, emphasizing the importance of strategic planning and adaptability.

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ELDERS REAL ESTATE COMPANY
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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 ESTATE is 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

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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.

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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 by ELDERS REAL ESTATE was 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 ESTATE applied 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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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 ESTATE used 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 strategies ELDERS REAL ESTATE was 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.

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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 ESTATE is 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

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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 ESTATE has 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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Country’s analysis.
The chapter aims at giving an overview of the Peru market in the real estate market. ELDERS
REAL ESTATE COMPANY has 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 for ELDERS REAL ESTATE

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COMPANY in 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 to ELDERS 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 COMPANY has 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.

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The country is involved in various agreement with other countries to economic development.
ELDERS REAL ESTATE COMPANY is 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 COMPANY to 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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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 as ELDERS REAL ESTATE COMPANY to 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).

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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
COMPANY has 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 to ELDERS REAL ESTATE COMPANY since 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.

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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.
The ELDERS REAL ESTATE COMPANY can 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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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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