Strategic Analysis of REA Group Ltd: A Management Report

This report provides a detailed analysis of REA Group Ltd's management practices, corporate governance, and strategic communication. It examines the company's approach to customer experience, strategic decisions, and the influence of stakeholders. The report delves into the company's corporate governance framework, board orientation, and the application of legitimacy theory to its communication strategies. It highlights the company's commitment to ethical business practices, diversity, and women empowerment. Furthermore, the report analyzes the company's annual report, focusing on its growth strategy, financial performance, and market position, particularly within the property advertising sector. The study also explores the role of the board of directors, risk management, and the impact of both internal and external stakeholders on the company's strategic direction. Overall, the report offers insights into REA Group Ltd's operational processes and its efforts to maintain a strong presence in the global market.

Running head: MANAGEMENT
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Name of the student
Name of the university
Author note

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Executive summary
In this study it has been identified that in order to bring the changes in customer experience, the
bold strategic step has been taken by the company by developing the innovative as well as
personalized products in the market for coping up with the emerging technological demand
among the consumers. Influences of independent stakeholders are really high in the company
operational process. The ratio of profitability as well as growth gets generated by the strategic
decisions adopted by the managers. Analyzing the communication strategy adopted by Rea
Group Ltd, it can be said that all the three elements of legitimacy is properly being followed by
Rea Group ltd, which has made it efficiency as well as strengthen its global operational network.

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Table of contents
Introduction......................................................................................................................................3
Summary of corporate governance..................................................................................................4
Board orientation.............................................................................................................................6
Interpretation of company communication using the legitimacy theory.........................................8
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

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Introduction
The purpose of the study is to develop scholarly debate based on the ethics and governance. It
has become as one of the important contributors in the business field that can drive the strategic
direction of REA group Ltd. The study has critically analyzed the annual report published by
REA group Lid, which is a digital advertising company, operates in Australia. It is true that
within few years the company has started operating in different countries too. Analyzing the
startup history of this company, it has been identified that REA group Ltd. has aimed to bring
huge changes in the global communication platform through internet (Rea-group.com, 2020).
Recently the company is operating with almost 1400 employees across the word and delivering
the exceptional experiences to the customers, it has enhanced its growth strategy. Analyzing the
growth strategy of REA group Ltd, it has been identified that the company has aimed to improve
the lifestyle of people by providing the financial benefits to the consumers. The company has
taken partnership approach towards the National Australia Bank for developing strong presence
in the broker market (Rea-group.com, 2020).
In the global market, the strategic investment of the company has brought huge changes in the
leadership approach adopted by the company. The central business theme of REA group Ltd has
got developed based on the property advertising process the company has mainly focused on
introducing the personalized marketing campaigns for helping the customers (Rea-group.com,
2020). In order to bring the changes in customer experience, the bold strategic step has been
taken by the company by developing the innovative as well as personalized products in the
market for coping up with the emerging technological demand among the consumers. The
strategic direction of the company has got influenced by three pillars such as property
advertising, financial services and lifestyle and global (Rea3.irmau.com, 2020). As it is a

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customer centric business brand, in that case, providing leads to the customers while sharing the
property advertising, the company has gained strong attention from the market. The purpose of
this study is to critically examine the strategic directions adopted by REA group Ltd while
operating in the global communication market. By continuing this adding some theoretical
explanation, the report has analyzed those practical implications in the strategic field. Making the
summary of corporate governance codes followed by REA group Ltd, the study has tried to
analyze its ethical approached towards the consumers (Rea3.irmau.com, 2020). In the broad
orientation section, the annual report of REA group Ltd has been critically examined where
media releases as well as activities of board of directors have been mentioned. In the end of this
study, for explaining the communication strategy adopted by REA group Ltd, the legitimacy
theoretical explanation has been provided.
Summary of corporate governance
Corporate governance can be considered as a vital part in the strategic direction of REA group
Ltd. By outlining the social benefits as well as maintaining the values, the company tries to
maintain its policies in the workplace (Rea3.irmau.com, 2020). The company is highly
committed towards accountable, transparent and ethical business practice. The company tries to
ensure the appropriate corporate governance framework for developing the sustainable
relationship with the stakeholders. Following the ASX corporate governance principles, the REA
group Ltd has maintained its diversity in the workplace (Rea3.irmau.com, 2020). By continuing
this, it can be said that effective leadership practices are being followed by the company and the
corporate governance objectives of the company are being developed based on ensuring the
inclusion and diversity by reflecting the strong policies. In order to promote the inclusive
behavior, REA group Ltd has made the situation more effective. In order to maintain the ethical

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organizational practice, the training against the domestic violence sensitivity has been provided.
The events such as ‘wear it purple’ day is being celebrated for showing the emphasis of mental
health in the workplace. Women empowerment can be considered as another important corporate
governance objective is about women empowerment (Rea3.irmau.com, 2020). In order to
support the women transition, personalized technology based program has been introduced
where exposing the technological strength, REA group Ltd has improvised the mentoring
program.
In the remuneration report, the evaluation of senior executives has been described. In the
remuneration report, it has been mentioned that the remuneration of non-executive directors is
fixed as its results the non-executives directors do not participate in the risk incentive program.
The HRM committee of REA group Ltd is influenced by the majority of independent directors
(Rea3.irmau.com, 2020). The chairman of board is being developed with at least three members.
Analyzing the remuneration of independent directors, it has been identified that under the
constitution of the subject and company, the directors mist retire from office and based on the
reelection process, new director is being selected. In the context of directors’ independence, it
can be said that by considering the materiality requirements both the qualitative and quantitative
elements are being analyzed (Rea3.irmau.com, 2020). Comparing the ratio of independent and
non-independent directors among the board members in the company, it has been identified that
numbers of independent directors are relatively high.
The CEO of REA group Ltd is responsible for the day to day administration activities which are
being supported by the executive team. In order to bring the appropriate range of experience,
expertise, diversity and skills in the workplace, emerging business issues are being addressed by
the directors (Rea3.irmau.com, 2020). The report has identified that the CEPO of the company is

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responsible for the initiatives adopted by HR committee and Audit and risk assessment
committee. The chairperson of the board is responsible for giving the approval for strategic
designs and well as monitors the progress against the company budget.
Board orientation
In the most recent annual report published by the company, it has been identified that the
company has aimed to bring changes in the providing the property experiences to the customers.
The annual report of the company has clearly mentioned about the strategic focus of the
company towards collecting technological strength for the future betterment. The strategic vision
of the company is to reach the global audience and introduce the best property related market
place for helping the customers financially (Rea3.irmau.com, 2020). The growth strategy of thee
company is about providing the comprehensive experience across the property.
Home finance can be considered as the integral part of the properly process. By making the
partnership with the Australian bank, home loan related facilities are being provided to the
consumers. Across the market there are 400 brokers who are ensuring their strong contribution
while establishing the largest network chain of REA Group Ltd (Rea-group.com, 2020). In the
annual report of the company, Chairman of REA Group Ltd has mentioned that in the running
year, the growth rate of the company has reached 8% which is almost $874.2 million. Due to this
achievement, 63% share has been franked. In the year 2019, 8% increase in market share has
represented the full year dividend of 118.0 percent (Rea-group.com, 2020). From the last few
years, REA Group Ltd is maintaining its position in the smart line as the Australia’s top
franchise. Maintaining the shameless leadership transition, the company has ensured its image as
the global digital real estate for news crop (Cdn.rea-group.com, 2020).

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In the annual report, comparing the revenue of the company from 2015, a gradual growth has
been seen in the parameter. In order to generate high growth, in different technology platforms
the company has made its string existence by investing right amount of money. In order to fulfill
the commitment of healthy eco system, the company has decided to reinforce the commitment
with the property management customers. In terms of empowering the real estate agencies,, REA
Group Ltd has maintained its commitment towards the automatic workflows, payments and
reduced the rental property administration. In the media release of 2019 on 25th Oct, it has been
mentioned that as it is a relatively young organization, in that case, establishment of thee
technological leader, it can be easier to deliver the strong values to the consumers (Cdn.rea-
group.com, 2020).
On the other hand, in the same year, in the middle of October, the board members have decided
to empower the real state agencies and followed the comprehensive survey of the franchises
across the globe. The Smart CEO Sam Boer opined that after receiving the 10th time honor of the
Australia’s top franchise, is quite thrilling to maintain the position. From the last 20years the
company is maintaining its strong partnership, which has made it strong. By delivering the
unpredictable services, the company has gained clients love and support. In order to maintain its
smart line business, using the company website www. rea-group.com, the company has
maintained its transparency with the clients (Cdn.rea-group.com, 2020).
In order to provide the personalized services, the cookies are being used for performance
analysis. Analyzing the objectives of Board of directors is to serve the interest of the
stakeholders and appraise them based on their strategies and discipline (Rea-group.com, 2020).
The company has aimed to build the sustainable values in terms of protecting as well as
optimizing the company performance. Analyzing the boards function and responsibilities, it has

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been identified that following the standard corporate governance framework the risk
management system of the company is being monitored. By continuing this, it has been
identified that major capital expenditure as well as progress is being monitored by the board of
directors. The audit recommendations as well as relation with the risk and compliance committee
is very important for influencing the corporate decision making processes in the company. In
order to set the remuneration for new KMP, the benchmark of information provided in the annual
report is properly being utilized (Rea-group.com, 2020). By continuing this, it can be said that
the majority independent group in the organization has influenced the diversity in the workplace.
The growth and capital management strategy gets highly influenced by both the internal and
external stakeholders in the company. In order to maintain the ethical practices in the workplace,
the stakeholders properly focus on the CSR activities for generating the strong popularity in the
market. By continuing this, it can be said that Majority of the independent stakeholders focus on
understanding the needs of individuals, which are very important for generating the profits as
well as organizational growth (Rea-group.com, 2020).
Interpretation of company communication using the legitimacy theory
REA group Ltd. follows the customer centric business approach for ensuring its existence in the
global market. In order to develop strong relations with the consumers, the company has
developed its networking system. In order to develop the personalized products in the market the
company has made the three pillars strategy for connecting with the global audience through
technological platforms (Rea-group.com, 2020). Comparing the communication approach
adopted by the company with legitimacy theory, it can be said that the legitimacy theory aims to
support the organization while implementing its strategies. It helps to develop the environmental
and social disclosure that can help to measure the societal communication. The concept of

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legitimacy theory is highly connected with the CSR initiatives adopted by the REA group Ltd.
By critically analyzing the annual report adopted by REA group Ltd, it has been identified that
for increasing its global presence, investors from different countries have been involved in the
company decision making process. Making the most significant auditing report, the company
tries to provide the interest benefits to the consumers. On the other hand, analyzing the
organizational behavior, it has been identified that for improving the social and environmental
relationships the company has adopted various strategies. In order to fulfill the social contact, the
company has provided customized products to the customers in lower range (Rea-group.com,
2020). By continuing this, it can be said that the purpose of the company is to improve the
lifestyle of the company. In that case, ensuring its online as well as offline presence in the
market, the company has developed strong connection with the customers. In order to avoid the
legal obligations as well as avoiding the trust issues, standard privacy policy is being followed by
the company where confidentiality of the customers banking details as well as properly related
information is being maintained.
On the other hand, analyzing the annual report of the company, it has been identified that
introducing the technologies, women empowerment as well as diversity is the important strategic
element that have made the company no1 in the global market. Analyzing the executive
remuneration philosophy adopted by the company, it has been identified that driving the desired
leadership behavior, the company tries to bring the accountable returns to the stakeholders (Rea-
group.com, 2020). In terms of generating higher growth in the market the company has improved
its reward strategy which has helped the company to bring employee satisfaction in the
workplace. As per the legitimacy perspective, the corporate communication can be done by

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ensuring the stakeholder satisfaction. In the institutional context the legitimacy theory can be
developed based on the pillars, Cognitive legitimacy, moral and pragmatic.
Depending on the self-interest the pragmatic legitimacy is being relied, where determining the
effect of the organization. Behavior of the organization gets influenced depending on the self-
interest. In case of moral legitimacy, the ethical values as well as corporate regulations are
strictly being followed. On the other hand, in case of cognitive legitimacy, the desired activities
of the organization is being combined with the restructured beliefs. Analyzing the
communication system in Rea Group Ltd, It has been identified that depending on the ethical
transparency as well as self-involvement in achieving the goals, the company tries to develop the
significant position in the global market. Therefore, it can be said that all the three elements of
legitimacy is properly being followed by Rea Group ltd, which has made it efficiency as well as
strengthen its global operational network.
Conclusion
In this study, it can be concluded that analyzing the annual report in Rea Group Ltd, it has been
identified that influences of independent stakeholders are really high in the company operational
process. The ratio of profitability as well as growth gets generated by the strategic decisions
adopted by the managers. The standard communication and social well-being strategy has helped
the company to bring positive outcome in the market.

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References
Asx.com.au (2020). retrieved from:
https://www.asx.com.au/asx/share-price-research/company/REA [Accessed on 13th Feb,
2020]
Cdn.rea-group.com (2020). retrieved from:
https://cdn.rea-group.com/wp-content/uploads/2018/09/23205626/BoardCharter.pdf
[Accessed on 13th Feb, 2020]
Cdn.rea-group.com (2020). retrieved from:
https://cdn.rea-group.com/wp-content/uploads/2018/09/23205626/BoardCharter.pdf
[Accessed on 13th Feb, 2020]
Rea3.irmau.com (2020). retrieved from:
https://rea3.irmau.com/site/PDF/2342_1/AnnualReporttoshareholders [Accessed on 13th
Feb, 2020]
Rea3.irmau.com (2020). retrieved from:
https://rea3.irmau.com/site/PDF/2335_1/SmartlinenamedAustraliastopfranchise
[Accessed on 13th Feb, 2020]
rea3.irmau.com (2020). retrieved from:
https://rea3.irmau.com/site/PDF/2344_1/REAGroupannouncesinvestmentinManagedtech
nologyplatform [Accessed on 13th Feb, 2020]

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Rea-group.com (2020). retrieved from:
https://www.rea-group.com/company/media-centre/media-releases/ [Accessed on 13th
Feb, 2020]
Rea-group.com (2020). retrieved from: https://www.rea-group.com/company/about-us/
[Accessed on 13th Feb, 2020]
Rea-group.com (2020). retrieved from: https://www.rea-group.com/company/about-us/future-
focus/ [Accessed on 13th Feb, 2020]
Rea-group.com (2020). retrieved from:
https://www.rea-group.com/company/investor-centre/corporate-governance/ [Accessed
on 13th Feb, 2020]