Reference no: EM133188230

Rick is concerned about competitor activity that could impact either initiative. Choose either initiative.

Carry out market research concerning the initiative.

• Who is in the market?
• What services do they offer?
• What market share do they have?
• Are they specialist or diverse?
• What types of marketing do they carry out?
• What is the quality of their marketing like (their website, social media presence etc)
• How big are they and how many staff do they have and the type of roles and apparent experience they have
• What does their brand look or feel like?
• What are their key strengths or weaknesses?

This exercise requires the student to carry out internet-based research. They can choose any CBD location they wish to and search for property agencies operating in them. There is no requirement to name the organisations specifically. It may not be possible to identify all information for any example competitor. Where there are blanks in information, generate additional data based on the scenario and other Property Agency data and your knowledge of the unit content.

Carry out research for three likely competitors that ABC could be facing.

Initiative One - New Strata Services Start up a Strata Management division of the business in the current CBD area. This will be run from the Head Office. Key Information The current Strata market in the area is believed to be worth $6m per year. The market has five main competitors with 70% of the market, varying between 15% and 5% and then other niche and independents making up the rest. 75% of business is taken by Strata only organisations. A minimum staffing required is considered as 3 staff, one Lead Licensed Strata Agent plus 1 assistant agent/administrator and one Strata development Lead Agent who has experience of the Strata industry. There is sufficient space in the current HO to accommodate the staff. The expectation is that this may also add to Agency reputation and brand. It may also produce more commercial opportunities from the network of developers and organisations concerned with Strata which is estimated to be worth $250k per year in both years two and three from more referred business. Key Financials Total Market $6m Target Market Share in the first twelve months of 5% which is $300k income (2% committed and 3% new business required) Start Up Costs are extra Marketing $50k, then $3k per month. Other operating costs of $3k per month. Staff costs are Fixed at $300k plus a further 10% of the new business income per month split between the staff. Year two Income forecast $600k Year three income forecast $800k Assume costs increase by 5% per year only and no start-up costs in year 2 or 3.

Initiative Two - Increase the Business Footprint Open further satellite offices in both the Regional and Head Office areas. Two more in each. This will take the number of locations covered by the Agency to eleven from the current seven. Key Information The same mix of property services is anticipated. Rent rolls can be secured for 1 each of the two further satellites in each area, so the other would start from zero. Rent Roll costs are excluded from financials. New Offices will be required. Staff have been identified from the current staff to move across as lead agents for each office with a backfill member to then be put in at the source office. Staffing will be 3 in each office (2 of which will be new) + the back fill in the current offices. So total staff requirements will be twelve. Key Financials Income anticipated as follows for the full year: Office 1 - Sales $750k, Rental $1m (rent roll) Office 2 - Sales $500k, Rental $200k Office 3 - Sales $750k, Rental $1m (rent roll) Office 4 - Sales $500k, Rental $300k Start Up Costs are extra Marketing $20k per office, then $5k per month per office. Office rental costs are $4k per office per month. Other start-up costs for branding and office equipment are $30k per office. Other operating costs of $3k per month per office. Staff costs are Fixed at $200k plus a further 4 0% of sales commission at the respective office. Assume costs increase by 5% year on year and no start-up costs in year 2 or 3. Assume Sales increase by 10% year on year. Assume Rentals Increase by 15% year on year.