growth strategies of real estate companies in a mature market

Growth strategies of real estate Growth strategies of real estate companies in a mature marketcompanies in a mature market

Ed NozemanEd Nozeman

Stockholm,25 June 2009Stockholm,25 June 2009

Growth strategies of real estate Growth strategies of real estate companiescompanies

ContentContent IntroductionIntroduction

MethodologyMethodology

AnalysisAnalysis

Conclusion/further Conclusion/further researchresearch


Which strategies are followed by real Which strategies are followed by real estate organizations, how are these estate organizations, how are these related with each other, are there related with each other, are there clear differences between these clear differences between these organizations as to their choice of organizations as to their choice of strategy and what causes those strategy and what causes those differences ?differences ?


11

Company strategies

From what basis

Competition strategyPorter

- Cost leadership- Differentiation- Focus

From what direction

Growth strategyAnsoff

- Market penetration- Market development- Product development- Diversification

Which type of implementation

Development strategyJohnson & Scholes

- Internal or autonomous development-- Acquisition-- Joint development


22

Cost leadership Differentiation

Position of low costUnique characteristics acknowledged by client

Total market

One segment Focus

Co

nc

ur

ren

tie

be

reik

Competitive advantage

COMPETITIONRANGE


22

Market development Diversification

Huidige Nieuwe

Huidige

Nieuwe

Producten

Markt

Market penetration Product development

Products

Present New

Present

New

Market


33

Development strategies

Internal development strategy

Acquisition strategy

Joint development strategy


MethodologyMethodology

Defining medium sized Defining medium sized developers and developers and housing corporationshousing corporations

Sample at randomSample at random

2 x 15 respondents2 x 15 respondents

Face-to-face Face-to-face interviews interviews


Type of market Type of market focus focus

At presentAt present Near Near futurefuture

N=15N=15 numbernumber %% numbernumber %%

ResidentialResidential 1414 9393 1414 9393

OfficesOffices 1111 7373 1010 6767

IndustrialIndustrial 77 4747 77 4747

RetailRetail 55 3333 55 3333

RecreationRecreation 11 77 11 77

Market focus developers


Type of Type of market market focus focus

At presentAt present Near futureNear future

N=15N=15 numbernumber %% numbernumber %%

Social rent Social rent (<€339)(<€339)

1515 100100 1515 100100

Medium Medium priced rent priced rent (€339-520)(€339-520)

44 2727 44 2727

Expensive Expensive rent (>€ rent (>€ 520)520)

44 2727 33 2020

Free sectorFree sector 22 1313 22 1313

Market focus housing corporations


Recent Recent pastpast


At At presentpresent

Near Near futurefuture

N=15N=15 numbernumber %% numbernumber %% numbernumber %%

Cost Cost leadershileadershipp

1111 7373 66 4040 66 4040

DifferentiDifferentiationation

77 4747 1313 8787 1414 9393

FocusFocus 33 2020 33 2020 33 2020

Applied competition strategy developers






N=15N=15 numbernumber %% numbernumber %% numbernumber %%

Cost Cost leadershipleadership

1212 8080 99 6060 1010 6767

Differenti-Differenti-ationation

88 5353 1313 8787 1313 8787

FocusFocus 44 2727 44 2727 44 2727

Applied competition strategy housing corporations


Type of Type of growth growth strategystrategy




numbernumber %% numbernumber %% numbernumber %%

Market Market penetration penetration

1414 9393 1313 8787 1212 8080

Market Market developmentdevelopment

22 1313 33 2020 55 3333

Product Product developmentdevelopment

99 6060 1212 8080 1212 8080

DiversificationDiversification 00 00 00 00 11 77

Growth strategy developers


Type of Type of growth growth strategystrategy





Market Market penetration penetration

99 6060 44 2727 55 3333

Market Market developmentdevelopment

11 77 11 77 33 2020

Product Product developmentdevelopment

77 4747 1414 9393 1414 9393

DiversificationDiversification 00 00 00 00 00 00

Growth strategy housing corporations


Type of Type of development development strategystrategy



Near Near

futurefuture


Internal Internal

developmentdevelopment 1313 8787 1414 9393 1414 9393

AcquisitionAcquisition 00 00 11 77 33 2020

Joint Joint

developmentdevelopment 66 4040 99 6060 1212 8080

Applied development strategy developers


Type of Type of development development strategystrategy



Near Near

futurefuture


Internal Internal developmentdevelopment

1414 9393 1010 6767 1010 6767

AcquisitionAcquisition 33 2020 44 2727 66 4040

Joint Joint developmentdevelopment

55 3333 1111 7373 1111 7373

Applied development strategy housing corporations


Threats for Threats for developersdevelopers

Threats for housing Threats for housing corporationscorporations


ConclusionsConclusions

Proven validity of Proven validity of most strategy most strategy conceptsconcepts

Revision of Ansoff’s Revision of Ansoff’s growth strategies in growth strategies in times of crisistimes of crisis

Path dependency in Path dependency in case of product case of product developmentdevelopment


Implications for further Implications for further researchresearch

Comparison with other Comparison with other types of real estate types of real estate companies companies

Relation between Relation between strategy types and strategy types and success indicatorssuccess indicators

International International comparisoncomparison

Impact of financial crisis Impact of financial crisis on company strategieson company strategies

Questions ?Questions ?

growth strategies of real estate companies in a mature market

Documents

real estate organizations

strategy types

choice of strategy

housing corporationssample

clear differences

times of crisispath

random2 x

company strategiesquestions