Assignment SWOT Analysis Essay
The business plan that I selected to perform a SWOT analysis on is the Start-Up Real Estate Business Plan. Golden Valley Real Estate, LLC (GVRE) is a start-up company located in the Tucson, AZ area and has designed a business model to provide full service real estate, mortgage, and title needs as well as a few ancillary services to a growing retirement demographic in the region. The founder of the company is Mrs. Susan Egan. Mrs. Egan possesses a significant and successful background in the real estate industry, having worked for RE/MAX Real Estate Company for 23 years.
Mrs. Egan, a recent retiree herself, believes that she is well suited to handle the needs of this growing population that carries with it significant income levels because she falls within this same demographic and can understand and appeal to the needs of these potential clients much better than her competitors. When considering the Strengths and Weaknesses of the business model, I have determined that the strengths of the plan far outweigh the weaknesses identified.
Mrs. Egan has proven through her successful track record in the real estate industry that she has adequate experience necessary to lead and develop this new venture. As you can see from her business plan, she have performed extensive research on this market and has identified a specialized segment that not only has great need for these services currently, but it is well documented that this demographic will grow substantially over the next couple decades, providing long term stability for this proposed business.
Mrs. Egan has accurately identified a void in the marketplace and is poised to provide valuable services to a growing demographic. She has correctly identified an increasing need to provide a “One Stop Shop” for these people who do not want to deal with all the various aspects of purchasing a new home. If GVRE can perform at the customer satisfaction levels that they are hoping to achieve, then they will gain the confidence of these people and they will be more than willing to use their collective services to alleviate the stress of such a huge buying decision.
This should also help them as they incorporate referral-marketing programs into their model. The current marketing program fails to provide much detail on how these resources will be utilized and seem to be mainstream methods. While this is a good start, I would highly recommend developing deeper levels of detail in the marketing plan and researching new methods of advertising to this demographic.
As long as the invested assets identified are proven to be real, there should be sufficient capital invested in the company to maintain the costs of overhead and keep the company solvent during this start up period. Due to the minimal need of human resources and direct costs, projections of early recognized profits should not be difficult to realize. This is all based on the understanding that the exclusive contract with Quadrant Homes is legitimate and not a short-term agreement.
This contract should be carefully scrutinized for clarification and accuracy. There is, however, a significant failure in this business plan to clearly identify the actual business systems that will be needed to coordinate the efforts of the company to provide these various services. I believe a critical aspect to the success of the company will be their ability to coordinate and integrate the various services that are being bundled together to create efficiency and value to the end-user.
I would like to see how these individually outsourced partners will work cohesively within your organization to provide the ultimate benefit. I believe it is attainable, but there are no details on how this will be effectively managed. When considering the Opportunities and Threats to this business plan, I see an equal amount of risk versus reward. I believe that the business model will capture an increasingly growing market that has the financial wherewithal to pay for these much needed services.
I believe that the business model would allow GVRE to expand into other demographic niches once they have established themselves as being proficient in their current role. There is no reason why this same model couldn’t expand beyond the retirement age demographic should the need or want arise. The company has done a good job at identifying their major competition but has failed to develop a plan to counter those who might enter the market based on their success. While I do not believe this is critical at this point, there should be some significant thought given to these potential threats.
The company must recognize (and it has made brief mention of it) to the increasing competition in the real estate industry and the company needs to put in place a method of competitive research to be prepared for the ever-changing real estate industry. Rivals will be able to quickly imitate this business model and so the success of the company will hinge on its ability to lock clients into long-term contracts and then ensure they provide a level of service that will allow them to achieve their goal of a 95% customer satisfaction rate.
The overall business model has the potential for great success, barring a catastrophic crash in the real estate industry. I believe there are competent people at the helm of this ship who have the expertise to predict changes in the market and make necessary adjustments. There are, however, a few areas of the business plan that need some additional time and attention. As these concerns are accurately addressed, I am confident this company will find success in the marketplace.