TITLE - TO DEVELOP AN ALTERNATIVE
SERVICE STRATEGY TO DIFFERENTIATE ARTHUR REAL ESTATE COMPANY (AREC) IN THE
(SLOVAK) MARKET
Table
of Contents
1.
Introduction
After
the turbulent phase in 2009, the real estate industry is experiencing
revitalization and business growth in the sector is witnessing an upward curve.
AREC
is well-established real estate firm and is one of the top five companies
operating in Slovakia. The company is well known among clients and has creative
frontline employees that have helped it to gain foothold in the market
(www.arec.sk).
AREC pursues the general practice of real
estate industry by offering only essential product range and ordinary levels of
customer services.
In
the real estate market in Slovak, there has emerged a number of small and
medium sized companies that are offering similar services to their clients.
These companies have increased the competition levels and established firms
like AREC are facing considerable threat from them. To sustain in this
competitive environment and achieve higher profitability, the company needs to
adopt a strategy that can differentiate its offerings. However, after the tough
market conditions in 2009, profits had declined and this consequently
constricted the scope for development of innovative strategies and policies in
marketing, product development, investment in customer satisfaction, training
to employees etc. (www.narks.sk). Hence, this project was necessary, as it
provided the development of an alternative strategy that facilitated the
company with competitive advantage.
Porter
(1985) in his generic strategies model had stated that organizations need to
identify the strongest competitive forces relative to the industry and
strategies need to be focused upon these forces. In the real estate sector
attaining cost leadership is not a sustainable strategy as bargaining power of
buyers is high, and similar services from all real estate companies have
resulted in negligible switching costs for the buyers and has consequently
restricted the scope for maintaining cost leadership.
Hence,
AREC has to choose strategies so that it can compete on factors other than
price. Innovation in services, consulting and client support services, delivery
time and strengthening brand image are some aspects of a service based strategy
that can improve value to the customer and will safeguard profitability.
The
report primarily dealt with the implementation of quality customer service as
an alternative differentiation strategy by real estate firm AREC to gain
competitive advantage and increase profitability through enhanced customer
satisfaction.
The
real estate contributes to a significant part of economy of the country. The
Slovakia real estate sector has witnessed slow growth in past two years after
the economic crisis in 2009. The high rate of unemployment about 14% in April
2011 (Slovakia Real Estate Report Q3 2011, Business Monitor International,
2011) has introduced a huge number of new agents and real estate firms.
According to industry reports in the Bratislava district itself (one of the
smallest cities in Slovakia) of about 35 thousand people, there are more than
320 registered real estate firms (www.narks.sk).
This
has stagnated the real estate market in the country and supply has exceeded the
demand. The real estate sector in the country is garnering more negative
attention in the media owing to growing instances of frauds, issues with
commission rates and quality of service being criticized (reality.etrend.sk).
This report contributed policies that assisted the company to gain trust of the
customer through better customer satisfaction.
Past
research and surveys on the sector has also presented that in the real estate
business the customer perceptions and desires often do not align with the
services offered by the real estate firms (Guntermann and Smith, 1988; Pancake
1997; Haag, 2000).
In
the real estate industry, where products are tailored according to the customer
(Johnson, 1988) and customers are connected with the product development
constantly, the delivery of better service is highly complex. Further, the
clients are not fully aware of their purchase requirements in many cases when
they visit real estate agents. This implies Real estate companies have to be
prepared to face the indecisiveness and varied demands of the customers in
order to be successful in the industry (Sergeant and Frenkel, 2000). Typical
service and deficiency of information is now intolerable by the customers in
transactions of property and if we consider industries like Real estate, many
times it is the sole differentiating aspect (Parasuraman et al, 1985).
To
read more…….
Contact
us -
Writekraft
Research & Publications LLP
www.writekraft.com
OR
Call us @ +91- 7753818181, 9838033084
Or
email us: writekraftuk@gmail.com
No comments:
Post a Comment