Saturday, 17 June 2017

TITLE - TO DEVELOP AN ALTERNATIVE SERVICE STRATEGY TO DIFFERENTIATE ARTHUR REAL ESTATE COMPANY (AREC) IN THE (SLOVAK) MARKET

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…….

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