For example, “all companies operate in a macro environment shaped by influences [including threats] emanating from general economic conditions; population demographics; societal values and lifestyles; legislation and isolations; technology; and closer to home the industry and competitive environment in which the company operates (Thompson, Strickland, & Gamble, 201 0, p. 56). Companies have an inner and outer ring in their macro environment. Happenings in the outer or inner ring of their macro environment may occur rapidly or slowly, sometimes even without advanced knowledge or warning.However, the major forces and factors that can have the largest impact on shaping the strategy of a company will normally pertain to the company’s “immediate industry and competitive environment-?the actions of rival firms, buyer behavior, supplier related considerations, and so on” (Thompson, et al.
, 201 0, p. 57). All of the major influences and threats will be discussed below. This discussion will include how Sky Renovations Inc. (SIR) will respond to each threat to ensure that the impact on the business is kept at minimal.Economic Conditions Today’s economic conditions are a great advantage for SIR.
Because of the current foreclosure market, there is more property that is available to enable SIR to renovate, rent, and resale properties. There are so many different takes and types of foreclosures, including the pre- foreclosures, the auctions, and the real estate owned (ORE) properties, SIR will have no problem finding its market niche (Chaplin, 2004). Population Demographics The current population demographics show that there are many” baby boomers” that are in the process of retiring.Some of these “baby boomers” have been life-long tenants.
Some of these people will be first time home buyers and some will be in the process of purchasing another home, where a prior home may have been loss during the past economic turnover. “Demographics are not quite destiny but do exert a powerful influence on true housing demand” (Belles, 2009, p. 99). SIR will make sure that population demographics will be carefully considered in all operations and expansions within the company.Societal Values and Lifestyles Societal values and lifestyles will determine the very existence and expansion of SIR. The determination of how clients and customers choose to live will determine the profitability of the company. SIR must make sure that its core values, mission statements, and vision statements coincide with the society’s values and lifestyles for this specific era.
A strategic vision will point SIR in the desired direction, plan SARI’S strategic path, and form its organizational identity (Thompson, et al. , 2010).Legislation and Regulations SIR must be very sensitive to the legislation and regulations that will be surrounding the foreclosure and real estate markets. These laws and regulations will determine SARI’S competitive advantage over other companies entering the market. Since much of SARI’S business depends on its ability to buy property at a discount and sell or rent this property ATA discount or affordable price, SIR much stay abreast to and legislative and regulative hanged in regard to the real estate and renovations industry.Technology Technology is changing at such a rapid pace. SIR must keep the accurate, proper, up-dated computer equipment, and websites to make sure that SARI’S presence and availability is accessible to any client or potential clients. These technological up-dates must be done on a regular and consistence basis.
This will give SIR a physical and web presence on a local, national, and international level. The factors, issues, and occurrences that are found in a company’s industry and competitive environment should be considered the strongest of the external threats. However, the factors and forces in a company’s macro- environment having the biggest strategy-shaping impact typically pertain to the company’s immediate industry and competitive environment-the actions of rivals firms, buyer behavior, supplier-related conditions, and so on” (Thompson, et al. , 2010, p. 57). Environmental scanning is very important to the health and success of a business. This is especially true of SIR .
Since SIR is dealing a lot with the foreclosure and ORE markets, environmental scanning will be needed to keep the company abreast of constant and volatile changes in this market.SIR will constantly need to use this process to be able to keep up with changes in different variations in their macro-environment. Battened, & Debris states that: Environmental scanning is the process of dealing with the measurement, projection and evaluation of changes in the different environment variables (Loadable, 2006).
Most of the organization[s] today are developing different types of strategies that will sustain them in their business environment, and this can only be achieved through the analysis of the environment. Opportunity and Threats). Loadable (2006) stated some importance to environmental scanning as follows: * the environment is dynamic in nature, therefore scanning is necessary to keep abreast of change; * it reveals the elements or factors that constitute threats and opportunity to the overall objectives of the organization; * competitors activities can be monitored and appropriate strategies put in place to check market incursion; * it gives necessary inputs to the formulation and implementation of potent marketing strategies. Battened & Debris, 201 2, p. 29). There are many factors in the external environment of a company that can rate serious threats to the company’s profitability, well-being, and prospects of growth. As stated by Thompson, et al.
Threats can stem from the emergence of cheaper or better technologies, rivals’ introduction of new or improved products, the entry of lower-cost foreign competitors into a company’s market stronghold, new regulations that are more burdensome to a company that to its competitors, vulnerability to a rise in interest rates, the potential of hostile takeover, unfavorable demographic shifts, adverse changes in foreign exchange rates, political upheaval in a foreign country where the company has facilities, and he like.External threats may pose no more than a moderate degree of adversity (all companies confront some threatening elements in the course of doing business), or they may be so imposing as to make a company’s situation and outlook quite tenuous. On rare occasions, market shocks can give birth to a sudden-death threat that throws a company into a battle to survive. (Thompson, et al. , 201 0, p. 113). However companies must not only focus on the external threats, because there can be very serious internal threats within a company.According to Maracas: [fraud perpetrated against an organization can originate from within internal fraud) and includes various methods of employee theft and espionage.
(Maracas, Summer 2011, Para # 2). The term “pashing’ was coined to describe an emerging form of fraud that is harming both businesses and consumers. Data thieves create a replica of an existing Web page to fool a user into submitting personal, financial or password data that can then be used for illicit purposes. (Maracas, Summer 2011, Para #3).As organizations batten down the hatches by limiting access to their networks and educating their employees about releasing critical information, they shouldn’t overlook the obvious. Most companies allow a cleaning agency into their building after hours. These individuals may have full, unsupervised access to the entire office.
The records left on desks, in unlocked recycle bins, logged on computers, etc. , provide a gold mine to identity thieves. By exposing your proprietary information or your clients’ records to data thieves within your own office, you stand to lose both financially and reputation-wise.
Maracas, Summer 2011, Para # 9-10). Sky Renovations Inc. ‘s (SIR) major external threat will be easy entry into the real estate market by other companies. With the real estate economy now eyeing so easily assessable, because of the current foreclosure market, anyone with a hammer and nails can declare themselves a landlord. Many current tenants see themselves as only being able to rent. Many tenants feel they will never be able to afford to purchase their own home.
That feeling makes tenants very vulnerable to the people or companies that hold their leases.As Williams stated: The nearly unparalleled levels of foreclosures resulting from the current real estate market meltdown reveal a significant gap in laws that address residential tenant rights. (Williams, 2010, p. 1 185) The American dream of fame, prosperity, and home ownership has been a part of the American landscape for decades. It is generally accepted that we may not all become rich or famous, but owning a home is the exception. Most Americans believe that homeownership is not only possible, but likely. However, for some, the American dream may never become reality.For these people, the American dream may be delayed if not entirely misplaced during their lifetimes.
The attainment of a home is highly unlikely to the destitute; they are destined to be lifelong tenants. Thus, their rental property is their “home” for al intents and purposes. Most would agree that times have changed since the real estate market heyday. More people are renting instead of buying, causing the rental market to increase exponentially. Today, because of the market downturn, there is a credit crunch.It is simply more difficult to qualify for loan products in order to purchase a home. (Williams, 2010, p.
1189). SIR understands the hopelessness that many people feel in this situation. SIR intends to bring back integrity and add flexibility to home purchases, starting on a local level. These purchases may even start out as rental properties. Even though SIR has focused on its main external threats, SIR is not oblivious to its internal threats. SIR knows that its employees can be its main internal threat and has decided to use extensive background checks before hiring to employees.SIR will insure that SARI’S mission and vision statements are constantly being relayed and taught to its employees. Sir will also constantly demand integrity and ethics when dealing with all of its potential customers and/or clients.
Question # 2- Based on the environmental scan, evaluate the company’s strengths and evaluate how the company can average these strengths so as to yield a competitive advantage in the marketplace. SARI’S major strengths will be found in the present economy in conjunction with the foreclosure and rental markets.SIR must also focus on its integrity, ethics, respect, and compassion in dealing with our clients. The American homeowner, or the potential American homeowner, has lost faith in the current American real estate market, as well as in rental agents.
SIR will put this faith back, as well as the potential to own their own property without the concept of renting forever. The attainment of a home is highly unlikely to the estimate; they are destined to be lifelong tenants. Thus, their rental property is their “home” for all intents and purposes. (Williams, 2010, p. 1 189).
SIR will change this vision of home ownership. SARI’S goal is to destroy and change this concept for many American families. SIR is not in the real estate game to become another “slum lord. ” There are too many of them already. SIR will not rent any properties that the company owners would not see as fit to live in themselves. SIR will leverage their company’s strengths and values, because of the inconsistencies and the fraud hat has developed during these critical housing times, to allow people to once again be proud of their homes, whether they are renting or purchasing them.
As stated in the real estate section Of the Seattle Times, C]loud today’s seductive conditions in the housing market -? severely marked-down prices, record low interest rates and hundreds of thousands of foreclosures wait Eng to be resold be breeding new generations of the very practices that led to the crash? In an ironic twist, there are signs that the wreckage left over from the housing bust may be reigniting dubious real- estate schemes and fraud. Harley, 2011, Para # 1-2). This shows how fraudulent the real estate industry still is and why there is still so much distrust among tenants.Question # 3- Identify a significant competitor for the company and assess how your company will compete against it to maximize profits and create value for stakeholders. The significant competitor in the Memphis, TN area will be Revived Reality and Property Management. Revived is buying properties all over town, but their only focus is in rental properties.
And as SIR viewed the comments Of some Of their prior and current tenants, there were very negative comments. Revived does not focus on the fact that their current tenants may have once been home owners, before the real estate market bottomed out, and may desire to be homeowners again.SIR realizes that in the wake of these serious times, everyone deserves a second or even third chance of being a home owner. This fact is not only good for the potential homeowner, but for the community as well. SIR realized that its most valued stakeholder is their clients. Question # 4- Assume that the U. S. Economy is in a state of decline requiring modifications to the strategy.
Evaluate how the strategy should be modified. Provide a justification of how this will help the company continue to compete in the marketplace. The reality is that the U. S. Economy is in a state of decline with bringing home ownership back to the general public.
SARI’S strategy is to change the banking industry being the main focus in home ownership and developing alternative solutions that will allow people to once again become home owners. The banking industry has become extremely cautious in lending money to potential home buyers. Most people now feel that the only way to purchase a home is to be in a financial state to pay cash and to have perfect credit.
SIR acknowledges that property owners rightly deserve to be paid for their properties.However, there is a need to justify the mark-up on these properties, instead of just greed. Also, the US. Government or state government needs more of a controlling hand on the percentage that properties can be marked up within a realistic amount.
This needs to be done at least until the real estate market stabilizes itself. Also, there needs to be a shorter limitation on the time that tax properties can be repurchased from investors. Question # 5- Evaluate how global competition may impact the business strategy and determine how the company should respond. SIR is starting on a local level.But after our concept on no-bank financing is developed and perfected, SIR will start to franchise its ideas and services.
According to Google’s free-advice legal column, A franchise idea is a great way to expand your business, as it is an opportunity to get your idea out there without having to assume the risks and come up with the capital on your own. When you franchise a business, the franchisee pays the franchiser a fee up front. This fee generally covers the right to operate a business under the franchise trademark as well as operation training for the business,