For Essays Guru - MKT WK6

Dr.Victoria Hailey

October 22, 2018

Introduction

SmartHomes Corporation, headquartered in Central Florida, is a real estate investment organization focused on buying family housing units below the fair market value, refurbishing them as well as renting the facilities at the current market rates. Owned by Paul Scholes and Ryan Schubaker, the corporation specializes in fractional home ownership, in which buyers own a unit for between 7 days and 28 days in year for 99 years. Home owners can rent their units for income or loan out their units to friends or spend their holidays there for the number of days owned. Currently, the company is selling its facility known as “The One” located near Daytona Beach, with plans to expand into the neighboring states in the future.

Mission Statement

SmartHomes Corporation’s is to invest in quality tenants and properties. At SmartHomes, the owners are devoted to the business as demonstrated by their commitment to meticulous selection of property location and long-term buyers.

Goals

Short Term

· To increase SmartHomes’ market share by 10 percent in the next 1 year

This will be by measured by tracking down the total number of new users on the organization’s website and social media platforms

· To increase SmartHomes’ revenue by 10 percent in the next 1 year

This will be measure by an increase in the firm’s product adoption plus retention rate relative to the market trends

Long Term

· To increase the number of new homes by 10 percent in the next 5 years

This will be demonstrated by customer engagement rates

· To increase SmartHomes’ profitability by 20 percent in the next 5 years

This will be demonstrated by an increase in the firm’s profit margins relative to the industry’s performance

Environmental Analysis

The real estate industry, just like other industries, is prone to environmental factors including, flooding and other harsh climatic conditions. With regards to environmental factors, Florida is a poster child for the impacts of climate changes with various studies indicating that the sea level will rise by 5 feet above sea level by the end of the 21st century and other indicating that properties worth more than 23 billion United States dollars could be destroyed by 2050. As a result, many real estate investors are looking for higher grounds elsewhere in the State like the traditionally black neighborhoods of Liberty City as well as Little Haiti (Luscombe, 2017). These events are, without any doubt likely to affect SmartHomes business growth in the future and for this reason the company has plans to move into neighboring states in the future.

Competitive Analysis

Florida State is home to numerous real estate organizations with agents that compete against one another for the real estate market share. Some real estate companies have full service agents are not only well respected in the community, but also boast of many years of experience. Some of the top real estate companies in Florida are: Keyes Company, located in West Palm Beach; RE/Max Direct, Delray Beach and Boca Raton; and House Pro Realty, Lake Worth. Others are Marcus and Company Realty, Bradenton; Smith and Associates Real Estate, Saint Petersburg; Navy To Navy Homes, Jacksonville; and the Agency of Pensacola, Pensacola (Up Nest, 2017). While many of these companies are popular in the real estate industry, none of them offers factional home ownership which is SmartHomes Corporation’s niche market

Economic Analysis

From the economic perspective, experts assert that Florida is one of the leading states in the United States with a booming real estate market in the country following the recent recession. Like the United States economy, Florida’s economy is showing signs of recovering from the recent recessions and there are plans in place to help propel the state’s economic performance in the future. For instance, the Federal Railroad Administration, in 2011, increased the federal funding for the states’ high-speed rail by 800 million dollars to 2.05 billion dollars. The high-speed rail will definitely stimulate the states job market which is a major boost for real estate companies. The state of Florida is also home to aerospace industry, with more than 15,000 people working at the Kennedy Space Center. The annual wage of aerospace employees is nearly 52,000 United States dollars (Spiegel, 2010).

Political and Legal Analysis

There are many political factors which make the State of Florida a favorable place for real estate businesses to enter the market. These include favorable tax structure which aimed at attracting investors and new businesses. The government policies as well as competitive costs make it easy for an organization to plan for business growth and opportunity of making profits. Also, the States’ regulatory agencies provide less costly and quicker means of permitting processes for businesses while focusing on environmental standards. Moreover, Florida is one of the 9 states in the country without personal income taxes for its citizens. Florida is also one of the 22 states in the country with the right to work law in the country. This law allows workers to decide by themselves whether to join as well as support a union or not (Altius Directory, 2010).

Technological Analysis

Martinez (2010) finds that the real estate industry is subject to technological innovations, which affect the way organizations construct and supply houses to the consumers. The introduction of the Internet as well as the improvement in information communication technologies is credited with the facilitation and acceleration of information flow between producers and consumers. SmartHome’s “The One” facility offers up-to-date technology to home owners. Each room is installed with modem jacks and Ethernet ports for easy Internet accessibility. The owners have easy access to copy and facsimile machines located in each room. Also, each room has an emergency panic alert system that is connected to the local police department and the manager’s office.

Socio-cultural Analysis

Florida State has some of the most famous social aspects in the country, including Disney, Universal Studios and Daytona Beach, which may boost the real estate market in one way or another. Besides, there are other interesting attraction centers which attract many people to the state. One of the most common features is the Florida Everglades which is known for attracting biologists from different parts of the world. Tourism is the biggest source of income in the States as it accounts for about 25 percent of the entire state’s economy. There are at least 60 million people visiting Florida each year which generates about 57 billion dollars (Nu Wire, 2010). SmartHomes Corporation can take advantage of the booming tourism sector by providing affordable housing for tourists. With regards to population growth, Florida is among the fastest growing states in the country and this is expected to continue to the unforeseeable future. As many people continue to visit the state, some will love whatever it offers and plan to return more frequently or to relocate permanently (Proximity One, 2018).

SWOT and Needs Analysis

Strengths

The rental facility, “The One”, is not only affordable to many American and foreign tourists but is also located near a major tourist center Daytona Beach with easy accessibility to the beach. Secondly, “The One” is a state-of-the-art facility with various features including the spa, a helipad, 5 swimming pools, children care center, restaurant, bar, spacious rooms, 24 hour Internet connectivity, saunas and many more. The facility boasts of friendly customer service personnel and highly qualified chefs, waiters and other supportive staff who aim at ensuring that home owners can enjoy their holidays in a more relaxing and serene environment

Weaknesses

From an investors’ perspective, this may be a seasonal location, and this may affect the buyer’s confidence level. SmartHomes is a new business with no reputation in the market compared to more established real estate firms in the region. There is a higher probability that the company may lose scope of the business

Opportunity

Fractional homeownership is a new investment decision in the region and the Company can use this as an opportunity to market its new facility, “The One.” The facility is in the fastest growing region or county in the State of Florida. Moreover, it is easier to market the states real estate across the globe as it is one of the world’s most popular tourist destination areas.

Threat

There is increased competition from established real estate companies in the region. The possibility of natural disasters such as Tornados and Hurricanes can affect tourist activities in the region thereby affecting the real estate business. The Florida State government’s decision to increase regulations regarding foreign home owners can greatly affect SmartHomes business activities.

Table 1

SWOT Analysis

Note: Strengths, weaknesses, opportunities, and threats for SmartHomes Corporation.

Conclusion

In conclusion, SmartHomes Corporation intends to increase its market share as well revenue by 10 percent each in the next 1 year. In the long term, it seeks to increase the number of new homes by 10 percent and profitability by 20 percent, respectively, in the next 5 years. SmartHomes relies on its strengths particularly housing affordability and location to realize its short term and long-term goals. Also, the economic environment and social environment provide great hope toward realization of the organization’s goals.

References