MSN Real Estate: Company Analysis

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Table of Contents

Company overview
S.W.O.T analysis
References

Company overview

The real estate market is considered to be one of the most important of the United States economy. The fact that the last financial crisis has a strong component from this sector serves as an argument on this behalf. The company we are going to analyze, MSN Real Estate is an enterprise that is involved in numerous aspects of the industry. Primary experience and expertise is in the development of high-quality, lower cost living for students and professionals seeking the most up-to-date technologically advanced living environment. An area of intense training and attention is the importance of strong customer service. The first property purchased by the company is a 40-unit apartment building on the corner of Hilyard and 14th in Eugene.

It is relatively close to the University, so will be easily rented to capacity nine months out of the year. For the remaining three months, the price of rent will be reduced and we will aim to remain at 60% capacity (“Company Summary”, par. 1). MSN Real Estate will be created as a Limited Liability Corporation based out of Portland, Oregon. It will be owned by its principal investors, Shawn Menashe and Nathan Koach. Shawn Menashe is the acting CEO and holds a 40% stake in the company. Nathan Koach is the acting CFO and holds a 40% share of the company as well. The other 20% is held by silent investors. area of Portland, Oregon. This will be the heart of our company, with satellite locations in Beaverton and Eugene, Oregon. We are also installing an in-house Internet server and 24-hour answering service so that all customer or business communications are dealt with in an expedient and fluid manner. Within any living development with more than 32 units a representative of the company will be located (“Company Overview”, par. 4).

S.W.O.T analysis

Strength

The market segmentation and target groups that the company has is probably the most important strength factor. At this stage the company has three main target groups, the primary of which is of students of the University of Oregon. These group of potential customers have been growing at a fantastic rate of almost 7% per year rising the opportunities to 18,000 potential customers for the company (“Executive Summary”, par. 2). Mathematically the actual rate of growth means that in a decade or so the potential customer number will double in size. The second target group is the young professionals who are growing at a rate of 4% per year and the third target group are the administrative and academic staff of the university who have been growing at a rate of around 5% per year. As we can see the potential customer target groups for the business are it main strength. Combine this to the fact that the competition is offering poor quality units. Another strength factor is the management strategy of offering to this three target groups the necessary facilities for their work and study within the rent of the houses. And finally, another strength factor is the fact that they have been planning a cautious financial policy. The company has planned to have a financial growth mainly through cash flow and a high liquidity rate (“Financial Plan”, par. 1). This will allow the company to grow slowly, true, but to gain a market position of a cash cow and assure a steady growth even in difficult times.

Weaknesses

Well. The company has made projection that the targeted potential customer groups will have this rate of growth but this is something that can change rapidly. In times of crisis, as we see today, the enrolling of new students can halt due to financial difficulties and new faculty positions will subsequently go down. Also, until now the competition is not a problem but in the future it can be. Having a high liquidity rate of cash flow the company lacks is investments and it could take a while to make the necessary adjustments to catch up with the competition if necessary.

Opportunities

If the company takes the necessary marketing actions, and the necessary investments in adjusting the units for rent according to the necessities of the three categories it has targeted, than it has the opportunity to gain a comfortable market share and position. This position can allow it to expand its business, if other opportunities are presented.

Threats

The main threat for the business I have mentioned in the weakness section. By having since the beginning a high rate of cash flow it has not the possibility to make investments. It is true that at the moment competition seems not to be “dangerous” but in the future when some other competitor shows up the company will be “forced” to step up investments. This will be a little difficult since it has much of the cash “out” of the business and it will take some time. But this time can be important because it can be on the favor of competition and make the company lose some market share.

References

(2008). “MSN Real Estate”. Bplans Website. Web.

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