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Course name: Generic MBA

Subject name: Strategic Management

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No. of pages: 13

Word count: 2269

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 ASSESSMENT SHEET
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Title: Strategic Management

Assignment Topic:

You are required to perform strategic planning for your organisation or one you are familiar
with in your country or region and:

 Develop a vision statement, a mission statement and a statement of values, and

explain their appropriateness.
 Undertake an internal analysis of the organisation and an analysis of its external
environment, using appropriate strategic management tools.
 Craft strategies and explain their appropriateness.

You do not need to develop implementation processes. But you should mention the critical
importance of implementation, execution and evaluation of the strategies you come up with
for this assignment.

Word Count:

2269 (plus figure 1)

Executive Summary:

Being strategic really means being clear about the organization's objectives, having an
awareness of the organization's resources, and making both into a responsive and dynamic
environment.

This report will show how a change in a assessment model can have a major impact on the
strategic thinking of an organisation using three key requirements: 1. having a definite
purpose be in mind; 2. An understanding of the environment and forces that affect or impede
the fulfilment of that purpose; and then being able to create an effective responses to those
forces.

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Table of Contents:

1. Introduction.......................................................................................................................5

2. Overview of Raine & Horne SA Pty Limited...................................................................5

3. Vision Statement...............................................................................................................7

a. Development of the Vision Statement .................................................................7

4. Mission Statement ............................................................................................................8

a. Appropriateness of Statement to RHSA...............................................................9

5. Statement of Values...........................................................................................................9

a. Appropriateness of this statement for RHSA.......................................................9

6. Analysis of Raine & Horne SA Pty Ltd..........................................................................10

7. Strategic Recommendations............................................................................................10

8. Conclusion.......................................................................................................................11

References .............................................................................................................................12

Appendices List.....................................................................................................................13

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1. INTRODUCTION

Strategic management at its core is a management tool used to determine an organisation's

vision, mission, core values, goals, objectives, roles, etc

This report provides an overview and critical analysis of Raine & Horne South Australia Pty
Ltd (RHSA) taken from an analysis of past surveys of franchisees within the group, revision
of the past business plan models and interviews with current franchisees, staff and real estate
industry leaders.

This information gathering process raised questions that helped enabled our research to
observe past and present experiences, test assumptions, gather valuable information about the
current situation as seen from within the organisation and provided guidance to determine and
anticipate the future environment.

Thompson et al. (2014 pg 4) state “A company’s strategy is its action plan for outperforming
its competitors and achieving superior profitability” which when applied to the business
model of RHSA (refer Section 2 of this report for a detail description of the RHSA’s
operational structure) form only a portion of its requirements, the requirement for a strategy
that looked wider than this concept was better illustrated by the AIB, Topic 1Strategy and
Strategic Management: an overview (2014) slide 6 where Rob Jano’s interpretation of another
definition where he states:

Strategy is the direction and scope of an organisation over the long term, which
achieves advantage in a changing environment through its configuration of resources
and competences with the aim of fulfilling stakeholder expectations.

RHSA, as a master franchise and following the results derived from the research undertaken,
this report will argue it is a combination of these definitions that must be used to ensure the
success of any strategy RHSA undertakes.

2. OVERVIEW OF RAINE & HORNE (S.A.) PTY LIMITED (RHSA)

RHSA is owned by the directors Christopher and Sue Weston who opened the doors of their
first a real estate office in Oakbank in 1980.

Within the next five years they had three offices located at Oakbank, Birdwood & Mount
Barker. By the late 1980’s Weston Properties consisted of 9 offices and through the use of a
franchising model by 1996 Weston Properties had grown to consist of 35 offices (the majority
independently owned and operated.

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Due to this rapid growth, Raine & Horne Pty Ltd, a major international real estate franchise
approached the Weston’s and in August 1996 they were offered the opportunity to operate
under a master franchise Licence Agreement (refer Appendix A) between Raine & Horne
(Holdings) Pty Limited and the newly established Raine & Horne (S.A.) Pty Ltd.

Under the Licence Agreement RHSA operates independently to the national body but is
represented on the board of Raine & Horne (Holdings) Pty Limited by Chris Weston and the
Chief Executive Officer of RHSA, Michael McDonald.

This operational independence allows RHSA total control over the stability of the business of
RHSA itself and also responsible for the overall growth of the South Australian network and
its franchisees.

Figure 1 – Organisational Structure of Raine & Horne SA

Figure 1 highlights the organisational style of RHSA and its relationship to its franchisees. It
is due to this structure why a combination of the previous definitions of a strategy must be
used as the success and profitability of RHSA itself relies on the success of its franchisees
(A.K.A. RHSA Customers) which reply on members of the public using their services.

It is also important to note, that RHSA not only has to service it’s existing franchisees
(A.K.A. RHSA Customers) but it must also have a vision that encourages new customers (i.e.
other real estate offices) to be attracted to RHSA and encourage them to become part of our
network, which directly aids the growth of RHSA.

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3. VISION STATEMENT

Raine & Horne S.A. empower our team to be recognised as marketplace leaders through
innovation, reputation and results.

3A. DEVELOPMENT OF THE VISION STATEMENT

The vision statement for RHSA must not only inspire and motive the members of the RHSA
corporate team it must extend and give a clear vision of where Raine & Horne in South
Australia will be, although the national body has a vision statement according to the article
‘Animated ampersand aims to revitalize 130-year-old Raine & Horne brand’ (2013)
which talk to part of the nation vision statement aims to “embraces positive partnerships and
focus on the customer”.

This corporate approach is aimed directly at growth of the network, not the customer (in
essence the Franchisee), the “head office” approach to a business strategy is out of date,
looking at ‘Crafting Strategy That Measures Up’ Ahenkora (2010), the ten commandments
that serve as useful guides for developing sound strategies where he states:

1. Place top priority on crafting and executing strategic moves that enhance the
company’s position for the long term

2. Be prompt in adapting to changing market conditions, unmet customer needs,

buyer wishes for something better, emerging technological alternatives, and new
initiatives of competitors

3. Invest in creating a sustainable competitive advantage

4. Avoid strategies capable of succeeding only in the most optimistic circumstances

5. Don’t underestimate the reactions and the commitment of rival firms

6. Consider that attacking competitive weakness is usually more profitable and

less risky than attacking competitive strength

7. Be judicious in cutting prices without an established cost advantage

8. Strive to open up very meaningful gaps in quality or service or

performance features when pursuing a differentiation strategy

9. Avoid ‘stuck in the middle’ strategies that represent compromise between

lower costs and greater differentiation and between broad and narrow market appeal

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 10. Be aware that aggressive moves to wrest market share away from rivals often
provoke retaliation in the form of a marketing ‘arms race’ or price war- to the
detriment of everyone’s profits.

The RHSA network group maintain a major presence in the real estate industry, and equally
as important to the group is a clearly defined sense of professionalism and innovation.

Today the SA network has a diverse input of experience and wisdom which is so important
for the intelligent and professional conduct of the business. There is also a strong healthy
gender mix and a an upcoming strong representation of young franchisee proprietors,
salespeople, property managers and administrative office staff, which of course, introduces
zest and vitality into the RHSA network which the group research showed was the very
essence of our secure future.

The decision to make the RHSA network vision statement talk to empowering the group,
which talks to the effect of investing in our people, a commitment to build the team and
commitment of growth both for the team and the network which continues to confirm to both
Ahenkora (2010) rules and one of the key wording statements eluded to by Thompson (2014)
where they talk to the do’s and don’ts especially allowing for the phase ‘Have some wiggle
room’.

Real estate remains a highly evolving industry where new technologies are constantly having
a major impact in the operation of a real estate company. This ongoing change and the speed
of which new technologies are being introduced as discussed by Drnevich & Croson
(2013) mean that RHSA must take the approach that all competitors have the opportunity of
developing a new system and RHSA must ensure the response time is minimised whilst also
being able to work to developing its own new innovations.

4. MISSION STATEMENT

Raine & Horne Real Estate SA is among the best in Australia in terms of, customer
satisfaction, service and value. We encourage a culture where our team flourish and are
provided the opportunity to achieve their fullest potential whilst exceeding our customers’
expectations.

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4A. APPROPRIATENESS OF STATEMENT TO RHSA

The concept and idea of ensuring great ‘on the job’ leadership development, Bigler &
Williams (2013) pp. 95-111 which talks to the fundamentals of developing a leadership
development framework which a model such as RHSA, where the individual franchisee have
a much higher ‘hands on’ role in the day to day running of their businesses means that RHSA
uses all endeavours to ensure they are clear about the direction that RHSA wishes to take
them and their business, means that the day to day mission statement for an office must
ensure the correct execution of the traits and values that the group has agreed upon.

This is further emphasised when you apply a company’s value chain as demonstrated by
Thompson et al. (2014 pg 98) where in this relationship both RHSA and each individual
company (as a franchisee) are both responsible for delivering the complete value chain
however both cross over at many levels. RHSA must provide enough for the franchisee to
engage in their operations, sales and marketing and ability to provide a service so that the
franchisee returns a profit margin which then feeds RHSA profit margin. This critical cross
over is at the heart of the franchise model concept therefore deliverability is one of the core
components of RHSA.

5. STATEMENT OF VALUES

The new statement of values for RHSA has been summarised to one word:

“Implementation”

5A. APPROPRIATENESS OF THIS STATEMENT FOR RHSA

The surveys and the semi structured interviews undertaken as part of the this report (refer
annexure B) have highlighted that a lack of corporate support as the number one issue for
most franchisees and as discussed in the article Agents of Change (2012), the essence of what
a franchisee is looking for is not the business structure. It is aid in the areas where they do not
have the relevant skill sets.

Real estate is full of what Stephen Covey refers to constantly in his book the 7 Habits of
Highly Effective People” , a technician who decided to open a business. They are now
responsible for a lot of items they are not skilled at and with technology rising as fast as it is,
they are getting caught further and further behind. This is the rationalisation behind RHSA
single vision for implementation. Get the “technician”, in this instant, a high performing
salesperson, out from behind their computer and email and get them where they are of value,

9
face to face with clients. RHSA vision is to establish all the extra skills as a value add service
i.e. integration of social media, database management, systems building, etc which are not
typically the strengths of a sales person, but can be managed off site and this is where
employing a Information Technology specialist at head office has become part of this system,
rather than the agent worrying about something not being able to be fixed the call and RHSA
take care of it and they go out and do what they do best, therefore ensuring cash flow back to
RHSA.

6. ANALYSIS OF RAINE & HORNE SA PTY LTD

Originally RHSA undertook a SWOT analysis of its operations (refer Annexure C), however
after further investigation the PESTEL model was determined to be a far better option as it
enabled RHSA to look at areas that would also have an effect on its franchisees.

The PESTEL of analysis model allows for targeted implementation between all aspect of the
group.

7. STRATEGIC RECOMMENDATIONS

The recommendation which RHSA are currently are undertaking can be summaries using the
above PESTEL model as set out by Thompson et al. (2014 pg 48 Table 3.1), an example of
the analysis currently being undertaken are highlighted below in Table 2.

Political Factors The recent election caused a “lull” in the market where potential buyers
held off due to promises made during the election process as they
would have an effect on purchasing properties, i.e. stamp duty rebates,
taxes, etc.

Economic The is a large a large amount of uncertainty that is coming from the
Conditions manufacturing sector which is putting some doubt into purchasers
minds and making them hold off.

Sociocultural This varies greatly across the state so need to be addressed from an
Forces individual office aspect.

Technological Technology is in a constant state of change especially in the areas of

Factors Search Engine Optimisation and Social Media, two core areas that have
had a major impact on the real estate market with the on-going demise
of traditional press advertising and therefore the reach of a ‘Brand’ is

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 being greatly influenced by these areas.

There is also the strain of the use of technology with an aging

population. The franchisees who are set in their ways and are no
embracing these new mediums have to be address quickly.

Environmental These areas typically only have an impact on RHSA’s regional offices,
Factors this area have been agreed as being outside the control of RHSA.

Legal and The legal factors recently have had a major impact on our industry and
Regulatory Factors have to be addressed. Two pieces of legislation, the Land Agents Act
1994 (and regulations) and the Residential Tenancies Act 1995
(Annexures D & E) have both undergone major reforms in the past five
months. This has influenced many consumer habits.

RHSA is still undergoing investigations into these areas and the PESTEL model of scrutiny
has been highlighted as the best method to analysis the ongoing market conditions.

8. CONCULSION

Many steps have been taken to ensure the ongoing success of RHSA.

A new model of business analysis based on the PESTEL has highlighted where many
competitive pressures are rising and new steps have been able to be identified due to this
method.

This method along with the ‘implementation’ value has given new life to RHSA head office
and as part of the overall culture of the company this clearer direction has been proven at
recent franchisee meetings as a highly effective method of setting the new vision for Raine &
Horne South Australia.

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REFERENCES

‘Agents of Change’, 14 August 2012, viewed 11 April 2014,

http://www.rebonline.com.au/features/technology/5385-cover-story-agents-of-
change

Ahenkora, K,2010,’Crafting Strategy That Measures Up’, International Journal of

Business and Management , Vol. 6, No. 10; October 2011 Page 279

‘Animated ampersand aims to revitalise 130-year-old Raine & Horne brand’, 2013,
viewed 10 April 2014, http://mumbrella.com.au/animated-ampersand-revives-raine-
horne-century-old-brand-162245

Australian Institute of Business (AIB), 2014, Topic 1 Strategy and Strategic

Management: An overview (2014) AIB, Adelaide

Bigler, W & Williams, F, World Class Strategy Execution Through ‘On the job’
leadership development, Business Studies Journal, Volume 5, Number 1, 2013, Pages
95-111

Covey S, 1989, The 7 Habits of Highly Effective People, Free Press, United States

Drnevich P, Croson D. INFORMATION TECHNOLOGY AND BUSINESS-LEVEL STRATEGY:

TOWARD AN INTEGRATED THEORETICAL PERSPECTIVE. MIS Quarterly [serial online].
June 2013;37(2):483-509. Available from: Business Source Complete, Ipswich, MA.
Accessed April 12, 2014.

Thompson, A, Peteraf, M, Strickland, A, Gamble, J 2014,Crafting and Executing

Strategy The Quest for Competitive Advantage19th Edition, McGraw-Hill/Irwin
Publications, New York.

Ibid, Page 22 Table 2.1

Ibid, Page 98-99 including Figure 4.3
Ibid, Page 48 Table 3.1

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APPENDICES

A. Licence Agreement between Raine & Horne (Holdings) Pty Ltd & Raine & Horne
S.A. Pty (Please Note: Item not attached due to confidentiality, but is available
upon signing of a confidentiality agreement)
** Student note: I am aware that failure to attach a mentioned appendix does
conflict with the essence of referring to it in this essay, however due to its
sensitive nature I have chosen to take this action.

B. Questionnaire surveys of Franchisees

C. SWOT Analysis of RHSA

D. Land Agents Act 1994 (and regulations)

E. Residential Tenancies Act 1995

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