Wednesday, October 28, 2009

Real estate strategy and competitive strategy

Posted by Lindsey Connell

An organization’s real estate decisions can greatly benefit and support the company’s overall business objectives. Some organizations consider how a specific real estate transaction relates to their real estate strategy but many do not even have a real estate strategy. By not having this strategy, many companies result in miscalculations and have a difficult time judging the appropriateness of a specific real estate plan. These companies may also go into a real estate transaction without a strategy.
A standardization real estate strategy, for example, is an appropriate one to have within a company because it supports all three competitive strategies: low cost, differentiation, and focus. A value-based real estate strategy supports the competitive strategies of differentiation and differentiation-focus. Incremental real estate strategies, on the other hand, are ambiguous and do not support any of these competitive strategies. If a business were to choose this strategy even though they had a competitive strategy of lowest cost, for example, then their competitive strategy and real estate ones would not be supporting one another to their full potential. A company must first determine their competitive strategy and from there they can make their real estate one. If these two strategies do not match up then the company will not be able to be successful, but with both strategies complimenting one another, it can give the company a competitive edge.

1 comment:

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