Strategic Planning for Real Estate Companies

By Hewlett, Charles A. | Journal of Property Management, January-February 1999 | Go to article overview
Save to active project

Strategic Planning for Real Estate Companies


Hewlett, Charles A., Journal of Property Management


Strategic planning helps a company decide what it wants to be when it grows up.

Broadly defined, strategic planning shows a company where it is going and how it plans to get there. Especially at a time when the real estate industry is changing and consolidating so rapidly, it is important to define company goals in both absolute and relative terms and to tie goals to specific tactics. Without this important step, strategic planning becomes only an empty exercise that does not reach any goal.

On the other hand, a company with a well-defined strategic plan and business strategy has the distinct advantage of having clearly articulated common direction for the company. For publicly traded companies, this clear focus garners a premium from analysts and shareholders. For all real estate companies, a strategic plan and the strategic planning process itself offers a competitive edge and enables the company to measure achievements against expectations.

Strategy and Business Plans

The outcome of the strategy planning process is a strategy plan document, designed to identify the goals and objectives of a company and the strategies that will be used to reach them. The intent of the strategy plan is to identify guiding principles of an organization that will pass the test of time and reflect a point of view regarding future business operations.

The starting point of a strategy plan is the mission statement which is the organization's fundamental reason for existence and serves as a perpetual guiding star on the horizon.

Core values support the mission statement and are essential and enduring tenets, not to be compromised for financial gain or short-term expediency. Strategies are the means to accomplish the company's goals, providing a framework for establishing the actions or tactics that will be used on a day-to-day basis.

The Strategic Process

The strategic planning process consists of four basic steps:

* Situation Analysis

* Strategy Planning

* Implementation

* Assessment

Situation analysis. Before determining a strategic road map for a business, it is vital to understand where the business is now in terms of its own competencies, in relation to competitors, and in relation to its industry and the economy as a whole.

Begin by assessing the company. Does the description of the company's current mission actually correspond with what the company does and how it operates? Does it measure up to its own standards?

What are the company's greatest assets and strongest core competencies? A company that does not have clearly definable core competencies is probably doomed to play a marginal role in the industry.

How is the company organized and how are personnel compensated? Does the mix of employees and their skills correspond to the business needs of the organization? What are the relative profitabilities of the company's activities?

Most companies know if they are profitable, but they do not always know which specific activities produced what percentage of that profit. If the company buys land, develops apartments, and then manages those apartments, where is more of the profitability produced. If most of the profits come from one area, it may be prudent to consider limiting your activity to that area, or begin to work toward improving efficiencies and profits in less profitable areas.

Next, assess the competition. What advantages and skills do your competitors possess?

How do they measure up in terms of profitability and market penetration?

What trends do you see emerging among competitors?

In assessing competitors, it is important to think locally, regionally, nationally, and even internationally.

Assess the industry and the economy. Understanding the current condition of the real estate industry and where it is going are critically important to successful strategic planning.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Strategic Planning for Real Estate Companies
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.