Daft.Ie Business Position

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Analyse Daft’s current (2007) business position drawing on any models or theories that you consider appropriate

Hamal and Prahalad began a debate which centres on a practise known as ‘strategic intent’. They argue that in order to achieve success an organisation must employ strategic intent. “Companies that have risen to global leadership over the past 20 years invariably began with ambitions that were out of all proportion to their resources and capabilities. But they created an obsession with winning at all levels of the organisation and then sustained that obsession over the 10 to 20 year quest for global leadership. We term this obsession “strategic intent””. (Hamel, 2005). Strategic intent may be applied to Daft.ie as the Fallon brothers (Eamonn and Brian) began their company in 1997 with a very basic website that had only two offerings: house sharing and rental. In the first two years of the company’s existence it was considered to be a small niche player with 5,000 hits per month on the company website. It now has 50,000 registered users and offers a wide range of services to its customers. (Article).

Strategic intent conveys a sense of stretching your resources and capabilities, and compete in innovative ways. Hamal and Prahalad argue that Western companies trimmed their ambitions to match their resources instead of trying to achieve seemingly impossible goals. This is how Daft.ie have risen to become “not only Ireland’s largest property website, but also the busiest website”. (Article). Independent auditors confirmed in May 2006 that Daft.ie received requests for over 27 million pages of information. As the business grew Daft.ie had to compete in innovative ways to satisfy its original audience. This led to the development of the company being a website based on renting and house sharing to one focused on sales, short term commercial and overseas properties. Daft.ie also stretched its capabilities, in-keeping with Hamal and Prahalad’s theory, to diverse from property to financial aspects such as a mortgage centre which allows users to apply online for a mortgage. The company went one step further by offering parking spaces for rental.

One of the basic principles behind strategic intent is the idea that most managers embrace the concept of winning over time. This can be applied to Daft.ie as they aim to grow organically by building a community of loyal users who would promote the company by word-of-mouth. This is also consistent with the view argued by Hamal and Prahalad that strategic intent is stable over time.

Some of Daft’s strategies are similar to that of Ansoff’s Growth Matrix. The matrix suggests that a business’ attempts to grow depending on whether it markets new/existing products in new/existing markets. This can be done using; Market Penetration, Market Development, Product Development and Diversification. Looking at Daft’s current 2007 position Market Development and Product Development seem to be part of Daft’s overall business strategy.

Product Development aims to introduce new products into existing markets. (website). The company has created numerous modifications to their website such as a mortgage centre for home buyers and parking spaces for rental which is a unique application on their website. Daft understand that their customers have remained loyal and they have placed themselves in a strong position in the marketplace through their house sales element they have been offering since 2003, customers consistently return to daft as they guarantee an excellent range of property for all segments of the market.

Market Development seeks to sell the companies existing products into new markets(website). This can clearly be seen as recently they have expanded their products into short-term commercial and overseas properties. Since the company is the busiest website in Ireland, this strategy will undoubtedly be availed of by their Irish customers and also create business linkages...
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