Strength And Weekness

Topics: Real estate, Estate agent, Real property Pages: 2 (598 words) Published: April 15, 2015


1. Rivalry among existing firms
In general, real estate industry has high fixed cost and high exit barriers features. However, technology has gradually changed traditional sale model of real estate industry. As an increasing number of low cost online estate agencies appearing, traditional high street estate agencies suffer intense rivalry pressure. Some of low cost online estate brokers like eMoov and Beeny’s Tepilo only need £495 as starting fees, compared with the percentage fee charged by traditional high street agencies are too much high (White, 2014). Thus, the competition among real estate agencies will be more and more intense.

2. Threat of new entrants
Foxtons Group PLC is one of the city’s biggest real estate agents. Firstly, the access and exit barriers of real estate are high, it is difficult for enterprises to enter and grab the property market in a short period of time. Secondly, as Foxtons mentions in 2014 Annual Report, in recent years, since the uncertainty political and economic in the UK and Europe, some of the adverse changes in government policy, laws and more serious mortgage loan regulations may influence the residential property sales or lettings transactions. Thus it can be seen that new entrants will have little effects on the existing real estate agencies. However, with less than half a month before the votes of UK (7th May), through the data from the Bank of England indicated the risky mortgage were in an increasing statue, which never appeared in last nine month (Wright, 2015). This is absolute good news to real estate industry. The threat of new real estate agencies entrants will be more and more serious under this trending.

3. Threat of substitute products
Porter (1979) believes that the competition pressure will be more powerful if the price of substitute products is low, as well as the low switching costs of consumers. For the real estate industry in the UK, one of the threats of substitute products is...
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