Strategic plan guidelines for real estate development to survive during economic crisis

Abstract

This research was initially aimed (1) to fin d the external and internal factors which can affect the real estate business, and (2) to develop a strategic plan guideline for the real estate business during economic crisis. Due to an economic crisis that has been started since 1997, every business had to face a tragic period in running the business, under the increasing foreign dept from currency devaluation of the government. E very business must try extremely hard to survive in such a hard competing situation, and so does the Real estate business. In order to be competitive in both short-term and long-term, a strategic planning increases its role in managing the business. Good strategic planning will lead an organization to work more effectively with greater efficiency. Real estate business is studied during before and after economic crisis, between 1996-1998. Major factors which have an effect on real estate business and how they affect the business are identified after the study. Both internal and external environment scanning, namely SWOT analysis, PEST analysis, and Porter's Five Forces Model, are conducted to examine a situation o f a business by using a case study. Strategic plan guidelines of real estate business are developed to lead the business to survive during an economic crisis. Sensitivity analysis is provided to suggest the w ay the business should change the strategy in order to absorb the effects of the changes of those major factors. The result indicated five external factors, being economic, employment, bank loan policy, interest, and price, and three internal factors, being marketing research, skill labor, and financial plan, affecting the housing market. Strategic plan for the project in case study was proposed in term s o f financial strategies, construction strategies, and marketing strategies. Moreover, the guidelines from this study could be further used to guide other studies of similar business or further studies in more details.