Strategic Planning in the Small Business

Unit

3

This heigl,

ened competition

is especially

meaningful in an

industry where

the service

rendered and

the channels used

for its trans-

mission

are the same

regardless of

the size

of the business.

Additional

difficulties arise

because real estate

service is

ill-defined in

the eyes of

the service consumer,

who tends

to be confused

about what

services to expect

from a real

estate broker.

6

When consum-

ers are unsure

as to what constitutes

a ser-

vice, firms

that do not have

a distinctive

competence,

but blend into

the pack, may

fall

behind.

THE SURVEY

Preliminary

interviews were

held with six

brokers

in order to

develop questions

focus-

ing on distinctive

competence.

Questions

were

developed in

the following

areas:

future of the

small firm,

perception of

competition,

goal

of advertising,

use of

media, activities

designed

to obtain market

share, criteria

used to determine

effective-

ness,

and strategic

planning.

For this

':udy, the small

real estate firm was

defined as one

having fifteen

or fewer li-

censed agents.

One firm was

selected from

each

of the 142 Georgia

counties from

the

list maintained

by the Georgi2

Real Estate

Commission.

An additional

65 firms were

selected

from those

counties that

contained

ten or more brokerages.

Thirty-seven

per­

cent, or

77 of the 207

brokers, returned

usable

questionnaires.

The

Sample

Fifty

percent of the

brokers had

been in

business in the

same county

for between six

and ten years.
Another 33
percent has been

in business
for over ten years.
This indi-

cates a high
degree of stability
in an indus-

try that can
experience wide
swings in mar-

ket conditions.
Seventy percent
of the firms

focused on
residential sales,
with the next

HO 3-1

(continued)

highest

area, farms, accounting

for 12

per­

cent. Furthermore,

63 percent

of the firms

provided only

redl estate

services. Eighteen

percent

of the brokerages

offered

insurance

services.

Results

The first

questions focused

on the broker's

perceptions of

the economic and

competitive

environment

within which

they performed.

The way

. which a person
perceives
the

environment

influences

that way in

whict; he

or

she will act. A

broker who perceives

the

market

as being very competitive,

for exam­

ple, is likely to

behave differently

from the

broker who

perceives

a noncompetitive

market.

When

asked, "In your

opinion, what

does

the future

look like for the

small real estate

firm?" Thirty-nine

percent of

the brokers

saw the

future as tough

and not very good.

However,

36 percent of the

brokers saw the

future as being good

to excellent.

In regard

to the competitiveness

of the market

in their

area,

39 percent of the

brokers saw

it as

extremely competitive.

Another

28 percent

of the brokers

saw the market

as being very

competitive.

There

was no difference

in the

perceptions

of competition

between

the

brokers

who saw a bleak

future and those

who saw a positive

one.

The

next set of four

questions focused

on

what the broker

was doing in order

to com­

pete.

The first pair of

questions asked

about

the

goals of advertising

and the use

of media

sources. The

advertising goals

cited most

often were name

identification, iniage

build­

ing, public

awareness, and

generation of

inquiries.

The media sources

listed by

all

the brokers

were newspapers

and yellow

pages.

Other media sources

were signs,

radio, billboards,

and

home magazines,

which include

photos of listings

and are

275