Strategic Planning in the Small Business

Unit 3

usually distributed

free. Half

of the brokers

used two or fewer

media sources.

The second

pair of questions

asked the

broker

what L.-or

she was doing

to obtain a

share of

the market. The

first question

asked

them to identify

the activities

used to

obtain a market

share. The

brokers listed

such activities

as direct mailings,

open

houses, neighbu.hood

letters,

special promo-

tions,

and public talks.

Only one firm

men-

tioned

that it targeted

a special

type of

customer

(those

interested in second

homes).

The

second question

asked the

brokers tc,

indicate what

made their firm

different from

their competitors'.

Thirty-two

percent

of

the brokers

listed "doing

a professional

job"

as their distinctive

competence,

while only

16 percent

listed the provision

of a special

service. Doing

a professional

job hardly

qualifies

as a distinctive

trait, since

all firms

are supposed to

be professional.

Moreover,

it is difficult to portray

a vague

concept like

"professionalism"

to

prospective

consumers.

The third

set of questions

focused on the

managt,ment

control used to

maintain perfor-

mance.

Control of performance

occurs

throi!gh evaluation

and strategic

planning.

The criteria used

to determine performance

guide a

firm's activities

in the market place.

Five criteria

were identified

by the brokers:

(1) sales, e.g.,

percentage

completed,

growth;

(2) listings, e.g.,

percentage held

by

firm versus

competition;

(3) image, e.g.,

repeat business,

customer opinions

obtxned

via questionnaire:

(4)

agents, e.g., experi-

ence,

turnover; and

(5) miscellaneous,

e.g.,

charting

of inquiries

pertaining to

advertised

property.

The brokers

were asked the

r~w her of cri-

teria

they used and

the frequency of

perfor-

mance

evaluation. Sixty-one

percent

of the

firms tised

two or fewer

criteria. These

criteria were
most likely to
be the number
of

HO 3-1

(continued)

sales and

the number

of listings. Forth

percent of

the firms kept

track of perfor­

mance on

a mo.ithly basis.

The next most

frequent

evaluation was

annual. Only

one

firm indicated

that it evaluated

every three

months

as well as annually.

Finally, brokers

were asked

questions re­

lated to strategic

planning.

Seventy-four

percent

of the firms set

short-term goals

cf

a year

or less. However,

only 56 percent

of

those

who set short-term

,,oals !'ad

them in

writing. Thirty-eight

percent

of the brokers

had

established long-term

goals of more

than

one year, with

two-thirds of

these having

written

goals.

DISCUSSION

Small

real estate firms

do not appear

to be

positioni.ig

themselves

to compete in

a

rapidly changing,

increasingly

competitive

market. Even

though the

brokers saw the

real estate industry

as being extremely

com­

petitive,

with over

ore-third seeing

the fu­

ture as

not very good,

there was little

evi­

dence to

indicate that

the brokers were

changing

their behavior.

The brokers seem

to be doing

the things

they have ben doing

for years,

operating as

if changes had

not

occurred in the

market place.

Although

the brokers

understand what

advertising can

do, they continue

relying

primarily

on newspapers

and yellow

pages.

Alternative

vehicles, such

as market-targeted

flyers, are

used by only

a small number

of

firms.

Few of the firms

engaged in

activities that

would separate

them from

the pack. Even

among the firms

that did use

different activi­

ties, the

number of activities

was limited

to

one

or two. The

brokers did not

seem to be

aware

of what

distinctive competence

means.

"Doing a

professional job"

was

cited as

a distinctive

competence. by

most

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