Synergy University, Strategic Management, Final Project

Strategy Modern Practices of
Development and Implementation
Individual Project
Fine Home International Group
Real Estate Company
EMBA Strategy and Leadership Program
Instructor: Dr. Jaafar Badwan
Student: Mohammed Nasser

Project One – Please choose any of the following industries and write about the external
environment that will impact their performance:
Topic to cover:
1- Industry development / review
2- External factor impacting the industry and challenges
Fine Home International Group
Firstly, I will talk about Real Estate industry in UAE especially in Emirate of Abu Dhabi.
Overview about industry development during last few years in UAE.
Abu Dhabi it’s Capital of the United Arab Emirates. I believe this is a city to watch out
for globally – it is well on its way to becoming a regional hub by 2015 and a World
Winning City by 2030, sitting alongside the likes of Shanghai and Mumbai in terms of
global reach and influence.
Abu Dhabi has ambitious plans to become a truly sustainable world class city, based on
infrastructure investment, large scale real estate development, world class cultural
facilities and major events and underpinned by significant population and employment
growth. As part of this plan, the Abu Dhabi government has published a number of
strategies to set direction of growth to 2030 covering urban planning, economic
development and transportation initiatives.
Over the past five years, Abu Dhabi has achieved strong economic development, with a
growth rate averaging over 9% per year. Urban growth challenges, resulting from
demographic, population shifts, etc...
The current global and regional economic conditions ask for Governments, Privet and
Regulatory Authorities to take a more active role in creating a framework that can rectify
and solve real estate issues.
In rapidly changing global and local economic conditions, Fine Home International
Group is committed to responding to the current urban growth challenges by developing
a more transparent framework.

This commitment is at the origin of the Abu Dhabi real estate forecast with primary aim
to follow the needs, challenges and opportunities of the real estate sector in Abu Dhabi.
With the Forecast, Fine Home International Group contributes to the strengthening and
more transparent regulatory environment by adding a new method to help all sides
throughout buying and selling properties as well as give them high security and high
satisfaction.
In every industry or market, there are several factors that an organization has to consider.
The market’s business environment such as its political, economic, social, technological,
legal and environmental conditions has to be analyzed in order to objectively identify the
organization fitness in the industry. The market analysis also helps organizations design a
well-developed strategy as it will be based upon concrete conditions of the country or
identified market.:
Demographic:
Demographic factors are exerted primarily through the characteristics and customs of
people. Examples of these factors are general population trends; attitudes toward
household formation (e.g. living alone or with others, having children, etc.); household
characteristics (e.g., family size and age groupings, etc.); changes in lifestyles and living
conditions, neighborhood characteristics, and attitudes of people toward government,
property development, ecological issues, and education level.
Physical:
Physical or environmental factors are the most noticeable because they can be observed.
On a macro level, these factors have played a large part in the location of cities. On a
micro level, their influence is felt down to the individual parcel. Physical and
environmental forces are either natural or man-made.
Important natural factors that affect real property value are topography; soil; climate;
natural resources such as water; scenic beauty or view; and flood or earthquake zones.
Important physical factors are the size and shape of a parcel, infrastructure, and the
accessibility of the parcel to other desirable destinations such schools, commercial areas,
residential area, industrial area, etc...

Economic:
Economic factors strongly affect city growth or decline and therefore property values.
This is generally measured by economic indicators such as the GDP, employment data,
manufacturing activity, the prices of goods, etc.
Broadly speaking, when the economy is sluggish, so is real estate. Examples of demand
factors are trends in employment and income, the availability of financing, the level of
interest rates, and trends in a community's economic base (e.g. industrial expansion or
contraction). Examples of economic factors that affect supply are the availability of
vacant and improved properties, rental and price patterns of existing properties,
construction planned or in progress, and construction costs.
Interest Rates:
Interest rates also have a major impact on the real estate markets.
Changes in interest rates can greatly influence a person's ability to purchase a residential
or commercial property. That is because in one hand the interest rates down, the cost to
obtain a mortgage to buy a home decreases, which creates a higher demand for real
estate, which pushes prices up.
In the other hand, as interest rates rise up, the cost to obtain a mortgage increases, thus
lowering demand and prices of real estate, this factor really major especially in UAE
market 90% of people are depend on the mortgage when they buy a property.
Governmental:
These broadly include political decisions made by all levels of government.
The demand and supply of real estate, and hence its value, are strongly influenced by
governmental actions and controls. Governmental influences include zoning and building
codes, development regulations, environmental regulation, police, fire, and health
protection, the construction of physical infrastructure (e.g., utilities and transportation
networks) and public school systems, Specific legislation, such as rent control, may
influence real estate markets. Federal monetary policy and federal and emirate fiscal
policies also influence real estate markets.

Expo 2020:
UAE has emerged as a front runner in the bid to host the coveted Expo 2020, and analysts
expect a successful bid (results are awaited in November 2013) to result in a massive shot
in the arm for the overall economy, as well as property prices in the emirate and across
the UAE.
In the event it does, close to 300,000 more jobs could be created with 25 million people
visiting UAE. 90 % of the job opportunities would occur from 2018 to 2021, with most of
the jobs created in the travel and tourism sector. This indicates a good chance that a high
percentage of these will be converted into permanent jobs, which would benefit the
expanded economy in the post-Expo period.
In conclusion, the report maintains that the current rally is based on solid fundamentals,
which suggests that it will continue for the foreseeable period. The recovery of UAE real
estate market started in 2011. It has set the scene for a slow, strong and persistent rise in
housing prices, pulled by real demand for housing from end users and a steady supply of
new developments to match it.
This commitment towards improving and strengthening corporate governance practices
by protecting property rights has helped gain new investors and maintain existing ones.
Stakeholders such as home-owners and tenants have regained confidence in the real
estate sector, as reflected in the recovery of market prices,” it says.

Project Two- Strategic Factors impacting the Firm. (Please select a firm)
Topic ton cover
1- Strategic factor that impact the firm internally and externally. Please apply Porter's 5
forces.
2- Please apply either SWOT or SFAS in your discussions of the threat/opportunities and
Strength/weakness.
I will present the internal and external strategic factors these will impacting our company
by apply a classic business tool and probably the most widely used framework for
strategic industry analysis are commonly known as Porter’s Five Forces. The framework
is based on Michael Porter’s seminal work published in 1976 and recently updated in
January 2008 (Porter, 2008). An industry member or security analyst, utilizing this
framework, can model an industry with five controlling economic processes:
1- The Threat of New Entrants:
New entrants to any industry typically bring to it new capacity, a desire to gain market
share, and substantial resources. Therefore they are threats to an established corporation.
In UAE every day we have new entrants get into the real estate market because it is a
high competition market without any barriers to get in, no strict policies or regulations
are implemented to restricting new entrants, so they can pose threat to old company such
as Fine Home International Group, but recently the government of UAE planning to put
high regulations to inter the real estate market, and make new entrants pay 5 million AED
for the bank as deposit (capital requirement) to get in the real estate market, but this
policy doesn’t apply till now, and we are under threat till apply it in UAE.
2- Bargaining power of the Buyers:
In real estate market the bargaining of the buyers are little pit strong because we are in
perfect competition market as well as the customers are very sensitive to price, when
price will be down the customer will buy more and the opposite is true, in addition the
customers can easily find substitutes product e.g. ( living in villa -- living in tower –
living in building) the products differentiation is low, furthermore, product switching is

not too costly the customers can transfer to any suppliers easily e.g. (Tomouh -- Sorouh --
AL Dar -- Aabbar- etc…), or transfer the community also, moreover, buyers are free to
buy from any real estate company in UAE that will increase the competition in the
market because customers aren’t loyal to one company aside some cases the customer
deal with one company.
3- Bargaining Power of the Suppliers:
Suppliers can affect an industry through their ability to raise prices or reduce the quality
of purchased goods and services. A supplier or supplier group is powerful if some of the
following factors apply:
The Supplier group is dominated by few companies and is more concentrated than the
industry especially in UAE 90% percent of all properties are produced by huge company
like ( Al Dar - Sorouh - Tomouh - Abbar) and Big Banks Like ( FGB - NBAD ) , in
addition, the supplier products is an important input to the buyers that mean to us also
because we are Real estate agent and consider as a buyer for Banks or Construction
Company and we take the offers and data from them, this data are very important for us,
Furthermore, the supplier group posses credible threat of forward integration like FGB
Bank he make forward integration and establish real estate company known as First Gulf
Real Estate.
4- The Threat of substitute products and services
A substitute product is a product that appears to be different but can satisfy the same need
as another product. So the threat if substitute products and services will going to be high,
because in real estate market the substitute products can easily found e.g open the internet
( Dubizzle - Propertyfinder - etc....), in addition the consumer can transfer from company
to another one in easily way with very low switching cost, moreover, the price for
properties in Abu Dhabi are almost the same for example ( Al Reem Island ) all 3 BR
apartment in all towers are rent between 135 k and 145 k per year this thing will create
more threat according to substitute products, as well as the consumer are willing to
switch products and change between apartment E.g. Transfer from Sun & Sky Towers in

AL Reem Island to Gate Tower in Al Reem Island also only to change the apartment and
view and life style without any other benefits.
5- The intensity of the rivalry among competitors in the industry:
Real Estate Market is a fast growth market in UAE, all competitors in market are offer
similar or almost similar properties in same price also this will create high competition in
market, in addition, all real estate company follow the same strategy, furthermore, in
UAE especially in Abu Dhabi and Dubai there are many competing companies.
The Threat of New Entrants:
1. Entry barriers are low.
2. Government regulations are not strict
to new entrants.
Bargaining power of the Buyers:
1. Customers are sensitive to prices.
2. Substitute products can be easily
found.
3. Product switching is not too costly.
4. Buyers can buy from any supplier.
Bargaining Power of the Suppliers:
1. The Supplier group is dominated by
few companies and is more
concentrated than the industry
2. The supplier products is an
important input to the buyers’business
3. The supplier group posses credible
threat of forward integration
The Threat of substitute products and services:
1. Substitute products can be easily found.
2. Product switching can be easily done.
3. Prices of products are almost the same.
4. Consumers are willing to switch products.
The intensity of the rivalry among competitors in the industry
1. Competitors offer similar or almost similar products.
2. Little differences in marketing strategies.
3. There are many competing companies.
Porter's 5 Forces

SWOT Analysis:
An analysis for Fine home International Group internal and external factors is necessary
in order to determine the company’s strengths and weaknesses as well as the
opportunities and threats in the market. Using the SWOT matrix, FHIG character and its
external variables can be studied. The photo shows the relevant points in FHIG
The company’s strengths, particularly its good reputation as well as excellent dealing and
high quality with consumers to give them high satisfaction presented by high qualified
staff as well as we have a lot of new technology in advertisements and presentation while
the company weaknesses is undifferentiated properties according to properties in the
UAE market.
The opportunities presented by the UAE real estate market are also advantageous to the
company. With the massive construction projects that are ongoing and future projects are
still under construction that will finish in 2030 as Abu Dhabi vision and high opportunity
to expansion to international market, although there are threats in the real estate industry
as I mentioned before the threat of new entrants and threat of substitute properties as well
as threat of forward integration by Big the leader company in the market.

Strengths
• Good image and
reputation in market
• Excellent dealing
with high quality
• Highly qualified
staff
• have new methods
to advertisements
and take photo for
properties
Weaknesses
• Undifferentiated
products
Opportunities
• UAE real estate
industry is booming
• Many government
development and
private construction
will finish in 2030
• Expansion to
international markets
Threats
• Threats of new
entrants
• Threat of substitute
properties
• Forward integration
from big company

Project Three- Review and selection of strategies for a specific firm you selected.
1- Review of strategies that will enable the firm to maintain sustainable growth and
competitive advantage
2- Select the strategy that you think is suitable and please support your selection
with an argument.
In my company (Fine Home International Group) we are planning to be No. 1 Real Estate
Company in UAE
Our Mission:
We are working hard to give our consumers high satisfaction when they need a properties
as well as we working to expanding our company to increase our market share throughout
our professional staff and implementing a new technology in real estate market as well as
increase our properties advertisement in all Emirates especially in Abu Dhabi to Promote
its image as a global destination, a good place to live, work, visit and enjoy life
Our Vision:
Achieve our mission in all emirates and to be recognize as the most credible and reliable
real estate company in the region, in addition, we will work to fill the gap and establish
trust and transparency between all sides in properties transaction processes.
Our Goals:
- To become one of the leading real estate company in UAE by take high position
between other companies in the market
- Expand to all emirates and globally to increase our market share.
- Build trust and high satisfaction for our consumer in the region and globally to increase
our reputation and image in the market.
- Implement new technology in real estate market, which will change real estate
perspective to hug segments of consumers.

Frankly, we must use suitable strategy which will really help us to maintain a sustainable
growth and competitive advantage as well as achieve our goals.
All research In UAE Real Estate Market talking about the market will going to have a
real growth in next 5 years, so this is an opportunities for us to implement good strategy
in term to increase our profit and our market share, and I will present simple research for
growth rate in real estate market in Abu Dhabi during last 6 months
Abu Dhabi Real Estate Market Overview - Q2 2014
The second quarter of 2014 continued to witness growth in Abu Dhabi's prime residential
market with little change in the office, retail and hospitality sectors. The Abu Dhabi
market continues to be dominated by government related investment with short-term
demand being fuelled by investment and job growth from new major government backed
construction projects, such as the Airport expansion, Etihad Rail, Saadiyat Island
museums and other major infrastructure, economic and social development initiatives. A
sustainable recovery requires the government to continue to implement supply controls as
many developers are now reviewing schemes that had been placed on hold following the
market downturn.
Abu Dhabi Real Estate Market Overview - Q3 2014
The third quarter of 2014 recorded the continued growth of prices in the residential
market, with more limited improvement in the hospitality, retail and office sectors. All
sectors of the Abu Dhabi market are now positioned in the recovery stage of their cycle,
for the first time since 2008. Residential remains the strongest performing sector driven
by positive investor sentiment and population growth and potential under-supply. The
office market has witnessed growth for the first time after being stable for the past 2
years. Vacancy rates are reducing due to increased market absorption and a reduction in
speculative supply in the pipeline. Retail rents for malls on Abu Dhabi Island have
remained stable this quarter, with some malls outside the Abu Dhabi Island seeing a
marginal increase in rents as they have witnessed higher footfalls. The Abu Dhabi hotel
sector continues to recover, with the year to August seeing higher occupancies (71%)

compared to 2013 (64%). Abu Dhabi hotels experienced higher occupancies than Dubai
in July (55% compared to 50%), for the first time ever.
according to previous market research we see the market going to growth in the next
year, and we have tow strategy to implement it as following:
Strategy Growth, Horizontal Growth
We can achieve horizontal growth by expanding our operations into other geographic
locations and concentrate more for another emirates not only in Abu Dhabi as well as
expanding globally like Qatar or Bahrain..... For this expending we need high fainaicial
resource to take this step, as well as we can achieve horizontal growth by increasing the
range of properties offered to real estate market throughout increase the quantity of daily
offers more and more to face the customer demands and cover the gap between supply
and demand in real estate market, and as an expectation for the real estate market will
going to potential growth, if we implement growth strategies we will increase our profit
and market share in next 3 years..
Stability Strategy
We can choose stability over growth by continuing our current activities without any
significant change in direction.
But, this strategy very popular with small business owners who have found a niche and
they happy with their success and the manageable size of their firms. Stability strategies
can be very useful in the short run, but it can be dangerous if followed for too long. Some
of the more popular of these strategies are the pause/proceed-with-caution, no-change,
and profit strategies.
As we know and all other real estate companies know that the real estate market are very
growth market in the last 3 years, and if we stability strategy firstly we will not achieve
our goals as well as our rank in real estate market will decrease and our market share will
decrease also, because we are in perfect competition market and each day new entrants
will coming to the market and they bring to it new capacity, a desire to gain market
share, and substantial resources.

In conclusion we can achieve our goals only with implementing a Growth strategy,
Horizontal Growth and increase our activities to compete another companies and stay in
the market as well as to increase our market share and our position, or expanding our
company to another emirates, in fact we are working now in FHIG to increase our market
share and we already expand and we will open our new branch in Dubai in the first of
second quarter of 2015
References:
Jllmena.com
Hraverd university, research department
Abu Dhabi Urban Planning Council
Dubai Chamber, Dubai Real Estate Sector
Strategic Management and Business Policy book

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