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Case Study

Strategic Planning: A Real Estate Investment and Fund Management Company

The Situation

SRC, an independent investment advisor and fund management company was evaluating their current business strategy, client base and future direction.
Wability, a strategic management-consulting firm located on Wall Street in New York was contracted to develop the approach and the methodology, and the required strategic plan.

The Objective

The objective of this assignment was to identify and describe in detail the associated phases and action items required for the development of a recommended corporate business strategy for SRC.

The Scope and Approach

Phase 1 - Vision and Initial Internal Review - Scope and Constraints

Purpose
The first phase establishes the initial parameters for the vision and boundaries of the strategic planning effort. Additionally, an internal assessment was conducted. The goals of this assessment were to:

  • Identify key features, profitability and market competitiveness.

  • Perform an initial strategic analysis, which will identify SRC’s major strengths and

  •  weaknesses with respect to present strategy and future vision.

  • Identify current corporate assumptions with respect to both current and future strategy.

  • Identify key corporate efficiencies.

Action Items

  1. Principals were individually interviewed with respect to their vision for the company i.e., evolution/growth, future mission, current and future products and services, target markets, clients, investors, branding, and differentiation.

  2. Key division executives were selected and interviewed.

  3. A company vision, scope, and constraints document was developed, based on executive input.

  4. Internal processes were examined and efficiencies of business services were enumerated.

  5. A Refined action plan was developed which detailed the next phase.

Deliverables

  1. The presentation of a succinct corporate vision, constraints, key issues and assumptions.

  2. A high level assessment of SRC’s current business status and direction.

  3. An assessment of SRC’s internal strengths and weaknesses

Phase 2 – External Environmental Analysis

Purpose
To elucidate SRC’s operating environment, and contrast it with their overall corporate vision.

  • Wability identified federal, state, and local legislation and anticipated future legislation, which could potentially affect the commercial real estate/financial industry marketplace as a whole as well as SRC’s current or future holdings.

  • Economic trends and scenarios were identified, which could potentially affect SRC’s investment strategy over the three-year planning period.

Action Items
Industry Environmental Analysis

  • The sellers of properties/real estate investments were categorized. Their present and future bargaining power was determined over the planning period.

  • Potential buyers of SRC’s property investments were identified, their present and future bargaining power was determined over the planning period.

  • Potential SRC investment capital sources were identified

  • SRC’s current and potential future competitors identified and assessed.

  • barriers to entry for new competitors and the likely number of new entrants over the planning period identified and evaluated.

  • Competitive opportunities were evaluated.

Market Analysis

  1. New potential products and services were identified.

  2. Potential market trends, growth forecasts, windows of opportunity, sub-segments and geographic locations for potential new products and services were proposed and evaluated.

  3. Details of the next phase were enumerated.

Deliverables

  1. Operating Environment Analysis.

  2. Industry Overview and Analysis

  3. Business trend Summary

  4. Refined Corporate Vision and Scope.

  5. Refined Action plan

Phase 3 – Internal Analysis

Purpose
To determine SRC’s distinct strengths and weaknesses

Action Items

  1. SRC’s operations and systems were evaluated for efficiencies and effectiveness, in order to determine capabilities to support new services and product offerings.

  2. Wability compared SRC’s value-chain with competitors.

  3. The organizational structure was evaluated for efficiencies and redundancies.

  4. Assessment for SRC’s overall business strengths and weakness was performed.

Deliverables

  1. Value chain enhancement recommendations.

  2. Present organizational structure recommendations.

  3. Present strategic (SWOT) analysis with recommendation to minimize the risk of threats and maximizing opportunities.

Phase 4 - Strategy development

Purpose
The development an overall executive business strategy for the three year planning period.

Deliverable
A detailed strategy plan was developed, addressing the following:

  • Goal identification for the planning period (three years).

  • Methods to grow the business.

  • An exit strategy (if needed) and timeframe.

  • Number of customers needed to meet the strategic goals.

  • Phoenix Four dependency.

  • Validity of additional products and services.

  • Expansion validation.

  • Flexibility of current investment strategy to meet future goals.

  • Market penetration and evaluation of potential new territories.

  • Assumptions and their respective dependencies.

  • Potential pitfalls and suggested remedies.

  • Infrastructure capabilities and limitations.

  • Shareholder composition.

  • Human resources issues.

  • Cash flow and external factors.

  • Best Practices.