Incorporating digital in your business strategy
By George O’Neill
Just like all other aspects of your real estate business, determining how best to use on-line and digital marketing channels to get exposure for your firm and your listed properties is best initiated from a strategic perspective. Incorporating these new channels into your business plan is a must, not an option, since the vast majority of consumers are now gathering information about real estate primarily on-line. But for many brokers, it is still a mystery how to do so. To shed light on one approach let’s take a look at the process I went through.
Prior to starting my own fully digital real estate brokerage, I developed a business plan outlining how we would enter and compete in the Toronto real estate market. But, before writing our business plan, I spent a considerable amount of time developing our business strategy.
So what is a business strategy and how do you develop one? If it’s not formally written down already, you are most likely executing your business strategy daily and can say what it is and how it contributes to your business plan. But is it all inclusive and does it incorporate the required digital components that are so necessary today and going forward?
For a number of years I worked as a management consultant at Deloitte and PricewaterhouseCoopers, helping other businesses define their digitally enabled business strategies. One framework we often used was the PEST analysis: P stands for identifying major political trends that may influence your organization; E for the major economic trends; S for social trends; and T for technological. Take a mid-term view – one to three years – as the planning horizon. Anything more is most likely guessing and aspirational, which is fine, but hard to be specific about. The more specific and accurate, the better. PEST is very helpful when working through the following six major activities that can be performed to get you on the road to incorporating digital into your business plan.
The starting point is to perform a competitive assessment of your business environment. The focus should be to identify key factors that create value for your business, industry changes expected over the next three years, how those changes may affect the nature of competition and how you can exploit those changes. Part of this assessment is to look at forces driving industry competition, including determining how powerful are customers and suppliers, what substitutes there are for your services and identification of potential entrants. Sizing up the competition and looking at emerging strategies is critical to understand where you may be able to compete best. Consideration of social media and other forms of digital marketing are examples of emerging strategies to integrate into your overall business strategy.
The second major step in developing your business strategy is to look inward. Honestly size up your organizational capabilities. Define your mission, which is the reason your firm exists. List what it is your firm does best. Identify how you create value. Then look at the services you provide, how you market and then deliver those services. Summarize your business philosophy by outlining your company’s values and how you treat stakeholders including staff, clients and suppliers. Also look at your firm’s financial position, significant business processes and re-investment policies.
Next, perform a positioning assessment to determine your market position relative to your competitors’ in terms of margins, price-versus-quality and identification of opportunities where you can grow.
The fourth step is to establish direction by identifying strategic objectives. For each opportunity identified in step three, perform a thorough PEST analysis to determine those that make sense to pursue. Look at information technology enablers to deliver on those opportunities, again with a focus on digital marketing and social media such as Twitter, LinkedIn, Facebook, YouTube and good now-old-fashioned email. Strategic objectives define make-or-break issues that will help your firm develop a long-term competitive advantage.
The next step is to develop detailed action plans. Create a worksheet for each strategic objective listing the strategic thrust (categories of initiatives that may require around 12 months to achieve) and associated actions that will achieve the strategic thrust and contribute to the objective. Each action must identify who will carry it out, what the specific action is, how the action will get done, when the action will occur, and how much it will cost to undertake. You may have several strategic thrusts to achieve any one strategic objective, and most likely many action plans associated with each thrust.
The final step is to execute smartly using appropriate digital tools. This is really where integration of traditional business strategy and digital strategy shines. Digital tools, when deployed effectively, can save your firm money and improve client service.
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