Current situation, trends and major players
The situation within the property arena is such that the world increasingly demands properties to satisfy its needs. Many people residing in South Africa are unable to afford their own properties. Therefore, they resort to renting in order to address their short to medium-term needs. This is also exacerbated by the fact that foreign nationals do not enjoy the same benefits as nationals in that the governing regulations dictate that they may obtain property finance up to 50% of the value of their home, which is a challenge on its own. Companies and individuals who are able to rent out their properties stand a good chance to make a profit over time while servicing this market segment. OCSTIN is well positioned to fulfill this demand by providing appropriate accommodation to this market.
Real estate is one of the biggest industries in South Africa and many other countries. Many large companies are successfully operating in this space within South Africa. These major players have vast amount of experience in real estate. A number of them are operating internationally and have mega assets in their portfolio. Their business units entail a combination of sales, rental and investment. In South Africa, such companies tend to focus on well established and affluent suburbs in major cities where lucrative market is found and risk is lower. They generally neglect inner cities due to challenges associated with human influx, crime, poor facilities and neglected properties. Their clientele base is huge and generally middle to high end income earners.
OCSTIN is poised to address low to middle level income earners in both the inner cities as well as in the peripherals of the cities in terms of providing affordable rental accommodation. It will also target accommodation in the vicinity of institutions of higher learning which is not generally the focus area of bigger players. Managing low level market including students seems not to be the focus area of the major players in the South African real estate industry. Smaller players tend to provide this type of accommodation but usually battle to do so adequately due to financial constraints associated with raising finance required to put up appropriate structures. Again, current situation provides a good opportunity for OCSTIN to enter this industry and flourish by exploiting this market gap.
Global markets have become increasingly complex, competitive and volatile. As a result this prompts OCSTIN to focus its attention on excellent service delivery as well as building a long term relationship with its clients. Life time customer value is a critical component of our operation. Our ultimate goal is to derive a stream of revenue that can be brought about by our clients over time. Therefore we will endeavour to incorporate decisions and activities geared to increasing satisfaction and loyalty with a view of producing the lifetime value for our clients.
Searching for new markets for existing and yet to be developed services, finding markets in new geographical locations and identifying unexploited segments or niches as well as developing special techniques for promoting our services will be some of the approaches we will pursue in marketing our services. We will embark on extensive and convincing communication programmes involving promotions efforts. We strongly believe that customer loyalty emanating from long term relationship will translate into huge profits for OCSTIN.
Extensive engagement will form part of our operations as we believe our clients need to know and understand the services we provide. We are also of the view that we must establish a rapport with our clientele if we desire to have a cordial and meaningful property business. This business has a potential of positively agitating and stimulating a meaningful growth both financial and property occupancy.
As soon as the specific property has been negotiated and agreed, intensive marketing will ensue to ensure that the property is occupied within a few days of registration. This will take place as soon as the conveyancers begin their transfer and registration processes. In some instances and in particular if a property is already tenanted, a new contract will have to be entered into between the company and the tenants. This is important to ensure that the company does not inherit too many problems associated with the previous owner or landlord.
Ocstin will adopt the Balanced Scorecard method by ensuring that financial measures which will be taken, also combine with operational measures such as tenant satisfaction, quality of service, professional approach and smarter work habits.
OCSTINu2019s interest would be how its services are perceived by its clientele as well as how its image is positioned in their minds. The ultimate goal here is to differentiate our services from those of our competitors so as to give OCSTIN a sustainable competitive advantage while still paying closer attention to the bottom line. This will be done to ensure that we retain our best tenants for a relatively long period of time. More importantly, that we continuously attract best tenants when the current ones are preparing to vacate the relevant properties.
The primary service will be tailor-made to the needs and wants of our clients whose interests we will be serving. We will use the internet and such means to reach out to prospective clients who are looking for properties to occupy. The target areas will include amongst others, the vicinity of higher education institutions where students always need accommodation around their institutions.
Evidence-based articulation of the market
Our interaction with the targeted market will be a strategic tool for us to do justice to this aspect. This includes a thorough understanding of the environmental context in which we operate. We will undertake an ongoing analysis of the market to inform our decisions. This will include amongst others being able to fully understand a number of conditions such as political and economic influences that might have either a positive or negative impact on our operations. To achieve this, we will embark on a robust research to determine the target market that will enable a sound market share. Evidence-based articulation will inform our decision making process.
The 4Cs of OCSTIN
OCSTIN will be operating within the following 4Cu2019s:
OCSTINu2019s internal resources, capabilities and strategies will have to be better articulated and managed throughout the lifetime of the business. An overall description has been put forward in this document. Our capabilities range from property development to sales and rental. The environmental context such as social and economic trends in which OCSTIN competes includes low end market areas that are currently neglected. This specific economic segment is preferred because itu2019s got a potential for quick turnover. The needs, wants and characteristics of current and potential clients remain the top priority of our operations and will have to be managed on a continuous basis. Our clients include individuals and businesses who need properties. Our research has shown that a low end market is poorly catered for and therefore business opportunities are missed in this regard. The relative strengths and weaknesses of competitors and trends in the competitive environment will be a critical component for OCSTIN to compete successfully. Our competitors are both local and international. There are local and international investors who compete with us on lucrative properties that we are targeting. In addition to our main focus areas, we will target low end market located in less attractive areas. Such properties will be carefully selected to ensure that the targeted area is on a path to recovery.
Mitigation against threats and risks
Engage in extensive direct advertising to ensure good property occupancy; Provide state of the art service to please and retain tenants longer; Provide service better than the competitor in terms of responding swiftly to clientsu2019 complaints; Put in place insurance against fire and natural disasters; Tenants to be held responsible for the state of the properties they are occupying. If vandalism has taken place, strict measures to be taken against specific offenders; Exercise good property management and maintenance to improve value; Acquire properties that already have a waiting list of tenants and located in strategic points; Introduce late payment fees and charges to discourage slow payments;