Swot Analysis
The current position of Knight Frank is going to be assessed with the use of SWOT.
The strengths of KF is a high performing team who are energetic and motivated as well. Another strength is also that the team strives to go the extra mile to reach the set targets for the year.
One of the weaknesses in KF is a lack of large accounts leading to lower sales and a low share of the market. Another weakness in the company is that there is a lack of client engagement, client retention and value additions. In addition, there is also a lack of benchmarking and best practices to improve performance.
Opportunities:
- Mechanisation
- Automation
- Rain Water harvesting
- Green Technology
- Wellness for an enhanced experience
- Technology to manage operations
Threats:
- Competition → JLL, CBRE, Cushman & Wakefield, ISS, Sodexo
- Staff retention
- Client retention
- Lower margins will bring the company to losses
Ansoff:
Keeping the above issues in mind. One of the best tools to assist in developing an effective strategy is the Ansoff Matrix. The Ansoff Matrix assists in making strategies for future growth. The matrix has four alternatives of market strategies:
- Market penetration
- Market development
- Product development
- Diversification
*DIAGRAM*
Market Penetration:
By using a market penetration strategy. One uses their existing product/ services and aims to increase its market share within its existing market. This can be done by:
- Decreasing prices to attract new customers
- Increasing marketing and distribution efforts
Product Development:
In the product development strategy, the firm develops a new product for the existing market. The firm looks at innovative solutions to letter meet the needs of the existing market.
Developing new products for existing markets
Market Development:
In the market development strategy, the firm enters new markets with their existing product. This means the firm can now enter new geographies or a different market segment, which they had not serviced before.
Diversification:
By adopting a diversification strategy, the firm develops a new product and enters new markets. This is considered the riskiest amongst the four strategies, as both, the market and products are unknown. Within the diversification strategy, one could either employ:
- Related diversification: this involves some synergies between business and the product and new market
- Unrelated diversification: this involves no synergies between existing business and new products/ markets
Based on the issues faced by KF, one would recommend a two-fold strategy to maximise revenue and to increase profitability. As the KF market share is very low, the most effective strategy would be one of market penetration.
To increase market share, one needs to retain clients and increase business from existing markets. To achieve this, KF would have to develop a service model that adds value to the client and makes their relationship far longer term. To get more business and within that to get larger accounts, KF must tweak their model in a manner that allows them to be more competitive in pricing, yet maintain their margins in the long term. One of the ways to achieve this is by introducing technology in their service design. By introducing mechanisation in their services, automation of their processes, use of artificial intelligence they can deliver better service quality levels at much lower manpower costs. The remaining manpower will also need to be reskilled and that will make them a lot more productive and motivated.
To increase business by getting accounts from the unorganised sector, legislation changes and compliance becomes stricter. Most organisations will want to award their FM contracts to vendors who are completely compliant with all laws. KF must develop an intelligent platform that will immediately demonstrate an organisations compliance with any statutory authority. That software should be able to show that all taxes have been paid on time, all utility bills have been paid, all rental agreements are current, etc. With software development changes have come down drastically over the past few years, this would be quite inexpensive. On top of compliance if KF could be a strong possibility of additional business.
To reduce costs to get large accounts, KF can set up a procurement cell. Presently, each site is negotiating their own contracts. If KF decides to set up central procurement cell and negotiates rates nationally with vendors that have a national presence, they can drive costs down by economies of scale.
Market development can also help KF increase its revenue by moving into areas where there is no competition as yet. Some examples are railway stations, airports and hotels. Since these are unexplored territories and the product/ service offering is not yet been standardised, it gives KF the flexibility to add value for the customers and also make better margins.
As each of the above are distinct markets, KF will have to understand their requirements thoroughly. The requirements of operating a railway station, airport, or a hotel are very different from running an office building. Thus, to be effective KF must have subject matter experts in the team and partner with experts to understand the requirements and offer effective solutions.
Recommendation:
For both the strategies of market penetration and market development, KF needs to offer services that are perceived to add value to the client. This would make the relationship far more longer lasting. Towards this end, two things are critical KF must attract, retain and motivate the last talent in the industry and it must introduce technology as the key differentiator backed by impeccable service. If this is done effectively it will help meet the twin objectives of getting more business and increase profitability by having able to charge more as well as reduce costs by introducing technology.
- Technology improving profitability: Process of automation refers to the use of digital technology to perform a process or processes in order to accomplish a workflow or function. A wide variety of business processes and activities can be automated, or more often, they can be partially automated with human intervention at strategic points within workflows.
- Mechanical cleaning tools: this makes cleaning easier, convenient and round the clock. This shall enable efficiency as cost becomes deeper for both clients and KF.
- Rainwater harvesting: this enables proper utilisation of natural resources and reduces the burden on water requirement from external sources.
- Control maintenance for assets: by using tools such as internet of things (IOT) and artificial intelligence (AT), KF could track the performance of technical assets Pan India in a centralised location and schedule preventive maintenance. Thus, avoiding huge costs incurred on breakdown maintenance.
- Help desk: KF could develop a web enabled app based help desk. This would allow all employees of the client to be able to log in their complaints or the system. This could again be managed by a 24×7 customer cell in a centralised location.
- Automation: the entire back and operation that today employs a huge number of people can get automated. This will result in massive efficiencies and will go a long way in increasing profitability.
- Payroll and attendance: by using an automated system, such as a biometric system, KF can eliminate all manual registers and staff compiling attendance records of thousands of employees. This data can be fed into a central payroll software that then pays salaries based on attendance.
- Customer feedback: along with the help desk all customer feedback can be centrally collated and actioned. Customer surveys could be planned to get honest feedback. A dashboard of both the surveys and the analysis of the type of complaints could be available to both clients and KF. This type of engagement would result in a longer lasting relationship between client and KF.
- Learning modules: one of the key differentiations in people, KF maintains that people are their greatest asset. To keep them motivated at all times and highly trained, it is important to have e-learning modules available.
2019-11-14-1573740232