Strategies for sustainable competitive advantage in real estate industry

Abstract

In order to differentiate from other companies, the real estate developers should understand and accept the fact that the industry is not facing a cyclical problem but it has fundamentally changed and in the following years the industry will remain less attractive. The paper focuses on the strategies a real estate developer could implement in order to develop a long term sustainable competitive advantage. On one hand a competitive advantage can be obtained by having a lower cost than the competitors and consequently obtaining higher margins when selling at the market prices. On the other hand a competitive advantage can be created by differentiation, by the ability to use the company’s unique skills and resources (better utilization of land and human capital, more appealing design, innovation) in order to obtain higher revenues by requesting a higher price. Knowledge is the key competitive advantage in real estate industry, the element which creates and sustains the competitive advantage on the long run. A developer may have a great knowledge of particular customer needs, a specific area, of the market in which operates or it can be better than the competitors in terms of economic intelligence. However, implementing a proper human resource strategy is at least as important as exploiting knowledge. Consequently, by achieving an efficient human resource management, real estate developers can take advantage of future innovation, better customer relationship or complementary growth strategies. In addition, the human resource strategy should facilitate the knowledge transfer within firm, as to fully exploit the knowledge competitive advantage and to support the knowledge creation. This paper is an exploratory research, based on secondary sources about strategies for developing competitive advantage on the long run, in real estate industry.