Business Analysis For Zeta

Introduction

            The construction business in the United States has contributed to more than $785 billion annual revenue making the contribution of the industry to 6 per cent of the total gross domestic product (GDP) in the year 2006. The industry has since then witnessed a steady rate of growth every year. Further, the house real estate industry was divided into different segment, like the construction of schools, hospitals, private as well as governmental buildings. The details of the construction industry in the United States will be studied as a result, along with the different implications and aspects of implementing the new business strategy in the following report.

E-business initiative

The idea of establishing the business of Zeta is entirely based on the establishment of an e-business that would provide the potential customers with finding their home solutions online. EBusiness will help Zeta to not only promote and market their products online but also help the organization to reach out to potential buyers as well as other government organizations in remote places that search for real estate properties for rent. Ebusiness can help Zeta to showcase their properties over the social media as well as aid in other business processes such as online payment of rents as well as advances payments for online booking of properties.

Environmental analysis

ZETA would make it sure that energy efficient living space with ultra-efficient designs of building is utilized including an R-value high insulation. It would consist of a roof of R 30, walls of R22, exterior rigid R5 foams, floors of R-22, and R-5 as well as R-7 energy star rating of R windows. However, it would also use the natural ventilation as well as daylight saving technology making optimum use of the natural recyclable resources (Chen et al. 2014). Some of the features that they decided should be there in the e-business solution are:

1. It should be scalable and should be capable of reducing Carbon dioxide emissions considerably to reduce greenhouse effect as well as global warming.
2. The workers should build the houses with a lot of dedication and responsibility.
3. The company should be able to offer the products such as the houses, hospitals, at an affordable price, which can be easily absorbed by the Market.

Local as well as national real estate’s companies came to a standstill during the housing recession and no one had any clues when the real estate’s Market would recover again (Chen, Kim and Yamaguchi 2014). On the other hand, the economy of the country began to fall rapidly and the founders of Zeta know that even the best of business strategies could fail now for Zeta. Still they believed in their optimism and innovative ideas for strengthening its position in the Markets across the United States (Teicholz 2013). Due to the increased emissions of carbon dioxide, gases from the existing building techniques used by Zeta it decided to reform the strategies.

SWOT analysis of Zeta

Strengths

• Naomi Porat has prior experience of 20 years in urban revitalization.
• Zeta had the most innovative and vibrant pedestrian friendly housing complex ever.
• The initiation of the entire business as an e-business setup would ensure that the business is utilizing the latest technologies in the progression of the business (Bilal et al. 2016). It would make sure that the minimum resources are utilized to generate the maximum amount of revenue.

Weaknesses

• Traditional construction issues such as noise as well as emission of dust still exist in Zeta.
• The potential of increased sales with instant gratification and the online buying of homes facility would work as a disadvantage to the customers.

Opportunities

• Zeta should make the prices of their houses and other properties affordable for the common Market.
• They should prioritize the educational Market since there is more possibility of increased business from that sector.

Threats

• Competition from other construction companies such as Pulte Homes/Centex as well as D.R. Horton.
• Competitor can offer properties at lesser price than Zeta.
• Threat of not abiding by the ethical considerations laid by the government.

Figure 1: SWOT analysis for Zeta (Source: As used by the author).

PEST analysis of Zeta

Political factors

• Economic recession from the government can cause downfall for the organization.
• Prices of same property can differ for different consumers based on different factors.
• Bories et al. (2014) stated that with the usage of internet business across other nations get easy but more complicated since ethical standards and other governmental policies have to be taken into consideration. However, Mitkus and Mitkus (2014) stated that being available online, the organization would open up to various countries that are plagued with corruption, and there are other factors like corruption level, bureaucracy, tax policy, policy towards private property, foreign policy as well as trade control.

Economic factors

• Tax frauds often lead to drastic changes of the prices of the properties.
• Economic forces such as inflation, interest rates, government monetary policies and the influence levels of labor and production also add to the economic factors.

Social

• Zeta is capable of boosting the economy of the society largely by making use of its competitive advantage over other real estate companies.
• On the other hand, the communities built by Zeta consisting of Community halls, children’s play area, dedicated pedestrian tracks are some of its initiatives and innovative ideas to ensure a better social place (Mahara 2013).

Technological aspects

• Zeta uses clean and green technologies that range from methods of carbon sequestration to more advanced efficient solar panels (Sezen and Çankaya 2013).

            Figure 2: PEST analysis for Zeta (Source: As used by the author).

Porter’s five forces analysis for Zeta

Competitive rivalry

• The competitors can provide better properties at lower prices than Zeta especially in a recession periods when the prices of homes fall drastically.
• Pulte Homes/Centex as well as D.R. Horton is the major competitors for Zeta.

Bargaining power of suppliers

• The general contractor is selected by Zeta wherein there is a considerable transfer of power and authority to the general contractor.
• Abilash and Sivapragash (2013) stated that subcontractors and supplies are then selected by the general contractors based on the lowest bid, leading to further division of the power. This can cause them to bargain in the prices of the raw material and other supplies with Zeta during the lifecycle of any of their projects.

Bargaining power of customers

• Clients often have fair knowledge about the competitors of Zeta in the Market and the prices at which the competitors offer the properties. That again is a major advantage for them to bargain with the company.

Threat of new entrants

• Innovative collaboration of Residential Energy Services Network (RESNET) with Pulte can cause Zeta’s business to go down.
• However, South California’s Living homes is a relatively new Market player in the segment of modular construction.

Threat of substitute products or services

• More innovative modular spaces such as prefabricated LEED Platinum house designed by Living Homes, which is located in Southern California is an innovative new product.
• Eco Offsite as well as Irontown Homes is new innovative substitutes to Zeta products.

Figure 3: Porters 5 forces analysis for Zeta (Source: As used by the author).

McKinsey 7S Framework

Hard elements

• Strategy: The strategy used by Zeta is extremely beneficial for the company and makes use of the competitive advantage that the organization has in terms of using clean and ecofriendly technologies in its construction processes.
• Structure: The structure consists of the Naomi Porat who is the chief executing officer and the co-founder of Zeta, Marc Porat who is the chairperson and cofounder and Shilpa Sankaran who is the vice president of Marketing as well as communications. On the contrary, according to Abou-Shouk et al. (2016), the structure of the working operations is extremely flexible and remains updated with all latest business requirements of the clients and the customers.
• Systems: In addition, the systems within the organization are all updated with the latest technologies and the an d all the stakeholders and departments within the organization ensure that the employees and the team members work in coordination with each other so as to avoid and gap in communications.

Soft elements

• Skills: Marc Porat is recognized on an international scale for his work in the sectors of clean and eco-friendly projects in the past and is immensely skillful. Naomi Porat has been an executive manager in sustainable development business projects in the past (Mathiyazhagan et al. 2013). Shilpa Sankaran has worked earlier in Fortune 1000 companies and is an expert management consultant in the fields of real estate, finance, retail, telecommunications, and automotive industries.
• Style: The style in which Zeta plan to operate is extremely flexible in nature by taking into consideration the concerns of the employees as well as ensuring employee job satisfaction (Ambec et al. 2013). On the contrary, Zeta plans to make use of innovative styles of real estate construction such as making use of clean and green technologies thereby reducing air pollution.
• Staff: Lack of employee job satisfaction has caused many employees to leave organizations in the past. Also due to the lack of their competency level often customer too have suffered due to improper troubleshooting. However as stated in the suggestions by Mahara (2013), Zeta aims to appoint highly experienced professionals. The staff will be well treated by the organization to ensure improved productivity and job satisfaction.
• Shared values: The employees at Zeta as well as the customer should share these shared values such as mutual respect and legal considerations.

Figure 4: McKinseys 7s analysis strategy for Zeta (Source: As used by the author).

Reasons for using the tools

            SWOT analysis gives a clear picture of the strength that Zeta presently has and the weaknesses that it should work on. It also identified the threats such as noise pollution and emission of carbon dioxide, which are in general associated with the construction industry that it should try to reduce.

            From the PEST analysis, it can be understood that Zeta will be able to generate new job opportunities thereby improving the condition of the society (Andersen et al. 2013). The political factors such as government interference were also discussed which can give the reader a clear understanding of the possible issues that Naomi and Marc should take into consideration.

However, the Porters model also gives the reader an idea of the role of the stakeholders such as the extent of power of the suppliers as well as the customers and the role they play in the business of Zeta as well as the competitive rivalry for the company.

Through the McKinsey’s model, the elements of conducting successful business and the possible success factors for Zeta are discussed. On the contrary, lo Storto (2013) suggest that the hard as well as the soft elements such as the skill sets expected out of the employees of Zeta at various levels, the business strategy as well as the organizational structure are discussed to give the reader a clear idea about the areas of improvement for Zeta.

Pollack and Pollack (2015) stated that Kotters 8 step change management plan has helped the organization gain an in-depth understanding of the change issues as well as the strategies of implementing the changes in the business operations in an efficient way.

Justification and feasibility of the proposal

            It is justified for Naomi as well as Marc to venture out on own ideas and start their company Zeta with a vision to further develop the future of construction within the United States. They have experience of real estate development using clean and green technologies. Shilpa Sankaran also has experience in advising business of top multinational companies in the recent past (Dadhich et al. 2015). However, there are chances that the business might face several risks while the business is in progression, and the use of all these tools will ensure that the risks are assessed and analyzed well before the business is in progression.

            In addition, it will be feasible for the company since they also have the competitive advantage in the market over the other real estate companies, which will aid them in finding sponsors for their projects (Murray and Dainty 2013). The approval of the sites in which Zeta plans to build its projects will also be easily obtained since Marc as well as Naomi has good terms with the different government bodies from their experiences in the real estate industry (Hanus and Harris 2013).

This in turn will now aid them in further improving their work operations within Zeta.

Added value of e-business for Zeta

Online Marketing of the Zeta products and e-business will be greatly beneficial since it will help in better Marketing of the products. It will also help the organization to reach out to more remote parts of United States (Monteiro et al. 2013). E business will also allow the customers to better surf their products online through the website and therefore make it easy for them to know and explore the Zeta products.

• Online brochures are available for the Zeta properties, which are available faster as well as cheaper than the physical printed brochures for the customers (Kanagaraj et al. 2015).
• Cost saving for the company and improved order fulfillment, inventory control as well as intercompany collaboration for Zeta.

E-business tools needed for the new IT system

E-Com chain

Using this cloud solution, a construction company can reach out to a network of dealers and distributors on the B2B platform (Kalpakjian et al. 2014). These dealers, suppliers as well as other stakeholders of Zeta can in turn reach out to the end user using their specialized websites of their own brand, by using the same E-com chain platform used by Zeta.

Sourcify

Sezen and Çankaya (2013) mentioned that a perfect e business tool, which can be incorporated by Zeta as it, can be used for construction of the frameworks of buildings as well as searching for potential clients. Gupta and Mishra (2016) commented that it reduces the risk of the construction processes since they vet their constructors and provides a complete guarantee of refunding the money to the storeowners if they are dissatisfied with the final product.

Salesforce:

            Salesforce is an important tool that can also be used for the successful implementation of e business for Zeta.  However, it will not only ensure an effective management of the sales operations but will also ensure that the customer satisfaction as well as interaction with them is also up to the mark (Madurwar, Ralegaonkar and Mandavgane 2013). The main benefits of incorporating Salesforce for Zeta are listed below:

• Improved Information management.
• Enhanced customer relationship management.
• Improved CRM helps in improving customer satisfaction.
• Task automation.
• Better efficiency for coordination among multiple teams.
• Improved data analysis a well as reporting.

Role of above tools in environmental benefits for Zeta

Some of the important advantages of using the above e business tools are described below:

–          Reduced carbon footprints by approximately 30%:

Because online sales from Zeta would ideally reduce the transportation to the physical sites by the customers largely since much of the operations can be done online ad they will be able to see picture of the properties in the ecommerce websites (Flanagin et al. 2014).

–          Lesser need for physical Marketing of the products:

Rakesh (2014) stated that it will reduce the environmental negative impacts by drastically reducing the usage of plastics and other non-biodegradable materials required in the process of Marketing Zeta products physically.

Areas of improvement and suggestions for the e-business tools

            Sourcify and e-com chain should both ensure that the pictures that are posted online in the Zeta website match the actual properties in reality so that customer’s expectations are met. On the contrary, Bories et al. (2014) stated that there should not be any discrepancy between the property pictures on the net and how they actually are in reality. All figures such as area in square kilometers and other information should be accurately posted on the net.

            Some of the suggestions are that Zeta should be using a proper enterprise antivirus system in their computers to ensure there are no malicious attacks in the organizational systems (Flanagin et al. 2014). They should also have a tea of customer care executives available for chat in the online website 24*7.

Arguments and critics for ebusiness in Zeta:

            Some of the recent studies show that in the field of e-commerce business, often due to lack of experience, users are skeptical about the quality of products offered. They often tend to doubt about the after sales service that will be provided by Zeta once a property has been sold.

            Additionally, it has to be noted that construction companies sale mainly wholesale or even agents, sold for corporate users. Direct marketing from the end users will be faced by business to business as well as business to customers. Employees in Zeta with prior experience in sales will face greater challenges in the process of logistics as well as product clearing.

            A positive aspect of ecommerce for Zeta can be noted as its ability to take full advantage of consumer potential discovery through the networks based on different consumer demands and requirements (Sarhan and Fox 2013). The ever-increasing personalized needs of the customers can be matched and incorporated within the ecommerce site by Zeta. Enterprise clients of Zeta can gradually look forward to shifting from product centric to a customer centric quality of service.

Organizational transformation

There were different changes within Zeta as planned by Naomi Porat and Marc Porat. Modular factories were visited to understand their operations and economics and they kept in touch with the different experts on the field to gather knowledge (Gupta and Mishra 2016). The different processes such as sales and Marketing, construction rules and guidelines have to be in compliance with the governmental rules of eco-friendly methods and technologies (Alaka and Pasha 2016). However, employee job satisfaction of employees form the basic hierarchy to the top management will have to be ensured.

Change management issues

Incorporating green technologies would need huge areas of free land, for instance in the process of installing solar panels to be used in the Zeta factories and assemble units (Storto 2013). That again will have associated issues like pollution, deforestation etc. Marc and Naomi Porat should be aware of these associated issues and should come up with proper techniques to overcome them.

Change management plan

Kotter’s 8-Step Change Model

• Creating a sense of urgency: This is extremely important since the employees as well as the worker who work on site (Fulford and Standing 2014) will not readily accept the new eco-friendly technology, which had not been used earlier within Zeta. Therefore, its importance has to be explained to them and its benefits highlighted to create a sense of urgency to instigate the change within the system.
• Building a guiding coalition: Hornstein (2015) stated that it is an important since the guidelines laid down by the government and the governing bodies within the organization will be determining the different policies and the regulations that Zeta must abide by.
• Creating a vision for change: Strategic initiatives such as making use of clean technologies should be incorporated in order to successfully implement the change within the organization. According to Koumparoulis (2013), often construction companies fail to implement the plans they create or the visions they have before beginning any project due to unforeseen environmental conditions, governmental policies etc. However, (Eadie et al. 2013) stated that the leader should have a clear vision regarding where they want to see Zeta in the coming years about its position in the Market in the construction business sector.
• Communicate the Vision: The Company should enlist a voluntary army of professionals, builders, subcontractors and brokers.
• Remove Obstacles: Barriers in the change such as objections from political parties as well as other governmental organizations, negative feedbacks and comments from critics should be removed and the leaders should haven optimistic approach.
• Build on the Change: Once all these parameters are set and decided by Zeta the new change within the organization can be rolled out and prior to that the employees should be well informed about the future changes.
• Anchoring the changes in corporate culture: Simplification of the changing habits as well as procedures of the staffs is not adequate for installing a culture that change across the enterprise. The changes need to be a part of the culture of the organization in order to have a lasting effect that keeps the senior stakeholders on board. It helps to encourage new staffs in order to adopt the specific changes as well as celebrating the people who has adopted the change. It will in promoting the change to core of the enterprise.
• Stick to the plan: Sustain the plan within Zeta.

Fig 5: Kotters 8 step change management plan within Zeta (Source: As used by the author).

Conclusion

            Therefore, it can be concluded from the above report that even though Zeta has multiple advantages such as prior experience of Naomi Porat as well as Marc Porat still it needs to consider the traditional disadvantages that the construction industry has as a whole. There are different issues such as pollution; environmental as well as legal aspects associated with constructing a property should be dealt in the most efficient way.

In order to mitigate the issues faced by the organization Zeta can look forward to use a mcommerce-optimized platform that can have the options of upselling other services from Zeta. Feedbacks can be collected from the customers and they should always be kept informed about the competitive advantages that Zeta provided for the customers. Zeta can also look forward to re sell their old properties and promote their services in social media to reach a wider range of audience in the future.

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