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Metro Case Study

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1. INTRODUCTION
1.1 Synopsis
The following report examines the UK estate agency industry (residential sales at a local market level) between two time periods (the recent boom and subsequent recession that followed). Porters 5 Forces framework has been used to evaluate the changes in industry attractiveness. The analysis draws on industry specific information and makes reference to strategic management theory where appropriate. The discussion alludes to the capabilities of a chosen company within this industry and how it fairs as a competitive player. Finally, a critical evaluation of the framework in reference to the industry is pursued to support a discussion around alternative frameworks and their contribution to a more wholesome analysis.

1.2 Industry context
The estate agency industry in the UK expanded considerably between the years of 1997-2006 with the average house price rising in value from £60,638 (1996) to £201,081 (2007), a rise of 232%[i], but witnessed a change of fate mainly due to the economic downturn post 2007. The expansion of such a lucrative market was due mainly to the buoyant activity of buying/selling of property/land for a higher realised value than what it was worth previously, an increase in disposable incomes and generous lending offerings by mortgage lenders. However as the UK economy slipped into decline, the industry stagnated.

The role of the estate agent is to act on behalf of a client in marketing residential property and undertake related activities to obtain offers in exchange for a fee (percentage of sale price of the property). This can also include associated services for example; valuations, surveys, conveyance services, mortgage advisory etc.

2. INDUSTRY ANALYSIS
Porter’s 5 Forces framework has been applied to this industry over two time periods.

2.1 Porters 5 Forces Analysis

*H/M/L refers to

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