Differentiation via innovation key to survival in realty
Last week I talked about how our strategy in real estate was based on market fundamentals that weren't affected by cycles or short-term factors. I promised to talk in this next column about how real estate can be used to deliver "urban living solutions"
I’m going to talk this week more on the tactics that allowed us to fulfil our strategic vision and overcome competition to gain market share.
Just a few years ago, Ananda was a small private developer, yet in the first quarter of this year we were the largest seller of condominiums in Thailand. I am often asked how we did it.
People think there’s one thing I can point to, but the truth is that there are four fundamental core competencies in real estate that all property companies need to be good at to be competitive: location, design, price (ie, cost control) and marketing.
Ananda innovated in each of these in order to differentiate itself to gain sufficient competitive advantages to overcome the power of larger incumbent competitors.
Now, all the major companies are pretty good at all of these fundamentals (or they wouldn’t be major companies in the first place), so how do companies prevent their products becoming commodity-like and differentiate them from one another? And how does an up-and-coming company compete?
Ananda has risen very quickly to become a major player as we managed to innovate to differentiate ourselves in each of the four core competencies and generated significant competitive advantage.
On location, we not only focused on mass-transit locations, but we have built a proprietary system of land acquisition (that I can’t reveal) that allows us to keep finding locations that surprise the market.
On pricing, we have introduced several new construction technologies and even set up our own construction company in part to give us a way of introducing new technologies more quickly.
We are also benefiting from technology transfer from our Japanese partner Mitsui Fudosan. The technologies that make them No 1 in quality in Japan are |being taught to our staff, allowing us to aspire to those same Japanese levels of quality – at Thai prices.
On design, we pioneered smaller unit sizes and also award-winning designs for those units to make them liveable as a result of extensive research and testing.
We pioneered many other building-design features as well, too many to mention in a limited column.
On marketing, we innovated in our use of social media and transitioning away from traditional media.
There were also some specific things, such as launching multiple projects at a single event.
There’s a fifth factor that is so limited right now you can’t really call it a core competency, but its about to become as important as the other four.
We’ll be having a press conference to announce this on August 13, so stay tuned.
All these innovations combined have given Ananda sufficient competitive advantage to achieve the success we’ve had.
Corporate culture
But as the list above shows – and this is just a partial list of innovations at Ananda – it’s not any one innovation, but a corporate culture that produces a constant stream of them.
And, more important, it allows new ideas to be deployed that are the key to our success and, I believe, any corporation’s success in the modern, globalised world. If there’s one thing I want my managers to do, it’s innovate to differentiate.
