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Costa Rica

Costa Rica

Posted on Aug 2017:- By: PaperHub
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Opportunities and Threat Analysis

Opportunities

Threats

Ø  Huge government incentives for direct foreign investments in the real estate sector.

Ø  High growth for the real estate tourism, especially along the coastlines of Costa Rica.

Ø  The rise in demand for homes related properties among international investors who want to own properties in the Costa Rican market.

Ø  Huge incentives for those intending to make investments in the real estate sector, especially in the construction of homes and rental properties.

Ø  Improvement in infrastructure, particularly in the area of transportation, thereby, opening up various parts of the country for real estate investment opportunities.

Ø  Real estate revenues from both domestic and international customers in the next 20 years are expected to continue rising, as the country real estate sector is experiencing rapid growth due to the need of the people to own homes.

Ø  Lack of adequate qualified employees to work in the real estate businesses, and this makes it difficult to hire as well as retain individual employees.

Ø  Currency fluctuations, which are experienced from time to time and this impacts on the cost of doing business, especially the cost of raw materials that needs to be imported from other countries.

Ø  High risks of properties being damaged by typhoons, earthquakes and other forms of natural disasters that are very common in Costa Rica, due to its geographical location.

Ø  The high taxation structure employed by the government is a threat to the profitability of a business investing in the country.

Ø  Cases of corruption in the public sector remains high, and they might cause certain delays and increase costs of undertaking construction projects in the Costa Rican market.

 

Competitors Analysis

 This section focuses on real estate agency and construction faction of the real estate sector in Costa Rican market, especially in various major cities, located in major tourism destinations. Most of the real estate properties are located in major cities compared to rural areas in Costa Rica due to their high demand. The major cities have the right infrastructure, regarding roads, water and sanitation services, telecommunication and electricity, and this make properties and homes found the areas attractive to potential buyers. Given the plan is to make a foreign direct investment in the real estate sector, the major competitors will be firms offering real estate agency services and construction related services in this sector.

Costa Rica Real Estate Services

 Costa Rica Real Estate Service is an organization that specializes in offering real estate services to target customers. It offers real estate brokerage services within the coastal town of Dominical, located in the Costa Rican South Pacific region, where unique rain forest covered Talamanca Mountains usually touches the magnificent Pacific Ocean. The company offers sales of properties in Uvita, Quepos, Dominical, Manuel Antonio, Ojochal, and Jaco neighborhoods found in San Jose as well as in other parts of the country (Costa Rica Real Estate Service, 2017). The company has made tremendous success for last 15 years since its formation (Costa Rica Real Estate Service, 2017). The main focus of the company is offering professional advice to people intending to buy properties and acting as their representations.

            The Costa Rica Real Estate Services is familiar with real estate needs of the Costa Rican customers and as a result, can offer services that tailored towards meeting the needs of different groups of customers.  As a result, it can offer services to clients that are highly competitive in nature and responsive to customer needs, building a group of satisfied customers and this is a strong marketing weapon for the agency. Therefore, the ability of Costa Rica Real Estate Services to offer services that are tailored to the needs of customers gives it an upper hand over other agencies operating in the country.

            According to Kotler and Armstrong (2010), the ability of an organization to offer high services that are tailored towards the needs of customers is a source of competitive advantage. Thus, the agency has managed to become one of the best preferred by customers in offering real estate brokerage services due to its ability to respond effectively to the needs of customers. Also, the expertise of the company when it comes to negotiations, enabling it to cut better deals for the customers gives it an upper hand over other real estate agencies in Costa Rican market. In real estate business negotiations are a key to cutting deals that are favorable to customers, and this has been a major strength of the agency for the last 15 years, enabling it to expand its services in different regions within the Costa Rican market. 

 Additionally, the agency has built a strong reputation of an organization that offers high-quality professional services to the target (Costa Rica Real Estate Service, 2017). The agency has a team of qualified real estate brokers, who serve customers in a professional and dedicated manner. As a result, the customer feels valued by the agency at all times. Finally, Costa Rica Real Estate Services faces stiff competition from agencies operating in the target markets, such as GoDutch Realty.

GoDutch Realty

            GoDutch Realty is a real estate brokerage firm operating within the Costa Rican market. Its offices are located in Escazu and have other operational offices in Atenas, Santa Ana, Grecia, and Cariari. The firm usually focuses on the entire of Central Valley region of Costa Rica, whereby, it sells residential properties to the target customers (GoDutch Realty, 2017). The firm has a proven record in the area of real estate brokerage. It has expertise in areas of advising customers who intend to invest or live in Costa Rica. The firm mainly specializes in residential properties and luxury properties, mainly targeting international investors who intend to own home in Costa Rica.

 One of the sources of competitive advantage is the business approach taken by the company. The firm usually specializes in small market segments, thereby managing to offer high-quality services to customers. According to Kolter and Armstrong (2010) focusing is an effective marketing strategy that enables a firm to offer high-quality services to the focus market segment, thereby, gaining a high competitive advantage over firms which offer a wide variety services to customers. Hence, the ability of the firm to focus on certain market segments, particular in residential properties enable it to win the heart of customers who need brokerage firms that specialize in offering residential properties.

 Lastly, the agency offers high-quality services to customers that are geared toward ensuring that the customer attains the success they intend in life (GoDutch Realty, 2017). Therefore, the agency offers residential properties that are tailored towards helping customers realize success in life. This enables the agency to attain high levels of success, as it needs connected to the needs of customers. It faces stiff competition from real estate companies that offer construction and brokerage services within Costa Rican market.