Foxtons is one of the largest growing estate agent in UK. It’s based on London and surrey area. It was founded in 1981 in Notting hill by Jone Hunt and he sold Foxtons in 2007 with a price of £370 millions. As up now it has 24 office across the London and surrey area, it has a headquarter in west London also.
1.1: Identify the mission, objectives and responsibilities of an organization
1.1.1: Mission, values and key objectives of Foxtons
Mission: Mission statement is act as a guideline for an organization’s decision making, planning and operation. It shows why the organization exist. The mission statement of Foxton is “We embrace change and are constantly challenging tradition because we have a strong desire to improve the way our industry operates. We do business differently to give you the edge”. From this statement we can easily say that, Foxtons mission is adopting with the changes and provide the best service to the customers.
Values: values could be the key characteristics which is very important to the organisations. Foxtons values are providing highest level of customer service.
Key Objectives: Key objectives normally set by top management which reflects the organization’s mission and goal and stakeholders expectations.
Foxtons key objective is providing best possible price within the shortest possible time.
1.1.2: Influence of Stakeholders
Shareholders/owners: Shareholders have a strong influence in the organisation decision making, setting mission and objectives. The board of director come through election participate by all shareholders. So that board directors decision will definitely reflect shareholders expectations.
Employees: employees are key people who implement the strategy of the organization and deliver the product or service to the customer. So that they have also strong influence.
Regulatory bodies: every organization regulated by a regulatory bodies which monitor organizations operation, standard of service etc. organisation must need to follow their instructions. So regulatory bodies have influence also
1.2: Achievement of stakeholders objectives
1.2.1: Achievement of employees objective: As we all know that employees are the key factors of an organization and the success of organisation depends on employees performance. So that they need desired salary, performance bonus, excellent working environment and training program that helps to employees to increase the performance. In order to achieve the employees objectives, Foxtons are paying comparative salary, excellent working environment and ongoing training program, reward program for outstanding performance.
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1.2.2: achievement of customer objectives: customers are key of a business. Customer always wants appropriate information and good customer service. Foxtons are providing high standard of customer service and providing appropriate information to the customer through website and brunch office.
1.1.3: achievement of regulatory bodies objectives: Foxtons is a member of The Property Ombudsman and The National Approved Letting Scheme (NALS) and also complies with the Tenancy Deposit Protection Scheme legislation providing sellers, buyers, landlords and tenants with an assurance that they will receive the highest level of customer service. As Foxtons are providing highest level of customer service they are fulfilling the regulatory bodies.
1.3: Responsibilities of Foxtons and strategies employed to meet them
1.3.1: Responsibilities to customer: every organization has some responsibilities to the customer. It could be providing good customer service, accurate information that they want, understanding customer needs and wants.
Strategies that Foxtons implemented to fulfil responsibilities: Foxtons providing accurate information through accurate validation process, award winning website, 24 branches across the London and surrey, expert advice etc. Foxtons also maintaining highest standard of customer service in order to keep good relationship with customer.
1.3.2: Responsibilities to employees: as it is mention earlier that employees are key factor of organization success. Organization is responsible to provide them comparative salary, good training program, reward for outstanding performance and excellent working environment.
Strategies that Foxtons implemented: Foxtons currently providing excellent salary package, ongoing training program and reward program and the working environment in Foxtons is friendly. Foxtons believe that, “it is important to have fun to be successful”. So that Foxtons send employees to all over the world for recreation.
1.3.3: Responsibility towards community and strategies that implemented: Foxton is investing to make new home across the London and southwest side in England and they aim to build up good community.
2.0: economic, social and global environment
2.1: allocation and use of resources:
2.1.1: Economic system: An economic system is the system of production, distribution and consumption of goods and services of an economy. Alternatively, it is the set of principles and techniques by which problems of economics are addressed, such as the economic problem of scarcity through allocation of finite productive resources. The economic system is composed of people and institutions, including their relationships to productive resources, such as through the convention of property. Examples of contemporary economic systems include capitalist systems, socialist systems, and mixed economies. “Economic systems” is the economics category that includes the study of respective systems
2.1.2:Allocation and effective use of resources: Economic system decide how an organisation allocate its resources. As we mention earlier production, distribution and consumption of the goods and service on a country is set by economy system of that country. In UK the economy system is ‘free market economy’ bases upon the Capitalist system of free trade and global economics open economy system and government does not interfere or get involved that much. As we all know that currently world’s most of economies are going through recession. UK economy also affected by the recession. Property and housing society passing through a difficult time. he UK real estate or property market has been growing for most of the years since 1992. Between 2000 and 2007 alone, some areas saw median prices trebling in value. Since the third quarter of 2007, prices have fallen every month, reaching record levels of price drops and record lows in terms of new sales. Speculators were a big part of the growth of that market, with Buy-To-Let buyers making up as much as 50 per cent of house purchases in London before the crash. This effectively priced new home buyers out of the market. Although prices have now dropped back to affordable levels, fears of further falls, rising unemployment and reluctance among beleaguered banks to lend continue to restrict the market. Foxton is trying best to keep up their position and good thing is that its expanding its business. They did not go for cost cutting or reducing employee. They are recruiting new people is order to expand their business.
2.2: Impact of social welfare and industrial policy on Organisation
2.2.1: Impact of Social welfare: social welfare initiative does affect an organisation. In UK social welfare is welfare facilities are very good. UK is a multi-cultural country and government are spending huge part of their budget to improve the education system, health system and security system. Living standard in UK is also very high. People over here normally does not stay for long time in one place or they changed their house according to the place of job. After certain time people try to buy their own home. So Foxtons provide rent service as well as they buy or sell the property also. So that social welfare initiative is increasing demand for Foxtons as people are coming from other country and they keeps moving.
2.2.2: Impact of industrial Policy: industrial policy also affect the business as well. If the government impose business friendly law and regulation, it does help to grow business. UK is a great place to do business. Government always encourage business. In property industry government has taken some industrial policies that are helping Foxtons. For example, due to the recession government has reduced the Moorgate interest rate and that’s helped Foxton to sell more property.
2.3: Impact of Macroeconomic policy and influence of global economy:
2.3.1: Impact of macroeconomic policy: Government take macroeconomic policy and that has a significant impact on organisation and stakeholders. Some time it may help to grow up the business or sometime it has negative impact on business. Two important macroeconomic policies are fiscal policy and monetary policy.
Monetary Policy: UK government reduce the interest rate which is now 1.0 percent and it is the lowest interest rate ever. This policy significantly helped property related business to grow up their business as mortgage interest rate goes down. More buyer will be attracted to buy new property. Foxtons also doing their business very well. Number of property selling has increased significantly.
Fiscal policy: fiscal policy indicated how government will be spending money and from where they will be getting money. Normally government get money from tax, borrowing etc. this policy decide the economy growth. Current fiscal policy is known as golden rule. The Golden Rule states that over the full economic cycle, the government should borrow to invest only for future needs. Current needs should be met by tax revenues. This should allow for stable finances as defined by the ratios of public sector net worth, debt and current expenditure to national income. In conjunction with the Golden Rule, the UK government also seeks to follow the Sustainable Investment Rule, which should keep national debt at a prudent level currently set at 40 per cent of GDP. By the end of 2008 estimated public debt had already risen to 42 per cent, and could rise to 70 per cent of GDP by 2010, meaning that the Sustainable Investment Rule has been broken. The justification is that a severe recession needs Keynesian stimulus to revive it, and that balancing the books should only be sought once the economic recovery begins. According to this policy there will be slide economic growth and it will influence the Foxtons business as well
2.3.2: Influence of Global economy: As this is the time of globalisation, global economy has also influence a organisation and stakeholder. UK economy is one of the strongest economy in the world and its attracts international investor. As property sector is one of attractable . sector of investment. Lots of investment are coming up. Apart from that, if there is positive move in global economy it does affect the local economy as well.
3.0: Behavior of organization and the market environment
3.1.1: Market structure and Perfect competition
Definition and characteristics of Perfect competition: perfect competition describes the perfect being a market in which there are many small firms, all producing homogeneous goods. In the short term, such markets are productively inefficient as output will not occur where marginal cost is equal to average cost, but allocatively efficient, as output under perfect competition will always occur where marginal cost is equal to marginal revenue, and therefore where marginal cost equals average revenue. However, in the long term, such markets are both allocatively and productively efficient. In general a perfectly competitive market is characterized by the fact that no single firm has influence over the price of the product it sells. Because the conditions for perfect competition are very strict, there are few perfectly competitive markets.
A perfectly competitive market may have several distinguishing characteristics, including:
Infinite Buyers/Infinite Sellers – Infinite consumers with the willingness and ability to buy the product at a certain price, Infinite producers with the willingness and ability to supply the product at a certain price.
Zero Entry/Exit Barriers – It is relatively easy to enter or exit as a business in a perfectly competitive market.
Perfect Information – Prices and quality of products are assumed to be known to all consumers and producers.
Transactions are Costless – Buyers and sellers incur no costs in making an exchange.
Firms Aim to Maximize Profits – Firms aim to sell where marginal costs meet marginal revenue, where they generate the most profit.
Homogeneous Products – The characteristics of any given market good or service do not vary across suppliers.
3.1.2: deviation from Perfect condition: as it is mentioned earlier that in perfect condition market structure the product has to be same but in this property market all the property are not same and the prices are also vary depends on location and size. Even though there is no entry barrier it is difficult to entry this market as it is required huge investment. So that its bit difficult to be in competition with other estate agent. I property market is not perfect condition.
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3.2: Market force and Organization response: first of all let’s have a look on definition of market force. “Forces of demand and supply representing the aggregate influence of self-interested buyers and sellers on price and quantity of the goods and services offered in a market. In general, excess-demand causes prices and quantity of supply to rise, and excess supply causes them to fall”
In property market, property price, rent rate, interest rate, availability of property can be consider as market force. Due to the recession the government decided to reduce the interest rate and housing price also fall down which was great opportunity for Foxtons to increase their sales. During this time they opened couple of new branches in order to increase sell. They have involved some new house development program as well.
3.3: Competitive strategy and role of the regulatory bodies:
3.3.1: Competitive strategy of Foxtons: the way a business organisation compete in market called competitive strategy. Foxtons is providing its service throughout 24 branches across the London and surrey. They have introduced new café style offices, long opening hours, award winning website, professional photography, Foxtons magazine, excellent customer service. These are the competitive strategies are employed by Foxtons.
3.3.2: regulatory bodies of Foxtons: Foxtons has couple of regulatory bodies. Name of the regulatory bodies given bellow:
The Property Ombudsman
The National Approved Lettings Scheme
Tenancy Deposit Protection Scheme
Office of Fair Trading (OFT)
3.3.3: Role of competition commission: The Competition Commission (CC) is one of the independent public bodies which help ensure healthy competition between companies in the UK for the benefit of companies, customers and the economy. We investigate and address issues of concern in three areas:
â€¢ In mergers – when larger companies will gain more than 25% market share and where a merger appears likely to lead to a substantial lessening of competition in one or more markets in the UK.
â€¢ In markets – when it appears that competition may be being prevented, distorted or restricted in a particular market.
â€¢ In regulated sectors where aspects of the regulatory system may not be operating effectively or to address certain categories of dispute between regulators and regulated companies.
3.3.4: Role of the office of fair trading (OFT): As an independent professional organisation, the OFT plays a leading role in promoting and protecting consumer interests throughout the UK, while ensuring that businesses are fair and competitive. Our tools to carry out this work are the powers granted to the OFT under consumer and competition legislation.
4.0: Significance of international trade and European Dimension For UK business
4.1.1: Importance of International Trade: International trade is important for any country in the world. As we know that not every country has the same resource. That’s why all the countries do International trade. Importance of International given bellow:
Economic gain for a country through export and import.
Creating new market and demand of product
Exchange of information
Competition among the supplier country
Better quality product with low price
Wide range of product for consumer
4.1.2: Economic integration: Any type of arrangement in which countries agree to coordinate their trade, fiscal, and/or monetary policies is referred to as economic integration. Obviously, there are many different degrees of integration.
Preferential Trade Agreement (PTA)
Free Trade Area (FTA)
4.2: Impact of two policies of EU on UK business
4.2.1: Energy policy: In January 2007, the Commission proposed a comprehensive climate and energy package containing targets of 20-20-20% reduction of energy consumption and greenhouse gas emissions, and increased share of renewable by 2020. According to this policy now every organisation has to reduce gas emissions and energy uses. And all the member country must apply minimum requirements as regards the energy performance of new and existing buildings, ensure the certification of their energy performance and require the regular inspection of boilers and air conditioning systems in buildings. So that its affecting UK business.
4.2.2: Repossession policy
The European Commission approved on Monday a British mortgage support scheme aimed at reducing the number of repossessions likely to occur as a result of the economic downturn
4.3: UK entry EMU: The UK has to decide whether to join the other members of the EMU in a monetary union. This choice depends in part on the outturns for the economy inside and outside EMU. If UK decided to entry in EU then they have to take EURO as a currency and the monetary and fiscal policy has to be taken according to the EMU. Competition among the member country will increase, as currency barriers will be removed it may help small and medium organisation to expand their business. There is a potential chance to increase in investment. Considering the inflation variability or the stability of the price level, the UK would benefit in joining EMU. In terms of the tests put forward by the Government, the increased volatility of output is unlikely to promote higher growth and a lasting increase in employment, whilst the increase in long term price stability would aid growth and encourage investment.
Conclusion & recommendation: From the above discussion Foxtons is doing very well in their business even there is recession going on. They are expanding their business area which is good sign. They are operating some investment program as well and they are trying to attract investor. They have an award winning website and for an potential customer it’s very easy to find out the property which may suite for them. They have dedicated staff those are helping its business.
Still there are some areas where Foxtons is not operating their business. Near future they should look on this and they should also focus on London Olympic 2012 which can be a great opportunity for them.