1.0 SWOT Analysis
1.1 Regus office location: Located in prestigious exclusive business hub locations having strong global presences covering more than 100 countries. 1.2 Highly market/customer oriented: tailor made offerings for different industry requirements. (Startups, SME, Multinationals, business travelers) 1.3 Standardized office environment maintained globally: unique office environment for Regus, Customer service and technological infrastructure. 1.4 Strong brand presences across the industry: Having 25 years + expert knowledge and being the dominant brand having 20% market in a fragmented industry and having positive customer review (8.4 out of 10).
1.5 Constant Expansions: Regus always expanding its operations through strategic allianes , joint ventures & acquisitions ( Virgin, Starbuks, iyogi, laptop lane, MWB , Avanta railways.) 1.6 High technology driven: global intranet, own website for each country, apps, sophisticated use of software for customer relationship management, SEO, Social media) 1.7 Prestigious customer portfolio: Google, Starbucks, GSK, Accenture) 1.8 Streamlined cost management practices: Regus reduced operating cost by 66% by disciplined cost management practices. 1.9 Managing & Navigating local market: Think global recruit local process giving expertise knowledge of the complex markets (laws, cultures and customs) 1.10 CSR and planet oriented work
1.11 Poor Financial Management: Volatile profitability (appendix 3) chapter 11 bankruptcy in 2006. 1.12 Volatile Share Price due to mismanagement of shareholders. 1.13 Poor Employee management. (Less Reviews, 47% would not recommend no proper training motivation programs, 1.14 Managing demand and supply: Volatile occupancy rate (occupancy rate an vary weekly basis increasing the risk of profits) 1.15 Regus strongly on branded officers potential threat of unbranded serviced officers.
1.15 Shift from the manufacturing sector to service: (85% are service industries who are using serviced industries 1.16 Industry growing at a
rapid rate (10%).
1.17 Global recession enabling stronger players to buy space at a discounted rate. 1.18 (easier to enter emerging markets)
1.19 Increase of the use of serviced offices in the emerging markets.(1.25% annually in the emerging markets ( prediction global GDP 50% would represent BICK countries Indonesia and korea, charge a premium price by being the 1st to move into this market. 1.20 Serviced offices would increase inward investment to countries. (less barriers from local governments) 1.21 High revenue generating industries’ (gazelle) preference for serviced officers 1.22 Growth of new markets.
1.23 Market being fragmented hence new competition joining regularly. 1.24 Potential threat of unbranded serviced officers.
1.25 Rapid technological changers.
2.0 Macro Environmental Analysis- PESTEL
2.1 Global recession
2.2 In 2009 UK introduced a tax for commercial property owners for empty buildings High Economical
2.3 Rapid pace of change of major organisations that requires flexible property solutions domestically and internationally. High
2.4 Majority of the market growth is taking place outside the UK. Creating new demands. High
2.5 Market is fragmented and new entrants are joining constantly High
2.6 The serviced office sector saw an increase of 21% during the past 12 months High
2.7 Fastest market growth is expected to be in Asia and developed countries in Africa High
2.8 The World Bank predicts that by 2025 the economies of Brazil, Russia, India, China, South Korea and Indonesia will account for more than half the world’s GDP growth High Social
2.9 Perceptions are becoming more favourable towards alternative workplaces High
2.10 Outsourcing services has become an acceptable way of doing business High
2.11 Market leaders always need to take the different cultural norms and requirements in to consideration in order to succeed in a global level High
2.12 Globalisation has made mobility while working a necessary requirement in many jobs High
2.13 More and more customers expect personalised and consistent services at every location High
2.14 Large organisations are expected to be active in CSR and charitable activities Medium Technological
2.15 Businesses in the IT services sector fall to the largest category of serviced office users Medium
2.16 As the serviced offices businesses grow, the need for advanced technological services grow with great speed High
2.17 The impact of social media has become stronger than ever and the need for keeping the momentum and consumer engagement active in various channels of social media has become crucial as well as challenging High
2.18 Having a comprehensive website, interactive mobile apps and easy-to-use location maps have become an expected norm for any organisation High Environmental
2.19 Organisations are held liable for their carbon footprint and the impact on the environment by many stakeholders High Legal
2.20 UK Government has implemented a Carbon Reporting Commitment initiative Medium
3.0 Competitive Environment Analysis- Porter’s Five Forces Factor
Bargaining Power of the Customers
3.1 Regus has the upper hand in the bargaining power as it is established in prime locations and provide an unmatched service and offer diversified range of products. 3.2 However, due to the fragmented market, the customers have the power to choose a competitor at a competitive price. Threat of Substitutes
Medium to High
3.3 In the UK, as the market leader (in a fragmented market) Regus has a medium threat by substitutes. 3.4 In the international markets, the threat is high as the local companies of the international markets would adopt the same business model on their own due to preferential laws and established brand names, may win the local customers. Threat of New Entrants
High to Medium
3.5 In the UK,
3.6 However, in the emerging global markets, Regus has a better chance to be one of the first players to enter the market. Bargaining Power of Suppliers
3.7 As the dominant brand, Regus can offer attractive bargains to the suppliers that the competitors cannot afford. Inter Rivalry
3.8 Within the last 12 months alone, the industry growth has been 21%. 3.9 As the industry is relatively unknown territory in a global level, there is a high level of rivalry among the players for market share.
4.0 Marketing Mix Analysis- 7 P’s
As the market leader Regus has a strong product portfolio. Regus offers a comprehensive range of services that are targeted at many levels of requirements and pricing. The premium quality of the services has been maintained with investments on acquiring best human resources and through joint ventures.
Though Regus offer premium services, the pricing strategy is attractive for both SME and large scale enterprises. Assumption: Many landlords don’t want to deal with small tenants. Regus is exploiting this opportunity by renting from landlords and subletting to multiple number of SME tenants. Regus employs a push strategy by taking the business to new markets and being the pioneers in untested markets. 4.3 Place
Regus has presence of 2,000 centres in 100 countries.
It has a strong online presences with a website (with dedicated pages for each country) and social media.
Regus is heavily dependent on social media for promotional activities. Regus has a Social media Manager and provides training to its marketing team on global social media. Regus use advertisements in social media, online video, online sweepstakes and face-to-face events. Existing customers are offered with online offers and price reductions for bookings. Assumption: Regus is tapping ATL and BTL methods to drive brand awareness and attract new customers.
Regus follows, ‘Think global, recruit local’ concept, thereby profiting from local knowledge of customs and practices. Regus recognise its CS staff as the bloodline of its success. In order to communicate with the global staff, Regus use the Intranet.
New customers can book tours, get quotes and view the office space online. Existing customers are provided with a private network (MyRegus). CSRs follow a detailed list of required procedures.
4.7 Physical Evidence
Regus works with Architects to develop its corporate identity. Regus places a great importance on providing the best possible service by keeping the centres equipped with high technical and physical specifications. All the offices are tastefully decorated, with the comforts of a professional environment.
5.0 Strategic Review
5.1 Differentiation (See Figure 1, page 3)
This is the key competitive advantage for Regus. As new entrants are constantly joining the market, it is difficult to keep a cost leadership and enter new markets.
Regus is entering new markets globally and has a broad market scope. As it is easier for local competitors to enjoy cost leadership, the competitive edge for Regus lies in differentiation of its products and services (customized services) and offer them at a premium price.
5.2 Market Penetration (Figure 2)
Online presence of Regus is strong.
Regus is on the top of Google search.
Each country in Regus network has its own webpage.
Clients can manage their activities easily
Regus offers free mobile apps to expedite the venue booking process Strong presence in social media
Regus is actively take part in CSR activities which attract customers who look for ethical business solutions. Regus looks to add value through joint venture (i.e. partnering with iYogi and offering free technical support trials to the customers)