A property developer facing major internal and market changes decided to begin a strategic planning process to reevaluate its business focus, identify new opportunities and define changes required to ensure its competitiveness and profitable development.
Context
The lack of attractive property, tighter regulatory requirements and an increasingly competitive market presented a complex and challenging outlook for the property development industry in Chile. The company decided to redefine its business focus to avoid a decline in margins and ensure it had the talent it needed to develop its business. Firstly, it sought to measure the potential future size of its business, identifying alternative strategies and agreeing a plan for the next five years. Secondly, it sought to redesign its organizational structure and ensure that it had the talent required to develop its strategic plan.
Opportunities detected
As a result of an exhaustive analysis of the company’s business units, three lines of action were identified: enter new market segments, enter the property rental market and achieve greater organizational agility. In addition, the company ruled out a possible expansion into new geographic markets which it had been studying internally.
Proposed actions
Based on the analysis, the company’s investment portfolio was revised and US$61 million was invested in business development. In addition, the company forecast sales and margins for both divisions and its core business for the next five years, defining side opportunities for analysis and investment over the following years. The company’s corporate governance was restructured, creating a board and a new organizational structure for both the company and the board was planned for the next five years in transitional stages.
Impact
The company increased its sales by 60% in three years and managed to maintain its margins at above industry levels. Thanks to a more agile and efficient organizational structure, the company was able to increase sales by more than the growth of its workforce.
