Equity Residential Report Sample
After a critical evaluation of the financial position and other strategic aspects of Equity Residential, it is clear that the financial and strategic position of the company is very effective and sound, and they have all the guts from which they can flourish positively in the market. They have the manpower and they have the innovative aspect which will help them to get their full potential.
Business model is very important for the sake of an enterprise, because without a perfect business model, it is not possible for the companies to maintain their level of significance in the market (Daft, 1997). Equity Residential is Real Estate Company and it should have a business model like this. The company should have the Distribution Model in which they will sell out the residential units to the third party and take money from them. The business model can be extremely essential and effective for the company for their core effectiveness in the market.
The line of business of Equity Residential is doing their operations into two main lines which are selling of the residential units to the third party. Apart from that, the company is also giving the residential units on the credit and on rent as well. The properties of the company are located in 15 different locations of the United States including Washington, DC. It has approx 112,000 units with them which are more than enough to comply with their current business lines, and the company is effective for them.
Products are the end things that associated with an organization, and it is usually associated with the manufacturing products (Daft, 2001). There are some companies which are actually associated with the service oriented functions. The business products of Equity Residential are renting out the residential units, parks and other properties for the officer management functions. Apart from this, the company is also found interactive in selling the residential units on cash and on the credit as well. The products are highly qualified and perfect for the company.
Customers are end users of the products or services of a company, and they are very effective for their long run effectiveness (Griffin, 1990). It is important for the companies to maintain a strong significance among their customers to maintain their significance. The customers of Equity Residential are the citizens of the United States which also include the Military professionals as well which are trying to get their own house or having the facility of a great park in the metropolitan area. This particular aspect will be very essential for the customers of the company.
Value Chain Analysis
Value Chain Analysis is basically a tool that used by the growing companies of the world which are trying to maximize the level of effectiveness of their customers with a positive mindset. It is basically associated with the value creation of the customers of the company (Griffin & Ebert, 1991). In terms of Equity Residential, the company may increase the value of their shareholders through providing quality units for residential as well as office purpose in affordable rates. The company is giving special discounts to the people who are having booking large amount of residential units.
The chances and rooms of diversifying the business by staying in the market of the United States is very easy and have worth as well. Equity Residential has the chance to diversity their business in the development and renovation market as well which will certainly help them out to increase their financial feasibility with expanding the involvement of different communities. Broadly speaking, Equity Residential is doing a marvelous job in increasing the level of interaction among the people belongs to different communities.
The performance of an organization comprises over its financial as well as strategic aspects, as both of these things are required to have the same tendency (Kloppenborg & Laning, 2012). From the overall analysis of the Equity Residential, it is clear that the line of business of the company is huge, perfect and effective which will become extremely effective for the company in the near future as far as increasing the values of their shareholders as well as the customers with a positive frame of mind. It will be very effective for the company to maintain their performance in the market with having other competitors.
Mission Statement Analysis
A mission statement is one of the most important statements that associated with the long term effectiveness and benefits which the company is expecting to give to their customers (Kloppenborg, Shriberg & Venkatraman, 2003). Mission statement is an in-line document in which the company will furnish their short term objectives. Likewise other companies, Equity Residential also has a mission statement which is as follows
”To become a reliable real estate company from which the customers have the options of property according to their income”
The company is expecting to increase their portfolio in the market of the United States with a positive mindset.
Corporate Governance is the practice document or implementation aspects which are essential for a company to follow (Kloppenborg, Shriberg & Venkatraman, 2003). Without corporate governance stance, it is not easy for the companies to maintain their core effectiveness and functionality in the market. Equity Residential also have to comply with the rules and regulations of Business Ethics and Corporate Governance to make the things in their favor.
Directors are those professionals which work in an organization for the purpose of directing the things in a credible and powerful manner. A company should have effective and powerful directors at their hands for their core productivity and efficacy in the market. In the overall board of directors’ category, there is only one head director is working in the company whose name is Charles A.Atwood, who was previously working with Harrah’s Entertainment as a Vice Chairman with strong educational background. Charles associated with the company to direct the performance of the company in a well organized and powerful manner for their core positivity.
Management of an organization usually comprises on directors, Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operating Officer (COO) and other individuals which are effective in terms of taking powerful decisions for the sake of the company. Equity Residential also comprises on a perfect managerial team which is essential for the company to take powerful and timely decisions for their significance. The management of the company includes Chairman, Vice Chairman, Chief Executive Officer, President, Directors and Trustees who are in the aspect of managing the working of the team in an organized manner.
External Environment: Opportunities and Threats
In terms of social aspect, Real Estate companies have nothing to deal with anything because it is not concerned with their line of business. Therefore Equity Residential is not having a tough time in terms of managing its social environment and operation.
Organizations always want to achieve effectiveness in the market with a positive node and for this purpose they required some positive framework. Delegating the authority and task is extremely important for the sake of an organization for their long run productivity and level of efficacy. Equity Residential is also having a tough time in terms of delegating the authorities among their employees because they are very much concerned with this particular aspect and well. However, the company still manages to manage its task oriented environment in a perfect and organized manner, which will certainly gives a sense of responsibility to the company for a long span of time.
The Acronym of EFAS is External Factor Analysis and it is very significant for the sake of an entity for a long span of time. EFAS usually comprises on external opportunities and threats which are essential for a company to maintain its significant position. After applying relevant ratings and score on each of the component found in the opportunities and threats for Equity Residential, it is found that the total rating of the company is 3.95, which is more than enough to show that the company is doing comparatively a sounder and powerful job as compared to its industry. The company has a leading position in the market and it is doing a phenomenal job to have a competitive advantage and edge in the market predominantly on their major competitors.
Internal Environment: Strength and Weaknesses
The corporate structure of Equity Residential is organized and perfect, as the company is having a great sign of relief in terms of managing its operations (Kloppenborg, Shriberg & Venkatraman, 2003). The reporting stance of the company is very powerful and strong that starts from subordinate level and then move in the upward direction for the execution of the task in a best possible and effective manner (Rush, 1983). The company is having upward communication and centralized operations in which all the decisions have been taken exclusively by the upper management.
One of the biggest competencies of the company is having a diverse, innovative, intelligent and very powerful management on their head, which are capable of taking effective and timely decision for the sake of the company and make it eminent than other companies operating in the same line of business. Apart from that the company is trying to have a perfect and organized culture at their end for the execution of day to day task and increase their financial and strategic belongings in a more specialized and perfect manner.
Having powerful management is one of the biggest competitive advantages have by Equity Residential followed by t providing cost effective solutions to their customers particularly. Apart from that, the company has a complete and big portfolio of the products and services that can be very essential and effective for them to maintain their core operations in the market. Innovation in the selling prospects is yet another important competitive advantages have by the company in its core operational analysis which will certainly gives a secure and complete power to the management of the company in a perfect and organized manner.
Financial Analysis of Equity Residential is based upon two different factors which are as follows
Common Size Statement
According to the common size statement, it is clear that the financial position of the company were extremely effective from 2010 to 2013. The gross profit margin (GPM) of the selected company has been increased with a regular percentage from 2010 to 2013. It was on the highest place of 65.1% in the year 2013, which is showing that the company is able to maintain its direct cost. Operating income is also powerful, and it is nearly 22% while proportionate with the net sales of the company, showing again a positive sign for Equity Residential in their core future.
Financial Ratio Analysis
The acronym of IFAS is Internal Factor Analysis, and it is known as one of the most important valuation tool that associated with an organization. IFAS usually include strengths and weaknesses of a company. Strong culture and diverse portfolio are some of the major strengths of the company, while Interest Rate and high competition are some of the major weaknesses which may derail their core momentum in the market. The score designated to Equity Residential in terms of IFAS matrix is 4.09, which is very high than the average of 3, showing the company is doing an exceptional job in terms of managing its strengths by mitigating the level of their weaknesses, which will be essential for them in the near future.
Analysis of Strategic Factors
Strategic Factors are very essential for the sake of an organization, and it is very valuable for Equity Residential as well
There are number of strategic factors that associated specifically with Equity Residential like Culture, Debt Burden, Strong Management and others, which are giving a sort of strength to the company as far as managing their needs and level of efficacy for a long span of time. The strategic factors have a long run influence over the productivity of the management. Total score that associated with this particular stance is 3.48, which is higher than the average level of 3. It is again showing the power of the company in terms of complying with their strategic factors which will certainly keep them competitive as compared to other companies operating in the same line of business.
As mentioned above, the mission statement of Equity Residential is
”To become a reliable real estate company from which the customers have the options of property according to their income”
The company is doing a fantastic and strong job to maintain their core significance in the market with zeal and complying effectively with the behavioral management to get the succession in their mission statement for a specific time period.
Strategic Alternatives and Recommendation Strategies (TOWS)
TOWS analysis is all about eradicating the factor of threat from the company by employing the power of opportunities and overcome on the weaknesses of the company by enhancing the level of strength in it. The housing crisis external threat can be overcome with the incremental opportunities of the development and renovation market in the region. Rising Unemployment and Interest Rate’s threat can be overcome by expanding their operations in different communities in which they found the opportunity to serve different types of communities in a given time frame with a positive attitude.
On the other hand, the weakness of high competition can be overcome through their diverse portfolio of operations and strong cultural managerial stance. This particular aspect can be very worthwhile for the company in terms of managing their needs and effectiveness in the market.
There are two recommended strategies located for Equity Residential that will certainly give strength to their operations to manage them in a more diverse, ethical and effective manner.
First of all the pricing structure of the company should be reform or revive, if they really wishes to target their customers because without effective pricing structure. Hence, it is recommended to them to have a COMPETITIVE Pricing Structure, in which the prices of the products will be in comparison to other companies
Secondly, it is recommended to the company to increase the level of their promotional activities from different channels and mediums which can be effective for them, as it is now become a major necessity for the companies to flourish in the market.
Implementation of Recommended Strategy
Strong programs in which Equity Residential can educate their readers and other important players regarding their products and services should be organized by the company. All of these programs will give a sort of awareness to the people regarding the level of efficacy of the operations of the company. All of such programs are needed by the company for a certain time period to stay effective and competitive in the market.
Financial feasibility of a company will be arising comprehensively, if the related net income, gross income and feasible functions can become effective for them. The current financial feasibility of the company is having a perfect time with the company to get the appreciation in their services orientation. Equity Residential is found a perfect company in terms of having financial feasibility, as all the things associated with the company in a positive manner.
The company is operating in the American region, which is one of the toughest and powerful regions in terms of complying with the legal bindings. In order to flourish in this market, it is very important for Equity Residential to plan the things in the right manner to operate accordingly, with having a sophisticated and complete license authority. The company is complying effectively with the operational procedure for their effectiveness.
As a conclusion, it can be said that Equity Residential is a positive and financially stable real estate company which has the potential to grow substantially and positively in the market, however the company should take the recommendations as compulsory to maintain the level of effectiveness in their operations, as it is the only way from which they can flourish in this market.
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