- International Presence (A Brief Review of Products/Services)
The ZILLOW Company is an online real estate database company, which deal in sell, purchases and rents regarding house and different building around the globe. Regarding its international presence, this has been observed that due to information technology and its effective use, this company has a prominent position in an international real estate market in the presence of immense competitors. The most prominent services are ZILLOW mobile. Through this service, customers can navigate technology to ask different questions regarding real estate to have effective assistance from the company. Inaddition, market place and boundary maps are also important services for customers.
· A brief review of size and performance (total assets, number of employees, total
sales/revenue, profitability and net income, ROA)
The performance and size of the company can be reviewed through various factors and ratio analysis is one of them. The Zillow Company has total assets of value $3,135.7 million as reported on the financial statement of 2015(Investors.zillowgroup.com, 2015, p. 43). The number of employees in the company as recorded in the year 2015 is 2014 full time employees as compared to the previous year that was 1215 full time employees. This increment in the number of full time employees is due to the inclusion of the Trulia in 2015.(Investors.zillowgroup.com, 2015, p. 47)The total sales volume for the Zillow Companyis $644,677 thousands in the year 2015, as compared to the last year’s revenue $325,893 thousands.(Investors.zillowgroup.com, 2015, p. 43)The company has recorded profit recorded as the Net loss in the year 2015 as $148,874 thousands. The previous year Net loss was $43,610 thousands.(Investors.zillowgroup.com, 2015, p. 43)The Return on Assets ROA can be computed as:
Other than this there are profitability and efficiency ratios for the analysis of the profitability and efficiency of the company.
|ROA||Net Income/ Revenue||(-148874)/3135700||-5%||(-43610)/649730||-7%|
|Gross Margin||Gross Profit/Sales||(644677-61614)/644677||90%||(325893-29461)/325893||91%|
|Operating Margin||Operating Profit/Sales||(-149531)/644677||-23%||(-44695)/644677||-7%|
|ROE||Net Income/ Total Equity||(-148874)/2697053||-6%||(-43610)/2697053||-2%|
|Current Ratio||Current Assets/Current Liabilities||574094/80422||7.14||401337/49196||8.16|
|Quick Ratio||Current Assets-Inventories/Current Liabilities||574094/80422||7.14||401337/49196||8.16|
The gross margin of the company has declined even with the increment shown in the revenue,it is due to the increased ratio of the cost of revenue as compared to the increment in the revenue of the company.
The operating margin of the company has declined adversely in the year 2015 because of the increase in the sales and marketing expenses, technology and development expenses, admin and general expenses and on the restructuring costs. (Investors.zillowgroup.com, 2015)
The return on Equity is decreased in the year 2015 due to the increased net loss to the company, which is caused by the increased cost of revenue and operating expenses.
The current & quick ratio of the company is same as there are no inventories for this company. The Zillow Company has current ratio that is greater than three, which depicts that there may be chance that the company is not utilizing its current assets more effectively and is therefore is in abundance.
· Key competitors and their positioning (products/services quality, prices, and market share)
The main competitor is this company is TRULIA. In addition, the other competitors are ESTETELY, Homes, HOMESNAP, MOVOTO, Open Listings, REDFIN and UPNEST. This is a fact that these competitors come up with effective pricing strategy along with quality services for customers. The management of these companies intends to come up with effective differentiation process, which makes services difference from ZILLOW. Some of the companies are using penetration-pricing strategies to attract and position better in minds of customers. Inaddition, the competitors, especially UPNEST and TRULIA are utilizing best possible distribution channels to have better placement and make customer’s minds regarding purchasing.
Success Factors In Foreign Markets
The success in foreign markets has been justified through effective expansions. Die to good revenue growth, the company has come up with differentiation regarding online sales services for the customers. In addition, the success in foreign market is prominent due to effective diversifications. For instance, the management of this company has good relations with different distribution and channels in different countries, which let them to gain an early success in foreign market. In addition, the organizational culture is containing adaptationability regarding home culture in different markets, which is also a big reason of success for this company.
Entry Mode(S) Choice
The main choices for the management are investments and licensing. Both two methods are successful for ZILLOW. However, the management is emphasizing on investment as its priority to have good cultural attachments with all stakeholders in different business operations.
9. Expansion plan in the new country (5-year plan with objectives) ((Please see 5yrs file to complete this part))
The main aim of the company is to have high profitability in first years due to quality online services for customers. The high profitability will come through good market share. For this purpose, the management has to attach with people through cultural and society involvements, which will help it to gain success according to expectations.
The five-year goals are competitive advantage, sustainability, customer satisfaction, cultural attachments and making good relations with all stakeholders such as local employees, suppliers and distribution channels. These goals have to be accomplished in annual goals, which are also pertinent to five years goals. Obviously, first the management has to achieve these goals annually and then gain high profitability.
The plan is to establish an effective organizational culture according to international standard, which will let the stakeholders to gather at the same path and achieve the goals for the company.
The management of this company is responsible for this planning and implementation. The most important thing is to make different strategies with mutual consent of all stakeholders and then come up with effective and efficient implementation. This is on the management that how it can improvise and implement all the plans in future.
The objective is to assist excellent customers in the competitive market. The customer satisfaction is a perfect measure for the management to derive success and accomplishments of planned objectives. This is necessary to mention that high profitability is not only main priority of this company, as customers services, care satisfaction will be considered as perfect measures for success for a long run.
Bizjournals.com. (2015, October 12). Success in swallowing Trulia propels Zillow shares to 52-week high. Retrieved May 9, 2016, from Biz Journal: http://www.bizjournals.com/seattle/blog/techflash/2015/10/success-in-swallowing-trulia-propels-zillow-shares.html
COOK, J. (2013, May 6). Zillow CEO Spencer Rascoff: International expansion is not in the cards for now. Retrieved May 9, 2016, from Geekwire: http://www.geekwire.com/2013/zillow-ceo-spencer-rascoff-expand-internationally-anytime/
Nielsen, R. (2016, February 1). These are the two types of companies Zillow would like to buy. Retrieved May 9, 2016, from Biz Journal: http://www.bizjournals.com/seattle/blog/techflash/2016/02/these-are-the-two-types-of-companies-zillow-would.html