Back to School for client Harvard Case Solution & Analysis

Back to School for client Case Solution

Weaknesses

  • There is no sufficient capital to invest in this mega project
  • The partners do not have sufficient real data and they are relying on secondary data from websites
  • The partners do not have cost estimation for this project
  • The partners are new in such kind of mega projects therefore they will face legal issues

Opportunities

  • Exhibit 1 shows the total population of the university. As per the total population of the university, there are no sufficient residential projects and many students have to come from distance. This problem can be exploited through this venture.
  • As per the Exhibit 2, the rental structure is growing and by entering in this venture; both the partners can be locked into the future profit.
  • They can convert the existing buildings into apartments in case of no vacant land to build a new building
  • Having no competitor, the partners can enjoy monopoly in this particular area with higher rents. Exhibit 3 and Exhibit 4 show the average of campus and off campus monthly rents. Comparing the rental structures of both, it is clear that the room for higher profit for off-campus residence is open.

Threats

  • The major threat in this case is the availability of the land. It is not certain yet that whether the current residents are willing to sell their properties or not.
  • They might encounter with the permit issues as there are also international students willing to locate in new apartments. But the University might not allow them to live in off-campus residence.
  • The third threat is the adverse aspect of the analysis. It may be possible that students will refuse to pay higher rents if it is higher than their travelling cost.
  • Private rental residents are also a threat for this project as they also provide with utility facilities. (SWOT Analysis, 2018)

ALTERNATIVE COURSES OF ACTION

Following are the alternative that can be adopted by the partners instead of the current strategies:

ALTERNATIVE I

Due to the limited availability of in-house campuses in the University of Wisconsin, an advantage can be taken by building an off-campus student housing that will provide accommodation to sufficient number of people at decent rates. Due to the lake barrier, the land available in the downtown area is limited. Building campus in the area of downtown will provide additional benefit to the developers as they will be able to generate high average rental incomes. Evident in the Exhibit 2, showing an increasing trend.

The developers need to take into consideration the problems that will be caused by the presence of the lake as this will limit the size and the capacity of the campus.

Therefore, instead of replicating the Juniper Vista, Gainesville design, they should redesign the structure keeping in view the limited capacity they have and how they can utilize the place in a way that it can accommodate the needs of as many students as possible.

ALTERNATIVE II

The data does not include any information regarding the preference of the students and no market survey has been conducted. Therefore, before investing any of their capital into the off-campus venture, they must conduct a detailed survey regarding the preference of the students. As some students might prefer to have a luxury apartment building having sufficient facility while some might prefer to live in a traditional apartment building having minimum rents might be  ready to compromise on the facilities.

Therefore, instead of having 3 properties, as the average lot size is 5000 square feet and the proposed development require an area of 14000 square feet, they can opt for 3 properties at three different locations to target a large number of students having different needs and requirement. Instead of building single 14000 square feet multifamily luxury off-campus housing, they can opt for multiple locations and build three separate off-campus houses, providing different number of facilities. Further, they can categorize each of the house according to its location and the facilities it will offer. This will help in providing students with variety of quotes as per the requirement of the students and will cater a large number of students.

ALTERNATIVE III

University of Wisconsin has currently increased its capacity so it can accommodate as many students as possible and has further involved itself into the construction of some new in-house campus and is also expanding the existing campuses. In addition to this, UW-Madison has formed a partnership with five participating private properties by incorporating some of the existing and newly constructed properties brought under the private housing connection program. Providing roommate placement services or renting entire apartments along with amenities that are commonly available in on-campus housing.

Slater and Lenard can become a part of the private housing connections program by doing a partnership with UW. This will benefit both by solving their respective needs. As Slater and Lenard will be new in the market so being affiliated with UW will be a plus point for them and will help in mitigating the future risk to an extent that was associated with the expansion of the in-house campuses. But the major drawback related with the partnership will be the division of profits.

RECOMMENDATIONS

On the basis of above discussion and alternatives, following recommendations can be made for this venture:

  • The partner should do proper market research and public survey in case of off-campus housing residence.
  • In case of going with the off-campus housing scheme, the owners should drop the idea of luxury housing and should build more rooms in one apartment so that more students can be accommodated.
  • Also, they do not need to build luxury apartments to charge higher rents because currently there is no competition to achieve competitive advantage.
  • Following the Alternative I, if the owners still want to go with the decision of off-campus residence, then instead of replicating the residential strategy of Juniper Vista, Gainesville, the owners should redesign their own strategy.
  • If the owners follow the Alternative II, then they should locate the buildings away from each other so that they can target a larger audience.
  • Finally, the statistical results based on primary data can precisely tell the feasibility of this project in real terms.
  • As the partners are new to the market and likely to be encountered with the legal issues, they should affiliate with the university and should project on-campus residence scheme first with less risk.

CONCLUSION

We can say that the likelihood of profitability in this venture is uncertain for a number of reasons. Based on some information, it seems profitable i.e. the growth rate of rents in the town and the advantage of having no competitor. But at the same time, this project has different threats that can adversely affect the projection of profitability. The owners should do proper market research and statistical analysis to estimate the results and then select the appropriate course of action.............

 

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