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Bank of America
Dr David Robinson
1
Radio City Lofts
March 6, 2012
2
College of Business
Stratford University
March 3, 2012
On behalf of Sycamore Business Advisors, we would like to thank you for the
opportunity to help your organization with your consulting needs. The Sycamore
Business Advisors believe that our consulting services and strategic management
assistance will be of great help to your organization.
If you have any questions or concerns about our services provided to you, please feel free
to contact us at any time.
Sincerely,
3
Table of Contents
Contents
Executive Summary.......................................................................................................................... 7
DIRECTIONAL ANALYSIS .................................................................... Error! Bookmark not defined.
Business Model Analysis: ............................................................................................................. 8
Mission. .................................................................................................................................... 8
Vision........................................................................................................................................ 8
Values ....................................................................................................................................... 9
Stakeholder Analysis: ................................................................................................................... 9
Potential for Sustainable Competitive Advantage: .................................................................... 11
EXTERNAL ANALYSIS ......................................................................... Error! Bookmark not defined.
General Environment: ................................................................................................................ 12
Political/ Legal ........................................................................................................................ 12
Economic ................................................................................................................................ 13
Socio-cultural. ........................................................................................................................ 14
Technology ............................................................................................................................. 15
Industry ...................................................................................................................................... 16
Customers .............................................................................................................................. 16
Competitors ........................................................................................................................... 16
Supplier and Partnerships ...................................................................................................... 20
Opportunities and Threats ......................................................................................................... 20
SWOT Analysis. .......................................................................................................................... 21
Summary .................................................................................................................................... 23
INTERNAL ANALYSIS .......................................................................... Error! Bookmark not defined.
Capabilities ................................................................................................................................. 25
Marketing ............................................................................................................................... 25
Management.......................................................................................................................... 26
Finance & Accounting. ........................................................................................................... 26
Resources ................................................................................................................................... 28
Tangible Assets. ..................................................................................................................... 28
4
Intangible Assets. ................................................................................................................... 28
Strengths .................................................................................................................................... 29
Location.................................................................................................................................. 30
Amenities ............................................................................................................................... 30
Experience of Investors. ......................................................................................................... 30
Marketplace ........................................................................................................................... 31
Weaknesses ............................................................................................................................... 31
Pre-Leases. ............................................................................................................................. 31
Building Scarcity. .................................................................................................................... 32
Imitability ............................................................................................................................... 32
Work Distribution. ................................................................................................................. 33
GAP ANALYSIS ................................................................................... Error! Bookmark not defined.
Marketing Gap ........................................................................................................................... 34
Management Gap ...................................................................................................................... 34
Marketing Plan .............................................................................. Error! Bookmark not defined.
Purpose .................................................................................................................................. 36
Marketing Plan (See Appendix C) .......................................................................................... 36
RECOMMENDATIONS ....................................................................... Error! Bookmark not defined.
Marketing................................................................................................................................... 39
Management.............................................................................................................................. 40
Create a Vision Statement. .................................................................................................... 40
Create a Statement of Values. ............................................................................................... 42
Create an Internship. ............................................................................................................. 43
References ..................................................................................................................................... 46
APPENDICES ...................................................................................... Error! Bookmark not defined.
APPENDIX A ................................................................................................................................ 49
Stakeholders .......................................................................................................................... 49
APPENDIX B ................................................................................................................................ 50
Vigo County Job Situation ...................................................................................................... 50
Housing Market Analysis: Selling Price .................................................................................. 51
Apartment Price by Square Footage ...................................................................................... 52
Apartment Price by Features/Amenities ............................................................................... 52
5
External SWOT Analysis ......................................................................................................... 53
APPENDIX C ................................................................................................................................ 54
Radio City Lofts Marketing Plan .......................................................................................... 54
Executive Summary:............................................................................................................... 54
Stage 1: Market Research ...................................................................................................... 54
Stage 2: Mission Statement/Slogan ....................................................................................... 55
Stage 3: Goals/Brand Image................................................................................................... 55
Stage 4: Promotion ................................................................................................................ 56
Stage 5: Competitive Advantage............................................................................................ 60
Radio City Lofts Flyer.................................................................................................................. 62
Radio City Lofts Brochure: Outside ............................................................................................ 63
Radio City Lofts Brochure: Inside ............................................................................................... 64
6
Executive Summary
The goal of the Radio City Lofts consulting project is to create a strategic plan in three
functional areas that will assist Mr. Jason Widen and his partners to open up the housing
project.
7
Directional Analysis
or develop success. The Radio City Lofts Team of Sycamore Business Advisors
desired situation, and what actions are necessary to reach the desired situation.
analysis of the business model. A business model describes what, when, and how the
activities of a business are performed. Its the activities within the business model that are
intended to create or maintain a high level of value to the customer. The parts of the
business model analysis include the mission, vision, and value statements
Mission.
The mission statement describes the services Radio City Lofts provides,
including for whom, where, and how. The mission is the reason the organization exists.
The mission statement is more focused on the present than the next statement, the vision
statement.
The mission statement of Radio City Lofts reads as follows: Our mission is to
Vision.
The vision statement is a solid statement of the ultimate dreams of Radio City
Lofts. This statement consists of the long term goals of the company and can be thought
of as a statement which describes where Radio City Lofts sees itself in 5-10 years or
more. Its more vague and abstract than the mission statement. Radio City Lofts is
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without a vision statement. More information on vision statements and how to create one
Values.
The last statement, the statement of values, describes Radio City Lofts
convictions on how business is to be conducted and how people are to be treated inside
and outside of the company. Radio City Lofts is without a statement of values. More
information on the statement of values and how to create one can be found in the
Stakeholder Analysis:
The second component of the Directional Analysis is the stakeholder analysis.
The purpose of the stakeholder analysis is to identify the needs of the stakeholders with
whom Radio City Lofts intends to benefit. Stakeholders are individuals or groups,
internally and externally, that may affect or be affected the activities of Radio City Lofts.
Business Advisors to determine who Radio City Lofts intends to deliver value to, directly
or indirectly. It not only identifies the needs of stakeholders but which stakeholders are
most important to the organizations survival. After the stakeholders are identified, the
consultation is, the unique characteristics created by the organization that appeal to each
customer individually. Put in the form of an equation, the worth, or value, of a product is
as follows:
9
As mentioned above, the stakeholder analysis identifies internal and external
stakeholders which Radio City Lofts intends to create and deliver value to, and captures
value from. The chart below lists the internal and external stakeholders of Radio City
The internal stakeholders consist of the three initial partners who joined forces to
tackle the Radio City Lofts project while the external stakeholders we discovered are the
customers, or tenants. These external stakeholders are the one and only group that Radio
We next take a look at the value exchange within this situation. We will begin
with the value exchange from the perspective of Jason Widen and his partners.
As you can see from the chart above, Jason, Donald, and Michael all provided the
initial capital, experience, time, and effort. In return you can expect a return on
The next chart depicts the value exchange from the perspective of tenants of
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Value Given Value Received
Money Place of living
Occupancy Amenities
Better Quality of Life
In this value exchange the tenants deliver value to Radio City Lofts in the form of
money, primarily for rent, and occupancy. In exchange the tenants receive not only a
place of living but amenities such as a washer and dryer, refrigerator, dishwasher, etc.,
and a better quality of life provided by Radio City Lofts unique apartments.
asked the following question: Does this model offer the potential for sustainable
competitive advantage? With the information we gathered we were able to take a look at
organizations ability to deliver and capture value for its customers over a long, ideally
indefinite, period of time. Also, the value a company provides must be a rarity, or value
Our team researched local apartments and housing options within a similar price
range. None offered everything Radio City Lofts does which is twelve feet high ceilings,
washer and dryer, stainless steel appliances, wood floors, storage, secured entry, large
To simply answer the question: Does this model offer the potential for
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External Analysis
The purpose of the external analysis is to examine opportunities and threats that
exist in the organization. Three things are identified in an external analysis, including
General Environment, Industry, and Partners and Alliances. Furthermore, the general
and technology. It is important to determine the factors that affect the organization so that
General Environment:
Factors within the political and legal section include any laws, regulation, judicial
decisions, and political forces in effect at the federal, state and local government.
Businesses are constantly dealing with political and legal issues. There are many
political/legal forces that will lead to opportunities and threats for Radio City Lofts.
Political/ Legal
Fairness Act is to authorize funds to prevent housing discrimination through the use of
nationwide testing, to increase funds for the Fair Housing Initiatives Program, and for
other purposes. The bill never becomes a law, but if does it would put pressure on the
business (GRO).
permit in the county. The inspections department issue's Building, Electric, Plumbing and
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Building Permits Required.
The law and the regulation of Vigo County require a construction permit issued
permits will result in no less than one hundred dollar fine (Chapter 7).
modification of the housing building to prevent lost in people or property. In any new
Furthermore, all building must be constructed with materials and utility equipment
resistant to flood damage. Also, the buildings must be constructed by methods and
practice to minimize the flood damages. Additionally, the water supply system must be
design to eliminate infiltration of flood waters into the system; as well as the sanitary
Economic.
current situation of the economy. With current state of the economy, most businesses are
feeling the pressure from unstable economy. The unemployment rates are higher than
ever, the demands of high standers living are minimized. In the current situation there are
71975 occupied jobs in Vigo County. On other hand, 7726 people unemployed in the
Vigo County, with 9.7 percent of unemployment rate (Labor). The table below shows
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Industry Job Description Income
Bachelors degree (Workforce). Studies show that in 2009 there were more than 47,706
housing units available in Vigo County alone. Furthermore, the homeownership rate
Socio-cultural.
Socio-cultural aspects of society have major impacts on organizations in any
industry. Cultural values are continually changing regarding the demographic situation.
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region of the world. The socio-cultural aspects are very important in determining if an
In 2010 the population of the Vigo County estimated around 107,848 people
(Bureau ). There are 17,807 people between the ages 18-24 attending colleges.
Additionally, there are 26,502 people between the ages 25-44 living in the Vigo County.
The majority of the ethnicity in the Vigo County are white with 88.3% and 6.9 black and
Asian with 1.7% and 1.3% others. The RCL could take advantage to attract these young
professional whom attending the school or just starting their professional career
(Bureau).
Technology.
opportunity and the threats caused by the change of technology. The Apartment Renter
Technology Survey indicate seventy eight percent of people have a computer in their
apartments, while eighty five percent subscribe to high speed internet. People intend to
give the internet high priority in their apartments (NMBC). Another survey indicate
that fifty eight percent of people have a wired landline in their apartment, while thirty
system is useful to use for the business owner and it is useless for the costumers.
Customers want someone to feel and care about their problem and find solution.
Technology brought great software that makes tracking of budget easier than ever. The
Guide+ is software that could be installs in desktop, and the manger could track the
15
Industry
Customers.
Radio City Lofts are targeting young professionals and graduate students between the
ages 25-40 with annual income starting from $35,000 a year. According to the Census
Bureau the estimated population in the Vigo County in 2010 is 107,848 (Bureau). The
Indiana State University is one of the main attractions of graduate students in the
Vigo County. With more than ten thousands students enrolling every year in graduate and
undergraduate class, Radio City Lofts would have great chance to reach out for one of
their targets. With dorms that overloaded with students; and the demand of hosing is high
in the downtown area. The location of Radio City lofts gives a unique opportunity for the
students to live in the downtown area and blocks away from the ISU campus. Indiana
State University intends to move to the downtown area in the soon future. Next year the
new collage of business will move to 7th and Cherry Street, and it will give the tenant
students in Radio City Lofts shorter distance to the campus compare to other students live
in the dorms.
Competitors.
The City of Terre Haute has many different schools surfing the Vigo County. For
example, Indiana State University, Rose-Hulman, and Ivy Tech locating in the Vigo
County. Furthermore, there are numbers of companies located in the Vigo County. With
high demand of housing the competitions are high. The two main competitors are housing
16
Housing market.
The housing market in Terre Haute City grow like never before. People inted to
buy houses in the Vigo County than montyly rent. In addition, the average price paid for
homes in Vigo County is increasing. It was $102,424 in 2010, the highest ever, topping a
2006 high of $100,475 (Real). The average price in Vigo County was $80,000 in 2010,
down from a high of $83,250 in 2006. In 2010 the median home sale in Indiana was
Vigo County decreased 3.57 percent over the last year. However, the number of pending
sales in Vigo County past months is up 15.48 percent over February 2010. In the state,
the pending sales down 6.6 percent. The number of closed sales is down 6.35 percent in
Vigo County and statewide it is down 6.6 percent. The median sales price is up 0.13
percent in Vigo County, while statewide it is up 1.8 percent (Greninger). (Please refer
$120,000.00
$100,000.00
$80,000.00
$60,000.00 2010
2006
$40,000.00
$20,000.00
$-
Price Median Median Sale in Indiana
17
Most of the houseing that on the markets are located in east, north, and south of
the downtown area. Which gives and advatage to the housing business in the downtown
areas for the location. The average monthly rent for house in the Vigo County $560.
Which is very compaetive price compaier to the apertments. The average year of built of
house in the Vigo County is 1920. The percentage of the householders in the Vigo
Apartment Complexes.
Apartment complexes are one the biggest competitors for Radio City Lofts.
Compared to the unique services and the amenities that they provide made them number
one choice for the customers. The apartment complex intends to gain the costumers trust
by providing them with unique and special amenities that no other real estate company
could provide. The space that the apartment complex gives the costumer the freedom do
walk with their pets around the garden, or gives their children space to play in their free
time. The table below shows the different in amenities between Radio City Lofts and the
The apartment complexes offer a verity of different life style for ether the students
or young professional. Mostly the apartment complex is built in a spacious place where it
gives their tenants a variety of space to expand their freedoms. After comparing
apartment complexes with Radio City Lofts it has become clear that the complexes offer
more square feet in the one and two bedroom, and Radio City Lofts offer more in square
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1800
1600
1400
1200
1000
Competitors
800
RCL
600
400
200
0
1 Br 2 Br 3 Br
Price is one of the most attractive things when it comes to new tanet. People
intend to look for the best price that match their budget before they sign up. The prices in
the apartments complex depends on the space and the number of the bathrooms. The
prices between RCL and apartment complex rughly the same. The diffrents start from
thirteen to a couple hundred, again the price depend on the featuers. The graph below
$1,800.00
$1,600.00
$1,400.00
$1,200.00
$1,000.00
Competitors
$800.00 RCL
$600.00
$400.00
$200.00
$-
1 Br 2 Br 3 Br
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Supplier and Partnerships
The industry is comprised of suppliers, competitors, and customers. Subcontractor
plays an important role in Radio City Lofts project. According to Mr. Widen the
estimated cost for redoing the building is 1.1 million dollar. The constriction includes
painting the interior and the exterior of the building, shaping the size of the units, and
designing each of the sixteen units. Bank is main money supplier for the project. The loan
estimated around 1.2 million dollar. Mr. Widen said in the similar project that he done in
the past he bought the appliances from whole seller at whole seller price. In Radio City
Lofts Mr. Widen planned to buy the appliances the same way that he bought it in the
previews projects.
There are several investors in Radio City Lofts. They all invest in different
amounts money with different percentages. The investors are Jason, Michael, Donald,
and ISU Foundation. With these investors on board they would drive the project
sustainable competitive advantage. It also can help identify how the organization can
move from the current state of readiness towards desired state. It is also important to
identify the threats in order to show what could hinder the operation from moving
After identifying the external factors, the opportunities and threats were
identified. One of the major threat is the banks would not give enough money to supply
the project. This could cause delay on the project construction and find other source or
investor. Another threat is the housing market. People intend to buy not to rent houses in
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the Vigo County. This could force the business to collapse. Another major threat that is
facing Radio City Lofts is the cost of the apartments for each month. The high price that
RCL charges their tenant roughly expensive compared to the competitors. This could
cause a vacancy to some units which prevent the business to break even.
Radio City Lofts has a unique opportunity by locating in the downtown area. The
location could give the new tenant the convenience of walking distance to Indiana State
University campus and the business in the downtown. Another major opportunity is the
population of Vigo County. With 107,848 people lives in Vigo County with median
income of $37,876 a year, Radio City Lofts would have a great chance to fill their units
every year. In addition, the building concept would add a great opportunity for Radio
City Lofts to shine in the middle of the downtown with the unique and beautiful design.
SWOT Analysis.
A SWOT analysis provides an assessment of strengths, weaknesses, opportunities,
and threats that exits in the organization. The strengths and weaknesses evaluate the
internal factors that can influence the ability to satisfy customers. Strengths are identified
as the core competencies, while weaknesses refer to any limitation the organization could
encounter. Conversely, opportunities and threats are independent for the organization and
can include items not directly correlated to the company itself; these would be considered
external factors. Opportunities specifically refer to the favorable conditions that exist in
the environment that can help the organization advance if acted don properly. However,
threats are the barriers that may prevent the organization from moving forward to reach
their objective and goals. With a thorough examination of each of the four areas, an
21
opportunities. Furthermore, ensuring that strengths and opportunities match will generate
desires. By completing the SWOT analysis, an organization can evaluate its current
perspective with the actual state they are operating at. A Visual Representation of the
Strengths Weaknesses
Location Pre-leases
Amenities Scarcity of building for
Experience future opportunities
Creating their own Imitability
Marketing
Niche
SWOT
Opportunities Threats
Location Banks
Population Competitor
Market Price
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Summary
The external analysis has identified important opportunities and threats that the
organization fact in the outside world. For the Radio City Lofts, forces that were
forces include Housing Fairness Act, Building Inspections Department, Building Permits
Required, and Provisions for Flood Hazard Reduction. Economics factors include
ages, and education rate. Technology forces include needs of internet, software use, and
humane representative.
The industry that the Radio City Lofts exists in consists of customers,
competitors, and suppliers. Customers include young professional and graduate student.
subcontractors, whole sale of appliances, and bank. The partners include Jason, Michael,
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INTERNAL ANALYSIS
Upon the completion of the directional analysis, the Sycamore Business Advisors
team conducted an internal analysis of Radio City Lofts. The intent of the analysis was
to identify the firms resources and capabilities that currently or will potentially
strategy because the strategic position is a path that focuses decision makers on the future
of the organization. A firms future success depends on its ability to develop capabilities
that are useful in obtaining competitive advantage. The focus of the following section is
to identify the capabilities and resources that affect Radio City Lofts competitive
advantage.
Capabilities are qualities, abilities, or features that a firm can use or develop to
create potential. Capabilities allow a firm to utilize its resources, which are the
advantage, it is imperative to identify the capabilities and resources that are most
important or lacking in a firm. Capabilities and resources can be either basic or core.
Basic capabilities and resources are those that merely satisfy the minimum standards and
can be easily outsourced to an outside company. Core capabilities and resources, on the
other hand, are those that are essential to a sustainable competitive advantage. Thus,
these capabilities and resources are likely to be completed internally and are likely never
to be outsourced. The following sections will identify the basic and core capabilities and
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Capabilities
The knowledge and technical skills that a company possesses in order to create
products and services make up its basic capabilities. To fully understand the capabilities
of Radio City Lofts, Sycamore Business Advisors examined each functional area
separately. This assisted the team in understanding how each area could be enhanced to
utilize its full capabilities and lead to profitability and sustainability. Detailed
suggestions for how to improve these areas will not be included in this section, but rather
in the GAP analysis and recommendations sections. The purpose of this section is
primarily to indicate the current situation for each of the important functional areas.
Thus, it will provide us with valuable information that will help develop worthwhile
recommendations.
Marketing.
Despite the fact that very little marketing for Radio City Lofts has been
conducted to this point, the initial interest from passers-by of the property is very
encouraging. The building signage has been effective in creative interest, but a more
extensive marketing approach is needed to further enhance the awareness of Radio City
Lofts. Thus, the team has developed a comprehensive marketing plan, which will be
outlined later in the marketing recommendations section. This plan will lay out a step-
previous experience in marketing, the team believes that the management group of Radio
City Lofts will be able to effectively follow through with the plan we will recommend.
The location and uniqueness of this property present a great opportunity for the investors.
By instituting an effective marketing plan, the likelihood for success and sustainability in
25
Management.
The current management team of Radio City Lofts is comprised of Mr. Jason
Widen, Mr. Donald Turner, and Mr. Michael McCourt. Each of these individuals brings
to the partnership a very distinct set of skills which will be utilized in many phases of this
business. During the construction stage of the project, Mr. Turner will act as the general
contractor. His extensive experience in the construction industry is very valuable for
Radio City Lofts because it eliminates the need to hire an outsider to fill this position.
Mr. McCourt is also utilizing his many years of experiencing in the finance industry to
lead his fellow partners through the financing negotiations. Based on the teams
conversation with Mr. Widen, it appears as though once Radio City Lofts is operating, he
will hold the responsibility of performing the day-to-day management and operations of
the property. In the recommendations section of this report, the team will provide some
suggestions, including an internship program, which can be used to help remove some of
finalizing a finance plan which presents them with the most beneficial financing terms.
Mr. McCourt, who has 25 years in the commercial mortgage banking industry, will be
primarily responsible for acquiring financing for the property. The investors have met
with at least four local bank financing officers to seek a construction loan. The intention
of the investors is to refinance the construction loan to a fix term loan after the
construction is complete. Mr. Widen has informed the team that some bank finance
officers have been hesitant to approve a loan request due to the fact that this property is
26
There have been some recent developments that have forced the investors to
reconsider their financing options. The main development occurred when the hard costs
of the construction came back approximately $200,000 higher than expected. This
caused the investors to begin to look at the possibility of adding more investors to their
ownership group because there was no chance of receiving a larger loan from the banks.
According to Mr. Widen, two distinct options have been discussed by the
partners. The first is a mezzanine loan structure. Under this scenario, an addition
investor would provide a loan to the partnership and would result in a repayment with a
preferred rate of return at a proposed rate of 12 percent. The second option is a full
partnership interest. Under this scenario, the additional investor would provide a
percent interest in Radio City Lofts. This plan has the potential for the additional
investor to earn an 18 to 20 percent internal rate of return over a two to three year
investment period. The partners have been in contact with several potential investors. A
Mr. Widen has not informed Sycamore Business Advisors of the partners plans
for an accounting system. However, it is assumed that some bookkeeping software will
be used to record expenses and rent revenue. In the finance and accounting
recommendations portion of this paper, we will present some suggestions that could
potentially help the partners with the current financing efforts as well as the accounting
27
Resources
Resources are the tangible and intangible assets that are necessary for a company
to conduct business. Tangible assets are capital, physical plant and machinery, buildings,
etc. Examples of intangible assets, on the other hand, are knowledge, brand name,
Tangible Assets.
The main tangible assets for Radio City Lofts are its building and surrounding
property, and its capital. The investors were fortunate to acquire the old TWI building at
a very low price. In addition, they were able to acquire enough surrounding property to
provide space for 30 parking spots near the building. The capital provided by the
principals is also an important tangible asset that will get the business off the ground.
The latest projections provided by Mr. Widen indicted that the partners have put forth
Intangible Assets.
Although a business cannot be successful without sufficient tangible assets, the
intangible assets it possesses may be equally important. The investors of Radio City
Lofts possess knowledge and experience in areas which coincide with the necessary areas
for this project. These include leasing, marketing, financing, and construction. The
knowledge base of the investors should be a driving force in making Radio City Lofts a
profitable and competitive business for many years to come. Finally, Radio City Lofts
has a prime location which will allow it to be easily viewable by anyone traveling down
7th Street. This is evident due to the large number of calls from interested individual who
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Core Capabilities and Resources
After examining the basic capabilities and resources of Radio City Lofts,
Sycamore Business Advisors developed its core capabilities and resources. A core
capability is something that a firm does better than anyone else in its industry. A firm
often derives its competitive advantage from its core capabilities. A core capability must
meet three distinct criteria. First, it must provide potential access to a wide variety of
markets. Next, it must make a major contribution to customer value. Finally, it must be
Sycamore Business Advisors believes that Radio City Lofts core capability is
providing a unique loft style apartment in downtown Terre Haute. No one else in Terre
Haute is providing consumers with the types of living styles that they are offering. The
company must utilize this core capability to ensure that it can sustain a competitive
Strengths
In this section, Sycamore Business Advisors will identify the strengths of Radio
City Lofts. The team analyzed the material provided by Mr. Widen to determine items
that are favorable or advantageous and have the potential to provide a competitive
advantage over industry competitors. Four main strengths were identified which will
greatly assist in building a competitive advantage in the Terre Haute real estate market.
29
Location.
One of the greatest strengths of Radio City Lofts is its location. With the recent
resurgence of downtown Terre Haute, the team believes that the prime location will allow
for continued occupancy and overall success of the business venture. Not only is the
property in close proximity to several shops and restaurants, it is located within walking
several undergraduate and graduate studentsthe main target market for the company.
Amenities.
Another key strength of Radio City Lofts is its amenities. Few, if any,
competitors offer the same amenities, especially twelve foot ceilings, large windows, and
wood floors. These amenities provide tenants with an alternative to the traditional
apartment floor plans which are prevalent in most of the other apartment complexes near
Indiana State University. In addition, tenants will be provided with stainless steel
appliances, high speed internet, and secure storage. The team is confident that these
amenities will attract several students who are looking for something other than dorm-
style living.
Experience of Investors.
Financing and operating a real estate property can be difficult. Thus, having
partners with experience and expertise in key areas is very important. Mr. Widens
experience in marketing, management, and leasing is quite valuable as these are the most
obstacle for Radio City Lofts is the financing of the construction. Finally, Mr. Turners
This was evidenced by Mr. Turner recognizing that the estimate for the electrical
component of the renovation was greatly overvalued. With Mr. Turner as the general
contractor for this project, the investor group can be assured that they are receiving the
best rates possible from their contractors and subcontractors. It is evident that all key
Marketplace.
The investors of Radio City Lofts are creating their own marketplace in the Terre
Haute vicinity. The modern luxury feel that the company is trying to portray is the first
of its kind in the city of Terre Haute. This concept differentiates itself from the
traditional style that is utilized in most properties. Instead of the usual square rooms with
drywall and carpet, Radio City Lofts will feature spacious, open designs that are likely to
be appealing to the younger generation. This appeal could likely attract undergraduate
Weaknesses
In addition to determining the strengths of Radio City Lofts, Sycamore Business
Advisors analyzed weaknesses of the company, mainly obstacles that could hinder the
weaknesses that could prevent the ultimate success of Radio City Lofts.
Pre-Leases.
The ultimate goal of a real estate company is to achieve full occupancy on a
consistent basis. For a new business venture, such as Radio City Lofts, it is even more
important to ensure that all units stay full due to low levels of capital and cash flows that
31
Mr. Widen provided the team with data which revealed that approximately 60
individuals have called to inquire information about the units. However, only two or
three interested parties have signed a lease agreement. This is discouraging because the
banks are more apt to provide loans at lower interest rates if the property owner can
In addition, most other rental properties in the area have begun to pre-lease their
units. Thus, by not acquiring pre-leases in the next few weeks, Radio City Lofts may
miss out on several individuals who are interested in living in their units. The uncertainty
concerning the beginning of construction will also likely deter interested individuals from
signing agreements. Most individuals do not want to take the chance of signing a lease
for a unit which may or may not be ready when they are scheduled to move in.
Building Scarcity.
Mr. Widen has expressed interest in acquiring additional property in the
downtown Terre Haute area for use in future projects. He has not informed the team of
any ongoing negotiations or inquiries for other property, but it is assumed that he is
keeping his eyes open for additional properties. Unfortunately, the team does not foresee
a significant amount of buildings that will become available over the next couple of
years. If the investors were to find an additional property, they would likely have to
settle for building units above a commercial unit. However, this provides the opportunity
to collect rent revenue from a local shop or restaurant owner, who is more likely to stay
Imitability.
business model is not easily imitable. If an outsider can achieve equal or larger success
32
than Radio City Lofts by spending close to the same amount of money, than the business
operation is easily imitable. The team expressed these concerns to Mr. Widen at a
meeting earlier this semester. He stated that there is a low chance of imitability due to
the amount of effort and cash investment it would take to develop a business similar to
Radio City Lofts. Pursuing a project of this magnitude requires a large investment of
Work Distribution.
Sycamore Business Advisors has analyzed the various functional areas of Radio
City Lofts. Based on conversations with Mr. Widen, it appears that he will be conducting
the majority of the organizational tasks for the firm. In addition to managing the
property, Mr. Widen will also be controlling the marketing and human resources tasks.
Due to Mr. Widens diverse business ventures, he is often forced to be out of the state or
the country for extended periods of time. Thus, the team questions how he will be able to
commit the necessary time that it will take to operate Radio City Lofts. It appears that
this heavy workload for Mr. Widen could hinder the overall successfulness of Radio City
Lofts.
it appears that Mr. Widen is doing more than his fair share of the operations. It is likely
that this is the desire of all of the partners, however the team believes it could be a
hindrance. However, the team has designed the framework for an internship program,
which would allow a college student to perform certain tasks that could remove the
burden from Mr. Widen. A detailed synopsis of this program will be identified in the
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Marketing Gap
A Gap analysis was performed on Radio City Lofts to determine where the
company stands with regards to competition. A line scale of zero-ten was used; zero
being the lowest or worst and ten being the highest or best. The requirements to obtain a
rating of ten are as follows; all rooms filled with people from target markets, have an
established brand image of luxury, advertising across multiple mediums social media
being the most important, and upon tenant move-in a two week turnover rate should be
established. Having these factors in place will earn a rating of ten and be considered the
The current situation for Radio City Lofts has been determined to be a rating of 5. This
shows that the company is performing a fair amount of advertising, no social media
though, they have a small number of pre-leases, and little brand image established. The
recommendations section was created in order to take the business from its current
Management Gap
Low 0 3 5 7 10 High
0=Not performing 3= Performing but hurtful to the company; 5=Average across market;
Current situation
Rating = 4
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Our consulting group has decided Radio City Lofts in their current state in concern to
their management are a 4 on a scale from 1 to 10. We have labeled Radio City Lofts a 4
due to the amount of management the business requires to operate, but is only managed
by one partner. As of now Jason is the only partner working the front end of the business
which also includes the marketing, human resources, and daily operations.
Desired Situation
Rating = 8
their management area of business. Sycamore Business Advisors believe for Radio
City Lofts to compete at the necessary level they should be operating at an 8. This is
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Marketing Plan
Purpose
The marketing section of this project was developed in order to help Radio City
Lofts with the current project as well as provide information that will be of value for the
next project. Throughout the semester we have created a marketing plan, performed
market research, and developed a set of recommendations based on a GAP analysis. This
section will include an overview of the marketing plan and detailed information about the
This plan details information about the target markets, set goals for the company, gives
options and recommendations about promotion, and defines Radio City Lofts competitive
advantages. Through the use of this plan Radio City Lofts will be able to obtain a
The first section of the marketing plan is market research. A survey was created in
order to find information about the already chosen target markets. The information deals
information. There were a total of 109 respondents, 48% undergraduate students, 38%
graduate students, and 14% young professionals. The scope of our survey was aimed at
students given that the previous survey provided more information about young
professionals. The surveys were distributed to two undergraduate classes and two
graduate classes within the College of Business at Indiana State University. Surveys were
also handed out at a Terre Haute Young Leaders meeting. The results from this survey
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The second section of the marketing plan focused on a slogan. With Radio City
Lofts having no tagline, we created one that is in line with the current mission statement
and competitive advantage factors. The new slogan developed is A new standard of
living. This will help to create the brand image of the company.
The third section set specific goals for the company in three areas; general,
annual, future. The general goals include; becoming the market leader in Terre Haute and
providing the most luxurious and comfortable apartments available. Because Jason is
breaking the mold of the apartment industry in Terre Haute, we feel as though these are
very obtainable goals and should influence his brand image. Annual goals included; pre-
leasing all units to people from the established target markets and to advertise across
multiple mediums specifically social media with Facebook and Twitter. These goals
should be met within the next six months, though social media should be addressed much
sooner. Finally, the future goals include; developing a brand image that has a monetary
value and maintaining a two week turnover rate for tenants. By creating a valued brand
image the company will be to sell or re-finance for a much higher rate than the fair
market value.
The fourth section deals with promotion. For this section a mixed media push
strategy was used. This includes radio, print, and online promotion in combination with
the large sign already on the building. For each medium a detailed price list is given
along with some suggestions about specific ways to use each medium to attract the
correct customers. A list of options for pre-lease incentives was also given. This is fully
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The last section of the marketing plan defined Radio City Lofts competitive
advantages. A total of four were defined and explained. The first advantage factor is
location, being located in the heart of downtown Terre Haute gives the company an edge
of competition and allows tenants to easily walk to many of their favorite restaurants,
shops, and bars as well as Indiana State Universities campus. The second factor was
luxury. The idea of bringing luxury to a city that has little of it will create a large amount
of interest in itself. By promoting this through all media forms the company will be able
to position itself correctly. The third factor is having a young appeal or feel. By
renting out to certain individuals in the target markets the complex will have a small
group feel and be a comfortable place for tenants to call home. The last factor identified
was the historical building. The history and old feel of the building will contribute to the
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Recommendations
Marketing
The recommendations section was made with marketing plan and GAP analysis in mind.
GAP rating of ten. There are four current recommendations that we have established.
The first is to develop the brand image. This will be done by using a push strategy
to obtain market interest from different directions at one time. By properly using the new
slogan and keywords the company can set its position in the mind of the customer. The
second recommendation is to develop social media. Keeping the specific targets in mind,
Facebook and Twitter are the most used forms of media. By developing these sites Radio
City Lofts can connect better with its potential customers and allow for an easy share of
pre-lease you build up a reputation and create hype around the service. This should
translate to awareness and ultimately help to fill the complex. The last recommendation is
to reorder the target markets. Through the use of the survey we have found that graduate
students are the most willing to purchase this service. They have the capital and are a
growing group with the annual expansion of Indiana State University. The undergraduate
section should also move up into the main targets and young professionals be dropped to
a sub-target. Our analysis of the survey shows that many young professionals either
is a list of three factors that should provide an advantage in the next project. The first
future recommendation is to perform market research earlier. This project had already set
target markets and the survey was used to determine information about those markets. If
39
market research is done earlier the target markets would be able to be chosen based off of
the results, then additional research can be done to find out relative information about the
specifically stating this on your site and social media sites you are showing that the
statement is of value to the company. Also, this creates a more professional appeal and
will attract the appropriate audience. The last recommendation for future projects is to
make sure that social media is kept up to date. Information is shared across the web very
quickly and people have grown accustomed to having updated information readily
available. By keeping up with your customer base they will remain happy and loyal. If
the sites fall behind and lack updates customers will get bored and move on, possibly not
Management
As defined by oxforddictionaries.com, management is the responsibility for and
analysis, Radio City Lofts is currently at a 4 on the number line. In the following
paragraphs we will provide recommendations we believe will help Radio City Lofts close
statement of the ultimate dreams of Radio City Lofts. This statement consists of the long
term goals of the company and can be thought of as a statement which describes where
Unlike a mission statement, a vision statement doesnt describe whom, where, and
how. Rick Maurer, a renowned change management consultant, explains in his article
40
How to Create a Vision (or Compelling Goal) Statement facilitates goal setting and
planning and has the power to align functional areas across the company. We feel a
vision statement could have a positive impact on the way Radio City Lofts shapes its
future. Below is an outline borrowed from the aforementioned article by Rick Maurer on
Before you begin, you must determine who needs to be in the room for the
meeting. We feel that the partners already involved with the project would make great
attendees.
I. The Meeting
a. Introductions
a. Hold a conversation that focuses on the question Who is the customer for
want the company to be. Have those in the meeting take a minute to relax
and think of ways to answer the question discussed earlier. Have everyone
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VI. Dilemmas
a. Identify issues that cant possibly be resolved from the first draft of the
vision statement.
a. Articulate a final draft of the vision statement. If you know someone who
is a great writer or someone who can proof read your final draft, have
them do it. Doing that will free up more time for you to focus on the
business.
dictates how business is to be conducted and how people are to be treated inside and
outside of the organization. We believe that creating a clear statement of values will give
statement of values. The following paragraphs fall into the outline above under section V
and begin with the question In order to be successful, what values do we need to
follow? This question can be answered through asking a few more questions.
Again, we feel that through creating a statement of values Radio City Lofts will
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Create an Internship.
On internship.coms list, 10 Benefits to Starting an Internship Program one will
find increase productivity take advantage of low cost labor and find future
employees among some of the reasons why creating an internship is a great idea.
Creating an internship program is a little more involved than making a list of the
implementing an internship program. Along with the ideas we offer, we have attached a
copy of the U.S. department of Labor Wage and Hour Divisions fact sheet on Internship
Programs Under the Fair Labor Standards Act. This will provide further guidelines on
creating an internship for an academic year you must create guidelines on when
applications are due and how long the internship will last. Take into consideration the
amount of time it will take to screen and select applicants. Keep in mind also that equal
involved and we suggest that, especially in the beginning, considerable time is taken to
mentor and teach the intern. Weekly progress meetings or coaching sessions are
suggested.
meaningful assignments. Tasks and assignments should be challenging and plentiful. You
are doing both yourself and the intern a disservice if you are only providing them with
busy work. Along with meaningful assignments, creating measurable learning objectives
43
is necessary. An example of a measurable learning objective as taken from
produce a marketing plan for XYZ product line. The objective is clear and it can be
recommended.
One of the biggest issues in creating an internship program is how the intern will
be compensated. A paid internship is similar to a part time job. All the procedures for
compensation, hiring, and firing lawfully must be followed and proper documentation
(i.e. tax information, work eligibility forms) must be turned in to the Department of
followed:
1. The internship, even though it includes actual operation of the facilities of the
environment;
3. The intern does not displace regular employees, but works under close
4. The employer that provides the training derives no immediate advantage from
the activities of the intern; and on occasion its operations may actually be
impeded;
internship; and
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6. The employer and the intern understand that the intern is not entitled to wages
If these factors are met, an employment relationship does not exist and minimum
wage and overtime provisions dont apply. Please refer to the attached document for any
1. Visit www.career.indstate.edu
2. Click the Get Linked tab on the left hand column of the
screen.
http://www.indstate.edu/psychology/docs/internshipAgreementForm.pdf
45
References
GPO. "H.R. 476, THE HOUSING FAIRNESS ACT OF 2009." U.S. Government
<http://www.gpo.gov/fdsys/pkg/CHRG-111hhrg56239/pdf/CHRG-
111hhrg56239.pdf>.
County, Vigo. "Vigo County, Indiana // Building Inspections Department." Vigo County,
<http://www.vigocounty.in.gov/department/?fDD=11-0>.
County, Vigo. "Chapter 7 - Building & Construction Regulations." Terre Haute. Terre
chapter/Chapter%207.pdf/view>.
<http://www.bls.gov/eag/eag.in_terrehaute_msa.htm>.
<http://www.terrehauteedc.com/workforce>.
"Vigo County QuickFacts from the US Census Bureau." State and County QuickFacts.
<http://quickfacts.census.gov/qfd/states/18/18167.html>.
"Economy & Demographics." Economy & Demographics. Terre Haute Economy &
46
NMBC. Web. 01 Dec. 2011.
<http://www.nmhc.org/Content/ServeContent.cfm?ContentItemID=4236>.
group.com/uploads/7_Impact%20of%20New%20Technologies%20on%20Space,
%20Ops%20and%20Revs.pdf>.
HOUSING
"Terre Haute Real Estate Market." ForecastChart.com Home Page. Forecast Chart.
Greninger, Howard. "Foreclosures Are Still Hampering Terre Haute Housing Market."
Foreclosures Are Still Hampering Terre Haute Housing Market (2011). Print.
"Terre Haute, Indiana (IN) Profile: Population, Maps, Real Estate, Averages, Homes,
News, Sex Offenders." Stats about All US Cities - Real Estate, Relocation Info,
House Prices, Home Value Estimator, Recent Sales, Cost of Living, Crime, Race,
Haute-Indiana.html>.
terre-haute/community-overview/housing>.
47
10 benefits of starting an intern program. (n.d.). Retrieved from
http://www.internships.com/employer/resources/setup/benefits
Maurer, R. (n.d.). How to create a vision (or compelling goal) statement. Retrieved from
http://www.rickmaurer.com/wp/wp-content/uploads/2011/01/CreatingVision.pdf
48
APPENDIX A
Stakeholders
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APPENDIX B
Vigo County Job Situation
Industry Job Description Income
(24 companies
1,338 jobs)
jobs)
50
companies 7,509 workers $12.83 avg/hr
$120,000.00
$100,000.00
$80,000.00
$60,000.00 2010
2006
$40,000.00
$20,000.00
$-
Price Median Median Sale in Indiana
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Apartment Price by Square Footage
1800
1600
1400
1200
1000
Competitors
800
RCL
600
400
200
0
1 Br 2 Br 3 Br
$1,800.00
$1,600.00
$1,400.00
$1,200.00
$1,000.00
Competitors
$800.00 RCL
$600.00
$400.00
$200.00
$-
1 Br 2 Br 3 Br
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External SWOT Analysis
Strengths Weaknesses
Location Pre-leases
Amenities Scarcity of building for
Experience future opportunities
Creating their own Imitability
Marketing
Niche
SWOT
Opportunities Threats
Location Banks
Population Competitor
Market Price
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APPENDIX C
Radio City Lofts Marketing Plan
Executive Summary:
The goal of this plan is to help develop a strategy that can be used for promoting
Radio City Lofts. The plan was made to help the current project under construction. Our
team performed market research, developed goals for the company and brand image,
established a slogan, created a mixed media advertising approach, and distinguished the
companys competitive advantages. We hope you find this plan valuable.
Market Research.
o Market research was done in order to assure that the company had
consumers willing to purchase the service and that the company was
directing its efforts toward the correct groups of people.
o For this project a simple survey was put together to find answers about
segmentation, consumer willingness to buy, and consumer purchasing
power. The survey was distributed to undergraduate and graduate students
at Indiana State University as well as young professionals in the Terre
Haute area.
Target Markets.
o There were two main targets chosen for this project and one sub-group of
targets. The two main consist of;
Undergraduate students of ISU: age 18-22 that have a household
income above $40,000.
Graduate students of ISU: age 22-25 and an income level higher
than $20,000 annually.
The sub-target market consist of;
Young professionals: age 25-40, who are employed, and
have an income level higher than $35,000 annually.
o Due to the nature of the business and the service provided the target
markets were designed to be very broad. This will help in the eventually
filling of the complex as well as to help the brand image develop.
o The analysis of the surveys is presented in the excel sheets attached to this
document.
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Stage 2: Mission Statement/Slogan
The mission statement should set the stage for long-term development, growth of
Radio City Lofts, and eventually how you want to be remembered. It should guide
the actions of Radio City Lofts, the overall goal, provide a path, and guide
decision-making. It is the reason for Radio City Lofts existence and vision of
what you want to be. All aspects of this plan have been based around the
statement below.
Mission Statement:
o Blending utility with simple, elegant design, each of our 16 apartments
provides a full feeling of character, comfort, and beauty. Our tall ceilings
and large windows push this further, drawing in stunning views of
downtown Terre Haute, giving residents a true fusion of light, life, and
space. Our spaces are living spaces, spaces valued by residents and
admired by guests.
Slogan:
o A new standard of living.
General Goals:
o Provide the most luxurious and comfortable downtown apartments in
Terre Haute.
o Become the market leader of luxury apartments in Terre Haute.
Annual Goals:
o Pre-lease all units to the established target markets.
o Advertise across at least 4 medians. (print, radio, billboard, internet)
Have 1000 followers on Facebook and Twitter combined.
Future Goals:
o Develop a brand image that has a monetary value.
o Maintain a two week turnover rate.
Brand Image: The goal of developing our brand image is to establish that Radio
City Lofts is a place of prestige, luxury, and comfort for working young
professionals as well as graduate/undergraduate students. More people should be
turned away than accepted, creating a prestigious feel. The customer service
needs to be very high to go along with the luxury feel; tenants should feel taken
care of. All aspects of the building, even those not in the rooms, should provide a
feeling of comfort and luxury for the tenants.
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Stage 4: Promotion
Below are some suggestions that could be useful on this project. We used a mixed
media strategy to try and specifically target the segments chosen.
Radio Stations:
Apartmentguide.com
Rentals.com
Apartments.com
Rent.com
The prices listed on the next page come from a company
that runs both apartmentguide.com and rentals.com
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By adding $35 they well advertise the property on more than 30
websites such as; yahoo and google.
For contact visit:
https://shop.rentals.com/Adstore/PropertyInformation
http://www.listonapartmentguide.com/
Facebook: Recommended
Facebook business page are free and easy to set up. This page
requires an e-mail account, log in information, a picture, and a
quick description. This can be done in a matter of minutes and
maintenance/updating is minimal. The sign up portion also allows
you to link a current website.
The target markets that were chosen are the on the leading edge of
the people that use social media. By entering their domain you will
generate much more buzz and have a better chance at achieving
the set goals.
This can be done very simply by visiting the link below:
https://www.facebook.com/pages/create.php
From here Social Plugins are used to connect people with your
Facebook page as well as your website. Your website can be
directly connected through Facebooks authentication process; this
will also provide additional security for the link.
Social plugins consist of items such as the Like button,
Activity Feed, and Comments. This will provide activities
for consumers to do while looking at your sites and will
keep them interested and able to share more thoroughly.
These Plugins are done through HTML or JavaScript.
Mobile apps can also be made that will let people view live
streams and make recommendations for friends to view.
Again, this is done through HTML or JavaScript and can be
linked to your website.
Apps can also be created for use on the FB page, website, or
mobile device. These can be games or interactions that will make
people stay on the page for longer and hopefully spread the word
about the business.
Ads can be made from scratch through Facebooks website.
This allows for complete customization for the ad. You can
select the targeted people (geographically and
demographically) and also choose a precise interest such as
real estate or apartments.
The ads run on Facebook, they have control over when and
where it runs and how often. Your ad will be in competition
with all other ads on Facebook. They are chosen based off
of the amount of money invested in the ads.
57
Ads can be bought two different ways: per click or per
impression. Per click is more expensive because the direct
connection that the customer makes with your site (FB
suggested = .46-.88 cents). Per impression is based on
views and will be less expensive because the customer may
or may not click the ad (FB suggested = .20-.38 cents).
Importing contacts through e-mail addresses and other websites
can be done to create an initial fan base for the site.
There are also analytics that can be reviewed for your site with
information about visitors, new subscribers, times viewed, and
more.
Facebook provides detailed instructions on everything stated
above. They have a walk through for HTML and JavaScript and
how to use them correctly on your site. As well as how to develop
ads, apps, and mobile apps.
Twitter: Recommended
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Newspaper:
Brochures/Flyers: Recommended
Option 1
Signees enter drawing for I-Pad
Option 2
Each individual signee receives $50 Gas Card
Option 3
Each signee receives $100 rent discount in 1st month
Option 4
Gift package giveaway from surrounding businesses
Be sure that in every form of media used there is a connection made between that
specific form and Radio City Lofts, this could be as easy as listing the URL for
the website on the bottom of a flyer or saying it over a radio ad. Having a home
base for people to refer too is crucial; this should be the site with the most
information about the service.
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By creating these advantage factors, Radio City should be able to cater to the
needs of its residences, fill the complex with the desired people, retain tenants,
and ultimately be more profitable.
By establishing brand image and developing competitive advantages, the
company will be able to charge a higher price for the service. The positive
correlation between these two ideas is never ending due to the higher price
driving the brand image of luxury.
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Radio City Lofts Flyer
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Radio City Lofts Brochure: Outside
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Radio City Lofts Brochure: Inside
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