Background
RE/MAX, also known as (Real Estate Maximum) was founded by Dave Liniger and wife in 1973, in Denver, Colorado. Prior to starting RE/MAX, Liniger experimented with buying and renovating homes before selling them for a profit while he was in the military. He was inspired to start a franchise after working as a real estate agent under a brokerage firm. He embraced the idea of 100% commission for agents, so long as a flat fee from that broker or agent would be guaranteed. RE/MAX’s business model was to attract top class entrepreneurs through provision of top-class support, information technology IT infrastructure, training, timely market knowledge, and a strong brand name. Brokerage firms and real estate agents loved Liniger’s business model, as it empowered them to own their businesses, make decisions, and had the potential to make lots of profit. Business was good for RE/MAX, but the company struggle to handle the economic wave and technological shift that changed from a Broker-centric model, to a Customer-centric model.
Issue #1 Since the era of broker-centric model, RE/MAX understood the role of IT in the real estate market, and made sure to invest accordingly in its IT infrastructure. …show more content…
For RE/MAX to attract the best and most motivated, the company engaged in the development and roll out of technological tools, network communications and training to retain competitive advantage over other rivals. RE/MAX Satellite, RE/MAX Mainstreet and RE/MAX University were investments made to broaden its global reach. In the broker-centric era, less technological advancements were needed in the real estate business. RE/MAX shifted as the business shifted. The company also adjusted accordingly to economic challenges and regulatory environments. My analysis of issue #1 is that RE/MAX, through its transition from broker-centric model to consumer-centric model, built a gigantic network of systems, and invested heavily in IT projects that appears to be unneeded in the now consumer-centric environment. The investments were profitable and gave the company competitive advantage over its rivals. RE/MAX’s 100% commission, provision of support, and training in IT would soon become a legacy as the economic, political and technological issues changed over time. My recommendation for RE/MAX would be for the company to invest in technology that can be upgraded dynamically to meet the fast pace of technological change. The company should also explore the idea of procuring the technology used in the MLS system to sustain the long run. Issue #2 RE/MAX embraced the power of information technology in its business model, but the business model was designed to better the experience of brokers and agents. Through the company’s innovation and training, the company retained top and talented agents and brokers, and in turn was able to enhance home-buying experience for home buyers. The agent-centric era gave proprietary knowledge and information to agents and brokers much more than it did to potential home buyers, and with other companies offering independent home sellers the technological tools to advertise and list their homes for relatively little to no financial obligation, RE/MAX now faced the challenge of knowing where and how its IT investment can be channeled. My analysis of issue #2 is that while RE/MAX made the right investments in trainings, IT systems and network communications, it now has to channel its wealth of IT experience to tech-savvy home buyers and sellers. The company faces a challenge in the diminishing market for middle tier agents that increase the overall cost of a home. This transition will certainly cut into RE/MAX’s profit as it made prior IT investment were designed to enhance agents and broker experience. My recommendation would be for RE/MAX to aggressively pursue IT initiatives that enhances individual sellers and buyers experience. The company should find a way to secure rights to IT tools that currently exist within the MLS system for which it made enormous contributions. Issue #3 As with any business or organization, change in regulations, economies and consumers, and how this change is responded to, determines the survival of that business. RE/MAX has been up-to-date with its IT investments, but one that did not target the final (buyers and sellers). Reaching home buyers and sellers directly would jeopardize the business model that built
RE/MAX, also known as (Real Estate Maximum) was founded by Dave Liniger and wife in 1973, in Denver, Colorado. Prior to starting RE/MAX, Liniger experimented with buying and renovating homes before selling them for a profit while he was in the military. He was inspired to start a franchise after working as a real estate agent under a brokerage firm. He embraced the idea of 100% commission for agents, so long as a flat fee from that broker or agent would be guaranteed. RE/MAX’s business model was to attract top class entrepreneurs through provision of top-class support, information technology IT infrastructure, training, timely market knowledge, and a strong brand name. Brokerage firms and real estate agents loved Liniger’s business model, as it empowered them to own their businesses, make decisions, and had the potential to make lots of profit. Business was good for RE/MAX, but the company struggle to handle the economic wave and technological shift that changed from a Broker-centric model, to a Customer-centric model.
Issue #1 Since the era of broker-centric model, RE/MAX understood the role of IT in the real estate market, and made sure to invest accordingly in its IT infrastructure. …show more content…
For RE/MAX to attract the best and most motivated, the company engaged in the development and roll out of technological tools, network communications and training to retain competitive advantage over other rivals. RE/MAX Satellite, RE/MAX Mainstreet and RE/MAX University were investments made to broaden its global reach. In the broker-centric era, less technological advancements were needed in the real estate business. RE/MAX shifted as the business shifted. The company also adjusted accordingly to economic challenges and regulatory environments. My analysis of issue #1 is that RE/MAX, through its transition from broker-centric model to consumer-centric model, built a gigantic network of systems, and invested heavily in IT projects that appears to be unneeded in the now consumer-centric environment. The investments were profitable and gave the company competitive advantage over its rivals. RE/MAX’s 100% commission, provision of support, and training in IT would soon become a legacy as the economic, political and technological issues changed over time. My recommendation for RE/MAX would be for the company to invest in technology that can be upgraded dynamically to meet the fast pace of technological change. The company should also explore the idea of procuring the technology used in the MLS system to sustain the long run. Issue #2 RE/MAX embraced the power of information technology in its business model, but the business model was designed to better the experience of brokers and agents. Through the company’s innovation and training, the company retained top and talented agents and brokers, and in turn was able to enhance home-buying experience for home buyers. The agent-centric era gave proprietary knowledge and information to agents and brokers much more than it did to potential home buyers, and with other companies offering independent home sellers the technological tools to advertise and list their homes for relatively little to no financial obligation, RE/MAX now faced the challenge of knowing where and how its IT investment can be channeled. My analysis of issue #2 is that while RE/MAX made the right investments in trainings, IT systems and network communications, it now has to channel its wealth of IT experience to tech-savvy home buyers and sellers. The company faces a challenge in the diminishing market for middle tier agents that increase the overall cost of a home. This transition will certainly cut into RE/MAX’s profit as it made prior IT investment were designed to enhance agents and broker experience. My recommendation would be for RE/MAX to aggressively pursue IT initiatives that enhances individual sellers and buyers experience. The company should find a way to secure rights to IT tools that currently exist within the MLS system for which it made enormous contributions. Issue #3 As with any business or organization, change in regulations, economies and consumers, and how this change is responded to, determines the survival of that business. RE/MAX has been up-to-date with its IT investments, but one that did not target the final (buyers and sellers). Reaching home buyers and sellers directly would jeopardize the business model that built