Essay on Industry Change Analysis

Published: 2021/11/15
Number of words: 1243


Societal, economic and technological changes have caused the transformation of business models and the general real estate industry. Structural changes are responsible for the process of transformation that is imminent. Wide discussions regarding drivers of structural change, socio-demographic change, sustainability, globalization, urbanization, digitalization and other megatrends are taking place in practice-oriented management studies, conferences, meetings and at congresses (Zhang et al., 2020). In a system of value creation, market participants make long-term decisions based on strategic processes of change. Business models’ strategic development and potential for significant market growth are facilitated with the help of long-term changes that also serve to place adjustment pressure to business models which are in existence.

Changes in the real estate industry

At levels which are widely differing, it is becoming evident that these change processes are starting to show their initial effects. For example, instead of possessing self-occupies spaces, short-term leases accommodation and increasingly reducing the occupied amount of space is the way to go for big firms at the moment according to various researches. Taking effect are office concepts changes as well as the already perceptible changes in the logics and retail sectors. In connection to investments in real estate, the capital market is foreseen to have changes that are far-reaching. For example, globalization increase and digitalization’s enabling technologies are the reasons behind the growth of real estate financing opportunities. Utilization, operation, construction, design and other areas of real estate industry are promised sufficient efficacy and effectiveness by digital technologies (Sangchan et al., 2020). Additionally, there is a foreseeable skilled workers’ shortage which would intensify the current situation. The world’s real estate industry value creation system is at present being affected by structural changes as demonstrated by the breadth and depth of these issues. Nonetheless, the transformation’s impact mechanisms and its actual effects carry with them a great deal of uncertainty. If anticipation of the change processes’ general effects is possible, processes, services, products and business models could be adapted by the real estate companies’ management. To achieve this, discernment of transformation’s impact mechanisms and identification of structural change drivers must be done.

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Corporate adjustments and change processes

Subject to unceasing changes is the environment within which businesses operate and this environment should come into play when management actions and strategic decisions are being aligned to the company. Companies’ novel opportunities of growth could be offered by these dynamics. However, fundamental threats could also be provided by these dynamics. External environment is also widely regarded as imperative in innovation research. This is the case because a significant impetus for innovation is generated by adjustment pressure and changed demand factors provided by environmental dimensions. Decision-making that is strategic is of particular significance to the management and is generated by external environment perception and interpretation (Chen et al., 2020). Corporate environments which are uncertain and complex have resulted in the increase of the importance of change processes. The new conditions dictate how corporate structures, processes, services, products and business models are adapted by companies. Space and developments future demand predictions will continue and increase owing to the real estate industry operating environment experiencing changes that are constant and fast-paced.

Research on the real estate industry highlights how individual players as well as the general real estate industry are affected by individual change processes. Demographic changes, globalization and urbanization along with their effects have been examined by a number of studies. Different researchers have also focused on specific sectors or markets future change processes forecasting using a research method known as environmental scanning (ES). Public authorities, businesses, citizens and other stakeholders and their actions are investigated using this method. This investigation is carried out for the sake of the stakeholders’ environment and the change processes affecting it. Economic, environmental, political and socio-cultural entirety relate to drivers or weak signals, trends, megatrends and other change processes. Individual players cannot influence economic, technical, sociocultural, legal, political, and social changes in the long-term and this ably defines what megatrends are. Therefore, different individual trends can amalgamate and also a broad spectrum could be influenced. Medium to short term impact on the other hand has to with trends. Nonetheless, strength or duration of action with regard to the definition of trends shows ambiguity to a certain degree. Specific trends are structural change drivers that force a reaction and also occur. Customer behavior changes or technologies are megatrend digitalization actual drivers.

Analysis of PEST uses technological, social, ecological and political factors to reflect influences. Macroeconomic factors are identified by this popular instrument. The external operating environment of a business is considered in this analysis. The external environment’s change processes must influence the actions of the company and this forms the fundamental premise of the PEST analysis (Chen et al., 2020). This is mainly the assumption owing to the fact that the external environment and the company’s capabilities require an accord with the company’s strategy. An entire industry’s as well as a particular company’s environment has been analyzed using the PEST analyses. Nonetheless, other analytical grids that are clearly defined and precise are preferred over PEST.

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Corporate environment manifestation of the drivers of change in the real estate industry has been assisted by studies conducted using the above mentioned methods. Nevertheless, own interpretation and own strategies of the players are the basis of change processes adaptation by the players and this is the basic principle used by these research studies. Individual companies, relevant markets or even a particular industry find it difficult to infer a lot from major change processes which are relatively easy to identify (Zhang et al., 2020). Exploration of opportunities and identification of possible threats by decision makers was assisted by the early detection of changes which was the objective of the previous studies. Nevertheless, various levels of industry players are affected in different ways by the change processes and this is not accounted for in these researches. Moreover, the way the general mechanism of transformation works and the change processes should be well understood by the players in the industry and should be inculcated in their strategic plans. To achieve this, interactions, impact mechanisms, and drivers of change need to be holistically understood. Also equally important is the value creation system and the players’ reaction towards it.


The occupiers’ requirements have not yet been satisfied by the real estate industry players. The general international competitiveness of the industry and its transformation will come under threat as a result of this disinclination to change. It is necessary that based on this research that the change processes of individual players of the real estate industry and the interactions in the real estate industry be closely investigated. Moreover, of further interest should be individual company’s analysis of transformation.


Chen, K., Song, Y. Y., Pan, J. F., and Yang, G. L. (2020). Measuring destocking performance of the Chinese real estate industry: A DEA-Malmquist approach. Socio-Economic Planning Sciences69, 100691.

Sangchan, P., Habib, A., Jiang, H., and Bhuiyan, M. B. U. (2020). Fair value exposure, changes in fair value and audit fees: evidence from the Australian real estate industry. Australian Accounting Review30(2), 123-143.

Zhang, Y., Zhang, W., Yan, Z., Zhao, R., and Yan, H. (2020). Prediction of Changes in China’s Resident Leverage Based on Chebyshev Polynomials and Suggestions for the Development of China’s Real Estate Industry.

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