Opportunity Analysis for

Student Home Australia

Word Count: 1489

7003MKT Marketing Foundations

7003MKT Opportunity Analysis Page 0

Table of Contents

Table of Contents............................................................................................................................1
Introduction to the Company.............................................................................................................2
Company Description and Problem Statement.......................................................................................2
Company Analysis.............................................................................................................................2

Market Situation.............................................................................................................................3
Market Overview.........................................................................................................................3
Macro Environment Analysis.........................................................................................................4
Political Analysis................................................................................................................................4
Economic Analysis.............................................................................................................................4
Social Analysis...................................................................................................................................5
Technological Analysis........................................................................................................................5
Legal Analysis...................................................................................................................................5

Micro Environment Analysis..........................................................................................................6

Competitor Analysis...........................................................................................................................6
Competitive market Summary.............................................................................................................7
Consumer Analysis.............................................................................................................................9
Collaborator Analysis.......................................................................................................................11
SWOT Analysis...............................................................................................................................12

Marketing Initiative.......................................................................................................................13
Reference List...............................................................................................................................14

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Introduction to the Company

Company Description and Problem Statement

The Student Home is a new company that relies on online websites and mobile device
application to provide international students in Australia with targeted housing rental
information and accommodation options. Student Home is launched to create an ideal
accommodation solution for international students living in foreign country to accelerate their
integration into local life. Studying abroad can bring international students benefits of
economic and social status, however, language barriers and lack of understanding of local
cultures make them face a series of difficulties and pressures in finding an ideal
accommodation to stay (Duangpracha, 2012). Therefore, the primary purpose of Student
Home is to help international freshmen easily find a satisfactory “new home” when they set
foot on the land of Australia, while relieving part of their anxiety.

Company Analysis
As a ubiquitous phenomenon, international students face a variety of challenges when renting
an accommodation in Australia, such as language barriers, traffic conditions, location and
prices (Duangpracha, 2012). This would also affect their academic performance to some
extent. Due to the lack of university student apartment traditions similar to other countries,
international students in Australia are more inclined to rely on the service of private rental
agencies (Burke, 2015). However, at current stage, rental agencies do not have specific
service for international student group, or there is no comprehensive housing option. This
would provide favorable market conditions for the launch of Student Home.
Unlike other rental agencies, Student Home is first committed to solving the housing
problems for international students who are new to Australia, and based on this, the company
would be gradually developed into a rental information integration platform for international
students. The key advantage of this project is that it collects information on housing that
meets the special requirements of international students and provides an advertising platform
for shared accommodation to reduce their economic expenditures.

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Market Situation
Market Overview
The export of educational resources has become a significant way to create economic value in
the Australian higher education industry. Quality educational resources attract hundreds of
thousands of international students to Australia every year. According to Studies in Australia
(2019), in 2017, approximately 780,000 international students registered for study courses in
Australia, while half of them, about 350,000 enrolled in higher education courses. Such a
huge number still has an upward trend. More specifically, regarding international students
enrolling in higher education, the data from Parliament of Australia (2019) shows that about
400,000 places were enrolled in 2018, which increased about 14% compared to the previous
year. The huge international student population has also brought considerable economic
benefits. The value of international education in 2018 has contributed to Australian overall
economy from $28.1 billion in 2017 to $32.4 billion (Parliament of Australia, 2019).
Prosperous international student input would bring huge market potential and customer
groups to Student Home.

(Parliament of Australia, 2019)

At the same time, Australian strong hospitality industry has also increased the feasibility of
implementing Student Home rental platform. Relying on the existing well-established
hospitality system and large number of vacant rooms, the rental industry is impacting the
traditional hotel and real estate industries, and contributed $1 billion to Australian economy
in 2018 (The Real Estate Conversation, 2019). Specific data also reveals its strong growth
momentum. Short-term rental industry in Australia increased by almost 50% in 2019
compared to the same phase, with more than 30,000 homes being rented (Ryan, 2019).
Positive market capacity provides an information base for Student Home to find housing that
meets the needs of international students.

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Macro Environment Analysis
PESTL analysis is a framework used by organizations in formulating an overall strategic
development plan, it identifies potential impact factors of the external environment in which
organizations implement projects (Christodoulou & Cullinane, 2019). Given that Student
Home is based in the field of accommodation rental and regards international students as its
main target customers, this section will focus on analyzing the potential impact factors of the
macro market for the project implementation.

Table 1 – PESTL analysis

Political Analysis
Simplification of
Australian student
visa
A visa is a prerequisite for international students to enter Australia.
For student visas, the Australian government started a simplified
student visa review policy in 2014, reducing the original five
assessments to three and shortening the period for funding
certification (Parliament of Australia, 2016).

On the basis of simplifying the student visa application process,

Broadening the according to Parliament of Australia (2016), the Australian Federal
scope of application Government (AFG) will widen the applicable population of student
for student visa visas from 2015. This will further attract more international students.

Strict foreign exchange policies in some countries could have a

Tightening of negative impact on the education industry in Australia. Taking China
foreign exchange as an example, the NDRC issued a statement on restricting foreign
control in student exchange transactions in 2016, which strictly restricted the amount
exporting countries of foreign currency exchanges by individuals (HoganLovells, 2017).

As a stimulus measure, the AFG will exempt up to 10% of capital

Tax deductions for gains tax (CGT) for qualified housing rental providers from 2018,
the housing rental which increases the potential CGT incentives up to 60% (Australian
industry Taxation Office, 2019). This will help the rapid expansion of the
industry.

Economic Analysis
Global economic
growth slowdown
The growth of the global economy in 2019 shows a slowest pace of
only 3% since the subprime crisis, while global GDP is expected to
decline by about 1% in 2020 (Gopinath, 2019). Economic tensions
will limit long-term spending on education by families, potentially
affecting the number of international students in Australia.

Compared with major education exporting countries, the high

High exchange rate exchange rate of AUD has severely affected the education cost of
of AUD international students, which has also increased the cost burden of
living in Australia (Schultheis, 2015).

Despite average house price reductions of around 5% in 2018,

Housing rents rise Australia's rental prices show a general upward trend (Kelly, 2019).
It seems not a bad thing. Prices directly reflect market demand, and

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 once there is oversupply, rent price will gradually fall (Kelly, 2019).

Social Analysis
Australians tend to
rent rather than buy
directly
Investors may shift focus from real estate development to rental
housing construction. Financial burdens change the way Australians
live and make renting a preference, data show that about 40% of
people are keen to rent and more than 60% consider it a long-term
choice (TREC, 2018)

Australians value
higher education
The survey shows that about 80% of Australians feel that university
education is vital to work and life, and they believe that university
life and certification will add value to future work and competition
(UNIVETSITIES AUSTRALIA, 2018). This public opinion will
inject booster into Australian education.

Racial Racism threatens international students. A survey of the Melbourne

discrimination area revealed that about 50% of international students believe they
erodes rights of are at risk of racial discrimination (VOA News, 2010). More
international seriously, attacks and murders against international students have
students continued to occur, and some students have been killed in such
incidents (Graycar, 2010).

Technological Analysis
With the development of digital technology, the Australian
Digital technology education model is more efficient. Students could use digital tools to
applied to obtain educational resources and have the opportunity to complete
Australian education courses online (Department of Industry, Innovation and Science,
2018).

Smart mobile In the face of underdeveloped public transport in Australia, ride-

services increase hailing software such as Uber uses ridesharing to make up for this
commute deficiency (Deloitte, 2016). This will ease the dependence on private
convenience: Uber cars and increase the range of accommodation options.
Social media The rise of social media has provided enterprises with a huge space
changes marketing for advertising through online sharing and information interaction,
model and it has provided enterprises with a low-cost platform to attract
customers and operate businesses (Queensland Government, 2016).
This will help promote the information of Student Home.

Legal Analysis
The EDUCATION SERVICES FOR OVERSEAS STUDENT ACT
Strict laws on 2000 (ESOS ACT) sets out a strict code of conduct for international
international student students in Australia (UNIVERSITIES AUSTRALIA, n.d.).
visas International students must strictly abide by the use of funds and
registration requirements in order to maintain the student visa.

Regarding the leasing industry, the establishment of laws in all

Australian states is neutral, owners (agents) and tenants are both
Neutral Tenant protected by states’ Residential Tenancy ACTs

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 Protection Law (GlobalPropertyGuide, 2006). This legislation is conducive to
protecting the legitimate rights of Student Home in the future
operation.

The Consumer Law
supervises the entire
service
Products and services provided to consumers in Australia must
comply with Australian Consumer Law (ACL). Regarding leases,
ACL includes consumer protection clauses that protect consumers'
legitimate rights and interests when using lease services (Consumer
Action Law Centre, 2014).

Micro Environment Analysis

Competitor Analysis
The prosperity of market economy has flooded profitable industries with competitors. Direct
competition occurs when there are two or more companies providing similar products or
services for the same market, the focus of competition will then be on fighting for potential
market share (Rouse, 2015). For the leasing industry that Student Home will enter, three
major competitors are identified, which are Airbnb, Domain and Flatmates respectively.
Their business scope and target customer group are similar to Student Home.
By evaluating the operations and developments of these three companies, this section will
present the similarities (POS) and differences (POD) of Student Home among the three
companies.

POS: Media and distribution channels

These three companies generally attract target groups through various channels of advertising
and sponsorship, and rely on online platforms to complete transactions (Stead & Thach,
2019; Domain Group, 2019; Wischusen, 2016). This is similar to the future marketing model
and respected trading methods of the Student Home. And the target market of Flatmates
matches Student Home to some extent.

Airbnb—POD: More specific tenant groups and specific room types

Airbnb's main customers are travel and businesspeople seeking short-term rentals, and the
options offered are mostly within a week (Stead et. al., 2019). While Student Home is
focused on international students in Australia and tends to provide long-term stable housing.

Domain—POD: More diverse mix of housing types

Compared with Domain’s scheme of packaging house rental, Student Home aims to provide
more diverse room types to target groups, which giving them more choices.

Flatmates—POD: Broader sources of home rental information

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The scope of housing information on Flatmates relies heavily on the provision of private
publishers (Wischusen, 2016). While Student Home resources will not be limited to this, and
will include rental information for a wider range of property management organizations.

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Competitive market Summary (Table 2)
Competitor Target Positioning Product Price Promotional Distribution Strength/
Market Weakness
Airbnb Travelers and Diversification Full Average $ per TV and travel Tenant's order is Main Strength
business of home types apartment and night: magazines advertisings completed via Will attract people who stay
people who to meet tenants’ house online payment at the destination for a short
looking for choices $150 for an Propaganda via social time period
short-term Private apartment or media Homeowner
ideal place to separate house completes house Main Weakness
stay rooms Sponsorship to sport review through High cost relative to long
$59 for a events online application lease
Homeowner Shared rooms private room
who have with others Title sponsorship for Generally, only applicable to
available $39 for a travel shows short-term stays and
rooms and shared room transitional tenants. Increased
want to make stay time will reduce the
a profit price economy.

(Stead et. al., 2019)

Domain People living Stable Home sales Average $ per Advertising in real Tenants make Main Strength
in Australia accommodation information week: estate magazines decisions online Has stable housing
place and information, more types of
Tenants investment Leasing of Different from Promotions in Sign a contract face home for tenants to choose
seeking stable environment apartment and regions: thousands of offline to face through a
housing house based stores domain agent Main Weakness
on huge $385-$550 for Monopoly operation may
Real estate property an apartment or Title sponsorship in Housing lead to higher prices of tent.
investors system house various fields information
collected from listed A model built for Australians
property companies may not be suitable for
by agents foreign tenants.

(Domain Group, 2019)

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 Flatmates Students and Convenient Variety of Depends on the Online advertising Charging fees for Main Strength
Adults within platform for shared and idea of the information Provides an information
Australia who housing whole room information Targeted advertising for publishers platform for those seeking to
looking for information types publisher, social media users reduce overhead through co-
accommodatio release and (depending on usually below Provide an tenancy
n and who collection the publishers) the market price Advertising on the information platform
seeking search engine about the for buyers and sellers Main Weakness
roommates to Entire units or "rental" keyword House types are limited by the
reduce costs houses for Renters and tenants publication of renters
leasing reach an agreement
online and deal in False information may harm
person the interests of both parties
(Wischusen, 2016)

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Consumer Analysis
International students in Australia is a huge rental market. The number of international
students enrolled in higher education increased by approximately 50,000 from 2017 to 2018,
reaching nearly 400,000 (Parliament of Australia, 2019). The huge population base and rapid
growth trend have increased the demand for housing rental. The need for accommodation
usually occurs when international students first enter Australia and live in Australia. There
are three main types of accommodation preferred by international students in Australia,
which are homestay, on-campus student apartments and private rental housing respectively
(nib, 2019). Regarding the way of renting, international students still rely on homestays and
student apartments provided by intermediaries. Despite the booming Australian rental market,
unfamiliar language on the rental website makes it difficult for international freshmen to find
an ideal private renter (Karpinski, 2015). And related survey shows that about 70% of
international students (Figure 2) still failed to find stable accommodation before entering
Australia (Kuhne, 2019). In addition, the geographical location of international students’
choices of accommodation is mainly concentrated around Australian institutions of higher
education (Savills, 2018) (Figure 3). For the first-year international students, most of them
might choose homestay or on-campus housing through the communication between education
agent and university officially.
Figure 2:

(Kuhne, 2019)

Figure 3: Main distribution of international student accommodation

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 (Savills, 2018)

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Collaborator Analysis
Education agents are potential collaborators for Student Home to acquire target customer
group. The service target of education agents is mainly international students who choose to
study abroad, which is consistent with Student Home. According to the survey of Kuhne
(2019), about 80% of international students choose an education agent to help them plan their
trip (Figure 4). The customer resources held by education agencies are significant for Student
Home to expand the market rapidly.
In addition, private rental properties are significant collaborators for Student Home to gather
collect housing information. Private rental properties hold a large amount of housing data
with the assistant of real estate agents. Reaching a partnership with private rental properties
will be beneficial for Student Home to find specific types of accommodation that meet their
demands.

Figure 4

(Kuhne, 2019)

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SWOT Analysis (Table 3)
Strengths
Targeted design. Housing infromation
is tailored for international students,
which could increase the transaction
success rate
Multilingual provided. In response to
language barriers, Student Home will
support multiple languages to increase
the accessibility of international students
Stable accommodation. Student homes
will offer long-term stable
accommodation options to reduce the
frequency of international student
moves.
Opportunities
Positive policies on higher education.
The relaxation of the study abroad
policy will promote the number of
international students (Parliament of
Australia, 2016).
Tax incentives for Leasing industry.
Home leasing companies will get more
CGT benefits from 2018 (ATO, 2019).
This will increase potential income of
Student Home.
High vacancy of accommodation. The
number of idle homes in Australia is
gradually increasing (Ryan, 2019). This
increases market capacity.
7003MKT Opportunity Analysis
Weaknesses
Brand recognition. In the increasingly
competitive rental market, it's difficult
for Student Home to form a strong
brand reputation in a short time.
Startup funds. The operation of the
platform depends on the improvement
of the overall supply chain, and a large
amount of capital needs to be injected.
Focus on international students only.
Focusing on a narrow target market can
restrict Student Home's lease-based
development model.
Threats
Tough niche market. Private rental
properties are highly competitive and
are not conducive to occupying a
smaller niche market (TREC, 2019).
Coporation and competition coexist.
Education agents provide temporary
housing programs for approximately
38% of international students (Kuhne,
2019).
Strict laws appy. ACL severely restricts
the way that leasing providers behaves
(CALC, 2014). This may limit the
business scope of Student Home.
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Marketing Initiative and Goals
The above analysis summarizes the current status and prospects of the Australian higher
education industry and the rental industry. These data and findings reveal the high potential
demand for leasing companies which aims at international students in Australia.
As a company emerging in this market, Student Home aims to expand its market by
establishing extensive partnerships, and the specific goals are:

1. Establish partnerships with 100 education agencies for international students in Australia
by 2020.
2. Sign agreements of sharing leasing information with 100 private property companies by
2020.

Based on the previous SWOT analysis, corporation is the best way for Student Home to enter
and expand the market at the beginning. Customers and information resources are the two
keys to the survival of Student Home in the market, the rapid access to international student
data and housing information through strategic partnerships could enable Student Home to
avoid potential market threats and make up their internal weaknesses.

Figure 5: Company’s logo

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