Marketing CONSULTING report_Manan Jain

Executive Summary
The report talks about the prevailing rental crisis in Australia. Report began with introduction
of crisis that it has been an issue since years. Major cause among all is 6 percent of housing
was social in 1991 and it became less than 4 percent now. It identified rents in particular
capital cities like Perth, Sydney and Adelaide etc. and how local regions of Queensland,
Victoria and NSW outscored the rents of various capital cities. Post analysing the crisis it
focused on the consequences in social and economic ways. Three key social consequences
that have been experienced since 1940’s are “Falling birth rate”; second the impact on mental
and physical wellbeing of people and third is political discontent. Economic consequences
highlighted transmission of existing housing wealth to younger generations has implications
for social mobility, augmenting unequal life and opportunities of young people. Interestingly
it comprises business plan of JLF Infrastructure Limited, a construction company which is a
public sector company focusing on social housing as per customer specific requirements. It
analysed JLF with the help of 9 frameworks including Risk matrix, VRIO, PESTLE analysis,
Shareholder matrix, Competitor analysis, Core competency, Resource Based View, Customer
Persona and Gantt chart. In 2015, construction sector experienced highest number of firms
going into liquidation, with 18% of country’s total. Through regulations and punishments,
governments enforce sustainable and socially responsible ways to conduct construction
activities. Since JLF is a public sector company, it has leverage of government support.
Customer differentiation along strategic partnership differentiates it from its competitors.
Resource Based View suggests that the resources possessed by the firm are the primary
determinants of its competitive advantage. Resources include Financial, Physical,
technological, organisational, human, intellectual and social. It is a growing company having
less experience than its competitors but may be a best fit for Australian crisis. One major
reason for crisis is the pricing strategy of private players. Current employees, local people at
construction site are most affected person by any decision of company. It may impact their
life economically and socially. The report aims to highlight key issues and more importantly
the solutions to the never ending crisis by a projection of Construction Company highlighting
the behaviour of key stakeholders toward it.

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 Marketing CONSULTING report_Manan Jain

Title

Construction companies and local people amid Australian Crisis

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Table of Contents
Executive Summary...........................................................................................................................1
Title........................................................................................................................................................2
Construction companies and local people amid Australian Crisis..........................................................2
Introduction.......................................................................................................................................4
Analysis of Case Study.......................................................................................................................5
Social Consequences......................................................................................................................5
Economic Consequences...............................................................................................................6
Analysis of case study........................................................................................................................8
Theoretical analysis of business plan (Using Frameworks)............................................................8
Target Customer Persona................................................................................................................12
Gantt chart.......................................................................................................................................12
Referencing.....................................................................................................................................13

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 Marketing CONSULTING report_Manan Jain

Introduction

The Australian rental crisis also known as race for space has been active since the last two
decades. The crisis is mainly concerned with housing the ever increasing people with the
same number of houses. Covid 19 and opening up of Australian borders have even extended
it. The average person living in each home decreased from average 2.5 people in 2020 to 2.48
by 2022. The essay will cover analysis of crisis along with practical solutions supported by
various frameworks. It’s important to understand the economic impact along with social
equity of Australians so as to analyse the overall spending pattern of a common Australian.
(Grattan Institute, 2023)

To address the issue, we introduce JLF Infrastructure Limited. It can tackle crisis by
constructing collective housing. Moreover it can collaborate with state governments to
enhance social housing at targeted places, bolstering low income earners. It may introduce
sustainable practices to reduce cost of rent agreements and raising general affordability
enhancing wider coverage. Requirement specific contracts for students, working
professionals, family and designing space effectively to accommodate more people in less
space. Partnering with transport companies to provide economical transport services from
distant places to reduce the rent effectively in comparison to a posh area.

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Analysis of Case Study

Social Consequences
Some people consider housing as a new crisis but it has been an issue since years. Australia
has merely 400 dwelling per 1000 person which is least housing stock per adult in the world.
Three key social consequences that have been experienced since 1940’s are “Falling birth
rate”; second the impact on mental and physical wellbeing of people and third is political
discontent (Rae Dufty-Jones, 2018). Falling birth rate could be backed by unstable rent
agreements and sudden hikes which eventually become insecurity factor among masses
especially in case of single parent which worsen in case of woman. Rental crisis has affected
mental piece of Australians, it worsen at the time of Covid 19. Both landlord and tenant lost
their incomes leaving them in financial uncertainty. Loss of income is much less than loss of
livelihood eventually promoting the felling of social deprivation (David Oswald, 2022).
Policies of government favoured
major dominance of private sector
resulting downfall in pace of social
housing with population. About 6
percent of housing was social in
1991 and it became less than 4
percent now. Lastly increasing
urbanisation is paving the way for
rental hikes in developed cities like
Sydney, Perth, and Adelaide etc.
Figure 1 Source : Grattan analysis of ABS (1978), ABS(1983), ABS (1988), ABS (1993), ABS
(1997), ABS (2002), ABS (2007), ABS (2012), ABS (2017) and ABS (2022c)

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Economic Consequences
 Home Values
The increasing income inequalities  Rent Values
widens the gap, transmission of
existing housing wealth to younger
generations has implications for
social mobility, augmenting unequal
life and opportunities of young
people ( Mark Weinrich, 2020).
There has been a rising pressure by
rental hikes as a result most of income goes to landlord. Figure 2 Calendar year growth values versus rents
Unemployment never fades away due to the inflationary pressure of realty market which
pushes several industries related from it such as house furnishing, home paints, marble,
construction, electrical and informal sectors such as carpenters and labour engaged in white
washing, construction etc.
There were times when the growth
in rent values had outpaced the
growth in home values. It happened
thrice, once in 2018 when home
values plunged by 4.2% but rent
values were 0.6% high. Other two
times were 2022 and 2023 when
the country was facing pandemic.
In 2023 rent hikes were highest at
Perth whooping 13.41%,
Melbourne 11.1% and Sydney
Figure 3 Rental Prices in Australia
10.2%.
Rental price in
regional areas of
NSW, VIC and
QLD crossed
$400 beating the
rental prices of
many capital
Figure 5 Average Household Size

Figure 4 Rent growth in regional

areas

Source ABS, RBA

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cities. Particularly rent in Queensland beaten Brisbane deviating trend since 2008. Figure 5
highlights the change in average household size due to life style changes and pandemic later
on. Decline since 2020, around 1 percent- is estimated to have contributed to 1,20,000
additional household’s as a result additional demand came in the market which further
created an inflationary pressure on existing private renters. (Reserve Bank of Australia, 2023)
Figure 6 shows that disposable income of renters Figure 6 Weekly disposable income as per age
have been less in comparison to owner
occupiers. The public renters were even
concentrated in the lower side but the
total outweighed due to the
concentration of private renters in
formal sector. Overall rent tightness has
raised affordability issues impeding year
on year growth, stability of domestic
and the global economy

Source ABS, RBA

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Analysis of case study

Theoretical analysis of business plan (Using Frameworks)

JLF Infrastructure Ltd is a public sector company which focuses on collective housing for
impeding rental crisis. In 2015, construction sector experienced highest number of firms
going into liquidation, with 18% of country’s total (AUBEA, 2017). Risk matrix suggests that
political instability, natural
calamities and winding up of
companies are the highest risk
factors. Financial issues include
rising interest rate, working
capital imbalances and
inflationary pressure. Other
factors include logistic issues,
delays in construction work,
electricity cuts and massive
unemployment. Technological
changes are not so frequent in
case of construction companies
and may possess suitable risk to
the investors. Since construction Figure 6 Risk Matrix
companies involve in more than one year projects, shareholders play a major role in overall
stabilisation. Governments are obliged to set the bottom lines regarding social issues.
Through regulations and
punishments, governments
enforce sustainable and
socially responsible ways to
conduct construction
activities. (Journal of Cleaner
Production, 2019). General
Public, professionals and
academic institutions do focus
on the acts but they neither
possess much power nor they
have high interest. Passive
investors, creditors and
suppliers play a crucial role
for influx of capital and
Figure 7 Shareholder Matrix
related services but they don’t influence decision making directly. Last but not
the least, current employees, local people at construction site are most affected person by any
decision of company. It may impact their life economically and socially.

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To cater market competition particularly to housing sectors in Western Australia

implementing off site construction can be considered essential for delivering quality housing
with efficiency(Towards adopting off
site construction in housing sectors as a
potential source of competitive
advantage for builders, 2022). Specific
rent contracts catering particular
requirements are rare and inimitable. It
would attract both youth and old aged
people. Offsite construction calls for
effective transport which is not a rare
but valuable factor. Lastly the
increasing emphasis of sustainable
buildings make the company unique
from competitors as the company has
several patents of valuable sustainable
designs and techniques. At this stage
company must analyse its business
environment to analyse potential risk
and opportunities.
Starting with political actions and inactions such as nationalisation and discriminatory
Figure 8 VRIO Framework
treatments, changes in regulations, laws and policies, restrictions, bribery and
corruption etc. Economic factors include change in monetary policy by government,
exchange rate and supply slide policies pose both advantage and disadvantage. Also, level of
education and unemployment, striking and demonstrations, level of human rights activism
impact heavily on performance of industries. Any change in technology causes changes in

Figure 9 PESTLE Analysis quality, cost and duration. Construction industries can make use of 3D and 4D
application model for analysing designs, application of sensing technology and
computer program application (Decision Support System). Government pass and enact
various laws for wellbeing of economy, changes in taxation, industrial safety and
environmental regulations during the time when projects are going on cause problem. Lastly,
quality of air, temperature, level of water table and climatic conditions have to be catered at
each site. Climatic changes affect the timely completion of construction contracts (IEOM
Society International, 2016).

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Since JLF is a public

sector company, it has
leverage of government
support. Customer
differentiation along
strategic partnership
differentiates it from its
competitors. Innovative
technology and
sustainable practices are
demands of new era.
Basic but essential is a Figure 10 Core Competency Framework
team of experienced
labours with prolonged
relation with suppliers of raw material. JLF is an emerging company and it has to face severe
competition from other firms in the market. It is focusing on economic accommodations
keeping in mind the average disposable income of Australians. It has less experience than its
competitors
but may be
a best fit for
Australian
crisis. One
major
reason for
Figure 11 Competitor Analysis crisis is the pricing strategy of private players. Moving towards the
internal resources of the company which provides strategies to cater competition. Resource
Based View suggests that the resources possessed by the firm are the primary determinants of
its competitive advantage. Resources include Financial, Physical, technological,
organisational, human, intellectual and social (Edward Goh & Martin Loose more, 2017).
Firstly tangible assets of JLF include physical assets relating to construction and
transportation network, must for offsite
and economical constructions.
Financial capital including working
capital and permanent capital have
been raised at a reasonable interest
rate. Other infrastructure like waste
management, electric supply are well
managed. On the other hand, intangible
assets are most crucial as tangible
assets can be replicated by competitors
over a period of time. 10+ years of
operation gave company a sensible
identification to customers about the
Figure
Figure 12 12 Resource
Resource Based
Based View
View

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 Marketing CONSULTING report_Manan Jain

company. Past projects and previous returns to investor’s distinct company from its peers.
Patents and copyrights in sustainable designing along with innovative culture make it a
perfect place to work. Customer Persona of Mr. Starc is based on demand for economic space
catering to his family needs and privacy. Gantt chart describes the project starting from
January1, 2023 and various stages in between.

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 Marketing CONSULTING report_Manan Jain

Target Customer Persona

Bio Goals and Challenges
Goals: To find a peaceful home that
Name: Mitchell Starc
serves as a peaceful retreat which can fulfil
Age: 32 training needs as well.

Occupation: Professional Cricketer Challenges: Balancing a secure environment

along convenient travel networks.
Location: Sydeney, Australia
Needs and Pain Points
Family Status: Mar
Privacy and Security:  100%
Quote
Comfort and Privacy:  80%
“Success is not final, failure is not fatal: It is
courage to continue that counts Economical Pricing:  80%
Background Proximity to facilities:  60%

Mitchell is a high-profile athlete known for Capital Appreciation:  40%

his fast bowling on the international cricket
stage. With a demanding travel schedule and
public life, he seeks a comfortable and private
residence where he can relax and spend
quality time with his family.

Gantt chart

Figure 13 Gantt chart

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Referencing
Coates, B. and Moloney, J. (2023). Submission to the Senate Standing Committees on
Community Affairs: Rental Affordability, Grattan Institute: https://grattan.edu.au/wp-
content/uploads/2023/09/Grattan-Institute-Submission-to-the-Senate-Standing-Committees-
on-Community-Affairs-Rental-Affordability.pdf

Rae Dufty-Jones, 2018 A historical geography of housing crisis in Australia:

https://www.tandfonline.com/doi/pdf/10.1080/00049182.2017.1336968

David Oswald, 2022. Exploring the well-being of renters during the COVID-19 pandemic:
https://www.tandfonline.com/doi/pdf/10.1080/19491247.2022.2037177

Mark Weinrich, 2020 International Union for Housing Finance Housing Finance
International: https://eprints.gla.ac.uk/227823/1/227823.pdf

Reserve Bank of Australia, 2023. Renters, Rental Inflation and Renter Stress:
https://www.rba.gov.au/publications/bulletin/2023/mar/renters-rent-inflation-and-renter-
stress.html

AUBEA, 2017. Profitability of Large Commercial Construction Companies in Australia:

Profitability of Large Commercial Construction Companies in Australia

Towards adopting off site construction in housing sectors as a potential source of competitive
advantage for builders, 2022: https://d1wqtxts1xzle7.cloudfront.net/82110984/ljlH-
libre.pdf?1647208578=&response-content-disposition=inline%3B+filename
%3DProfitability_of_Large_Commercial_Constr.pdf&Expires=1714234234&Signature
=DHMxY4FnUVI~irl1lz8BenKHL5TlxVmaJRlD8rltf~xETBmArVLrvMXvAikfXmwY
zEXJij5DyHnF4jzeqSTsbNsuFwD8o3MMPmprm0S0IJVtJgx9wtoCajp3dLHKRLQox
Q5wE3CTz1v6KPV2XKtIUGwcNZkLdvVbBmwlRJEGzgEnWBbDdw2IcQpkyH1rvG
W5HrREPrfN-6K-
EJMHqKFBTUGIC0KIz~DdKnT0Y3NfKkIwXote9KL5~qahteLAaXNFZ9BRPj~2a1m
C4Ny31tLP8Zk-Bnfpn78JPQHyvEz8L8-z~3sjqc-uof6GagpKQANx-
Efr4KqdRPUuIBWcra5VMA__&Key-Pair-Id=APKAJLOHF5GGSLRBV4ZA

Journal of Cleaner Production, 2019 Stakeholders’ influence strategies on social

responsibility implementation in construction projects:

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https://espace.library.uq.edu.au/data/UQ_30dcc20/UQ30dcc20_OA.pdf?
Expires=1714386457&Key-Pair-
Id=APKAJKNBJ4MJBJNC6NLQ&Signature=YDMi7UPnqpJ4QpLBdkUU8HLve5WUx1g
yr4Krxyta05TcK1qFd~~IX6fegiPFmN6Se584gX2LjKuLMPDvyKuuC~Lj-
L9FxGFO8nbuP97BjxMK1AwTuglibfD3GY3nbsPigNiR19VAgKFfg5dtJ-bVG-
8ZdBZ3NTKCwGFTIwxk-DMkQ~AoZAW5w-
OrMTcYNdoydmBxFL2CEw2iAHTWkz87gskfzSNMTLIaV1x8sK~Zvq99oqxmHvkl6UyF
8tnolSiOoY7onEHo8O~DXh27ix-
GdO2LIFJ5ug04Aa1s~rhhXCyQvYeHfMfEUTCIXt83hZcLAFpSYVjKe9vk9ry7rdhX~g__

IEOM Society International, 2016. An Environmental Impact Framework for Evaluating

Construction Projects Delays: https://ieomsociety.org/ieomdetroit/pdfs/254.pdf

Edward Goh & Martin Loose more, 2017. The impacts of industrialization on construction
subcontractors: a resource based view:
https://www.tandfonline.com/doi/pdf/10.1080/01446193.2016.1253856

Gantt chart: Book 2.xlsx

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