Foxtons Group is an estate agency that offers residential property lettings and sales services based in London. The company was founded in 1981. The company had a revolutionary offers of 0% commission and longer opening hours 9am to 9pm that makes Foxtons successfully open other offices in the following years and be the leading yet biggest London estate agency today. Now it has network of 51 branches. Foxtons have established themselves as a highly innovative business over the years, challenging the tradition of property markets. (Foxtons Group, n.d.)
In 1981, an entrepreneur, Jon Hunt, founded Foxtons as a two-person estate agency. A year later, the first branch was opened in Notting Hill Gate. The objective was to be…show more content… But, the bargaining power of suppliers and buyers are classified as vertical competition because they operate within the supply chain.
2.1.2. Foxtons’ Market Analysis using Porter’s Five Forces
Rivalry Among Existing Competitors
There are large numbers of estate agents operating in United Kingdom, especially London. The companies provide different services and different kinds of deals, rates of commissions, and variety range of properties.
Result: the competition is strong between existing competitors.
Threat of New Entrants
It will be difficult for the new entrants to get a hold, because the rivalry between existing firms is strong. But, if the new-coming power is tough, there will be decrease in profitability due to increase in the number of entrants and loss of clients to Foxtons and other existing estate agents companies.
Result: relatively weak threat of new entrants.
Threat of Substitute Products or Services
The estate agents in London are providing many ranges of properties that depend on the area and budget for each. So, if the company doesn’t provide what the customer wants or needs, the customer will easily choose another estate agents that can fulfill the customer with their service.
Result: the threat of other services is strong in this estate agents market.