A Methodology to Assess the Competitiveness of

Real Estate Developers in China

By Vera Li
A Thesis Submitted for the Degree of PhD.

At Queensland University of Technology

Supervisor: Professor Martin Skitmore

School of Built Environment and Engineering

2011
CERTIFICATE OF ORIGINALITY

The work contained in this thesis has not been previously submitted to meet

requirements for an award at this or any other higher education institution. To the

best of my knowledge and belief, the thesis contains no material previously

published or written by another person except where due reference is made.

Signature _____________________________

Date _____________________________

i
ACKNOWLEDGEMENT

I would like to express my deepest appreciation and gratitude to my supervisor

Professor Martin Skitmore for his supervision, support and guidance. The

completion of this thesis would not have been possible without his help and

encouragement.

I am deeply indebted to the School of Built Environment, Queensland University

of Technology, which offered me the opportunity to pursue a PhD degree.

I wish to thank my family for their tremendous support during the past few years.

Without their continual encouragement and care it would have been impossible

for me to complete this course of study.

ii
 KEYWORDS

Competitiveness study, real estate developer, competitive indicators,

questionnaire.

ABSTRACT

Real estate, or property development, is considered one of the pillar industries of

the Chinese economy. As a result of the opening up of the economy as well as the

―macro-control‖ policy of the Central Chinese Government to moderate the

frenetic pace of growth of the economy, the real estate industry has faced fierce

competition and ongoing change. Real estate firms in China must improve their

competitiveness in order to maintain market share or even survive in this brutally

competitive environment.

This study developed a methodology to evaluate the competitiveness of real estate

developers in the China and then used a case study to illustrate the effectiveness

of the evaluation method. Four steps were taken to achieve this. The first step was

to conduct a thorough literature review which included a review of the

characteristics of real estate industry, theories about competitiveness and the

competitive characteristics of real estate developers.

Following this literature review, the competitive model was developed based on

seven key competitive factors (the ‗level 1‘) identified in the literature. They

iii
include: (1) financial competency; (2) market share; (3) management competency;

(4) social responsibility; (5) organisational competency; (6) technological

capabilities; and, (7) regional competitiveness.

In the next step of research, the competitive evaluation criteria (the ‗level 2‘)

under each of competitive factors (the ‗level 1‘) were evaluated. Additionally,

there were identified a set of competitive attributes (the ‗level 3‘) under each

competitive criteria (the ‗level 2‘). These attributes were initially recognised

during the literature review and then expanded upon through interviews with

multidisciplinary experts and practitioners in various real estate-related industries.

The final step in this research was to undertake a case study using the proposed

evaluation method and attributes. Through the study of an actual real estate

development company, the procedures and effectiveness of the evaluation method

were illustrated and validated.

Through the above steps, this research investigates and develops an analytical

system for determining the corporate competitiveness of real estate developers in

China. The analytical system is formulated to evaluate the ―state of health‖ of the

business from different competitive perspectives. The result of empirical study

illustrates that a systematic and structured evaluation can effectively assist

developers in identifying their strengths and highlighting potential problems. This

is very important for the development of an overall corporate strategy and

supporting key strategic decisions.

This study also provides some insights, analysis and suggestions for improving

the competitiveness of real estate developers in China from different perspectives,

iv
including: management competency, organisational competency, technological

capabilities, financial competency, market share, social responsibility and regional

competitiveness. In the case study, problems were found in each of these areas,

and they appear to be common in the industry. To address these problems and

improve the competitiveness and effectiveness of Chinese real estate developers, a

variety of suggestions are proposed.

The findings of this research provide an insight into the factors that influence

competitiveness in the Chinese real estate industry while also assisting

practitioners to formulate strategies to improve their competitiveness. References

for studying the competitiveness of real estate developers in other countries are

also provided.

v
 TABLE OF CONTENTS

KEYWORDS ......................................................................................................... iii

ABSTRACT ........................................................................................................... iii

TABLE OF CONTENTS ....................................................................................... vi

LIST OF FIGURES ............................................................................................... ix

LIST OF TABLES .............................................................................................. xii

CHAPTER 1. INTRODUCTION ...................................................................... 1

1.1 OVERVIEW ............................................................................................. 1

1.2 RESEARCH OBJECTIVES ..................................................................... 2

1.3 METHODOLOGY OF THE RESEARCH ............................................... 5

1.4 CHAPTER ORGANISATION ................................................................. 7

CHAPTER 2. LITERATURE REVIEW AND THEORETICAL

FRAMEWORK 10

2.1 INTRODUCTION .................................................................................. 10

2.2 REVIEW OF THE REAL ESTATE INDUSTRY .................................. 10

2.3 REVIEW OF COMPETITIVENESS ...................................................... 30

2.4 REVIEW OF REAL ESTATE DEVELOPERS‘ COMPETITIVENESS

43

2.5 SUMMARY ............................................................................................ 59

CHAPTER 3. RESEARCH METHOD AND DESIGN .................................. 61

3.1 INTRODUCTION .................................................................................. 61

3.2 SURVEY DESIGN ................................................................................. 63

3.3 DATA COLLECTION PROCEDURE ................................................... 63

3.4 SUMMARY ............................................................................................ 73

vi
CHAPTER 4. DATA ANALYSIS ................................................................... 74

4.1 INTRODUCTION .................................................................................. 74

4.2 DEVELOPMENT OF IMPORTANCE WEIGHTS ............................... 74

4.3 RATING DEVELOPERS BASED ON ATTRIBUTES ......................... 94

4.4 AGGREGATION OF WEIGHTS AND RATINGS ............................ 100

4.5 SUMMARY .......................................................................................... 102

CHAPTER 5. DISCUSSION OF RESULTS ................................................. 104

5.1 RESULTS OF EVALUATION ............................................................ 104

5.2 DISCUSSION OF RESULTS ............................................................... 141

5.3 SUMMARY .......................................................................................... 155

CHAPTER 6. CONCLUSIONS ..................................................................... 156

6.1 OVERVIEW ......................................................................................... 156

6.2 REVIEW OF OBJECTIVES ................................................................ 157

6.3 GENERAL CONCLUSION ................................................................. 157

6.4 PRACTICAL VALUE OF THE RESEARCH ..................................... 164

6.5 RECOMMENDATIONS FOR FURTHER STUDY ............................ 166

REFERENCES: .................................................................................................. 168

APPENDICES. QUESTIONNAIRE SAMPLES ............................................... 197

A1-1. QUESTIONNAIRE ON REAL ESTATE DEVELOPMENT

ENTERPRISES [HUMAN RESOURCES] .................................................... 197

A2. QUESTIONNAIRE ON REAL ESTATE DEVELOPMENT

ENTERPRISES [EMPLOYEE SATISFACTION] ........................................ 200

A3. QUESTIONNAIRE ON CONSUMER SATISFACTION TOWARDS

REAL ESTATE DEVELOPMENT ENTERPRISES ..................................... 202

vii
B1.QUESTIONNAIRE ON REAL ESTATE DEVELOPMENT

ENTERPRISES ............................................................................................... 204

B2-1. QUESTIONNAIRE ON REAL ESTATE DEVELOPMENT

ENTERPRISES [HUMAN RESOURCES] .................................................... 210

C. QUESTIONNAIRE ON REAL ESTATE DEVELOPMENT

ENTERPRISES ............................................................................................... 214

viii
LIST OF FIGURES

Figure 2-1 Three Stages of Development of Chinese Real Estate Market ... 23

Figure 2-2 Porter‘s Diamond Theory ............................................................ 34

Figure 2-3 The adoption frequency of competitiveness indicators in the

literature (Zhang et al., 2009) ................................................................ 50

Figure 2-4 The pyramid structure of classical competitiveness evaluation

approaches ............................................................................................. 53

Figure 2-5 Competitiveness indicators, criteria and attributes for assessing

real estate developers in China.............................................................. 55

Figure 3-1 Survey design for the research (Zikmund,W. G.2003) ............... 62

Figure 3-3 Types of questionnaires and respondents for this study .............. 66

Figure 3-4 Details of questionnaires A1 and B2 in this study ...................... 67

Figure 4-1 Comparison of the average weight and importance weight of

factors (the first level) for measuring the competitiveness of property

developers in China ............................................................................... 80

Figure 4-2 Comparison of the Average Weight and Importance Weight of

Criteria (the Second Level) for Measuring the Competitiveness of

Property Developers in China ............................................................... 83

Figure 4-3 Comparison of the average weight and importance weight of

attributes (the second & third level) under the management competency

for measuring the competitiveness of property developers in China .... 86

ix
Figure 4-4 Comparison of the average weight and importance weight of

attributes (the second & third level) under the organizing competencies

for measuring the competitiveness of property developers in China .... 87

Figure 4-5 Comparison of the average weight and importance weight of

attributes (the second & third level) under the technological capabilities

for measuring the competitiveness of property developers in China .... 88

Figure 4-6 Comparison of the Average Weight and Importance Weight of

Attributes (the Second & Third Level) under the Financial

Competencies for Measuring the Competitiveness of Property

Developers in China .............................................................................. 90

Figure 4-7 Comparison of the average weight and importance weight of

attributes (the second & third level) under the market share for

measuring the competitiveness of property developers in China.......... 91

Figure 4-8 Comparison of the average weight and importance weight of

attributes (the third level) under the social responsibility for measuring

the competitiveness of property developers in China ........................... 92

Figure 4-9 Comparison of the average weight and importance weight of

attributes (the third level) under the regional competitiveness for

measuring the competitiveness of property developers in China.......... 93

Figure 5-1 Radar diagram representing the competitiveness factors in

maximum score, expected/reasonable score, and actual score for

Company A ......................................................................................... 105

Figure 5-2 Radar diagram representing the competitive attributes scores of

Company A in management competency factors................................ 110

x
Figure 5-3 Radar diagram representing the competitive attributes score of

Company A in the organizational competency factor ......................... 114

Figure 5-4 Radar diagram representing the competitive attributes score of

Company A in the technological capabilities factor ........................... 122

Figure 5-5 Comparison of competitive attribute scores of Company A in the

‗financial competency‘ factor ............................................................. 126

Figure 5-6 Radar diagram representing the competitive attributes score of

Company A in the ‗market share‘ factor ............................................. 129

Figure 5-7 Radar diagram representing the competitive attributes scores of

Company A under the ‗social responsibility‘ factor ........................... 136

Figure 5-8 Radar diagram representing the competitive attributes scores of

Company A in the ‗regional competitiveness‘ factor ......................... 139

Figure 5-9 the population distribution of interviewees ............................... 144

xi
LIST OF TABLES

Table 2-1 Leading Theories of Corporate Competitiveness ......................... 35

Table 2-2 Typical indicators for assessing the competitiveness of

organizations (Zhang et al., 2009)......................................................... 49

Table 3-1 Number of respondents for the study ........................................... 72

Table 4-1 Survey results of the importance weights of competitive factors,

criteria and attributes ............................................................................. 75

Table 4-2 The importance weights of competitive factors and criteria ........ 79

Table 4-3 The importance weights of competitive attributes........................ 81

Table 4-4 Survey results of the rating of Company A against each

competitive factor, criterion and attributes ........................................... 95

Table 5-1 Summary of scores of competitiveness factors (the ‗first‘ level) for

Company A ......................................................................................... 106

Table 5-2 Summary of scores of competitiveness criteria (the ‗second‘ level)

for Company A .................................................................................... 107

Table 5-3 Summary of scores of competitiveness attributes (the ‗third‘ level)

for Company A .................................................................................... 108

Table 5-4 Summary of scores of competitiveness criteria (the ‗second‘ level)

and attributes (the ‗third‘ level) for management competency factors 111

Table 5-5 Details of scores of the best and worst five competitive attributes

under the management competency factor .......................................... 112

Table 5-7 Details of scores of the best and worst five competitive attributes

under the organizational competency factor ....................................... 116

xii
Table 5-8 Summary of the score of the attributes under the ‗staff satisfaction‘

criteria ................................................................................................. 119

Table 5-9 A comparison of staff satisfaction in different office branches and

age ....................................................................................................... 120

Table 5-10 Summary of scores of competitiveness criteria (the ‗second‘ level)

and attributes (the ‗third‘ level) under the technological capabilities

factor ................................................................................................... 123

Table 5-11 Details of scores of the best and worst five competitive attributes

under the technological capabilities factor .......................................... 124

Table 5-12 Summary of the scores of the attributes under the ‗customer

satisfaction‘ criteria ............................................................................. 125

Table 5-13 Summary of scores of competitiveness criteria (the ‗second‘ level)

and attributes (the ‗third‘ level) under the ‗financial competency‘ factor

............................................................................................................. 127

Table 5-14 Details of scores of the best and worst five competitive attributes

under the financial competency factor ................................................ 128

Table 5-15 Summary of scores of competitiveness criteria (the ‗second‘ level)

and attributes (the ‗third‘ level) under the ‗market share‘ factor ........ 131

Table 5-16 Details of scores of the best and worst five competitive attributes

under the ‗market share‘ factor ........................................................... 132

Table 5-17 Reasons for customer/owner‘s decision to purchase from

Company A ......................................................................................... 133

Table 5-18 A comparison of customer/owner satisfaction in different regions

............................................................................................................. 134

xiii
Table 5-19 Summary of scores of competitiveness criteria (the ‗second‘ level)

and attributes (the ‗third‘ level) under the ‗social responsibility‘ factor

............................................................................................................. 137

Table 5-20 Details of scores of the best and worst five competitive attributes

under the ‗social responsibility‘ factor ................................................ 138

Table 5-21 Summary of scores of competitiveness criteria (the ‗second‘ level)

and attributes (the ‗third‘ level) under the ‗regional competitiveness‘

factor ................................................................................................... 140

Table 5-22 Details of scores of the best and worst competitive attributes

under the ‗regional competitiveness‘ factor ........................................ 141

Table 5-23 Summary of the results of the re-interview .............................. 144

Table 5-24 Summary survey results of ―management competency ............ 146

Table 5-25 Summary survey result of organizational competency............. 148

Table 5-26 Summary survey results of technological competency ............ 148

Table 5-27 Summary of survey results of financial competency ................ 150

Table 5-28 Summary of the survey results of market share........................ 151

Table 5-29 Summary of the survey results of social responsibility ............ 151

Table 5-30 Summary of the survey results of regional competition ........... 152

xiv
CHAPTER 1. INTRODUCTION

1.1 OVERVIEW

Real estate, or property development, is considered as one of the pillar industries

in the Chinese economy. As a result of the opening up of the economy as well as

the ―macro-control‖ policy of the Central Chinese Government to moderate the

frenetic pace of growth of the economy, the real estate industry has faced fierce

competition and ongoing change. It is essential, therefore, for the decision makers

in real estate firms to determine what strategies to adopt to best leverage their

competitive advantages in this highly competitive market environment. As

Flanagan et al. (2007) indicated, although the study of corporate competitiveness

has been extensively conducted of industry and various methods have been

established to measure the competitiveness of firms in this sector, there is a

paucity of research into the competitiveness of other sectors of the economy such

as construction and real estate development.

With the limitations and deficiencies of the current research in mind, this study

established a competitive evaluation index system. This was done through

literature searches, evaluation of model cases and consultation with experts

combined with Delphi surveys to measure the competitiveness of real estate

developers in China. The purpose of this study was to formulate a corporate

competitiveness analytical system for the real estate sector. Through this

analytical system, real estate development firms can evaluate their ―state of health‖

from a number of different competitive perspectives. Using this structured

evaluation approach, threats to the business and existing problems within it can be

1
identified which can help guide the management of real estate development firms

in formulating appropriate strategies. This study provides a useful, practical

analytical tool to assist practitioners in the real estate industry to make appropriate

strategic decisions for maintaining and enhancing the competitiveness of their

firms. By using the model-procedure, senior management of a real estate

development company can self-assess its competitiveness through a quantitative

measure. This measure is particularly useful for leading companies as they are

already the benchmark for other companies in China. Without such a model-

procedure, these leading companies have difficulties to make sustainable

improvements in terms of competitiveness. Through using this method real estate

developers can better understand their current competitive position and

accordingly create suitable development strategies. This tool is particularly

focused on real estate developers in China.

Ultimately, this study provides real-world guidance to real estate developers for

pursuing sustainable growth in the highly competitive Chinese market. It also

makes an important academic contribution since it fills a gap in existing research

into competitiveness.

1.2 RESEARCH OBJECTIVES

Real estate development is a relatively new industry in China which is growing

steadily. It has undergone tremendous change over the last thirty years since

China adopted its ―open-door‖ policy in 1978 (Li et al. 2009). Many real estate

companies of different types are being setting up in China. However, only a

2
limited number of these have notable competitive advantages. As the market

matures it will be dominated by those firms with strong competitive attributes.

In previous studies, numerous scholars have considered organisational core

competitiveness as the key to survival for commercial organisations (e.g.

Wernerfelt1984; Porter 1990; Prahalad and Hamel 1990; Barney 1991; Drew and

Skitmore 1997). Likewise, establishing an elevated level of competitiveness is

critical to the success, or even survival, of a real estate firm. It is very important,

then, to properly assess the competitiveness of such organisations in China‘s

fiercely competitive property market. Therefore, the primary purpose of this

research is to evaluate and analyse the competitiveness of real estate developers in

China. To achieve this goal, some specific targets were identified as following.

The first objective was to determine a suitable measurement method for the

competitiveness of real estate developers. The proposed evaluation method should

be specifically tailored to the characteristics of the real estate industry.

Another important objective was to determine competition attributes for

evaluation, since the appropriate attributes will improve the precision of the

measurement method.

The third goal was to verify the effectiveness of evaluation method by conducting

a case study. The case study was used to illustrate the procedures of the

competition evaluation system and to identify the effectiveness of the evaluation

method. Furthermore, some common characteristics of Chinese real estate

developers highlighted in the case study. This includes shortcomings and strategy

measures to overcome them.

3
The ultimate goal of this study was to provide managers of real estate

development firms with useful tools for improving their companies‘

competitiveness.

However, how to formulate and measure the competitiveness of real estate

enterprises is complicated, especially in an emerging market like China‘s.

Abundant research on competitiveness has already been conducted on other

sectors of the economy, but not real estate. In order to bridge this academic gap

and provide useful tools for practitioners, the principal objective of this research is

to develop a practical model for the evaluation of the competitiveness of real

estate businesses in China.

This model is developed through the application of various established assessment

methods for organisational competitiveness in the context of the particular

features of China‘s real estate market. The competitiveness model contains seven

key competitive factors (the ‗level 1‘) identified in the literature. These include: (1)

financial competency; (2) market share; (3) management competency; (4) social

responsibility; (5) organisational competency; (6) technological capabilities; and,

(7) regional competitiveness.

For each competitive factor there are associated a group of competitive criteria

(the ‗level 2‘). For example, under the competitive factor ―market share‖ there are

five criteria, i.e.: (i) localisation; (ii) market coverage; (iii) land acquisition

strategy and implementation; (IV) property sales strategy and implementation; and,

(v) consumer satisfaction. Additionally, there are a set of competitive attributes

(the ‗level 3‘) associated with each competitive criteria. For example, under ‗land

4
acquisition strategy and implementation‘ there are four attributes: (i) rate of land

acquisition; (ii) quantity of land bank; (iii) quality of land bank; and, (iv) land

acquisition/pricing strategy.

The competitiveness framework developed in this research is based on the core

competitive factors that are unique to real estate development. This

competitiveness model also takes into account the five distinct stages of the real

estate development cycle (i.e., land acquisition, design and development,

construction, sales and property management) to develop a comprehensive

competitiveness framework.

1.3 METHODOLOGY OF THE RESEARCH

To fulfil the specific objective of this research, quantitative analysis is used as the

major research tool to process data. This is complemented by qualitative analysis.

Quantitative research focuses on ensuring that any concept can be described in

such a way that it can be quantified (Hussey, 1997). All collected data in this

study are defined in a manner suitable for quantification.

A quantitative survey is used to answer ―what‖ the important competitiveness

factors are and ―how‖ significant they are (Yin, 1994). Additionally, many

scholars suggest exploratory research and qualitative methodologies to capture

multi-dimensional phenomena (Yin, 2003) as well as non-linear, sometimes fuzzy,

patterns of reality (Sinkovics et al. 2005). This perspective is supported by

arguments of which qualitative methodologies can help to find ―meaning behind

the numbers‖, provide flexibility without requiring large samples (Sykes, 1990),

and offer a clear and holistic view of the context (Denzin, Lincoln 1994; Ghauri

5
and Grønhaug, 2005). Hence, to analyse a company‘s competitive strengths and

weaknesses after acquiring the specific data, qualitative analysis is useful for

determining the implicit truth of the data.

In undertaking this study, the following steps were performed:

The competitiveness factors, criteria and attributes were developed through an

extensive and holistic literature review combined with in-depth interviews and

Delphi interactions with well known academics, experts and experience-rich

practitioners.

Then, a series of questionnaires tailored appropriately for different investigation

purposes were formulated based on the previously-developed competitiveness

factors. Prior to the commencement of the survey, a pilot study was undertaken to

examine the suitability and comprehensibility of these questionnaires. A panel of

experts, including professors in the related disciplines of construction and real

estate as well as senior managers in the real estate field who are familiar with the

Chinese market, was invited to test these questionnaires. Their evaluation

included: whether the proposed factors were suitable and comprehensive; whether

the wording was acceptable and easily understood by respondents; and whether

additional factors should be added. Their comments were received and the

original instruments amended accordingly.

After this pilot test, the general survey was carried out. Two methods were applied

to enlarge the sample size. The first method is called a remote survey. It relies on

a combination of conventional mail and online applications. Invitation letters and

e-mails were sent to the senior managers of major real estate developers in China

6
inviting them to take part in the survey either online or by post. The method for

increasing the survey sample size was to conduct the survey face-to-face. The

most efficient way to do this is at industry conferences such as academic symposia,

the annual conference of industry societies, promotional conferences, and so on.

Finally, the research data was collected and analysed. This analysis was conducted

using quantitative methodologies such as statistics. The overall corporate

competitive score results were produced by calculating the weight of each

competitive factor, criterion and attribute, and combining these in accordance with

the appropriate weight. To acquire more insight into the statistical data, qualitative

analytical methodologies were also applied. Another survey was then conducted

to investigate the previous interviewees‘ opinion of the results. Much additional,

useful information was received from this re-examination process. This included

managerial recommendations and advice to enhance the competitiveness of real

estate developers. To put this all into context and illustrate the effectiveness of the

proposed competitiveness evaluation system, a case study was then performed of

a prominent real estate developer in China with rich experience both at home and

overseas.

1.4 CHAPTER ORGANISATION

This thesis is structured in line with the previously-introduced research steps. This

first chapter is an introduction which includes three parts. First, the background of

the research is presented. The subsequent part provides an introduction to the

objectives the study is striving to achieve. This is followed by a statement of the

7
significance of the study together with the proposed research methodology and

procedures.

Chapter 2 summarises a comprehensive literature review. Such a review was

carried out both of the real estate industry itself and of the concept of business

competitiveness. An overview of the real estate industry in emerging countries

was first performed. A brief outline of China‘s real estate industry is presented

through this review. The second part of this chapter relates a review of existing

research on competitiveness. The review first discusses the background and

definitions of competitiveness. It then addresses sub-branch research such as

organisational competitiveness, industry competitiveness and the measures

approach of competitiveness. In the final part of this chapter, a critical review is

made of the research that exists of competitiveness in the field of real estate

development highlighting the limitations of existing theories. A comparison of

current assessment methods of real estate developers‘ competitiveness is made. It

is found that any evaluation method has its strengths as well as weaknesses and

limitations of application. Lastly, a series of competitive factors, criteria and

attributes tailored to the evaluation a real estate development enterprises is

extracted. Drawing on this master list, the final list of factors, criteria and

attributes employed in this study is determined through interviewing and

surveying experts and practitioners in the real estate industry.

The research design and methodology is presented in Chapter 3. This chapter

provides a detailed introduction to how the study was carried out, what methods

were applied to address research problems, how the data was acquired and

8
analysed, and finally how the research results were formulated and assessed for

reliability.

Chapters 4 and 5 report the major findings of the study. The detailed results of the

research are presented and analysed. A case study of a real estate developer in

China is also presented to illustrate the applicability of the original study.

Furthermore, the effectiveness of research results is validated through a round of

re-visit interviews with pervious interviewees. Through these interviews,

additional valuable information related to this research and to future study is

presented.

Finally, practical managerial recommendations and suggestions for real estate

industry practitioners are discussed in Chapter 6. In the last part of this chapter,

the academic contributions of this research are summarised and the limitations of

the study and a research agenda for the future are given.

9
CHAPTER 2. LITERATURE REVIEW AND

THEORETICAL FRAMEWORK

2.1 INTRODUCTION

This chapter presents a comprehensive literature review of existing research

covering three areas. The first review is of the real estate industry, in particular

real estate development in China. The second review is of literature related to

theories of competitiveness. It is here that we first present the definition of

―competitiveness‖ as well as address the competitiveness of business

organisations. The third review is of research into competitiveness in the real

estate industry. A series of theories of competitiveness in real estate are

summarised first. Then, a comparison of competition evaluation methods is made.

Based on this review, an evaluation model for the competitiveness of real estate

developers in China is proposed. The factors in this initial model are re-examined

and complemented by experts and surveys as presented in Chapter 3.

2.2 REVIEW OF THE REAL ESTATE INDUSTRY

2.2.1 Real Estate Industry in China

The real estate industry China emerged as a commercial operation accompanying

with reforms and opening-up policies started in 1978, before then housing was

merely a kind of social welfare distributed to the people by the government. From

1980, private-owned capitals were permitted to invest in the real estate market.

From then on, the real estate industry had increased dramatically to become a very

large industry and the gross product of the industry leaped to 28.4 billion Yuan at

10
the end of 1991(CSSB, 1990-1995). In last 10 years, domestic and foreign

investors have invested heavily in the industry and this had led to the housing

prices in major cities in China hitting a record high (Jiang, D.C, Chen, J.H and

Isaac, D, 1998).

The real estate market of China has become a prosperous business and a pillar

industry in the country due to a series of national reforms. It is estimated that over

4.5 billion m2 of property was provided by the private-owned property developers

which account for approximately 80 per cent of the whole market share. The

annual new completion of commodity property has increased from 36.4 million

m2 in 1991 to over 290 million m2 in 2002 (Li, X., 2004). Rising household

incomes, rapid economic growth and massive rural-to-urban migration have made

a strong housing demand in Chinese cities (Liu, 2004). In 2003, the SDPC (State

Development Planning Commission) stated that the urbanization rate of China

will be over 50 percent by 2020, and the annual housing demand in major cities is

estimated to reach to about 300 million m2 when the urban population increases

to 650 million in 2010 (Xie, 2004).

There exists certainly a great body of literature describing the real estate market in

China from various perspectives including housing structure (e.g. Wu, 1996; Zhu,

2000), housing policies (e.g. Chen and Gao, 1993), housing problems (e.g. Logan

et al., 1999; Wang and Murie, 2000; Zhang, 1999; Zhou and Logan, 1996), tenure

choice (e.g. Li, 2000a, 2000b; Huang, 2004; Huang and Clark, 2002), and

interurban and interurban residential mobility (e.g. Li, S. M., 2004; Li and Wu,

2004; Sabin, 1994; Wu, 2002; Wu, 2004; Zhang, 2001).

11
In terms of housing structure, due to the vivid character of the institutional

structure which dominated by the government in a socialist country, there are

complicated procedures involving various management levels to allocate the

public housing to individual tenants. The Chinese housing structure, however, has

its unique features, as stated by Wu (2002), the 'state provision' has different

meanings between municipally-managed and work-unit housing. Wu (2002)

argued that ambiguous understanding in the structure of public housing provision

has led to the problem of the real estate market during the 'commercialization'

process. He has adopted a perspective of structure of housing provision (SHP) to

examine the changes in public-sector housing provision in China. His study

reveals that some significant changes in the SHP have been stimulated by the

housing reform. The changes certainly have profound implications to the nation's

urban development and urban spatial structure (Wu, 1996). This reform has been

implemented in gradual manner due to the existing complicated housing provision

structure, which caused the housing shortage problem of cities in China. Through

two decades of development, the housing structure is gradually transferred into a

market-oriented system of property development and investment, with is

complemented by a modest provision of affordable housing by local government

at various levels (Zhu, 2000). However, this kind of housing structure provoked

fierce debates nationwide as emerging problems such as rocket-high price, Private

Housing Vacancy Rates, real estate bubbles, as well as unfair provision system of

affordable housing. This is still a challenging problem that remains to be attacked

by the government and real estate developers.

12
The tenure choice is another important issue of China‘s real estate market. Huang

(2004) uses a multilevel modelling technique to analyse national survey data of

China‘s real estate market in 1996. Through the study, he reveals that both market

mechanisms and institutional forces have effect on householders‘ tenure choice in

urban China. However, market mechanisms are gradually replacing the previously

welfare-oriented housing provision system during the further step of housing

reform. Micro-level factors such as household characteristics begin to change

tenure choice behaviour in urban China as in the Western countries, but macro-

level constraints and opportunities defined by not only housing stocks and

housing markets but also local government behaviours continue to be crucial.

Through conducting case studies in 3 different cities in China, Huang (2004)

concludes that high ratio of vacant flats in the commercial housing market, and a

conservative local government all encourage consumers to choose public housing

and rental.

The residential mobility and housing decisions are major issues in real estate

studies in which individual households are the focus of analysis. There are

numerous literatures focusing on residential mobility and housing choice. These

studies mainly investigate the residential mobility and housing decisions from the

perspective of urban theory. Usually, residential mobility is considered as a spatial

adjustment process, through which tenants adjust their housing consumption in

location, size, type, and tenure form to changing circumstances, both internal and

external to the tenants (Wolpert, 1966; Brown and Moore, 1970; Michelson,

1977). Residential mobility aims at restoring a state of consumption equilibrium

(Quigley and Weinberg, 1977). Comparing to studies conducted in western

13
countries, studies conducted in China expand the conventional western context to

an unfamiliar, dynamic, and transitional form. Given the size of the country in

terms of geographical extent, population, and economic strength, and given the

scale and pace of urban transformation that is currently unfolding within the

country, whether the status cities real estate development in major cities of China

can be explained well by the theories and known concepts formulated in the west

need to be testified (Li 2004)

Furthermore, the real estate development in China has also been simulated by

foreign direct investments which provide not only in capital but also in form of

services and developmental experience to the real estate industry. As real estate is

a localization industry operating within local market conditions, foreign direct

investments in real estate can be considered as a local economic activity. Hence,

the returns of foreign investments in real estate are directly determined by

economic dynamism, as well as supply and demand and purchasing power of local

real estate markets. However, the realization of profits and returns to capital in

such markets require good regional institutions and governance. He (2002) finds

that developers from Hong Kong, Macao, and Taiwan, because they have a better

understanding of the local culture and institutional governance, tend to perform

better than investors from other countries in terms of profit gain and market share.

2.2.2 Characteristics of Real Estate Enterprises

Different types of enterprises have unique characteristics and effective boundaries

to their businesses (Committee of Donor Agencies for Small Enterprise

Development, 1995). The characteristics of real estate enterprises are

14
distinguished by an industry that is complex and diverse as well as risky in nature.

These characteristics are summarised as following:

 Real estate development has strong local characteristics which results in each

project having unique features.

Real estate products differ widely in location, configuration and application of

materials. These fundamental differences make the promotion of standardisation

difficult (Weimer et al. 1966). Hence, unlike industries which rely on mass

production, each real estate project is unique. Additionally, property development

is an offspring of the political process. For each real estate development society

has an opportunity to negotiate debate and reconsider the basic issues

underpinning the project (Graaskamp 1981).

The real estate development process principally involves three groups: consumers,

producers, and providers of public infrastructure. Thus REEs (real estate

enterprises) need to expend additional effort in planning each project to optimise

the benefit to all concerned. How to ensure the success of the real estate project

for all stakeholders is a question that must be taken it seriously by any property

developer.

 Real estate development involves long and complicated contractual processes

with numerous participants from various business sectors.

The production process in real estate involves a number of lengthy activities

including such things as: site acquisition, site survey and formation, securing

planning consent, arranging financing, design, construction, and marketing

15
(Barrett et al. 1978; Healey 1994). Cadman, Wilkinson and Reed (2008) divide

the development process into four phases: evaluation, preparation, implementation

and disposal. Another more detailed model was presented by Miles (1991) who

contains eight stages as follows: inception of the idea, refinement of the idea,

feasibility, contract negotiation, formal commitment, construction completion,

formal opening, and asset and property management. Ratcliffe et al. (2004)

identified the following five-phase process from a property development

prospective: concept and initial consideration; site appraisal and feasibility study;

detailed design and evaluation; contract and construction; and marketing,

management and disposal. However you characterise it, property development

involves a lot of interrelated steps.

Although the descriptions of these steps appear relatively simple, the activities

themselves can grow to be very complex. Each step in property development

involves the cooperation of a number of stakeholders from different business

sectors including: suppliers, design firms, consultant companies, construction

firms, property management companies, and others (Jin 2003). The fact that these

processes involve a large number of players across a wide range of sectors, each

with its motivations and objectives, makes real estate development very

convoluted and challenging.

To succeed in real estate development, much preparation is required including

acquiring a deep understanding of relevant public policy, physical planning,

municipal regulation, market conditions, site appraisal, economic evaluation,

financial requirements, contractual procedures, building design, construction

16
techniques and marketing strategies. Additionally, a professional approach to

project management is necessary to coordinate schedule, quality and cost. All of

this adds up to yet more demands on the real estate developers‘ management

expertise.

 Real estate development is resource intensive.

Finance is one of the most critical elements of successful property development.

The funds needed for the development of a real estate project are considerable and

are used mainly for land acquisition and construction. REEs must access a number

of financial channels to secure adequate financing for operating business activities

(Wu 2002). Fortunately, financing can be obtained from a number of channels.

The choice depends mainly on the statues of developer and the degree of risk

attached to the proposed project (Ratcliffe et al. 2004). In a mature market like the

US or Britain, sources of finance include: insurance and pension funds, banks,

trusts, bonds, internal finance. However, that is not the case in China where a real

estate developer‘s financing options is limited, for the most part, to banks and

internal finance. This was echoed by interviewees including the managers in

Vanke (China Vanke Co., Ltd. which develops residential properties in 19 cities

throughout China as well as providing property management services.) and

Greentown (Greentown China Holdings Limited, located in Hangzhou, Zhejiang

province, which is one of the Top 10 real estate enterprises in China) who agree

that banking is the most important financial channel for their businesses.

17
In addition to capital, REEs must possess others important resources in order to

survive and prosper. Land reserves and sufficient, competent human resources are

key factors.

Land is fundamental in order for an REE to undertake his business (Liu 2004). In

the absence of adequate land reserves, a real estate developer will lose

opportunities and his business may have to be suspended. Available land in urban

areas is becoming increasingly scarce and expensive. Real estate firms with no

land reserves in an urban area will find themselves in a disadvantaged position.

Hence, proper strategies for acquiring land resources are very important to an

REE.

The complicated development process inherent in real estate projects requires the

employment of many different professionals and technical experts. These

individuals are vitally important. Their expertise crosses numerous disciplines and

knowledge areas including: obtaining land-use rights, planning and design, project

financing, project management and marketing management (Cong and Wang

2004). Acquiring these essential skilled resources is another challenge for

developers.

● Real estate development is subject to high risk but with the expectation of high

return (Tay and Tay 2007).

The future is uncertain and many events may affect the expected outcome of a real

estate development. As previously discussed, real estate projects generally involve

a long production process. Unsurprising, these lengthy and involved processes

present various risks such as changes in governmental policies, changes in interest

18
rates and changes in the market environment (Van der Krabben and Lambooy

1993). Although it is impossible to list of all of the possible risks in a real estate

development project, defining risk categories allows us to structure risk

identification and gain insight into those risks.

Various authors (Miller and Lessard 2000; Bing 2005; Risnun Instituut. 2005; Ng

and Loosemore. 2007) define real estate risk categories as technical, financial,

legal, political, physical, social, and organisational. Risks can also be categorised

as organisational, project-related and environmental, or macro level (exogenous),

meso level (endogenous), and micro level (stakeholder relationships (Baloi and

Price, 2003; Bing et al., 2005; Mbachu and Vinasithamby, 2005). Others assign

risk to the parties in the process (Kumaraswamy 1997; Rahman and

Kumaraswamy 2002). Additionally, real estate development risk can be

categorised into seven types according to the steps in the real estate development

process. These categories, including a few examples of the risks associated with

each of these steps, are summarised by Ellen Gehner (2008) as follows:

 Land development risk: e.g. land cannot be purchased - i.e. land prices are

disproportionately high considering land conditions and the current Zoning

plan;

 Design risk: e.g. program of requirements cannot be realised or the design

cannot be kept within budget due to delays as a result of changes imposed by

the market or the planning application process;

 Entitlement risk: e.g. lack of approval of the zoning plan or building permit;

19
 Financing risk: e.g. financing cannot be arranged;

 Construction risk: e.g. tendered construction costs exceed the budget or there

is a delay in the construction process;

 Leasing risk: e.g. time-to-market lags behind schedule and as a result the

design does not meet the current demand of the space market (e.g. a decrease

in rental prices) due to economic fluctuations or changes in market supply;

and,

 Sale risks: e.g. incorrect estimate of yield development.

From a managerial perspective, events with a positive impact are regarded as

opportunities and events with a negative impact are regarded as risks

(MacCrimmon and Wehrung 1986; March and Shapira 1987; Akintoye and

MacLeod. 1997). Developers can not only choose to invest, they can also

influence the risk factors of a project (Keizer et al., 2002). This means that the

decision challenge is dynamic (Halman 1994). However, this ability is limited by

a lack of control, information and time. MacCrimmon and Wehrung (1986) have

said that;

If we had complete control over the situation, we could determine the best

outcome and there would be no risk. If we had complete information about which

event would occur, we could select the best alternative based on this knowledge

and again there would be no risk. If we had unlimited time in which to decide

which alternative to choose, we could wait until the outcome of the uncertain

20
event was resolved and then choose the best alternative alter the fact. This

scenario also involves no risk.

However, practice is nearly the exact opposite of MacCrimmon and Wehrung‘s

ideal. Developers constantly need to make critical decisions based on limited

information and within tight timeframes. The result is high potential risk.

Mitigating this risk to boost the potential profit of a project is heavily dependent

on the property developers‘ management skills.

In today‘s world, information technology is increasingly widespread, economies

are going global, specialisation and integration are the two main trends in the real

estate development industry, and competition between developers is becoming

increasingly fierce. As a result, property development companies have evolved

into a wide range of types and sizes. There are large companies with extensive

development programmes capable of undertaking complex projects, spreading

their attention and applying their skills across the market, and there are small

companies content to operate on a more modest scale in selective sectors such as

office, retail, industrial or residential (Ratcliffe et al. 2004).

Increasingly, real estate development requires greater information about

prospective markets and marketing, patterns of urban growth, property legislation,

local planning regulations, the procurement and disposal elements of building

design, site development and construction techniques, methods of controlling

financial risk and managing schedule. Greater complexity in property

development has also resulted in more specialisation. As more affiliated

21
professionals become involved, the size of the development team has grown and

the role of some of the professional disciplines has changed. (Ratcliffe et al. 2004)

Development in real estate in the 2000s is different from that in the 1990s and is

likely to be different from that in the 2010s. Although developers may not

continually address societal trends and changes in the short-term, over the longer-

term these trends and changes have a tremendous effect on what developers do.

2.2.3 Features of Real Estate Industry in China

China‘s real estate industry has made great progress over the past three decades

and is considered to be the main engine of China‘s economic growth (Fung et al.

2006; Hinton and Tao 2006). Since 1978, the Chinese government has reformed

its land administration and housing systems as a part of a nationwide economic

restructuring program. The central government has begun to adjust its land

allocation system with the intention of transforming it from a socialist central-

planning economic system to one with a market orientation (Hinton and Tao

2006). A land tenure system was introduced to replace collective ownership, while

state direct allocation and planning of land use gave way to a market-oriented

allocation system (Qu, Heerink, and Wang 1995; Dowall 1993; World Bank

1993). Housing reform has tried to convert urban housing from a merit good that

is allocated among its users as a welfare entitlement to a commodity that is

allocated according to free-market mechanisms (Chen 1996; Wang and Murie

1996; World Bank 1992). A series of government policies have been introduced to

hasten this transformation, including abolition of the administrative housing

allocation system and reforms of the finance, land supply and taxation systems, all

22
of which have created a favourable operating environment for real estate

developers (Choi 1998). General reviews of these processes are discussed from

the perspectives of the historic development of the real estate market in China and

the opportunities and constraints for the real estate developer.

 Historic development of the real estate market in China

A persistent obstacle to the study of China‘s real estate market is the fragmented,

erroneous or lack of data (Wong, 1999). This situation makes a thorough

understanding of the evolvement of the China real estate market an arduous task.

Nonetheless, the evolution of this market is divided into three stages by

referencing available existing literature as shown in figure 2.1.

• The pre-reform era (1947-

Stage 1 1977)

• The conceptual reform period

Stage 2 (1978-1988)

• The experimental reform

Stage 3 period (1989-1995)

Figure ‎2-1 Three Stages of Development of Chinese Real Estate Market

23
 The pre-reform era: 1947-1977

The pre-reform era comprised two parts. The first part was the period between

1947 and 1957 when the fundamental structure of the land system was established

(Shillinglaw 1974; Tang 1994; Ratcliffe et al. 2004). The second part is the

turbulent period from 1958 to 1977 when the rational development of the real

estate system was literally halted by radical social campaigns (Ratcliffe et al. 2004;

Wong 1999; Li 1996). During in these thirty years, private property ownership

was abolished and replaced by state and collective ownership under which land

and real estate were distributed by assignment instead of by market rules. As a

consequence, the real estate market practically ceased to exist.

 The Conceptual reform period: 1978-1988

Major reforms were introduced after Deng Xiaoping came to power in the late 70s.

These reforms were to transform China from a highly centralised planned

economy that was virtually closed to the outside world into one that is more open

and operates with some market aspects (Wong 1999). This market-oriented

economic reform not only brought an end to the monopoly public economy, but

also ended the institution of free land use (Zhu 1994). Many reform measures

were put forward during in this period. The changes introduced in the late 70s and

early 80s were gradual and often more conceptual than implemental in nature, as

in the example of the amendment to the constitution in 1982. Although the use of

land as capital had been permitted since 1979, the 1982 amendment to the

constitution still explicitly forbade the transfer of land for value. Nevertheless, it

introduced the first official land nationalisation policy, clearing the path for

24
further land reforms. Afterwards despite the public denial of land as a commodity,

in truth a charged land-use system was forming as more and more cities started

collecting fees for the use of land (Wong 1999).

 The experimental reform period: 1989-1995

While the period between 1978 and 1988 was essentially a period of conceptual

reform, the third stage commencing after 1988 marks the beginning of an

experimental reform process towards increased market activities. A breakthrough

in the land system was seen at the end of 1987 when the first transactions in land

was made in Shenzhen after land had been prohibited from entering the market for

decades. In 1988 the constitution was revised to permit the transaction or land use

rights. However, as a result of the June 4th incident and subsequent stringent

policies, market activities declined between 1989 and 1991. Deng Xiaoping

consequently made his famous Southern Tour in 1992, reaffirming the

continuance of economic reform. Immediately the economy was boosted and the

real estate industry became one of the ―hot spots‖ for investment. The expansion

of the industry between 1992 and mid 1993 exposed serious weaknesses in the

market. Backwardness in the system including ineffective administration, lack of

legislation and chaotic market signals were magnified during the rapid expansion.

This in turn led to disordered development that was fuelled mainly by speculation

from state organisations and overseas investors. By mid 1993 the market became

so overheated that it was affecting the wellbeing of the economy. Consequently, a

severe administrative clamp down was imposed in the form an austerity program

(Wong 1999).

25
 Opportunities and constraints in the current Chinese real estate market

The experimentation with real estate market reform in China from 1989 to 1995

ran up against numerous barriers such as an undeveloped market, irregular and

conflicting regulatory mechanisms, inadequate legal system and over-extension.

To break down these barriers, many readjustments both in the market and within

government were put forward in subsequent years.

First it is necessary to look at structural problems in the market system. The

explicit rules and regulations which form the framework of the market are

essentially established by the administrative and legislative systems. However,

these systems have their own problems. An ambiguous definition of power in the

administrative system caused discord between different government bodies;

notably, the State Land Administration Bureau and the Ministry of Construction,

both of whom oversee the administration of land and real estate. Furthermore, the

legislative system was inadequate which caused a heavy reliance on local

legislation. This often resulted in confusion and divergence from central policies

(Urban Real Property Law 1995). Some laws were impractical as they were

equivocal and lacking a clear stipulation about penalties. The legislative process

was found to lag persistently behind developments in the market. Finally, the

implementation and execution of legislation was found to be ineffective. Hence,

there is still a long way to go to establish a mature market system for real estate in

China.

In contrast to the structural level of market administration, the operational level is

concerned with how rules and conventions are implemented and how the market

26
actually functions within the structural framework. Significant operational

problems in the Chinese property market include the lack of regulation of first tier

land supply, irregular administrative behaviour, lack of development of subsidiary

services for the operation of the real estate market, lack of a supporting secondary

market, and the over-speculative nature of the market (Wong1999).

Obviously, many of these problems must be viewed in the context of the reform

process that has been going on in China. The uncertainty of issues and policy,

weak legal enforcement, imperfect market mechanisms, unstructured

administration system and decentralised administration can all be identified as

contributors to these structural and operational problems.

However, as a transitional market in a transitional economy, some phenomenon

are only transient characteristics of the market while others will stay and form an

integral part of the system affecting future development. Since the overheating of

the real estate market in 1992 and 1993, the government has introduced many

changes, including the re-centralisation of the land supply administration,

promulgation of legislation targeting areas with problematic track records such as

property rights, mortgage and land distribution methods, and clearance of

unreasonable fees in real estate development and expansion of mortgage services

(Wong 1999). These changes deeply influenced further development of the real

estate market.

In addition, the successful bid to host the 2008 Olympic Games in Beijing and

entry of China into the World Trade Organisation (WTO) in 2001 sped up a series

of gradual reforms of the legal and regulatory systems further improving the real

27
estate investment environment (Fung et al. 2006). The government is actively

seeking to encourage real investors and discourage speculators. Polices were

continuously formulated according to market conditions with the objectives of

developing a healthy real estate industry and hasten the transition from market

initiation and experimentation to consolidation and maturity.

Now the constraints and opportunities of the real estate market are discussed in

the context of this analysis of the development and characteristics of market

system of real estate in China.

 Opportunities

The opportunities for the further development of China‘s real estate market will

be triggered by improved institutional and operational factors. With continued

strong economic growth, urbanisation will intensify. Furthermore, there is a

strong Chinese tradition to own one‘s own housing. This will generate a large and

sustainable demand for residential housing and make China one of the world's

largest residential markets. Housing prices and turnover have consistently risen in

recently years. For example, housing prices increased by 68% in China between

2001 and 2004 (Woods and Smith 2005). In 2007 alone the sales price of houses

increased by 10.5% in major cities as compared to 2006 (Xie 2008). China is

providing ample opportunity for real estate developers to expand their businesses.

 Constraints

Although both China‘s real estate market and economy appear to have

considerable growth potential, there are significant constraints to be overcome.

28
With the booming market of recent years, real estate prices have consistently risen

faster than overall inflation (Fung et al. 2006). The surge in property prices and

rising real estate investment has gained wide attention, in particular in relation to

the macroeconomic consequences and affordability for ordinary people (Peng et al.

2008). For example, housing prices in China are comparable to those of high-

income nations but per capita income in China remains low by international

standards (Zhang and Fung 2006). Concerned that this reflects an overheated real

estate market, the Chinese authorities have applied regulatory policies to control

the housing supply structure in the hopes of averting an asset bubble.

Additionally, further development of the market will be constantly constrained by

the pace of development of China‘s institutions including the appropriate

legislation to regulate market activities and the establishment of a more efficient

and effective administrative framework, especially at the contextual level.

Contextual problems include policy uncertainties, weak legal enforcement,

imperfect market mechanisms, frequent administrative interference, and an

unstructured and decentralised administrative system. The market remains unduly

affected by government policies and the ―invisible hand‖ of government often

shapes market outcomes.

As a result of the restructuring of the market system and adjustments to

administrative polices, as well as the special characteristics of the real estate

industry of China, real estate developers in China have faced considerable

pressure on their operations. Competition among real estate developers has

continuously intensified and many have struggled for survival (Li and Li 2009).

29
As identified by Xie (2008), the number of real estate enterprises of China in 2007

decreased by 39.8% compared to 2006. Because of this rapid and unpredictable

change, self-analysis in search of competitive advantage has been widespread

amongst real estate companies in China. Improved competitiveness is considered

essential for their survival in the current hyper-competitive market.

2.3 REVIEW OF COMPETITIVENESS

2.3.1 Definition of Competition

To understand competitiveness, you must first understand what competition is.

Competitiveness is embodied by competition. Almost every paper on this subject

struggles with the definition of competitiveness (Belkacem 2002). Various

definitions of competition are provided by scholars. One opinion holds that the

logical precision of a word or concept like competitiveness is not important as

long as the outcome of it is good (Turner 1991). Other researchers (e.g.

Henricsson et al. 2004) stress that defining competitiveness does matter. It

determines the contours of the factors influencing it (Belkacem 2002), which in

turn are essential in the diagnosis of any competitive problem (Scott and Lodge

1985). Hence, defining the concept becomes a task that cannot simply be ignored

by competitiveness research.

Competitiveness can be defined in a number of ways. According to IMD (2004),

the concept is a result of a long history of thought from classical and modern

economists including Adam Smith, David Ricardo, Max Weber, Joseph

Schumpeter, and Nicholas Negroponte. IMD (2004) summarised a list of fourteen

typical definitions of competitiveness that have appeared in literature. Typical

30
contributors include the World Economic Forum (WEF), IMD, and the Ciampi

Group. Definitions of competitiveness can also be found in other publications, for

example, Scott and Lodge (1985), Ivancevich et al. (1997). Among these, Stigler

(1991) is widely accepted. Stigler defined competition as; ―A rivalry between

individuals and it arises whenever two or more parties strive for something that all

cannot obtain.‖

Competition comprises four dimensions:

 Competitors. This means those with whom you will be competing, including

existing and potential competitors.

 Competing Objects. This is the specific object of competition, which includes

such things as profits, market share, material sources, ideas and innovation,

service networks, customer‘s satisfaction.

 Competitive Capability. Independent interested individuals demonstrate their

special characteristics and abilities during the competitive process. The

greater quality or ability one has, the greater the chance of success as

compared with one‘s competitors.

 Competed Results. The result of competing is a reasonable allocation of

competing objects among competitors. If the results are not mutually

satisfactory, competition will continue.

Based on these four dimensions of competition, each competitor is seeking to

enhance his competitive capability by specialisation in particular abilities or by

differentiation of its products or services to successfully realise the desired

31
competitive object. Competed results will approach a point of equilibrium

asymptotically among competitors through repeated competition. During this

process of repeated competition, each competitor will develop its specific

competitiveness.

2.3.2 Definition of Competitiveness

The study of ‗competitiveness‘ has proven extremely popular with

economic/management theorists, business managers and directors alike in recent

years. It is generally believed that mapping the competitive environment of an

organisation helps to form a sound basis for business strategy development

(Feurer and Chaharbaghi 1994). In recent years, various studies have been

conducted on the subject of competitiveness. These can be categorised into three

levels: micro, meso and macro. These can be further characterised as being

applicable to organisation competitiveness, industrial competitiveness, and

national competitiveness (Nelson 1992). As maintained by Man et al. (2002),

whatever the levels of focus are, competitiveness is eventually concerned with the

long-term performance of the subject relative to its competitors - the result of

being competitive. Waheeduzzaman and Ryans (1996) indicate that

competitiveness involves multidimensional concepts and disciplines, including:

comparative advantage and/or the price competitiveness perspective; the strategy

and management perspective; and the historical and socio-cultural perspectives.

Different definitions of competitiveness apply to these different levels. From a

macro perspective, i.e. a national viewpoint, competitiveness enhances the

prosperity of the nation by improving the real income of its citizens whose

32
performance comprise the social, cultural, and economic variables in international

markets. Scott and Lodge (1985) gave the definition of national competitiveness

as; ―A country‘s ability to create, produce, distributes and/or service products in

international trade while earning rising returns on its resources‖. In the early

1990s, Porter (1990) developed a diamond framework to specify the role of the

national environment in influencing the international competitiveness of an

industry. Porter (1990) reveals that four attributes of the home country

environment have an effect on the context which allows firms to gain and sustain

competitive advantage. These are: factor conditions, demand conditions, related

and supporting industries, and context for firm strategy and rivalry. In Porter‘s

view, two exogenous factors, government and chance, influence the functioning of

these four major determinants as shown in the figure 2.2. Man et al. (2002)

proposed four characteristics of competitiveness: long-term orientation (focusing

on long-term performance), controllability (managing resources and capabilities),

relativity (performance relative to other firms) and dynamism (concentrating on a

dynamic process to generate the desired outcomes).

From a micro-meso perspective, the concept of competitiveness at the company

and industry levels has also been adopted in different contexts. Industrial

competitiveness is considered as the ability of a company or industry to meet

challenges posed by foreign competitors (US Department of Energy, World

Competitiveness Yearbook 2003 (IMD 2004)). Ivancevich et al. (1997) defined

firm competitiveness as; ―The degree to which a firm can, under free and fair

market conditions, produce goods and services that meet the test of international

markets while simultaneously maintaining or expanding the real incomes of its

33
employees and owners.‖ Industry bodies and firms are keen to understand and

improve their competitiveness, as competitiveness is the key to the success or

failure in a market economy (Porter 1980). Therefore, competitiveness at the firm

level is mainly measured by the competitive capability of a firm to earn desired

competed results (profits, and market share) and ensure its future development.

Figure ‎2-2 Porter’s‎Diamond‎Theory

Because the focus of this study is the competitiveness of real estate development

businesses, competitiveness will now be reviewed in more detail from a micro

perspective, i.e. organisation or firm competitiveness.

2.3.3 Corporate Competitiveness

As pointed out by Krugman (1997), at the individual firm level competitiveness is

a comparative concept of the ability and performance of a firm, sub-sector or

country to see and supply goods and/or services in a given market. In fact, the

34
competitiveness concept includes various disciplines such as comparative

advantage, price competitiveness perspective, strategy and management

perspectives, and the historical and socio-cultural perspectives (Man et al. 2002).

Several different micro perspectives of competitiveness have been proposed in

existing literature. Waheeduzzaman and Ryans (1996) maintain that the study of

competitiveness involves multidimensional concepts and disciplines. Flanagan et

al. (2007) have made a critical review and provided valuable insights into firms‘

competitiveness. They summarised three main schools of thought as shown in

Table 2.1. These are: i) competitive advantage and competitive strategy models

(i.e. Porter 1980); ii) resource-based view (RBV) and core competence approach

(e.g. Wernerfelt 1984; Prahalad and Hamel 1990; Barney 1991); and, iii) the

strategic management approach (e.g. Wheelen and Hunger 2002).

Table ‎2-1 Leading Theories of Corporate Competitiveness

Issue Sources of Competitive Advantage Authors

Competitive Five competitive forces model Porter, 1980,1985

advantage and Three generic competitive strategies
strategy model The value chain

Resource based Enterprises‘ internal specific resources Wernerfelt, 1984;

view and core Prahalad and
competence Hamel, 1990;
approach Barney, 1991

Strategic Strategic management approach Wheelen and

management Hunger,2002
approach

The ‗diamond‘ competitiveness framework presented by Porter (1990) has been

widely adopted for analysing competitiveness at both the national and industry

35
levels. Porter‘s theory for corporate competitiveness is characterised as the

industrial organisation view of competitive advantage (Flanagan et al. 2007),

which was grounded on the earlier works of Mason (1939) and Bain (1959) in the

area of industrial organisation economics (Kale 2002). It was postulated that

competitive advantage comes from the competitive strategy a firm adopts to

neutralise threats or to exploit opportunities presented by an industry (Porter 1980,

1985). In the ‗diamond‘ competitiveness framework, Porter (1990) classifies basic

factors (i.e. natural resources, climate, location, unskilled and semiskilled labour,

and debt capital) and advanced factors (i.e. modern communications infrastructure

and highly educated personnel) as the factor conditions of corporate competitive

advantage. Porter (1990) also argued that rapid domestic growth, sophisticated

domestic buyers, general infrastructure, and domestic and international rivalry are

all critical to corporate competitive advantage. Major components in Porter‘s

theory are: i) the five competitive forces model; ii) the three generic competitive

strategies; and, iii) the value chain. In analysing the competitiveness of firms,

Porter‘s theory has been the dominant tool for the past two decades. Its various

merits include its simplicity (Miller and Dess 1993), its strong theoretical

underpinnings (White, 1986). However, due to the openness of Porter‘s theory,

the criticism directed towards it is almost as great as the acclaim it has received.

For example, it does not address the internal mechanisms by which a company

converts the influence of a challenging external environment into useful internal

abilities (Lado et al. 1992). For some companies, the pursuit of more than one

generic strategy simultaneously is viable (Hambrick 1983).

36
RBV assumes competitive advantage does not depend on market and industry

structures but stems from the resources inside a firm (Flanagan et al. 2007). The

resource-based competitiveness theory considers the corporation‘s unique

resources as the source of its organisational core competitiveness (Wernerfelt

1984). This is mainly based on Selznick‘s (1957) seminal work on ―distinctive

competences‖ and on Penrose‘s (1959) early argument that a firm is a collection

of resources and its performance depends on its ability to use them (Ambrosini,

2003). This view really took off in the 1990s when a number of conceptual papers

were published (e.g. Barney 1991; Conner 1991; Mohoney and Pandian 1992;

Peteraf 1993). The principles were popularised by Prahalad and Hamel (1990,

1994), who proposed that firms should develop unique resources and thus achieve

the core competence to sustain growth. According to Dunning (1988), Dierickx

and Cool (1989) and Douma and Schreuder (1998), firm-specific internal

resources include: financial resources, tangible resources (such as plant,

equipment and buildings), and intangible resources (such as patents, brands,

reputation, experience, technologies, and organisational routines). Similarly,

Barney (1991) classifies firm‘s resources into three categories: physical capital

resources (i.e. plant, equipment), human capital resources (i.e. training, experience,

judgment, intelligence, relationships, and insight of individual managers and

workers in a firm), and organisational capital resources (i.e. formal and informal

planning, and the controlling and coordinating systems of a firm). According to

Haan et al. (2002), RBV only focuses on critical or strategic resources — those

resources that are critical for a firm‘s superior economic performance and

constitute organisational routines or core competences (Hamel and Prahalad 1994;

37
Hamel 1996; Cool and Schendel 1988; Rangone 1999). Haan et al. (2002) and

Teece et al. (1997) defined capabilities as the firm‘s capacity to develop and

reconfigure its internal and external resources and competences to promptly

respond to changing environments. In the analysis of strategy of small–medium

size enterprises using the RBV approach, Rangone (1999) argues that a firm‘s

superior economic performance is based on three core capabilities: i) innovation

capability; ii) market management capability; and, iii) production capability to

satisfy customers.

A major contribution of the RBV approach is that it provides valuable guidance

for a company to focus on its firm-specific internal resources. It largely

complements the limitations that are inherent in Porter‘s theory (Miller and

Shamsie 1996). However, the concept of resources remains an amorphous one that

is rarely operationally defined and tested in different competitive environments

(Miller and Shamsie 1996). Critics also pointed out that its inward focus may risk

ignoring the nature of market conditions (Hooley et al. 1997). It appears that the

strengths of the RBV are the aspects where Porter‘s theory presents limitations.

The third school of corporate competitiveness theory focuses on strategic

management (Flanagan et al. 2007). The discipline originated in the 1950s and

60s, with its heyday in the 1970s. It had Alfred Chandler, Philip Selznick and Igor

Ansoff as its most influential pioneers. Mintzberg (1990) located 10 ―schools‖ of

strategy research that have developed from the emergence of strategic

management as a field of study. As defined by Wheelen and Hunger (2002),

strategic management refers to a set of managerial decisions and actions that

38
determines the long-run performance of a corporation. It comprises some generic

procedures such as environmental scanning, strategy formulation, strategy

implementation, and evaluation and control (Wheelen and Hunger 2002). Each

generic procedure in turn comprises different tools for conducting the

corresponding functions. For example, for scanning the competitive environment,

the five forces model, value chain analysis and resource-based approach are all

possible tools. For formulating strategies, the SWOT matrix (Andrews et al. 1965;

Weihrich, 1982), and the three generic strategies are approaches that are

frequently used. Interestingly, the evolution of strategic management theory has

embraced Porter‘s theories and RBV as components (e.g. Wheelen and Hunger

2002; Lancaster and Massingham 1993). Indeed, because the environment is

constantly changing, effective strategic management requires a continuous flow of

new theories suitable for new circumstances. In spite of the criticism that the

strategic management field is too pluralistic (Foss 1996), it seems that a greater

consistency among the three schools has been achieved. Flanagan et al. (2007)

conclude that all three schools of theories are useful in their own way for

achieving competitive advantage for firms and none of them on its own can fully

explain a firms‘ competitiveness.

2.3.4 Competitiveness Evaluation Methodology

According to these theoretical perspectives, competitiveness in a specific industry

results from the convergence of management practices, organisational modes in

the home country, and the sources of competitive advantage within the industry.

Thereby, competitiveness in an industry of a country is influenced by a range of

qualitative and quantitative factors. The three most common measures of

39
competitiveness as cited in existing literature (Guan et al. 2006) are: cost-benefit

analysis, resource-based viewpoints and ranking style (Porterian style). These

measures are briefly reviewed below.

2.3.4.1 Cost-Benefit Analysis

Artto (1987) applied economic theories to demonstrate that competitiveness

measurements could be determined by financial status and relative total costs,

including: i) cost-competitiveness: the most common measurement is based on

unit labour costs; ii) price-competitiveness: used for heterogeneous markets and

measured by relative selling price; and, iii) non-price competitiveness: measured

by cost, price (or both) of a non-separable part. Artto employed all three

dimensions of competitiveness in developing the concept of ―total

competitiveness‖ to measure the competitiveness of an industry. This is based on

total revenues minus total costs; or simply, net income. For a more accurate

measurement he developed the concept of relative total costs (total costs divided

by net sales; i.e., operational mastery) as a substitute for unit total costs (total

costs divided by units sold). Henceforth, the cost-benefit analysis approach

became the mainstream in competitiveness evaluation research. Oral (1986)

constructed an industrial competitiveness model which analysed three basic

factors: industrial mastery, cost superiority and the political-economic

environment. Oral (1993) and his colleagues (Reisman 1988) both successfully

implemented the proposed industrial competitiveness model to perform empirical

research regarding the glass industry. Their findings provide useful insight into

competitive strategy formulation. Li (2000) applied the least squares method to

construct simple regression models revealing the relationships between

40
performance and competitive sources for Chinese manufacturers. However, the

essential findings of Li are beyond the scope of cost-benefit analysis.

These cost-benefits analyses focused mainly on financial indicators, particularly at

the firm level. Although they may have weaknesses in their technical assumptions

of regression models of error terms, they do provide lists of competitive factors

without explaining the formation mechanism of competitiveness.

2.3.4.2 Resource-Based Viewpoint,

Resource-based analyses (Barney, 1991&2001; Helfat, C.E, & Peteraf, M.A, 2003;

Peteraf, M.A. 1993; Prahalad & Hamel 1990; Wernerfelt 1984) have been applied

to explain the composition of competitiveness. Examined dimensions include

organisational management, manufacturing, marketing and environment.

Wernerfelt (1984) suggested that most products require the services of several

resources, and most resources can be used in several products. Hence, specifying a

resource profile for a firm should reveal its optimal strategic activities. Prahalad

and Hamel (1990) further argued that core competencies, particularly those which

involve collective learning and are knowledge-based, are enhanced as they are

applied. Such sources may provide both the basis and the direction of growth of

the firm itself. The Prahalad and Hamel proposition enhanced the resource-based

model developed by Barney (1991) by including two assumptions in the analysis

and analysing sources of competitive advantage. Barney employed four attribute

criteria - namely, value, rarity, imperfect limitability and substitutability - as

empirical indicators of the heterogeneity and immobility of firm resources and

how to sustain competitive advantages. Peteraf (1993) applied the concept of

41
―rent2‖ to gain insight into theoretical conditions (namely, cornerstones) of

proposed resource-based models underlying competitive advantage. Peteraf also

conducted well applications of his proposed model for both a single-business

strategy and a corporate strategy. Those resource-based frameworks mainly

focused on resources controlled by a firm - including assets, capabilities,

organisational processes, firm attributes, information and knowledge - to

determine the superiority of the resources possessed by the firm. Similar to cost-

benefit analyses, however, these frameworks are still limited to the firm level.

2.3.4.3 Ranking Style (Porterian Points)

Recognizing which factors primarily affect competitiveness remains controversial.

Particularly, measuring only a single performance criterion such as profitability or

finance is insufficient to determine the excellence of an industry. Consequently,

multifactor modelling was developed (Chakravarthy 1986; Chin et al. 2003). This

ranks market competitive position and identifies the appropriate strategic

combinations needed to sustain a strong competitive edge. In addition, as the

globalisation process continues, competitiveness is often presented by ranking for

comparison between countries. The World Economic Forum (WEF 2005) and the

International Institute of Management Development (IMD 2005) have started to

rate countries annually based on various competitiveness indicators. IMD and

WEF have produced the most extensive and widely publicised comparisons of

national competitiveness via the annual publications of WCY (World

Competitiveness Yearbook) and GCR (Global Competitiveness Report),

respectively. GCR is an index for 117 countries containing data obtained from

secondary sources and primary surveys of various macro and microeconomic

42
dimensions of national economies. The competitiveness score for each country is

a synthesis of data for eight major factors, including: openness, government,

finance, infrastructure, technology, management, labour and institutions. WCY,

which analyses approximately 60 countries, is derived from data underlying socio-

economic and political indicators and surveys of various international and

individual country statistics. The competitiveness score for each country

synthesises all data into four major factors: economic performance, government

efficiency, business efficiency and infrastructure. Importantly, both the GCR of

WEF and the WCY of IMD are clearly based on PCA.

As stated earlier, these two reports analyse almost the same factors of

competitiveness. However, they are quite different in the weight assigned to each

factor. The WCY of IMD uses a one-third/two-third balance between hard data

(statistical indicators published publicly) and soft data (via survey activities).

Clearly, the weighted assignment of factors is quite arbitrary and sometimes lacks

theoretical support. Ranking style comparisons can be misleading if they are not

based on a rigorous theoretical methodology (e.g. a lack of explanation for factor

selection) and measurement model (e.g. a lack of suitable weights for each factor).

Therefore, these two competitiveness reports often produce significant

discrepancies in their rankings (Cho and Moon 2000). WEF has emphasised that

the GCI and the BCI measure complementary dimensions of competitiveness.

2.4 REVIEW‎OF‎REAL‎ESTATE‎DEVELOPERS’‎COMPETITIVENESS‎

The Pareto principle (Pareto, V. and Page, A.N. 1971) is a prevalent phenomenon

in the real estate industry; i.e. more than 80% of the market is dominated by less

43
than 20% of the developers. There are many small real estate developers fiercely

competing with each other at the bottom-end of the market. Each of these operates

a small number of projects in its regional market. In contrast, a handful of major

developers with quasi-monopolistic powers dominate the full spectrum of the

market through trans-regional operating networks. This is a common situation in

the mature property markets of developed countries such as the UK, New Zealand

and Australia. A brief description of the features of these countries‘ property

markets is provided here based on a review of current literature.

Haley identified that real estate is a ‗highly oligopolistic‘ industry in UK. Haley

observed that the property industry in the UK has combined land development

with construction to form a complex, competitive, powerful industry. As depicted

by Ballina Byron through case studies, there are a great many developers (about

800 firms) in rural regions but with very low mean outputs (an average of eleven

lots per year). These smaller developers have a high deconcentration rate. A

totally different story applies to the larger firms covered by the same study; the

top four leading developers had a combined 64% market share (Ballina Byron,).

This illustrates the highly oligopolistic nature of the UK‘s property market.

Similar to the UK, the model of land developers combined with contractors is

becoming a trend in the real estate industry in Australia. The alliance between

contractors and land developers aims to improve their market competitiveness

enabling them to chase higher monopoly profits as well as maintain a dominant

position in the market.

44
Mergers and acquisition amongst the relevant enterprises along vertical and

horizontal value chains in the industry is another way to leverage up the

competitiveness of real estate developers. Through an expansion in business scale

and movement up the value chain, developers can grow in both market share and

sales volume.

The real estate industry‘s pattern of development in developed countries is a

useful reference for developing countries like China. China‘s real estate market

has evolved from almost nothing in a relatively few years. Now there are many

enterprises operating in the market, and the number is increasing every year

keeping pace with the economy‘s rapid rate of growth. However, no developer in

China has established an absolute advantage whether in business scale or market

share. Compared with the leading developers in developed countries, Chinese

developers are still in their infancy being relatively small in scale and with low

competitive capabilities. Chinese developers have a long way to go to eliminate

the gap between themselves and world-leading developers.

Expressed another way, the real estate industry in China is in a fragmented,

competitive phase. Facing future structural adjustments in their market and in

their industry, real estate developers in China must take action to enhance their

competitiveness so that they can survive and thrive in the future. Before taking

any action, however, the priority must be to assess the current competiveness of

real estate developers. In the remainder of this section, existing competitiveness

measurement methods are summarised through an extensive literature review.

45
2.4.1 Existing Methods for Assessing the Competitiveness of Real Estate

Developers

While methods have already been developed for assessing the competitiveness of

firms in different industries, this is not the case for real estate development

industry. As individual real estate firms are structured and focused differently, it is

a challenge to choose common measures to identify the competitiveness of these

varied businesses. Another major challenge to understanding organisational

competitiveness is the dynamic market environment of the real estate industry.

There are many uncertainties and constant changes in an under-developed market

such as China‘s. An understanding on these challenges is essential to enabling

organisations to choose effective methods for properly assessing their

competitiveness.

Intense competition amongst property developers requires these firms to improve

their competitiveness. Competition not only forces firms to improve themselves,

but also exerts a direct positive impact on the competitiveness of the industry as a

whole. There has been some debate as to how the competitiveness of contractors

and developers should be measured and what factors affect their competitive

performance.

In the analysis of industrial competitiveness, Sirikrai and Tang (2006) pointed out

that while financial indicators such as return on investment and return on assets

are the conventional competitiveness proxies, a number of non-financial

performance indicators are also important. These non-financial performance

indicators include: overall customer satisfaction (Sharma and Fisher 1997, Tracy

46
et al. 1999), productivity (Noble 1997; Ross 2002; Sharma and Fisher 1997),

performance in sales (Anderson and Sohal 1999; Li 2000), growth of sales (Lau,

2002; Sharma and Fisher 1997), market share (Anderson and Sohal 1999; Li 2000;

and, Sharma and Fisher 1997), growth of market share (Tracey et al., 1999), and

overall competitiveness (Anderson and Sohal, 1999; and Lau, 2002). Sirikrai and

Tang (2006) pointed out that the use of both types of performance indicators

creates a more accurate performance measurement system as it offers a more

complete view of the business and thus leads to better-informed business

decisions. Additionally, Man et al. (2002) argued that demographic, psychological

and behavioural characteristics of entrepreneurs, as well as managerial skills and

technical ‗know-how‘ are important features related to a firm‘s performance. The

relationship is also affected by industrial, environmental and firm-specific

characteristics and strategies.

Man et al. (2002) suggested that three key aspects contributing to a firm‘s

competitiveness are: internal firm factors, the external environment and the

influence of the entrepreneur. The internal aspects of a firm‘s competitiveness,

which are represented by the capital and resource dimensions of the framework in

the study by Horne et al. (1992), are considered a key facilitating element applied

to a variety of competitiveness strategies. Studies by O'Farrell et al. (1992) and

O'Farrell and Hitchens (1988 and 1989) stressed the relationship between sources

of competitiveness and corporate performance as well as the importance of the

effects of price, quality, design, marketing and management on a firm‘s

competitiveness. Other factors of competitiveness include the level of overhead

costs, organisational structure, corporate culture, human resources, quality of

47
customer service, product/service development and efficiency, and marketing

expertise (Pratten, 1991; and, Slevin and Covin, 1995). With regard to external

environment factors, Horne et al. (1992) point out that the scope for action and

growth reflects the availability of opportunities to generate increased long-term

profitability inherent in the external environment. Slevin and Covin (1995)

suggested that continuous repositioning is needed for new, small firms to

anticipate and be responsive to the actions of competitors. The influence of the

entrepreneur is also an important factor affecting corporate competitiveness. Man

et al. (2002) suggested that the process of achieving competitiveness is strongly

influenced by key players. Scholars like the OECD (1993) and Stoner (1987)

argue that the basic role played by the owner/manager is a major determinant of

corporate competitiveness as the decisions made by this individual determine the

firm‘s overall strategy. Other entrepreneurial factors include the ‗experience‘ and

‗goal orientation‘ of the small business owner (Chawla et al., 1997).

 Indicator Approaches (IA)

Various indicators have been formulated by researchers for evaluating

organisational competitiveness. This is the indicator approach (IA). Through an

extensive literature review, 91 relevant papers published during the period from

1973 to 2007 are identified by Zhang et al. (2009). From these identified papers,

Zhang summarised 24 contributors as described in Table 2.2. The rate at which

each of these indicators appears in published papers is exhibited as Figure 2.1

(Zhang et al., 2009). This reflects the relative importance of these indicators as

determined by researchers. For example, indicators I12 and I16: ―innovation

48
action‖ has appeared in 18 out of a total of 91 reviewed papers (a 20% adoption

frequency) while ―market process‖ appeared in only 14 papers (a 15% adoption

frequency).

Table ‎2-2 Typical indicators for assessing the competitiveness of

organizations (Zhang et al., 2009)

Indicators

I1-Brand value I2-Core Competence I3-Cost I4-Culture

Advantage
I5-Customer I6-Competitiveness I8-Total Assets
Satisfaction Strategy I7-
Entrepreneurism
I9-Organisational I10- Expertise Talent
Structure I12-Innovation
Capability
I13-IT I11-HR
Application I14-Knowledge Management I16-Production
Management Efficiency
I15-Production
Capacity

I17-Market Share I18-Organisational I19-Marketing I20-Productivity

Learning

I21-Profitability I22-Quality Control I23-Uniqueness I24-Value

of Product Creation

The indicator approach is widely used to assess the competitiveness of an

organisation or industry. It can be employed in one of two ways: the single

indicator method and the multi-indicator method (Rappaport, 1983). Indicators

such as profitability, organisational structure, total assets and profitability are

often used to appraise the competitiveness of an organisation from a specific

perspective (Rainer and Kazem, 1994). The method for adopting a single attribute

49
to examine the competitiveness of an organisational is called the single indicator

approach (SIA). The limitations of the SIA are obvious: it can‘t be use to evaluate

an organisation‘s comprehensive competitiveness.

Figure ‎2-3 The adoption frequency of competitiveness indicators in the

literature (Zhang et al., 2009)

To overcome this limitation, multiple indicators are used to assess the

competitiveness of an organisation from multiple perspectives. This method can

precisely represent the overall competitiveness of an organisation. To distinguish

the relative importance of the individual contributors, each indicator is given a

different weight. This is called the Weighted Summation (WS) method. WS is a

quantitative method that uses the following equation (2.3) to calculate the total

value of competitiveness:

N
TV  Wi  V ( Ai )
i 1 (2.1)

50
TV represents the overall value of competitiveness. Ai (i=1, 2, 3… N) are

indicators adopted to evaluate each aspect of competitiveness. Wi means the

weight of indicator Ai, and V (Ai) evaluates the performance of indicator Ai.

 Modelling Approaches

In addition to the indicator approach, modelling is another often-used assessment

method for organisational competitiveness. A number of different models can be

employed as part of this approach.

(1) Value Chain Model (VCM)

Value chain modelling was presented by Porter to examine the competitiveness of

an organisation based on the production process. The VCM includes five major

production processes, including: internal logistics; production; external logistics;

marketing and post-sale services; and four support activities, comprising

infrastructure such as administration, HR management, technology R&D and

material procurement. The core principle of VCM is that an organisation‘s

competitiveness accumulates through conducting all these value adding activities.

Thus each of these activities must be nurtured in order to increase competitiveness.

(2) Portfolio Matrix Model (PMM)

To analyse the competitive portfolio of a business, PMM was proposed by some

leading consultant firms during the 1970s and early 1980s. PMM evaluates the

competitiveness of a portfolio business organisation from two dimensions: i) the

strength of the business; and, ii) the attractiveness of the industry. The strength of

the business is evaluated by such indicators as market share, productivity,

51
profitability and customer loyalty, while the attractiveness of the industry is

determined by such indicators as potential market size and a predictable market

growth rate (Majluf and Hax, 1983).

(3) Competence Pyramid Model (CPM)

Walsh and Linton (20010) first used CPM to assess the competitiveness of

organisations in manufacturing. In their research, four aspects of an organisation

are applied to evaluate competitiveness: materials, fabrication and assembly,

knowledge-based services and knowledge-embedded services. Each of these

aspects had two dimensions: i) managerial capability; and, ii) technical

competency.(HulshuÚ , H.E., KirchhoÚ , J.J., KirchhoÚ , B.A. and Walsh, S.T.

1998)

(4) Enterprise Model (EM)

The enterprise model (EM) was used by Hatten and Rosenthal (1999) to analyse

business functions and processes as a means of understanding the competitiveness

of an organisation. The model established a schematic network comprising

horizontal and vertical axes which represent business processes and functions

respectively. Horizontal units express business processes such as production, sales,

logistics and post-sales service, while vertical units related to business functions,

such as R&D, finance and marketing. The enterprise model provided a basis for

measuring the competitiveness of an organisation as well as identifying

opportunities for leveraging its performance.

(5) Industrial Competitiveness Model (ICM)

52
The industrial competitiveness model (ICM) measured the competitiveness of a

manufacturer from an industry perspective (Oral, 1993). The ICM model

considers competitiveness as a mathematical function of the firm‘s position in its

operating industry. This includes its present position, present comparative position,

potential position, and potential comparative position.

(6) Weibull Model (WM)

Weibull (1951) developed the Weibull model (WM) to measure stability in the

discipline of physics. Lin (2001) identified the applicability of the model for

evaluating the competitiveness of a manufacturer at a specific time in its life cycle.

Competitiveness assessment methods

Qualitative approaches Quantitative approaches

Modeling approaches Indicator approach Weighted summation

VCM PMM CPM EM SIA KCIs ICM WM

Figure ‎2-4 The pyramid structure of classical competitiveness evaluation

approaches

These different models for evaluating the competitiveness of an organisation can

be organised as shown the pyramid structure below (Figure 2.4). As each

assessment method has its own characteristics, choosing the right one is vital to

ensuring that organisational competitiveness is evaluated appropriately.

53
2.4.2 Formulate the evaluation framework for assessing

competitiveness of Chinese real estate developers

Previous studies have shown that the indicators and attributes of competitiveness

are multi-faceted in nature. Literature has highlighted a number of firm-specific

factors such as financial, human and technological resources, organisational

structures and systems, productivity, innovation, quality, image and reputation,

culture, product/service variety and flexibility, and customer service. Based on the

aforementioned literature review and combined with features of the real estate

industry, the following indicators (Figure 2.5) have been adopted to form a

framework for measuring the competitiveness of Chinese real estate industry

enterprises.

As shown in the figure 2.5, the study will adopted multiple indicators approach to

evaluate the comprehensive competitiveness of real estate developers in China,

which measure the organization competitiveness from multiple perspectives

capabilities including management competency, organizing competency,

technological capabilities, financial competency, market share, social

responsibility and regional competitiveness. These perspectives together reflect

the overall competitiveness of a real estate development corporate, since they are

all necessary and indispensable capability to achieve the success of business for

any real estate development corporate. Each of these aspects will be discussed as

following.

54
 The Competitiveness of the Real Estate
Development Corporate

Management Organizing Technological Financial Market Share Social Regional

Competency Competency Capabilities Competency Responsibility Competitiveness

Localisation Population factor

Organisational IT technology
development
Market coverage Infrastructure and
Technological
strategies
Training advancement
Land acquisition strategy
R&D & implementation Urban economy
Use of human resources

Construction technology Sales strategy &

Staff satisfaction implementation
Consumer satisfaction to
technology Consumer satisfaction
Strategic Management with the property sales

Time Management
Financing capabilities Qualification
Cost Management
Capital growth
Quality Management Image and reputation

Risk Management Spending on charity

Environmental Mgt
Corporate culture
Safety Mgt
Public relationship
Contract Mgt

Collaboration

Figure ‎2-5 Competitiveness indicators, criteria and attributes for assessing real

estate developers in China

In terms of management competency, management in any business or

organization is the activities to accomplish the setting goals and objectives by

using the available resources efficiency and effectively. Regarding to the real

estate development corporate, the management competency are surrounding the

activities of real estate value chain realization, which mainly include strategic

management, time management, cost management, quality management, risk

management, environment management, safety management, contract

management, and collaboration management. Each of these sub-activities can be

represented by a series factors included in questionnaires.

55
Secondly organizing competency, in this study, it means the capability of

motivating people act within organizations, which including disciplines like

organizational behaviour, human resources, and management. Organizing

competency is a very important competency for real estate developer, as it reflects

the situation of organizational structure of developers. It comprises the four

aspects such as organisational development, Training use of human resource, and

staff satisfaction. These perspectives are used to represent the organizing

competency of developers, each of which can be described by lots of attributes as

shown in the sample of questionnaires.

Technological capabilities are another one of important component of

competitiveness for real estate developer. For a real estate development enterprise,

its technological capabilities can be reflected by such aspects as IT technology,

technological advancement, R&D capability, construction technology and

consumers‘ satisfaction to technology. Like wisely, each of these aspects contains

a great deal of specific attributes, which will detail in the questionnaires.

Moreover, as the real estate development industry is a capital-intensive industry,

the situation of financial always influence the operation of real estate developers.

The study also adopts the financial capability as a factor for assessing the

competitiveness of real estate developer. The financial competency of developers

can be measured from these two aspects like financing capabilities and capital

growth.

Market share is a factor used to reflect the percentage or proportion of total

available market serviced by a corporate. It can illuminate the position of a

56
corporate in the market and also represent the level of competitiveness of a

corporate. Therefore, it is included in the competitiveness evaluation system. In

terms of the real estate development industry, the market share can be appraised

by such five aspects as localisation, market coverage, land acquisition strategy &

implementation, sales strategy & implementation, and consumer satisfaction with

the property sales. These aspects all influence the market share of a developer.

Taking the land acquisition strategy and sales strategy for example, the more

volume of land reserves a developer have, the more products a developer will

provide to the market. So, the more market share will be occupied by the

developer. The sale strategy will impact the amount and speed of property

products sale. Hence, the sale strategy has the effect on the market share in

volume and velocity. Similarly as above, these five aspects all have series of

specific attributes.

Corporate social responsibility (CSR) is a form of corporate self-regulation

integrated into a business model (D Wood, 1991). The goal of CSR is to integrate

responsibility into the corporate‘ action and encourage a positive impact on the

environment, communities, consumer, employees, and all of stakeholders. More

recently, as CSR has become mainstream, more and more companies are applied

the CSR programs. Actually, CSR programme is not only a self-regulation active

of a corporate, is also an effective method to improve the corporate‘ public image,

mitigate the ethic risk, and leverage the awareness of brand. From this point of

view, the corporate social responsibility can also improve the competitiveness of a

corporate. In addition, regarding to a real estate development corporate, good

public image and strong brand awareness are very important to its operation and

57
development. Therefore, this study also considers this aspect of contents as an

influence factor for the competitiveness of real estate developers. The social

responsibility of a real estate developer can be estimated by these attributes like

qualification, image and reputation, spending on charity, corporate culture, and

public relationship.

Lastly, regional competitiveness is a reflection of the competitiveness of a

corporate in a region. It is a common phenomenon for Chinese real estate

developers that some developers have higher competitiveness in some specific

regions, but have very low competitiveness in other regions, since the unbalanced

regional economic development in China. In another way, the selection of

operation region will also influence the business development of real estate

developers. For example, in the developed region, the real estate market is more

mature with fierce competition, and vice versa. Consequently, regional

competitiveness can be used as a factor to measure the overall competitiveness of

Chinese real estate developers. The regional competitiveness of a real estate

developer can be accessed through population factor of a region, infrastructure

and strategies, urban economy, of which can be represented by series relevant

attributes.

Additionally, although culture is an important factor in Chinese business

environment as many scholars mentioned, the study does not select the culture as

a criteria for evaluating the competitiveness of Chinese real estate developers

since they are all operating in the same Chinese culture environment.

58
2.5 SUMMARY

In the first part of this chapter provide a background introduction of real estate

industry. Through the extensive review of literature, real estate industry

development in China are introduced in detail, which experienced a relative short

period development actually begin from 1980‘s, but quickly developed into a

huge market accompany with rapid economic growth. Then the characteristic of

real estate enterprise are summarized, which are complex, complex and risky with

feature of strong localization, complicated production processes, resource

intensive and high level of risk as well as high return. Lastly, the features of real

estate industry in China are described from its phases of development, and

opportunities and constraints in the Chinese real estate market. All in all, it

provides a big picture of the real estate industry, real estate enterprise and the real

estate market of China.

The second part of the chapter conducted an extensive review of literature on the

competitiveness. The review comprises three aspects like competition,

competitiveness, corporate competitiveness, and competitiveness evaluation

method. Competitiveness evaluation method is the key content of this part. Three

types of evaluation method are briefly reviewed including cost-benefit analysis,

resource-based viewpoints, and ranking style. On the whole, this part of review

provides a theory foundation of competitiveness for the study.

The last part of this chapter is a review of real estate developer‘s competitiveness.

It firstly investigated the existing methods used to evaluate the competitiveness of

developers including indicator approaches, modelling approaches. An

59
examination of the applicability of existing methods for addressing organisational

competitiveness in the Chinese real estate industry reveals that these are not

effectively applicable. This study aims to develop a comprehensive indicators

competitiveness evaluation method that is more appropriate for assessing firms

operating in this market. Therefore, base upon the combination of literature

review of competitiveness and the feature of Chinese real estate development

enterprise, an evaluation framework tailored for Chinese real estate developers are

established, which evaluate the competitiveness of developer from such seven

aspects as management competency, organizing competency, technological

capabilities, financial competency, market share, social responsibility and regional

competitiveness.

60
CHAPTER 3. RESEARCH METHOD AND DESIGN

3.1 INTRODUCTION

This chapter focuses on the important issues to be considered in the selection of

an adequate research design for empirical studies. It also describes the research

method and design of this study. This study proposes a positivistic approach as the

research plan for data collection and analysis, and develops the survey method and

questionnaire design. The data used for supporting the analysis in this section is

from a practical survey of the real estate industry in China supplemented by

literature references. In the survey, 20 senior managers were selected from real

estate enterprises to participate in interviews including ten vice general managers,

five general managers and five department managers. These managers from the

large real estate development enterprise in China some are invited by sending

them invitation letters, some are recommended by personal relationship. These

real estate enterprises are located in the Yangtze River Delta (including Shanghai,

Hangzhou, Nanjing, and Suzhou) and in Beijing.

The interviews were conducted in August and September of 2008. Semi-

structured interviews were adopted using open-ended questions over a period of

less than three hours. The interview questions were designed to help understand:

(1) what are the particular characteristics of REEs in comparison to other types of

businesses? (2) What competencies do their organisations have? (3) What

procedures should be used for a competitiveness analysis of REEs? And, (4) How

applicable are established competitiveness assessment methods for REEs in the

Chinese context.

61
According to Zikmund (1997), research design is a master plan specifying the

methods and procedures for collecting and analysing the needed information.

Research design provides a framework for the research plan of action. Any

research should ensure that the information collected is appropriate for solving the

research problem. The researcher needs to determine the appropriate type of data,

research techniques and sampling methods.

Define the target population

and sampling method

Develop and design

questionnaire

Conduct pilot study and

review questionnaire

Revise questionnaire after

pilot study and review

Collect data

Process and analyze the

data; interpret and report the
survey findings

Figure ‎3-1 Survey design for the research (Zikmund,W. G.2003)

62
3.2 SURVEY DESIGN

3.2.1 Design of Survey Questionnaires

The first step is to define the target population and select the sampling process.

The survey design consists of the six procedures as showed in Figure 3.1.

(Zikmund, W.R., 2003). In this research, a set of two survey questionnaires were

designed (Figure 3.2). These were intended to: i) evaluate the competitiveness of

property developers in China (i.e. Company A) (Questionnaire A1-1 to A1-8, A2,

and A3; see Appendices); and, assess the appropriate weights of the

competitiveness factors, criteria (Questionnaire Type C) and attributes

(Questionnaire Type B1, B2-1 to B2-8).

3.3 DATA COLLECTION PROCEDURE

3.3.1 Investigating Corporate Competitiveness

Through a literature review a list of competitiveness attributes were identified and

developed. The first step of the competitiveness analysis was to evaluate the

performance of companies against each of the competitiveness attributes. To rate

a developer in term of its competitiveness, information could be obtained

internally or from external sources. Internally sourced information comes from the

firsthand knowledge of staff as well as company records. External sources may be

financial institutes as well as referees related to the company.

Data in this study will collected through questionnaire survey. So, the formulation

questionnaires are one of key parts in this study. The questionnaires adopted in

this study are designed according to the established evaluation framework for

63
measuring the competitiveness of real estate, which assess the developers‘

competitiveness from such seven perspectives as management competency,

organizing competency, technological capabilities, financial competency, market

share, social responsibility and regional competitiveness. Therefore, the

questionnaires are aim to investigate the detail contents of each of these seven

aspects. The following will introduce the specific questionnaires designed

according the above mentioned seven aspects. Firstly, Data were collected using

three sets of questionnaires (i.e. Type A1-1 to A1-8, Type A2 and Type A3). The

purpose of Questionnaires A1-1 to A1-8 was to assess the performance of the

property development company from managerial and financial perspectives.

According to the contents of managerial and financial as mentioned above, these

questionnaires include such eight types as human resources (A1-1); finance (A1-

2); land development (A1-3); design, planning, and research and development

(RD) (A1-4); construction and project management (A1-5); sales (A1-6);

information technology (A1-7); and general management (A1-8) (Figure 3.3).

Among these eight types of questionnaires, except the information technology is

easy to understand as these seven aspects obviously related with the managerial

and financial context. Actually, information technology are playing more and

more important role in both management and production process. In terms of real

estate developer, more and more developer is using IT in their management

system including such as Enterprise Resource Planning (ERP), Electronically

Project Management System (E-PMS) etc. to improve the management efficiency.

As aforementioned, the feature of real estate enterprise involves complicated

contractual relation, huge resource commitment, and high potential of risk, an

64
advanced management information system can improve the management

efficiency as well as mitigate the risk of operation for the real estate developers.

Therefore, the application of IT is used as a specific aspect to evaluate the

competitiveness of developers. The target population were the directors, managers

and supervisors since they have firsthand knowledge of the performance of the

company as shown in figure 3.2. As shown in the figure 3.2, to investigate the

opinion of different level of staff, different types of questionnaires are used to

survey the attitude of specific level of staff. For example, questionnaire type B1

and C are specially used to survey the director/ CEO/senior manager/ experts as

this level of managers have high level vision and good understanding the strategy

of the corporate. Questionnaire type A2 are use to the survey the division manager

and supervisor and general staff as they have directly understanding of how the

corporate acutely operating. To illustrate the survey arrangement, figure 3.3

provide the detail introduction of questionnaires using type A1 and B2 as example.

All of A1 and B2 contain 8 aspects questionnaire including human resource,

corporate finance, investment/land, design/planning/R&D, project management,

sales planning, IT communication, and General management. The difference

between the A1 and B2 is the specific attributes of each questionnaire, as these

two types of question are designed for two different levels of staff in real estate

development corporate. The method of design can improve the effectiveness of

questionnaire survey since the questionnaire is more pertinence and specification

for all of the interviewees.

Respondents were asked to rate their company using the competitiveness

attributes on a 5-point Likert scale. The Likert scale was selected to obtain

65
weights for this survey as it gives unambiguous results which are easy to interpret.

For example, respondents were required to assess the effectiveness of corporate

policy in risk management based on a scale where 1 represents ‗very ineffective‘,

2 is ‗ineffective‘, 3 is ‗acceptable‘; 4 indicates ‗effective‘, and 5 is ‗very effective‘.

The five-point Likert scale facilitated the quantification of responses so that

statistical analysis could be undertaken and differences between participants could

be observed and generalised (Abdel-Kader and Dugdale, 2001). This method

employs a positivistic approach and objectivity can be achieved. In addition, as

shown in the figure 3.2, different levels of staff‘s opinion have different

importance weight. In the study, the survey results of Director/CEO/Senior

Manager have the highest importance weight.

Research Contents Sampling Targets Methods

Importance weights of
factors/ criteria/ attributes Director/ CEO/ Senior
Questionnaire
Level of Importance Manager/ Experts
(Type B1+ C）

Reasonable score of each

Assistant
factor/ criterion/ attribute
Director/ Chief Questionnaire
Level of reasonable score
Supervisor/
(Type B2）
General
Manager
Competitive score of
Company A for each of the Division Manager
factors/criteria/ attributes Division Supervisor Questionnaire
(Type A1 + A2）

Staff Questionnaire
(Type A2）

Clients/ Customers/ House owners Questionnaire

A2类）
(Type A3）

Figure ‎3-2 Types of questionnaires and respondents for this study

66
 Sampling Targets Division (Questionnaire)

Human Resource (A1-1，B2-1）

Corporate Finance (A1-2，B2-2）

Investment/Land (A1-3，B2-3）
Assistant
Director/ Chief
Design/Planning/R&D (A1-4，B2-4）
Supervisor/
General Manager
Project Management (A1-5，B2-5）

Sales Planning (A1-6，B2-6）

Division Manager
Division Supervisor IT Communication (A1-7，B2-7）

General Management (A1-8，B2-8）

For example: CEO, Customer Services, Contract Mgt.

Figure ‎3-3 Details of questionnaires A1 and B2 in this study

Prior to sending the questionnaires, the first version was pre-tested and reviewed

by industry experts and academics. These interviews served two purposes; first, to

pilot the questionnaire before sending it out, and second, to ensure the suitability

and comprehensibility of the questions. These interviewees comprised two senior

managers and two academics. The aim was to ensure that every question was

stated appropriately so that respondents could clearly understand the intent. A

debrief was given to each of the interviewees to ensure that they interpreted the

question as expected. Improvements were then made to the questionnaires based

on the feedback received, and the amended questionnaires were ready for data

collection. Due to the limitation of length of the thesis, the detail explanation of

each questions in questionnaires will not provided in here. The specification of

each questionnaire is introduced to the interviewees in the phases of survey. The

samples of questionnaires attached in the appendix just provide a reference.

A total of 105 replies were received to Questionnaires A1-1 to A1-8 from the

supervisors and a manager in different divisions of Company A. Company A has

67
office branches across China. The head offices as well as a number of regional

offices which have a long history were selected as the sample locations. Figure 3.4

lists the offices selected for study in this research.

To collect data on staff satisfaction, sub-ordinates were asked to complete

Questionnaire A2. This questionnaire was designed to assess overall job

satisfaction (i.e. salary, performance review system, and promotion) as well as the

staffs‘ perception of corporate culture. They were asked to rate their views based

on the Likert scale. Questionnaire A3 was designed to evaluate the satisfaction of

the buyers of the finished product (i.e. houses and apartments). There were 269

and 377 completed questionnaires received from staff (i.e. Questionnaire A2) and

property owners (i.e. Questionnaire A3), respectively. All returned questionnaires

were edited and analysed using the statistical package for social science (SPSS).

3.3.2 Weighting of Competitive Factors, Criteria and Attributes

After assessing the competitive performance of Company A, the next step was to

assess the importance of each of the competitiveness factors, criteria and attributes.

As the different factors, criteria and attributes do not have the same significance,

these attributes were discriminated by weights ranging from 0 to 1 (0 for ‗not

important‘ and 1 for ‗very important‘). A rating method was developed and

verified by industry experts and researchers.

These attributes were then structured into an MAVT model. Using MAVT, the

attributes were structured into a hierarchy tree comprising ‗factor‘ (wk, first level),

‗criteria‘ (wj, second level), and ‗attribute‘ (wh, third level). The standard MAVT

formula (Keeney and Raiffa, 1976) was used to calculate the weights of attributes,

68
criteria and factors. The formula for calculating the weight of an attribute is given

in this Equation 1:

wh  a h / h1 a h
m

Where: h is the attribute reference and there is ‗m‘ attributes less than one

criterion, wh is the weight of attribute ‗h‘, and ah is the mean importance rating of

attribute h obtained from Equation 2, below.

1(n1 )  2(n2 )  3(n3 )  4(n4 )  5(n5 )

a
(n1  n2  n3  n4  n5 )

Where: a is the mean importance rating of attributes, and n1, n2, n3, n4, and n5

are the number of respondents who indicated on the 5-point Likert scale, the level

of importance as 1, 2, 3, 4 and 5, respectively, for attribute h, where 1 represents

‗very unimportant‘, 2 ‗unimportant‘, 3 ‗good to have‘ 4 ‗important‘, and 5 ‗very

important‘.

The employment of the MAVT approach to solving problems with multiple

attributes allows the development of a scoring model where each attribute is

assigned a weight to reflect its importance. The weight is multiplied by the rating

and the product is summed for each alternative. To achieve this, another group of

questionnaires (i.e. Type B1, Type B2-1 to B2-8, and Type C) were developed to

determine the relative weighting of the competitiveness attributes. Questionnaire

B1 (for CEOs) was designed to elicit the opinion of senior management and

executive directors regarding the relative weighting of the competitiveness

attributes, while Questionnaire B2-1 to B2-8 was designed for supervisors and

69
managers in different sections or departments of the company to examine the

weighting of the attributes and also set acceptable levels for each attribute.

Similar to Questionnaire A, these questionnaires were designed and divided into

eight managerial and financial aspects, which included: human resources (B2-1);

corporate finance (B2-2); land development policy (B2-3); design, planning and

R&D (B2-4); project management and construction (B2-5); sales performance

(B2-6); IT development (B2-7); and general management (B2-8). Questionnaire

Type C was developed to determine the appropriate weighting of the first two

hierarchical levels, i.e. competitive factors and criteria, of the competitiveness

model. Respondents were asked to indicate the importance of the competitiveness

factors, criteria and attributes on a 5-point Likert scale.

There were 26 and 32 completed questionnaires were received for Questionnaire

B (including B1 and B2) and Questionnaire C, respectively. This raw data was

subsequently used to calculate mean importance ratings and normalised to derive

the weights of the attributes. All returned questionnaires were edited and analysed

using the statistical package for social science (SPSS). The data was then entered

into the computer. Mean importance rating and statistical t-test of the mean were

carried out. Those attributes that were found to be statistically important were

used to construct the competitiveness model. Multi-attribute value techniques

were used to calculate the weighting of the attributes in the model, formulate the

methods of rating the competitiveness of the property developers and aggregate

the final scores.

70
3.3.3 Details of Survey Respondents

As indicated in Figure 3.4, the questionnaire survey was conducted over 9

divisions of Company A. Each division has around 150 people. Among them; 20

people are within the rank of supervisors and managers; and the rest are technical

and non-technical staff responsible for different procedures and operations related

to real estate development projects. The headquarters of Company A has 3

executive directors, and 30 general managers to manage and coordinate activities

among different divisions.

1
Company A

Southern Eastern Northern Western

2 3 4 5 6 7 8 9
ChanhChun
Guangzhou

Chongqing
Hangzhou
Shenzhen

Zhongsan

Shanghai

Chengdu
Suzhou

Ningbo
Naijing

Beijing
Fusan

Xian

1988 1992 2003 2004 1992 2004 2004 2005 2007 1997 2002 2000 2004 2006

Figure 3.4 Survey sample

As indicated in Table 3.1, Questionnaire A1-1 to A1-8 were sent to 105 people

who were at the level of division supervisors and managers in divisions located in

Shenzhen, Guangzhou, Shanghai, Ningbo, Beijing, Changchun, Chengdu and

71
 Chongqing, respectively. These people ought to have at least 2-years of working

experience in the company. With the strong support of the senior management of

Company A, all of the 105 people completed and sent back valid responses.

Questionnaire A2 were sent to 280 staff members working in the divisions. These

280 people should have at least 1-year working experience in the company. 268

out of 280 people have completed and returned the questionnaires with relative

high return rate of 96%. Questionnaire A3 were sent to 600 people who have

bought properties from Company A, and among the 600 people 377 completed

and returned the questionnaire with 63% return rate. Questionnaire B1 were

completed by 2 executive directors and Questionnaire B2 were completed by 24

general managers at the headquarters of Company A. In addition, Questionnaire C

were completed by 32 experts and academics selected from Tongji University,

Tsinghua University, and the Hong Kong Polytechnic University.

Table ‎3-1 Number of respondents for the study

Questionnaire Targeted Criteria for the Number Sub-total
respondents respondents received
A1-1 to A1-8 Division supervisors Minimum 2-years 105 751
and managers working experience in
the company
A2 Staff Minimum 1-year 269
working experience in
the company
A3 Buyers/ Owners Properties more than 377
60% of the total
occupancy
B1 Executive Directors Minimum 3-years 2 26
working experience in
the company
B2 General managers, Minimum 3-years 24
assistant general working experience in
managers the company
C Experts and 32 32
academics
Total: 809

72
3.4 SUMMARY

This chapter presented the data collection procedures adopted in this study. A

positivistic orientation was proposed as the research plan for data collection,

survey method, questionnaire design, pilot study, target population and sample

process. Six procedures are adopted to design the questionnaire and survey, which

include define target population, develop questionnaire, conduct pilot study,

revise questionnaire, collect data, and analyse the data. After pilot study, final

questionnaire contained six types of questions are designed for different level of

interviewees in the developer enterprise. Through two months questionnaire

survey, 1043 copies of questionnaires are sent out and totally 809 copies of

effective respondents including all levels of interviewees are received, of which

32 copies are come from experts and academics, 26 copies from senior managers,

and 751 copies from the other levels. As the questionnaire survey is strongly

support by the senior manager of real estate development enterprise, the return

rate is relatively high to 77.5%. The weight of each attribute is calculated by using

the MAVT model based on the respondents of questionnaire.

73
CHAPTER 4. DATA ANALYSIS

4.1 INTRODUCTION

This chapter analyses the data collected from the survey questionnaires as

discussed in Chapter 3. The weight of each attributes will be calculated firstly by

using method MAVT proposed in chapter 3. Then, the competitiveness of a case

study is evaluated by using the multiple attributes. At last, the specific

competitiveness in each aspects of the real estate development enterprise is

calculated through summarizing all the attributes, which are aggregated as the

overall competitiveness of real estate development.

4.2 DEVELOPMENT OF IMPORTANCE WEIGHTS

From the calculated mean importance weights of each competitiveness factor

(level 1), criterion (level 2) and attribute (level 3), these were ranked by their

order of importance. The weight is important to decision makers because it

expresses the relative impact of each factor, criterion and attribute on

competitiveness.

To determine the importance of the competitiveness factors, criteria and attributes,

48 experts were selected from the Chinese real estate development and academic

fields. These 48 experts comprised senior managers with many years experience

in the real estate and construction industries. Academics that specialise in real

estate research also formed part of the sampling group. As mentioned in Chapter 4,

data was collected using structured questionnaires (i.e. Questionnaire B1, B2-1 to

B2-8, and C). Some of the survey was also conducted through face-to-face

74
 interviews. From the ratings of these 48 experts, mean importance weights for the

competitive factors, criteria and attributes were calculated. These importance

weights were also normalised. The results of the importance weights of each

competitive factor, criterion and attribute are tabulated in Table 4.1.

Table ‎4-1 Survey results of the importance weights of competitive factors,

criteria and attributes

Factors (Level 1) Criteria (Level 2) Attributes (Level 3) Reasonable Importance
Code Name Code Name Code Name score weight
Management
A 0.6550 0.8875
competency
A-1 Strategic Mgt 0.0932 0.7655
A-1-1 Corporate concept and vision 0.0281 0.6634
Corporate strategic objectives and
A-1-2 0.0303 0.7144
expansion policy
A-1-3 Property management system 0.0348 0.7655
A-2 Time Mgt 0.0750 0.6656
A-2-1 Time management policy and system 0
A-2-2 Project completion on time/schedule 0.0750 0.5515
A-3 Cost Mgt 0.0651 0.7766
A-3-1 Cost mgt policy and system 0
A-3-2 Project completion on budget 0.0236 0.5436
A-3-3 Construction cost reduction strategy 0.0157 0.5547
A-4 Quality Mgt 0.0818 0.7377
A-4-1 Quality mgt policy and system 0.0242 0.5902
A-4-2 Establishment of quality system 0.0245 0.6640
A-4-3 Quality rewarding system 0.0109 0.4426
A-4-4 Quality control policy 0.0221 0.5902
A-4-5 Satisfaction with the quality services 0
A-5 Risk Mgt 0.0875 0.6878
A-5-1 Risk mgt policy and system 0.0875 0.5503
Environmental
A-6 0.0510 0.5547
Mgt
A-6-1 Environmental mgt policy and system 0.0249 0.3051
A-6-2 Establishment of environmental system 0
Complaints/punishment on environmental
A-6-3 0.0261 0.3421
aspects
A-7 Safety Mgt 0.0634 0.6323
Construction site safety regulation and
A-7-1 0
policy
A-7-2 Number of site accidents 0.0403 0.5239
A-7-3 Durations of accident cases handling 0.0231 0.4806
Contractual
A-8 0.0568 0.6601
Mgt
Contract management/administration
A-8-1 0.0284 0.4753
system
A-8-2 Contract negotiation power 0.0175 0.4225
A-8-3 Completion of contract 0 0.3960
A-9 Collaboration 0.0812 0.7433
A-9-1 Collaboration with the design 0.0408 0.5352
A-9-2 Collaboration with the contractor 0.0404 0.5054

Factors (Level 1) Criteria (Level 2) Attributes (Level 3) Reasonable Importance

Code Name Code Name Code Code score weight
Organising
B 0.5850 0.7118
competency
Organisational
B-1 0.1647 0.5946
development
B-1-1 Organisational structure 0.0156 0.5054
HR development strategy and
B-1-2 0.0157 0.5351
management system

75
 B-1-3 Recruitment system 0.0088 0.3568
B-1-4 Promotion system 0.0165 0.5351
B-1-5 Rewarding system 0.0165 0.5946
B-1-6 Salary system 0.0184 0.5946
B-1-7 Job security system 0.0184 0.5946
Job authorisation and profit sharing
B-1-8 0.0147 0.4757
system
B-1-9 Information sharing system 0.0132 0.4757
B-1-10 Compensation system to the accident 0.0099 0.3568
B-1-11 Dispute resolution system 0.0055 0.2973
B-1-12 Organisation culture 0.0116 0.4162
B-2 Training 0.1272 0.5024
B-2-1 Training system and resource 0.0599 0.4019
Variations between training to new and
B-2-2 0.0674 0.4019
old staff
Use of human
B-3 0.1354 0.8110
resources
B-3-1 Growth rate of GDP per annum 0.0152 0.4425
B-3-2 Growth rate of average profit per annum 0.0179 0.4425
B-3-3 Growth rate of salary 0.0143 0.4702
B-3-4 Ratio of the technicians-to-staff 0.0143 0.4425
Ratio of the senior management from
B-3 -5 0.0179 0.4425
lower lever of the same company
Ratio of the professional qualification in
B-3-6 0.0118 0.4148
the middle and senior management
Percentage of staff with university
B-3-7 0.0108 0.3319
education
B-3-8 Turnover of staff 0.0092 0.3595
B-3-9 Record of dispute amongst staff 0.0078 0.9250
B-3-10 Spending on HR 0.0161 0.5000

Factors (Level 1) Criteria (Level 2) Attributes (Level 3) Reasonable Importance

Code Name Code Name Code Code score weight
B-4 Staff satisfaction 0.1576 0.5577
Recognition of the corporate strategy and
B-4-1 0.0141 0.5206
policy
Recognition of the corporate concept and
B-4-2 0.0131 0.4833
vision
Staff satisfaction at cultural activities by
B-4-3 0.0114 0.4218
corporate
B-4-4 Staff satisfaction at training system 0.0117 0.4462
B-4-5 Recognition of the award system 0.0146 0.5577
Staff satisfaction at the salary/payment
B-4-6 0.0162 0.5577
system
B-4-7 Staff satisfaction with job security 0.0162 0.5577
Staff satisfaction with job authorisation and
B-4-8 0.0130 0.4462
profit sharing
B-4-9 Staff satisfaction at the promotion system 0.0146 0.5020
Staff satisfaction at the compensation
B-4-10 0.0087 0.3346
system
Recognition of the channel of information
B-4-11 0.0117 0.4462
sharing
Staff satisfaction with the working
B-4-12 0.0123 0.4462
environment
Technological
C 0.4817 0.7063
capability
C-1 IT application 0.0787 0.4370
C-1-1 Application of new tech. in corporate 0.0293 0.3496
C-1-2 Application of new software 0.0293 0.3496
C-1-3 Spending on IT from profit 0.0202 0.3205
Technological
C-2 0.0553 0.4855
advancement
C-2-1 No. of patents 0.0061 0.2185
No of patents in application
C-2-2 0.0187 0.2671
C-2-3 Application of IT technology 0.0306 0.3642
C-3 R&D 0.1034 0.5650
C-3-1 Existence of R&D staff/ department 0.0293 0.4238
C-3-2 Spending on R&D from profit 0.0188 0.3955
C-3-3 Diversification of R&D area & project 0.0277 0.3892
C-3-4 Diversification of products 0.0277 0.3892
Construction
C-4 0.1180 0.5297
technology
C-4-1 Productivity of the construction facility 0.0265 0.3178

76
 C-4-2 Effective use of construction site 0.0248 0.3178
C-4-3 Effective use of materials 0.0277 0.3390
C-4-4 QA of the products 0.0393 0.4238
Consumer
C-5 satisfaction (CS) 0.1263 0.5606
with technology
C-5-1 CS with quality 0.0207 0.5157
C-5-2 Quality over consumer expectation 0.0207 0.4485
C-5-3 CS with interior design 0.0177 0.3364
C-5-4 CS with building design 0.0134 0.4485
C-5-5 CS with surrounding facilities 0.0176 0.3364
C-5-6 CS with the landscaping 0.0178 0.4858

Factors (Level 1) Criteria (Level 2) Attributes (Level 3) Reasonable Importance

Code Name Code Name Code Code score weight
C-5-7 CS with the recreational facilities 0.0176 0.4858
Financial
D 0.6219 0.8938
competency
Financing
D-1 0.3567 0.8435
capabilities
D-1-1 Creditability offered by banks 0.0483 0.5061
D-1-2 Understanding of financial system 0.0715 0.6748
D-1-3 No. of financing institutes 0.0501 0.6748
D-1-4 Channels of corporate financing 0.0563 0.7591
D-1-5 Loan for land acquisition 0.0894 0.8435
D-1-6 Loan received for building construction 0.0411 0.5543
D-2 Capital growth 0.2652 0.7373
D-2-1 Capital growth rate 0.0196 0.5161
D-2-2 Profit growth rate (average) 0.0347 0.6267
D-2-3 Average debt rate 0.0138 0.5899
D-2-4 Cash flow (average) 0.0344 0.7373
D-2-5 Annual growth rate of share prices 0.0120 0.5161
D-2-6 Securities price growth rate 0.0258 0.5530
D-2-7 Capital gain rate 0.0248 0.6267
D-2-8 ROI 0.0241 0.5161
D-2-9 Net capital profit 0.0309 0.6636
D-2-10 Bad debt (average) 0.0241 0.5161
D-2-11 Annual growth rate of profit tax 0.0211 0.5161
E Market share 0.5716 0.8875
E-1 Localisation 0.1352 0.6934
E-1-1 Cope with the property market trends 0.0448 0.6934
E-1-2 Understanding of property markets 0.0447 0.6656
E-1-3 Understanding of competitor 0.0457 0.6656
E-2 Market Coverage 0.0824 0.6767
E-2-1-1 Coverage of land market(local) 0.0096 0.5414

E-2-1-2 Coverage of land market(provincial) 0.0090 0.4060

E-2-1-3 Coverage of land market(national) 0.0088 0.4963

E-2-1-4 Coverage of land market(international) 0.0032 0.2707

Coverage of the property development
E-2-2-1 0.0037 0.5955
(local)
Coverage of the residential property market
E-2-2-2 0.0088 0.5684
(local)
Coverage of the commercial property
E-2-2-3 0.0053 0.4511
market (local)
Coverage of the hotel property market
E-2-2-4 0.0036 0.4060
(local)
Coverage of the office property market
E-2-2-5 0.0047 0.4511
(local)
Coverage of the industrial property market
E-2-2-6 0.0017 0.2256
(local)
E-2-2-7 Coverage of other property market (local) 0

E-2-3-1 Rental/sales of residential building (local) 0.0077 0.5414

E-2-3-2 Rental/sales of commercial building (local) 0.0047 0.4511

E-2-3-3 Rental/sales of hotel building (local) 0.0036 0.4060

E-2-3-4 Rental/sales of office building (local) 0.0047 0.4511

E-2-3-5 Rental/sales of industrial building (local) 0.0036 0.4060

E-2-3-6 Rental/sales of other building (local) 0

77
 Factors (Level 1) Criteria (Level 2) Attributes (Level 3) Reasonable Importance
score weight
Code Name Code Name Code Code
Name Code
Land acquisition
E-3 strategy and 0.1550 0.7877
implementation
E-3-1 Bidding (success rate) 0.0146 0.5251
E-3-2 Total amount of land bank 0.0468 0.7877
E-3-3 Quality of land bank 0.0468 0.7877
E-3-4 Effectiveness of land pricing strategy 0.0468 0.7877
Sales strategy and
E-4 0.1228 0.7710
implementation
E-4-1 Effectiveness of sales strategy 0.0184 0.7093
E-4-2 Effectiveness of sales training 0.0173 0.6682
E-4-3 Sales estimate 0.0146 0.6168
E-4-4 Average property sales rate 0.0133 0.6168
E-4-5 Sales variations (actual/estimate) 0.0109 0.4626
E-4-6 Price variations with similar property 0.0178 0.7196
Ratio of sales area compared to the whole
E-4-7 0.0097 0.6168
area
Ratio of sales amount compared to the
E-4-8 0.0097 0.6168
whole area
E-4-9 Growth rate of sales prices 0.0110 0.6682
Consumer
E-5 satisfaction (CS) 0.0762 0.7045
over sales
E-5-1 CS to sales staff 0.0217 0.6105
E-5-2 CS to sales prices 0.0186 0.6105
E-5-3 CS to property surrounding environment 0.0144 0.5166
E-5-4 Total amount of consumer complains 0.0000 0.5592
E-5-5 CS to complain handling 0.0214 0.6105
Frequency of consumer recommendations of
E-5-6 0.0000 0.5592
the corporate products
Possibility of consumer for buying another
E-5-7 0.0000 0.5592
property from the same corporate
Social
F 0.5678 0.7875
responsibility
F-1 Qualifications 0.1262 0.5316
F-1-1 Quality of R&D 0.1262 0.4253
Image and
F-2 0.6940
reputation
F-2-1 Credibility of contract exchange 0.0298 0.6477
F-2-2 Quality performance 0.0255 0.5552
F-2-3 Number of awards from industry 0.0234 0.5552
F-2-4 Number of awards by the gov‘t 0.0128 0.5552
F-2-5 Number of complains per month 0.0255 0.5552
Spending on
F-3 0.0540 0.4873
charity
F-3-1 Spending on charity from profits 0.0540 0.2924
F-4 Corporate culture 0.1219 0.5906
F-4-1 Brand concept, direction and strategy 0.0365 0.5119
F-4-2 Development of corporate brands 0.0202 0.4725
F-4-3 Establishment of dept. for corporate brand 0.0316 0.5119
F-4-4 Practicability of corporate culture 0.0337 0.4725
F-5 Public relationship 0.1487 0.6546

Factors (Level 1) Criteria (Level 2) Attributes (Level 3) Reasonable Importance

score weight
Code Name Code Name Code Code
Name Code
F-5-1 Relationship with clients/ customers 0.0215 0.5237
F-5-2 Relationship with the government 0.0259 0.5891
F-5-3 Relationship with sub-contractors 0.0242 0.5891
F-5-4 Relationship with supplier 0.0225 0.5891
F-5-5 Relationship with the press 0.0288 0.6546
F-5-6 Relationship with the public 0.0259 0.5891
Regional
G competitive- 0.4835 0.7063
ness
G-1 Population factor 0.1307 0.5120
G-1-1 Population growth 0.0310 0.3840
G-1-2 Change in population density 0.0334 0.3840

78
 G-1-3 Change in labour market 0.0330 0.4096
G-1-4 Change in city-to-city immigration 0.0334 0.3840
G-2 Urban economy 0.1853 0.5650
G-2-1 Urban economic development 0.0600 0.4520
G-2-2 Urban GDP
G-2-3 Growth rate of urban GDP 0.0578 0.4897
Difference between the growth rate of
G-2-4 0.0675 0.5085
property price and the salary
Infrastructure and
G-3 0.1675 0.5871
strategies
G-3-1 Transportation system 0.0271 0.5088
G-3-2 Educational and medical system 0.0235 0.4697
G-3-3 Stability of local gov‘t policy 0.0203 0.5088
G-3-4 The effectiveness of social security system 0.0192 0.4109
G-3-5 The openness of info. exchange 0.0178 0.4109
G-3-6 The openness of commercial development 0.0205 0.4403
G-3-7 Regional land policy and legality 0.0391 0.5871

The importance weights of competitive factors (the first level) and criteria (the

second level) are shown in Table 4.2. The survey results show that financial

competency (at a weighting of 0.8938) was considered by the experts to be the

most important. This was followed by market share (0.8875), management

competency (0.8875), social responsibility (0.7875), organisational competency

(0.7375), technological capabilities (0.7063) and regional competitiveness

(0.7063).

Table ‎4-2 The importance weights of competitive factors and criteria

Rank Factor (Level 1) Level of Criteria (Level 2) Level of Factor

Importance Rank
Importance (Level 1)
1 Finance 0.8938 1 Financing capabilities 0.8435 FC
competency (FC) Land acquisition strategy
2 0.7877 MS
2 Market share 0.8875 and implementation
(MS) 3 Cost management 0.7766 MC

3 Management 0.8875 4 Sales strategy & 0.7710 MS

competency (MC) implementation
5 Strategic management 0.7655 MC
4 Social 0.7875
responsibility (SR) 6 Collaboration 0.7433 MC
5 Organising 0.7375
competency (OC)
7 Quality management 0.7377 MC

6 Technological 0.7063 8 Capability of capital growth 0.7373 FC

capabilities (TC) Consumer satisfaction
9 0.7045 MS
Regional with sales
7 0.7063
competitiveness (RC) 10 Localisation 0.6934 MS

79
At the level 2, top 10 competitive criteria, financial capability (0.8435) was

accorded the highest importance weight by the respondents, followed by land

policy strategy and implementation (0.7877), and cost management (0.7766).

Other criteria with high importance weights include: sales policy planning and

implementation (0.7710), corporate strategic competency (0.7655), coordination

(0.7433), quality management (0.7377), financial asset growth (0.7373), customer

satisfaction (0.7045) and localisation (0.6934).

Management
Competency

0.970.8875
0.91
0.85
Regional 0.79 Organizing
0.8009
Competitiveness Competency
0.73
0.67
0.61
0.55
0.7375
0.7063 0.49
0.43
0.37
0.7063
Social
0.7875
Technological
Responsibility Capability

Importance
weight

0.8875 0.8938
Mean weight
Market Share Financial
Competency

Figure ‎4-1 Comparison of the average weight and importance weight of factors

(the first level) for measuring the competitiveness of property developers in China

Figure 4.1 indicates the weight of importance (in red) and means weight of factors

(blue colour) at the First Level. As shown in the figure, three factors‘ weight is

80
higher than the average weight, which includes financial competency (0.894),

market competence (0.8875), and market share (0.8875). It is means that these

factors are more important in measuring the competitiveness of real estate

developers than the other factors like social responsibility (0.78), organizing

competency (0.73), technological capability (0.71), and regional competitiveness

(0.706), which weight are smaller than the average weight. Therefore, from the

first level of evaluation criteria, the developers‘ competitiveness should be

considered more from the financial, management and market perspectives.

Table ‎4-3 The importance weights of competitive attributes

Rank Attributes (Level 3) Level of Impo.

1 Loan received for land acquisition 0.8435

2 The total amount of land bank 0.7877
3 The quality of land bank 0.7877
Criteria (Level 2) Level of
Rank Importance 4 Land acquisition pricing strategy 0.7877

1 Financing capabilities 0.8435 5 Property management system 0.7655

6 Channels of corporate financing 0.7591
2 Land acquisition strategy 0.7877 Difference of sales price amongst similar prop.
and implementation 7 0.7196
8 Corporate strategic objectives and exp. plan 0.7144
3 Cost management 0.7766
9 Sales planning 0.7093
4 Sales strategy & 0.7710 10 Adaptability of the corporate to local market 0.6934
implementation
11 No. of financing institutes 0.6748
5 Strategic management 0.7655
12 Understanding of financial system 0.6748
6 Collaboration 0.7433 13 Market sales training 0.6682
14 Growth rate of the property price 0.6682
7 Quality management 0.7377
15 Understanding of the (local) property market 0.6656

8 Capability of capital growth 0.7373 16 Understanding of the (local) competitor 0.6656

17 Establishment of quality system 0.6640
9 Consumer satisfaction with 0.7045 Net capital gain rate (average)
18 0.6636
sales
19 Corporate concept and direction 0.6634
10 Localisation 0.6934
20 Relationship with the press 0.6546

Table 4.3 summarises the top 20 competitive attributes with the highest relative

weights in level 3 as shown in following. The leading attributes include the loan

81
received for land acquisition (0.8435), the total amount of financing for land

(0.7877), the quality of developers‘ land bank (0.7877), and land acquisition and

pricing strategy (0.7877) followed by property management system (0.7655).

there are other four attributes‘ weight like channels of financing (0.76), difference

of sales price amongst similar prop.(0.72), corporate strategic objectives and

expansion plan (0.71) and sales planning (0.71) in the top 20 attributes are higher

than 0.7. All of the total top 20 attributes‘ weights are more than 0.6.

Figure 4.2- spider chart- compares the average weight and importance weight of

criteria at the second level for measuring the competitiveness of property

developers in China. As shown from the chart, there sixteen attributes‘ weights

are higher than the average weight in the second level, while other seventeen

factors‘ weights are smaller than the average weight. Nine of the sixteen factors‘

weight are higher than 0.7 as illustrated in the chart. The top three of them are

financing capability (0.84), land acquisition strategy (0.78), and cost management

(0.77).

From figure 4.3 to 4.9, they provide the detail introduction of third level under

each perspective in first level attributes. Figure 4.3 describe the attributes in the

second and third level under the management competency for measuring the

competitiveness of property developers in China. Management competency of

developers comprise 9 aspects of specific management items such as strategic

management, time management, cost management, quality management, risk

management, environment management, safety management, contractual

management and collaboration.

82
 Infrastructure Strategic Mgt
and strategies Time mgt
Urban economy 0.900 Cost mgt
Population factor Quality mgt
0 0.7655
Public relationship 0.7766 Risk mgt

Corporate culture Environmental mgt

0.7377
0.6656
Spending on charity Safety mgt
0.6546 0.5871 0.6878

Image and reputation 0.5650 Contractual mgt

0.6323
0.6940 0.5906 0.5120 0.6601
0.5547
0.4873
Qualification 0.7433 Collaboration
0.400 0.4370 0.5024 0.5946
0.7045 0.5316
Consumer satisfaction
0.4855 Organisational
with sales 0.5531
0.7710 0 development
0.5297
0.5577
Sales strategy and 0.6767 0.5606 Training
implementation 0.5650
0.7877
Land acquisition strategy 0.6934
Use of human resources
and implementation

0.7373 Staff satisfaction

Market coverage

IT technology Importance
Localisation
weight
Capital growth 0.8435 Technological advancement
R&D Mean weight
Financing Construction technology
capabilities Consumer satisfaction to technology

Figure ‎4-2 Comparison of the Average Weight and Importance Weight of Criteria (the Second Level) for
83
Measuring the Competitiveness of Property Developers in China
From the spider chart of 4.3, five aspects management are more important than others,

since their weight are much higher than the average weight. These five aspects are the

cost management (0.77), strategic management (0.76), collaboration (0.74) ，quality

management (0.73), and risk management. Under each of these aspects have some

important sub-level attributes (third level); these important factors in third level are

shown in the table under the spider chart of 4.3. Taking the cost management for

example, the factors of reduction of construction cost and project completion on

budget are the key factors impacting the cost management. The other factors shown

in the table have the similarly meaning.

Figure 4.4 provide the detail information of average weight and importance weight of

attributes at the second and third level under the organising competencies perspective.

Organising competencies mainly consist of four aspects contents like organisational

development, training, use of human resources and staff satisfaction. As has been

mentioned before, the importance weight of organisational competencies are lower

than the average weight. Therefore, all of four aspects （second level） factors‘

weight under the aspects of organisational competency are lower than the mean

weigh. Organisational development and staff satisfaction are the much more

important factors among the total four aspects as shown in the spider chart, and the

specific attributes under each of them are illustrated in the table below the spider

chart 4.4. In terms of organisational development, there are five important factors

under it like reward system, salary system, job security system, human resource

development strategies and management system, and job promotion system. On part

84
of staff satisfaction, four factors are needed to pay more attention such as reward

system, salary system, job security system, and recognition of corporate strategic

objectives and expansion policy.

Figure 4.5 given the importance weight of the second and third level factors under the

aspects of technological capabilities (first level). The technological capabilities

contain five aspects sub-level factors as construction technology, R&D, technological

advancement, IT technology, and consumer satisfaction with technology. From the

spider chart, even though all of the five factors‘ weight is smaller than the average

weight, the attributes of R&D (0.565) and consumer satisfaction with technology

(0.561) are the most important among the five factors. Under the R&D, two factors

like development of R&D unit and staff and spending on R&D from corporate profit

are in prior consideration. Satisfaction with quality and actual quality compared to

expectations are the two main factors need to be deal with well in the consumer

satisfaction with technology.

85
 Strategic mgt

1.00

0.90
Collaboration
0.7655
0.80 Time mgt

0.70
0.7433 0.60

0.6317
0.50

0.40
0.6656
0.30
Contractual mgt 0
0.20 0.7766 Cost mgt

0.6601 0.10

0.00

0.6323

Safety mgt 0.5547 0.7377

0.6878
Quality mgt

Importance
weight

Environmental mgt Risk mgt Mean weight

Reduction of construction cost

Cost Management
Project completion on budget
Property management system
Strategic Management Corporate strategic objectives and expansion policy
Corporate concept and vision
Collaboration with design teams
Collaboration
Collaboration with contractors
Quality Management Quality plan
Risk Management Risk management system
Figure ‎4-3 Comparison of the average weight and importance weight of

attributes (the second & third level) under the management competency for

measuring the competitiveness of property developers in China

86
 Organizational
development
1.00
0.90
0.80

0.5946
0.70
0.60
0.50
0.6317
0.40
0.30
0.20
0.5577 0.10
Staff satisfaction Training
0.00
0.5024

0.5531 Importance
weight
Mean weight

Use of human resources

Reward system
Salary system
Organisational Job security system
Development Human resource development strategies and management
system
Job promotion system
Reward system
Salary system
Staff Satisfaction Job security system
Recognition of corporate strategic objectives and
expansion policy
Figure ‎4-4 Comparison of the average weight and importance weight of

attributes (the second & third level) under the organizing competencies for

measuring the competitiveness of property developers in China

87
 IT technology

0.70

0.60
0.6317
0.500.4370

0.40 Technological
Consumer satisfaction with
advancement
technology
0.5606 0.30
0.4855

0.20

0.5297
0.5650
Importance
weight

Construction Mean weight

technology R&D

Development of R&D unit and staff

R&D
Spending on R&D from corporate profit
Consumer satisfaction with Satisfaction with quality
technology Actual quality compared to expectations
Figure ‎4-5 Comparison of the average weight and importance weight of

attributes (the second & third level) under the technological capabilities for

measuring the competitiveness of property developers in China

The detail instructions of factors in the second and third level under the aspect of

financial competency are shown as the figure 4.6. The financial competency is

coming from the financing capabilities and capital growth two sides. As

aforementioned, the financial competency is the one of most important factors for the

competitiveness of developers. Therefore, it is undoubted that the weight of two

88
factors under financial competency, financing capabilities and capital growth, are

much higher than the average weight. In the third level, both of the two factors have

several important attributes need to be considered. In the aspects of financing

capabilities, loans received for land acquisition and channels of corporate financing

(like bank, trust and fund) are the most important factors among others. In terms of

capital growth, four factors are more important than others like cash flow, net profit,

annual profit growth rate and return on investment (ROI).

In the figure 4.7, the introduction of specific attributes in the second and third level

under the aspects of market share. Market share can be represented by five factors as

localisation, market coverage, land acquisition strategy and implementation, sales

strategy and implementation, and consumer satisfaction with property sales. All of

these factors‘ weights are higher than the average weight. As shown in the spider

chart, among these five factors, land acquisition strategy and implementation (0.78),

sales strategy and implementation (0.77) and consumer satisfaction with property

sales (0.71) are the most important factors need to be taken care reasonable. The

important third level factors of each of these three facts are listed in the table under

the spider chart 4.7. Land acquisition strategy and implementation include size of

land bank, quality of land bank and land acquisition pricing strategy. Sales strategy

and implementation involves the difference between sales prices of similar properties,

effective sales strategy, sales training, and sales price growth rate. And finally,

consumer satisfaction with the property contains such three factors as satisfaction

89
whit the salesperson, satisfaction with the sales price, and satisfaction with the

handling of complaints.

0.8435
0.9
0.8 0.7373
0.6317
0.7
0
0.6
0
0.5
0
0.4
0
0.3
0 Importance
weight
0.2
0
Mean weight
0.1
0
0.0
0 Capital growth
Financing
0 capabilities

0
Loans received for land acquisition
Financing capabilities Channels of corporate financing; for example,
bank, trust and fund
Cash flow (average)
Net profit (average)
Capital growth
Annual profit growth rate (average)
ROI (return on investment)
Figure ‎4-6 Comparison of the Average Weight and Importance Weight of

Attributes (the Second & Third Level) under the Financial Competencies for

Measuring the Competitiveness of Property Developers in China

90
 Localisation
1.00

0.90

0.6934
0.80

0.70

0.60

Consumer 0.63170
0.50

satisfaction with 0.40

property sales 0.7045 0.30 Market coverage

0.20 0.6767
0.10

0.00
Importance
weight
Mean weight

0.7710 0.7877
Sales strategy and Land acquisition strategy and
implementation
implementation

Land acquisition Size of land bank

strategy and Quality of land bank
implementation Land acquisition pricing strategy
Difference between sales prices of similar
properties
Sales strategy and
Effective sales strategy
implementation
Sales training
Sales price growth rate
Consumer satisfaction Satisfaction with the salesperson
with the property sale Satisfaction with the sales price
Satisfaction with the handling of complaints
Figure ‎4-7 Comparison of the average weight and importance weight of

attributes (the second & third level) under the market share for measuring the

competitiveness of property developers in China

91
 Qualification
1.00
0.90
0.80
0.70
0.63170
0.60
0.50
Public relations 0.5316
0.40

0.6546 0.30 0.6940 Image and reputation

0.20
0.10
0.00

0.5906 0.4873 Importance

weight
Mean weight

Corporate culture Spending on charity

Credibility contract exchange (without dispute)

Quality
Image and reputation
Number of awards from government
Number of complaints per month
Public relations Relationship with the press
Figure ‎4-8 Comparison of the average weight and importance weight of

attributes (the third level) under the social responsibility for measuring the

competitiveness of property developers in China

Figure 4.8 compares the average weight and importance weight of attributes at the

third level from the perspective of Social Responsibility. Five second level attributes

including qualification, image and reputation, spending on charity, corporate culture,

and public relations comprise the social responsibility, of which image and reputation

(0.69) and public relations (0.65) have the higher weight than the average weight. The

92
image and reputation have four key factors need to be considered, including

credibility contract exchange, quality, number of awards from government, and

number of complaints per month. The key factor in public relations is the relationship

with the press.

0.70
0.631
0.565 0.587
0.60
0.512
7
0.50 0 1
0
0.40
Importance
0.30 weight
Mean weight

0.20

0.10

0.00
Population factor Urban economy Infrastructure &
strategies

Regional land policy and legality

Infrastructure and
Transportation
strategies
Stability of local government policy
Difference between the growth of
Urban economy
property price and salaries
Figure ‎4-9 Comparison of the average weight and importance weight of

attributes (the third level) under the regional competitiveness for measuring the

competitiveness of property developers in China

93
The following figure 4.9 represents the average weight and importance weight of

attributes at the third level under the regional competitiveness. Three factors like

population factor, urban economy and infrastructure & strategies are used to measure

the developers‘ regional competitiveness. The weight of all of the three factors are

lower than the average weight, since the regional competitiveness are not the key

factor in evaluation the developers‘ competitiveness as discussed above.

Infrastructure & strategies are the most important factor among the three factors.

Under the infrastructure and strategies, there are three sub-level factors including

regional land policy and legality, transportation, and stability of local government

policy. Urban economy is another important factor under the regional

competitiveness, which also have a key factor – different between the growth of

property price and salaries.

4.3 RATING DEVELOPERS BASED ON ATTRIBUTES

Having established the importance weights, the next step was to evaluate the ―case

study‖ property developer (i.e. Company A) against each attribute. As discussed in

the previous chapter, a series of questionnaires were designed to collect information

regarding the performance of the developer in terms of: human resources

(Questionnaire A1-1); finance (Questionnaire A1-2); land development

(Questionnaire A1-3); design, planning, and research and development (RD)

(Questionnaire A1-4); construction and project management (Questionnaire A1-5);

94
sales performance (Questionnaire A1-6); information technology (Questionnaire A1-

7), general management (Questionnaire A1-8); overall staff satisfaction

(Questionnaire A2); and customer satisfaction (Questionnaire A3).

Table 4.4 summarises the Results Company a scored for each competitive factor,

criterion and attribute. Company A scored highly on financial competency (0.6414)

followed by management competency (0.6249) and market share (0.5426). Among all

competitive criteria, Company A scored highest in two criteria under the factor of

financial competency: financing ability (0.3265) and asset growth ability (0.3149). At

the attributes level, Company A scored highest in ―customer satisfaction with quality‖

(0.5157) and ―actual product quality over expectation‖ (0.5157).

Table ‎4-4 Survey results of the rating of Company A against each competitive

factor, criterion and attributes

Factors (Level 1) Criteria (Level 2) Attributes (Level 3) COMPANY
Code Name Code Name Code Name A Score
Management
A
competency
0.6249
A-1 Strategic Mgt 0.0824
A-1-1 Corporate concept and vision 0.0263
Corporate strategic objectives and
A-1-2 0.0260
expansion policy
A-1-3 Property management system 0.0301
A-2 Time Mgt 0.0788
A-2-1 Time management policy and system 0
A-2-2 Project completion on time/schedule 0.0788
A-3 Cost Mgt 0.0725
A-3-1 Cost mgt policy and system 0
A-3-2 Project completion on budget 0.0310
A-3-3 Construction cost reduction strategy 0.0170
A-4 Quality Mgt 0.0764
A-4-1 Quality mgt policy and system 0.0194
A-4-2 Establishment of quality system 0.0245
A-4-3 Quality rewarding system 0.0100
A-4-4 Quality control policy 0.0225
A-4-5 Satisfaction with the quality services 0
A-5 Risk Mgt 0.0642
A-5-1 Risk mgt policy and system 0.0642
Environmental
A-6 0.0565
Mgt
A-6-1 Environmental mgt policy and system 0.0214

95
 A-6-2 Establishment of environmental system 0
Complaints/punishment on
A-6-3 0.0351
environmental aspects
A-7 Safety Mgt 0.0649
Construction site safety regulation and
A-7-1 0
policy
A-7-2 Number of site accidents 0.0376
A-7-3 Durations of accident cases handling 0.0273
Contractual
A-8 0.0575
Mgt
Contract management/administration
A-8-1 0.0265
system
A-8-2 Contract negotiation power 0.0151
A-8-3 Completion of contract 0
A-9 Collaboration 0.0717
A-9-1 Collaboration with the design 0.0338
A-9-2 Collaboration with the contractor 0.0379

Factors (Level 1) Criteria (Level 2) Attributes (Level 3) COMPANY

A Score
Code Name Code Name Code Name
Code
Organising
B
Competency
0.4682
Organisational
B-1 0.1161
development
B-1-1 Organisational structure 0.0128
HR development strategy and
B-1-2 0.0122
management system
B-1-3 Recruitment system 0.0086
B-1-4 Promotion system 0.0112
B-1-5 Rewarding system 0.0125
B-1-6 Salary system 0.0132
B-1-7 Job security system 0.0069
Job authorisation and profit sharing
B-1-8 0.0055
system
B-1-9 Information sharing system 0.0104
B-1-10 Compensation system to the accident 0.0078
B-1-11 Dispute resolution system 0.0051
B-1-12 Organisation culture 0.0098
B-2 Training 0.1018
B-2-1 Training system and resource 0.0494
Variations between training to new
B-2-2 0.0524
and old staff
Use of human
B-3 0.1336
resources
B-3-1 Growth rate of GDP per annum 0.0161
Growth rate of average profit per
B-3-2 0.0155
annum
B-3-3 Growth rate of salary 0.0126
B-3-4 Ratio of the technicians-to-staff 0.0158
Ratio of the senior management from
B-3 -5 0.0176
lower lever of the same company
Ratio of the professional qualification
B-3-6 0.0158
in the middle and senior management
Percentage of staff with university
B-3-7 0.0118
education
B-3-8 Turnover of staff 0.0090
B-3-9 Record of dispute amongst staff 0.0104
B-3-10 Spending on HR 0.0090

96
 Factors (Level 1) Criteria (Level 2) Attributes (Level 3) COMPANY
A Score
Code Name Code Name Code Name
Code
Staff
B-4 0.1166
satisfaction
Recognition of the corporate strategy
B-4-1 0.0124
and policy
Recognition of the corporate concept
B-4-2 0.0116
and vision
Staff satisfaction at cultural activities
B-4-3 0.0093
by corporate
B-4-4 Staff satisfaction at training system 0.0090
B-4-5 Recognition of the award system 0.0106
Staff satisfaction at the
B-4-6 0.0102
salary/payment system
B-4-7 Staff satisfaction with job security 0.0098
Staff satisfaction with job
B-4-8 0.0079
authorisation and profit sharing
Staff satisfaction at the promotion
B-4-9 0.0096
system
Staff satisfaction at the compensation
B-4-10 0.0069
system
Recognition of the channel of
B-4-11 0.0093
information sharing
Staff satisfaction with the working
B-4-12 0.0100
environment
Technological
C
capabilities
0.4194
C-1 IT application 0.0682
C-1-1 Application of new tech. in corporate 0.0260
C-1-2 Application of new software 0.0233
C-1-3 Spending on IT from profit 0.0189
Technological
C-2 0.0458
advancement
C-2-1 No. of patents 0.0092
No of patents in application
C-2-2 0.0121
C-2-3 Application of IT technology 0.0246
C-3 R&D 0.1001
C-3-1 Existence of R&D staff/ department 0.0246
C-3-2 Spending on R&D from profit 0.0137
Diversification of R&D area &
C-3-3 0.0316
project
C-3-4 Diversification of products 0.0303
Construction
C-4 0.1068
technology
Productivity of the construction
C-4-1 0.0233
facility
C-4-2 Effective use of construction site 0.0246
C-4-3 Effective use of materials 0.0251
C-4-4 QA of the products 0.0340
Consumer
satisfaction
C-5 0.0984
(CS) with
technology
C-5-1 CS with quality 0.5157
C-5-2 Quality over consumer expectation 0.5157
C-5-3 CS with interior design 0.4485
C-5-4 CS with building design 0.3364
C-5-5 CS with surrounding facilities 0.4858
C-5-6 CS with the landscaping 0.4645
C-5-7 CS with the recreational facilities 0.0138

97
 Factors (Level 1) Criteria (Level 2) Attributes (Level 3) COMPANY
Code Name Code Name Code Name A Score
Financial
D 0.6414
competency
Financing
D-1 0.3265
capabilities
D-1-1 Creditability offered by banks 0.0483
D-1-2 Understanding of financial system 0.0656
D-1-3 No. of financing institutes 0.0393
D-1-4 Channels of corporate financing 0.0483
D-1-5 Loan for land acquisition 0.0751
D-1-6 Loan received for building construction 0.0499
Capital
D-2 0.3149
growth
D-2-1 Capital growth rate 0.0265
D-2-2 Profit growth rate (average) 0.0365
D-2-3 Average debt rate 0.0220
D-2-4 Cash flow (average) 0.0387
D-2-5 Annual growth rate of share prices 0.0181
D-2-6 Securities price growth rate 0.0316
D-2-7 Capital gain rate 0.0329
D-2-8 ROI 0.0211
D-2-9 Net capital profit 0.0340
D-2-10 Bad debt (average) 0.0241
D-2-11 Annual growth rate of profit tax 0.0295
E Market Share 0.5426
E-1 Localisation 0.1309
E-1-1 Cope with the property market trends 0.0443
E-1-2 Understanding of property markets 0.0447
E-1-3 Understanding of competitor 0.0419
Market
E-2 0.0572
Coverage
E-2-1-1 Coverage of land market(local) 0.0055
E-2-1-2 Coverage of land market(provincial) 0.0036
E-2-1-3 Coverage of land market(national) 0.0044
E-2-1-4 Coverage of land market(international) 0.0014
Coverage of the property development
E-2-2-1 0.0049
(local)
Coverage of the residential property
E-2-2-2 0.0077
market (local)
Coverage of the commercial property
E-2-2-3 0.0046
market (local)
Coverage of the hotel property market
E-2-2-4 0.0019
(local)
Coverage of the office property market
E-2-2-5 0.0033
(local)
Coverage of the industrial property
E-2-2-6 0.0010
market (local)
Coverage of other property market
E-2-2-7 0
(local)
Rental/sales of residential building
E-2-3-1 0.0072
(local)
Rental/sales of commercial building
E-2-3-2 0.0048
(local)
E-2-3-3 Rental/sales of hotel building (local) 0.0021
E-2-3-4 Rental/sales of office building (local) 0.0031
Rental/sales of industrial building
E-2-3-5 0.0018
(local)
E-2-3-6 Rental/sales of other building (local) 0

98
 Factors (Level 1) Criteria (Level 2) Attributes (Level 3) COMPANY
A Score
Code Name Code Name Code Name
Code
Land
acquisition
E-3 0.1171
strategy and
implementation
E-3-1 Bidding (success rate) 0.0125
E-3-2 Total amount of land bank 0.0298
E-3-3 Quality of land bank 0.0391
E-3-4 Effectiveness of land pricing strategy 0.0357
Sales strategy
E-4 and 0.1266
implementation
E-4-1 Effectiveness of sales strategy 0.0176
E-4-2 Effectiveness of sales training 0.0152
E-4-3 Sales estimate 0.0161
E-4-4 Average property sales rate 0.0153
E-4-5 Sales variations (actual/estimate) 0.0053
E-4-6 Price variations with similar property 0.0170
Ratio of sales area compared to the
E-4-7 0.0114
whole area
Ratio of sales amount compared to the
E-4-8 0.0114
whole area
E-4-9 Growth rate of sales prices 0.0172
Consumer
E-5 satisfaction 0.1108
(CS) over sales
E-5-1 CS to sales staff 0.0170
E-5-2 CS to sales prices 0.0171
CS to property surrounding
E-5-3 0.0142
environment
E-5-4 Total amount of consumer complains 0.0173
E-5-5 CS to complain handling 0.0149
Frequency of consumer
E-5-6 recommendations of the corporate 0.0147
products
Possibility of consumer for buying
E-5-7 another property from the same 0.0156
corporate
Social
F 0.5142
Responsibility
F-1 Qualifications 0.1118
F-1-1 Quality of R&D 0.1118
Image and
F-2
reputation
F-2-1 Credibility of contract exchange 0.0281
F-2-2 Quality performance 0.0241
F-2-3 Number of awards from industry 0.0303
F-2-4 Number of awards by the gov‘t 0.0175
F-2-5 Number of complains per month 0.0234
Spending on
F-3 0.0521
charity
F-3-1 Spending on charity from profits 0.0521
Corporate
F-4 0.0962
culture
F-4-1 Brand concept, direction and strategy 0.0267
F-4-2 Development of corporate brands 0.0187
F-4-3 Establishment of dept. for corporate 0.0275

99
 brand
F-4-4 Practicability of corporate culture 0.0232
Public
F-5 0.1307
relationship

Factors (Level 1) Criteria (Level 2) Attributes (Level 3) COMPANY

A Score
Code Name Code Name Code Name
Code
F-5-1 Relationship with clients/ customers 0.0194
F-5-2 Relationship with the government 0.0213
F-5-3 Relationship with sub-contractors 0.0219
F-5-4 Relationship with supplier 0.0219
F-5-5 Relationship with the press 0.0249
F-5-6 Relationship with the public 0.0213
Regional
G Competitive- 0.4877
ness
Population
G-1 0.1518
factor
G-1-1 Population growth 0.0381
G-1-2 Change in population density 0.0385
G-1-3 Change in labour market 0.0378
G-1-4 Change in city-to-city immigration 0.0374
Urban
G-2 0.1696
economy
G-2-1 Urban economic development 0.0560
G-2-2 Urban GDP
G-2-3 Growth rate of urban GDP 0.0601
Difference between the growth rate of
G-2-4 0.0536
property price and the salary
Infrastructur
G-3 e and 0.1662
strategies
G-3-1 Transportation system 0.0255
G-3-2 Educational and medical system 0.0233
G-3-3 Stability of local gov‘t policy 0.0254
The effectiveness of social security
G-3-4 0.0197
system
G-3-5 The openness of info. exchange 0.0193
The openness of commercial
G-3-6 development 0.0218

G-3-7 Regional land policy and legality 0.0313

4.4 AGGREGATION OF WEIGHTS AND RATINGS

Having established the importance weights of the attributes and the score that

Company A obtained in relation to their competitiveness performance against each

100
attribute, the next step was to calculate an overall competitiveness score for Company

A. That calculation involved the aggregation of weights and ratings to produce one

overall score (Ling et al., 2003). To derive the weighted scores, the importance

weights (w) of each competitive factor, criterion and attribute, which were developed

earlier in this chapter, were multiplied by the ratings (r) for the corresponding

competitive factors, criteria and attributes that Company A obtained from the raters.

All the weighted ratings were summed to produce an aggregate property developer‘s

competitiveness score (ScorePDC). The following equation is the mathematical

expression for that score.

Aggregate score (ScorePDC) = Score (FI) + Score (MS) + Score (MA) + Score (SI) +

Score (OR) + Score (TE) + Score (RC)

Where:

Score (FI) is the aggregate score of attributes under ‗financial competency‘ factor.

Score (MS) is the aggregate score of attributes under ‗market share‘ factor.

Score (MA) is the aggregate score of attributes under ‗management competency‘

factor.

Score (SI) is the aggregate score of attributes under ‗social responsibility‘ factor.

Score (OR) is the aggregate score of attributes under ‗organising competencies‘ factor.

101
Score (TE) is the aggregate score of attributes under ‗technological capabilities‘

factor.

Score (RC) is the aggregate score of attributes under ‗regional competitiveness‘ factor.

As an example, the mathematical expression for Score (FI), finance competency, is

given in the following equation.

Score( FI )  wC [wC1 ( wC1a  rC1a )  wC 2 ( wC 2b  rC 2b )]

Where:

Score (FI) is the aggregate score of attributes under the financial competency factor,

Wc is the weight of ‗financial competency‘ factor

Wc1 and Wc2 are the weights of the ‗financing capabilities‘ and ‗the capability of

capital growth‘ criteria respectively,

Wc1a and Wc2a are the weights of the attributes under the ‗financing capabilities‘

and ‗the capability of capital growth‘ criteria respectively,

rc1a and rc2a are the ratings given to Company A for the attributes under the

‗financing capabilities‘ and ‗the capability of capital growth criteria‘ respectively

4.5 SUMMARY

This chapter presented a detailed analysis of data collected from Company A in order

to evaluate its competitive strengths and weaknesses. Through the questionnaire

102
survey, the importance weights of indicators were established. Then the procedures

for using these weightings to calculate competitiveness were presented. The values of

each aspect of first level factors are obtained by weight sum of all the attributes in the

second and third level. The overall competitiveness of a developer is calculated by

accumulating all of the seven aspects of factors in the first level. The whole of the

procedure to evaluate the competitiveness of the real estate developers are illustrated

by using company A as a case study. Through this chapter, it describes a specification

process of data analysis and provides an important foundation of result discussion in

the next chapter.

103
CHAPTER 5. DISCUSSION OF RESULTS

5.1 RESULTS OF EVALUATION

5.1.1 General

The performance of Company A in relation to various competitive factors is

represented graphically in Figure 5.1 and tabulated in Table 5.1. The results show

outstanding performance in financial competency (Company A score: 0.6414;

reasonable score: 0.6219; maximum score: 0.7971) and regional competitiveness

(Company A score: 0.4877; reasonable score: 0.4835; maximum score: 0.6299). The

performance of Company A in both of these factors exceeded their expected

reasonable score. This suggests that these are true strengths of the company.

Despite excellent performance on these two axes, Company A scored less than

expected in organizing competencies (Company A score: 0.4682; reasonable score:

0.5850; maximum score: 0.6577) and technological capabilities (Company A score:

0.4194; reasonable score: 0.4817; maximum score: 0.6299). Clearly there is room for

improvement in these two aspects.

104
 Management Competency

0.8 0.7915
0
0.7 0.6550
0
0.6
Regional 0 0.6249 Organising Competency
Competitiveness 0.5
0.6299 0 0.5850 0.6577
0.4
0.4877
0
0.3
0.4835 0.4682
0
0.2

0
0.1

0
0.0

0
0.4194 0.6299
0.702 0.514
Social 0.567 0.4817 Technological
Responsibility 3 2 Capabilities
8

0.5426
0.6219 Maxi. Score

0.5716
Reasonable score
0.6414
0.7915 0.7971
Finance Company A
Market Share Competency

Figure ‎5-1 Radar diagram representing the competitiveness factors in maximum

score, expected/reasonable score, and actual score for Company A

105
 Table ‎5-1 Summary‎of‎scores‎of‎competitiveness‎factors‎(the‎‘first’‎level)‎for‎

Company A

Rank Factors Reasonable Score of

Compatibility
Score Company A
1 Finance 0.6219 0.6414 1.0313
Competency
2 Regional 0.4835 0.4877 1.0087
Competitiveness
3 Management 0.6550 0.6249 0.9541
Competency
4 Market Share 0.5716 0.5426 0.9493

5 Social Responsibility 0.5678 0.5142 0.9056

6 Technological 0.4817 0.4194 0.8706

Capabilities
7 Organizing 0.5850 0.4682 0.8003
Competency

Table 5.2 summarises the scores of 33 competitiveness criteria (the ‗second‘ level)

obtained by Company A. The top five scores were: ‗consumer satisfaction with the

sales‘ (1.4543), ‗capabilities of capital growth‘ (1.1873), ‗population factor‘ (1.1612),

‗cost management‘ (1.1143), and ‗environmental management‘ (1.1071). This

tabulation also shows that Company A obtained low scores in: ‗land policy and

implementation‘ (0.7559), ‗staff satisfaction‘ (0.7402), ‗risk management‘ (0.7333),

‗organisational development‘ (0.7048) and ‗market coverage (0.6941).

106
Table ‎5-2 Summary of scores of competitiveness‎criteria‎(the‎‘second’‎level)‎for‎

Company A

Rank Competitive Criteria Score Rank Competitive Criteria Score

Consumer satisfaction with the sales 1.4543
1 18 Financing capabilities 0.9153
2 Capabilities of capital growth 1.1873 19 Construction technology 0.9053
3 Population factor 1.1612 Qualifications 0.8857
20
4 Cost management 1.1143 Strategic management 0.8842
21
5 Environmental management 1.1071
22 Collaboration 0.8825
6 Image and reputation 1.0556
23 Public relationship 0.8791
7 Time management 1.0514
24 IT technology 0.8661
8 Sales strategy & implementation 1.0304
25 Technological advancement 0.8298
9 Safety management 1.0242
26 Training 0.8000
10 Contract management 1.0115
27 Corporate culture 0.7889
11 Infrastructure & strategies 0.9926
28 Consumer satisfaction to tech. 0.7791
12 Use of human resource 0.9867
29 Land acquisition strategy & impl. 0.7559
13 Localization 0.9680
Research & Development (R&D) 0.9680 30 Staff satisfaction 0.7402
14
Spending on charity 0.9643 31 Risk management 0.7333
15
16 Quality management 0.9345 32 Organizational development 0.7048

17 Urban economy 0.9157 33 Market coverage 0.6941

Table 5.3 lists Company A‘s score for each competitive attribute (the ‗third‘ level).

The five highest scores were: ‗average debt rate‘ (1.600), ‗the growth rate of property

sales price‘ (1.5561), ‗the number of patents owned by the company‘ (1.5000),

‗annual growth rate of share‘ (1.5000), and ‗capabilities of negotiating contract sum‘

(1.4500). Company A scored low in a number of attributes, including: ‗the variation

between actual sales and prediction‘ (0.4822), ‗land market coverage at the

international level‘ (0.4375), ‗land market coverage in other provinces‘‘ (0.4000),

107
‗acceptance of the job-related security system‘ (0.3750) and ‗acceptance of job

authorisation and profit sharing system‘ (0.3750).

Table ‎5-3 Summary of scores of competitiveness attributes (the ‘third’ level) for

Company A

Rank Competitive Attributes Score Rank Competitive Attributes Score

1 Average debt rate 1.6000 142 Job promotion system 0.6800
2 Growth rate of sales prices 1.5561 143 Rental/sales of commercial bldg (local) 0.6735
3 No. of patents 1.5000 144 Staff satisfaction with the promotion system 0.6578
4 Annual growth rate of share price 1.5000 145 No. of patent in application 0.6500
5 Contract pricing strategy 1.4500 146 Total amount of land bank 0.6364
6 Annual growth rate of profit tax 1.4000 147 Staff satisfaction with the salary/payment system 0.6307
7 Number of awards by government 1.3750 148 Staff satisfaction with the job authorization 0.6109
8 Annual growth rate of profit tax 1.3538 149 Staff satisfaction with the job security 0.6035
Complaints/punishment on environmental aspects Coverage of local industrial property dev.
9 1.3460 150 market
0.6000
10 Ratio of the prof. quail. in the middle/senior mgt 1.3429 151 Rental/sales of local hotel property 0.5769
11 ROI 1.3235 152 Coverage of land market (local) 0.5750
12 Record of disputes amongst staff 1.3214 153 Spending on R&D from profit 0.5556
13 Local coverage of property development 1.3187 154 Coverage of local hotel property dev. market 0.5385
14 Project completion on budget 1.3143 155 Coverage of land market (national) 0.5000
15 No. of awards from industry 1.2954 156 Rental/sales of local industrial property 0.5000
16 Stability of local government policy 1.2500 157 Sales variations (actual/estimate) 0.4822
17 A stable population growth 1.2308 158 Coverage of land market (international) 0.4375
18 Securities price growth rate 1.2250 159 Coverage of land market (province) 0.4000
19 Loan received for construction projects 1.2143 160 Recognition of the job security system 0.3750
Durations of accident cases handling Recognition of the job authorization and profit
20 1.1833 161 sharing system
0.3750

5.1.2 Managerial competency

The performance of Company A in various competitive criteria relating to

management competency are graphically represented in Figure 5.2 and listed in Table

5.4. The results suggest that Company A is strong in ‗cost management‘ (Company A

score: 0.0725; reasonable score: 0.0651; maximum score: 0.0988), ‗environmental

108
management‘ (Company A score: 0.0585; reasonable score: 0.0510; maximum score:

0.0705), ‗time management‘ (Company A score: 0.0788; reasonable score: 0.0750;

maximum score: 0.0847) and ‗safety management‘ (Company A score: 0.0649;

reasonable score: 0.0634; maximum score: 0.0804). For these four criteria Company

A exceeded its expected/reasonable score, which suggests that these four aspects are

true strengths of the company. The results also show that improvement is needed in

‗strategic management‘ (Company A score: 0.0824; reasonable score: 0.0932;

maximum score: 0.0974), ‗collaboration‘ (Company A score: 0.0717; reasonable

score: 0.0812; maximum score: 0.0945) and ‗quality management‘ (Company A

score: 0.0764; reasonable score: 0.0818; maximum score: 0.0938).

Tables 5.4 and 5.5 tabulate the scores of Company A‘ for each of the competitive

criteria and attributes under the management competency factor. The top five scores

of Company A in the competitive attributes were ‗contract pricing strategy‘ (1.4500),

‗complaints/punishment on environmental aspects‘ (1.3460), ‗project completion on

budget‘ (1.3143), ‗durations of accident cases handling‘ (1.1833), and ‗construction

cost reduction strategy‘ (1.0809). Company A scored low in a number of attributes

including ‗environmental protection system‘ (0.8571), ‗corporate strategic objectives

and expansion‘ (0.8571), ‗negotiation with design teams‘ (0.8282), ‗quality

management approach and system‘ (0.8000) and ‗risk management approach and

system‘ (0.7333).

109
 0.10
0.0974

0.09
0.0932
0.08

0.0824
0.09450.0812 0.07 0.0847

0.06
0.0750 0.0788
0.0717 0.05

0.04

0.03
0.0988
0.02
0.0839
0.0575 0.0725
0.0568
0.01 0.0651

0.00

0.0649 0.0634
0.0764 0.0818

0.0510
0.0938
0.0804
0.0565 0.0642

0.0705

0.0875
Product innovation

Figure ‎5-2 Radar diagram representing the competitive attributes scores of

Company A in management competency factors

110
Table ‎5-4 Summary‎of‎scores‎of‎competitiveness‎criteria‎(the‎‘second’‎level)‎and‎

attributes‎(the‎‘third’‎level)‎for‎management‎competency‎factors
Rank Attributes Score
1 Contract pricing strategy 1.4500
2 Complaints/punishment on environmental aspects 1.3460
3 Project completion on budget 1.3143
4 Durations of accident cases handling 1.1833
5 Construction cost reduction strategy 1.0809
6 Project completion on time 1.0514
Criteria Score
7 Control of quality 1.0177

Cost management 1.1143 8 Quality assurance/ control plan 1.0000

9 Effectiveness of purchasing strategy 0.9524
Environmental 1.1071
management 10 Negotiation skills with sub-contractors 0.9375
Time management 1.0514 11 Corporate concept and vision 0.9351
12 Number of accidents 0.9330
Safety 1.0242
management 13 Contract management system 0.9330
Contract 1.0115 14 Quality rewarding system 0.9167
management
15 Property management system 0.8666
Quality 0.9345 16 Contract negotiation power 0.8640
management
17 Environmental protection system 0.8571
Strategic 0.8842
management 18 Corporate strategic objectives and expansion 0.8571
Collaboration 0.8825 19 Negotiation with design teams 0.8282
20 Quality management approach and system 0.8000
Risk management 0.7333
21 Risk management approach and system 0.7333

111
Table ‎5-5 Details of scores of the best and worst five competitive attributes under

the management competency factor

Best-performing Attributes

Contract pricing strategy Largely Decline Slightly Decline Steady Slightly Increase Slightly Increase Score

A（COMPANY A Score） 15.0% 15.0% 30.0% 25.0% 15.0% 2.9000

B（Reasonable Score） 0.0% 0.0% 0.0% 100.0% 0.0% 2.0000

Complaints/punishment on None 1-3 4-6 7-9 10 or more
environmental aspects

A（COMPANY A Score） 73.3% 24.4% 2.2% 0.0% 0.0% 4.7111

B（Reasonable Score） 25.0% 41.7% 8.3% 8.3% 16.7% 3.5000
Project completion on budget <1％ 1-25％ 25-50％ 50-75％ >75％

率
A（COMPANY A Score） 0.0% 5.0% 0.0% 25.0% 70.0% 4.6000
B（Reasonable Score） 0.0% 25.0% 25.0% 25.0% 25.0% 3.5000
Durations of accidents handling <1 day 1day 2-4 days 5-7 days >7 days
A（COMPANY A Score） 40.0% 0.0% 45.0% 5.0% 10.0% 3.5500
B（Reasonable Score） 0.0% 50.0% 0.0% 50.0% 0.0% 3.0000

Project completion on time <1％ 1-25％ 25-50％ 50-75％ >75％

A（COMPANY A Score） 5.9% 64.7% 5.9% 23.5% 0.0% 2.4706

B（Reasonable Score） 0.0% 71.4% 28.6% 0.0% 0.0% 2.2857

Worst-performing Attributes

Environmental protection system None Not Obvious Fair Obvious V. Obvious Score

A（COMPANY A Score） 0.0% 28.6% 21.4% 50.0% 0.0% 3.2143

B（Reasonable Score） 0.0% 0.0% 50.0% 25.0% 25.0% 3.7500
Corporate strategic objectives V. inefficient Inefficient Fair Efficient V. efficient
and expansion

A（COMPANY A Score） 0.0% 0.0% 11.1% 77.8% 11.1% 4.0000

B（Reasonable Score） 0.0% 0.0% 0.0% 33.3% 66.7% 4.6667
Negotiation with design teams V. bad Bad Fair Good V. good

A（COMPANY A Score） 4.3% 8.7% 26.1% 56.5% 4.3% 3.4783

B（Reasonable Score） 0.0% 0.0% 20.0% 40.0% 40.0% 4.2000
Quality mgt approach/system V. inefficient Inefficient Fair Efficient V. efficient

A（COMPANY A Score） 0.0% 0.0% 0.0% 100.0% 0.0% 4.0000

B（Reasonable Score） 0.0% 0.0% 0.0% 0.0% 100.0% 5.0000
Risk mgt approach and system V. inefficient Inefficient Fair Efficient V. efficient

A（COMPANY A Score） 0.0% 0.0% 33.3% 66.7% 0.0% 3.6667

B（Reasonable Score） 0.0% 0.0% 0.0% 0.0% 100.0% 5.0000

112
5.1.3 Organisational Competency

Figure 5.3 graphically represents the competitive performance of Company A in the

‗organizing competencies‘ factor. The results show that Company A is strong in the

‗use of human resources‘ (Company A score: 0.1336; reasonable score: 0.1354;

maximum score: 0.1648) but weak in ‗staff satisfaction‘ (Company A score: 0.1166;

reasonable score: 0.1576; maximum score: 0.1662) and ‗organisational development‘

(Company A score: 0.1161; reasonable score: 0.1647; maximum score: 0.1771).

Tables 5.6 and 5.7 tabulate the scores of Company A in each of the competitive

attributes under the ‗organizing competency‘ factor. The results suggest that

Company A has a good proportion of professional qualifications in the middle and

senior management levels (1.3429), a low incidence of disputes amongst staff

(1.3214), a high ratio of the technicians-to-staff (1.1000), and a high percentage of

staff with a university education (1.1000) and a sound growth rate of GDP per annum

(1.0588). However, Company A scored low in a number of attributes including: ‗staff

satisfaction with job authorisation‘, ‗profit sharing‘ (0.6109), ‗staff satisfaction with

job security‘ (0.6035), ‗spending on human resources‘ (0.5556), ‗acceptance of the

job security plan‘ (0.3750) and ‗acceptance of the job authorisation and profit sharing

system‘ (0.3750).

113
 Organisational
development
0.18
0.1771
0.16
0.1647
0.14

0.12

0.10

0.1161
0.08

0.06

0.04

Staff
0.1576 0.02

satisfaction Training
0.1166 0.00
0.1018
0.1662 0.1272
0.1497

0.1336

0.1354
0.1648
Maxi. Score
Use of human resources
Reasonable score

Company A

Figure ‎5-3 Radar diagram representing the competitive attributes score of

Company A in the organizational competency factor

114
 Table 5.6 Summary of scores of competitiveness attributes (the ‘third’ level)
Rank Attributes Score
Ratio of the professional qualification in the
1 middle and senior management
1.3429

2 Record of dispute amongst staff 1.3214

3 Ratio of the technicans-to-staff 1.1000

4 Percentage of staff with university education 1.1000

5 Growth rate of GDP per annum 1.0588

Criteria Score 6 Turnover of staff 0.9864
Ratio of the senior management from lower
7 lever of the same company 0.9800

8 Recruitment system 0.9750

Use of Human 0.9867 9 Dispute resolution system 0.9333
Resource
10 Corporate concept and vision 0.8874

11 Growth rate of salary increase 0.8800

Training 0.8000
12 Corporate strategy 0.8771

13 Growth rate of average profit per annum 0.8666

14 Collaboration in the corporate 0.8444

0.7402
Staff satisfaction
15 Training system and resources 0.8250

16 Organisational structure 0.8200

Organisational 0.7048 17 Working environment 0.8153
development Staff satisfaction at cultural activities by
18 corporate
0.8101

Rank Attributes Score

19 Staff satisfaction at information sharing 0.8015

20 Recognition of the channel of information sharing 0.7901

21 Recognition of the compensation system 0.7901

22 Staff satisfaction at compensation system 0.7838

23 HR development strategy and management system 0.7789

Criteria Score 24 Variations between training to new and old staff 0.7778

25 Staff satisfaction at training system 0.7698

26 Recognition of the award system 0.7556

Use of Human
Resource 1.0078 27 Staff satisfaction at the compensation system 0.7293

28 Recognition of the salary/payment system 0.7200

Training 29 Recognition of the promotion system 0.6800

0.8000
30 Staff satisfaction at the promotion system 0.6578

31 Staff satisfaction at the salary/payment system 0.6307

Staff Staff satisfaction with job athorisation
32 0.6109
satisfaction 0.7402
33 Staff satisfaction with job security 0.6035

34 Proportion of spending on HR to other costs 0.5556

Organisational
development 0.7048 35 Recognition of the job security system 0.3750

36 Recognition of the job authorisation and profit 0.3750

sharing system

115
 Table ‎5-6 Details of scores of the best and worst five competitive attributes

under the organizational competency factor

Best-performing Attributes

Ratio of the professional qualification <20％ 20-30％ 30-50％ 50-70％ >70％ Score
in the middle and senior management

A（COMPANY A Score） 0.0% 0.0% 0.0% 30.0% 70.0% 4.7000

B（Reasonable Score） 0.0% 0.0% 50.0% 50.0% 0.0% 3.5000

Record of dispute amongst staff None 1-5 6-10 11-20 21 or more

A（COMPANY A Score） 62.5% 37.5% 0.0% 0.0% 0.0% 4.6250

B（Reasonable Score） 0.0% 50.0% 50.0% 0.0% 0.0% 3.5000

Ratio of the technicians-to-staff <10% 10-25% 25-50% 50-75% >75%

A（COMPANY A Score） 0.0% 0.0% 10.0% 40.0% 50.0% 4.4000

B（Reasonable Score） 0.0% 0.0% 0.0% 100.0% 0.0% 4.0000

Percentage of staff with university <20％ 20-30％ 30-50％ 50-70％ >70％
education
A（COMPANY A Score） 0.0% 20.0% 0.0% 0.0% 80.0% 4.4000

B（Reasonable Score） 0.0% 0.0% 0.0% 100.0% 0.0% 4.0000

Growth rate of GDP per annum Rapidly De. Decline Steady Increase Rapidly Inc.

A（COMPANY A Score） 0.0% 0.0% 20.0% 10.0% 70.0% 4.5000

B（Reasonable Score） 0.0% 0.0% 0.0% 75.0% 25.0% 4.2500

116
 Worst-performing Attributes
Staff satisfaction with job athorisation V. Dissat Dissat Fair Satisfy V. Satisfy Score

A（COMPANY A Score） 4.3% 22.9% 41.5% 26.0% 5.4% 3.0543

B（Reasonable Score） 0.0% 0.0% 0.0% 0.0% 100.0% 5.0000

Staff satisfaction with job security V. Dissat Dissat. Fair Satisfy V. Satisfy

A（COMPANY A Score） 5.4% 22.2% 43.2% 24.1% 5.1% 3.0117

B（Reasonable Score） 0.0% 0.0% 0.0% 0.0% 100.0% 5.0000

Proportion of spending on HR to other <10% 10-25% 25-50% 50-75% >75%

costs

A（COMPANY A Score） 16.7% 33.3% 33.3% 16.7% 0.0% 2.5000

B（Reasonable Score） 0.0% 0.0% 0.0% 50.0% 50.0% 4.5000

Recognition of the job security system V. Unreas. Unreasonable Fair Reasonable V. Reason.

A（COMPANY A Score） 44.4% 22.2% 33.3% 0.0% 0.0% 1.8889

B（Reasonable Score） 0.0% 0.0% 0.0% 0.0% 100.0% 5.0000

job authorization and profit sharing V. Unreas. Unreasonable Fair Reasonable V. Reason.
system
A（COMPANY A Score） 50.0% 12.5% 37.5% 0.0% 0.0% 1.8750

B（Reasonable Score） 0.0% 0.0% 0.0% 0.0% 100.0% 5.0000

The scores of each attribute under the competitive criterion, ‗staff satisfaction‘ are

listed in Table 5.8. The attributes with the highest scores were ‗corporate vision and

mission‘, ‗corporate strategic objectives‘, ‗corporate development and expansion

strategies‘, and ‗working atmosphere‘. However, there was dissatisfaction amongst

staff with various corporate systems including: ‗salary system‘, ‗job authorisation and

profit sharing system‘ and ‗job-security system‘. In addition, the survey showed that

there is higher staff satisfaction in northern China branches such as Changchun than

the southern branches such as Shenzhen (Table. 5.9). Similarly, junior staffs (less

than 3 years in CS) are generally more satisfied than more senior staff (more than 11

years in CS).

117
In order to understand why staff satisfaction in Changchun is much higher than the

southern branches such as Shenzhen, interviews of 9 branch managers were

conducted. Main reasons are summarised as follows. First, the land slots for

developing real estate projects in Chanchun were obtained at relatively low prices,

thus the branch has a more relaxed cash flow to improve working environment and

staff benefits. The Staff working in the Shenzhen branch, however, could not enjoy

this as their real estate projects were based on relative higher land prices. Second,

Chanchun is a city without a big flow of migrants. Unlike Shenzhen where most

residents are from different parts of the country, Chanchun has a steady population

who share the same background and habitat. Because of this, staffs working in the

Chanchun branch tend to get on well with each other, whereas people working in the

Shenzhen office, because of their diversified backgrounds and dialects, tend to

generate more misunderstandings and conflicts.

118
 Table ‎5-7 Summary‎of‎the‎score‎of‎the‎attributes‎under‎the‎‘staff‎satisfaction’‎

criteria
Attributes ％ V. Dissat Dissat. Fair Satisfy V. Satisfy Score

Corporate vision and mission 0.4 1.5 15.6 48.7 33.8 4.1413
满意
Corporate stragetic objectives 1.1 1.1 15.7 51.5 30.6 4.0933
Working atmosphere 1.1 4.1 18.4 59.2 17.2 3.8727
Activities for appraising staff 1.5 5.2 27.9 44.6 20.8 3.7807
Staff information sharing/ communications 0.4 9.4 34.1 41.6 14.6 3.6067
Training for staff 1.5 10.6 36.6 42.6 8.7 3.4642
Compensation/ insurance for staff 1.5 3.8 44.6 40.4 9.6 3.5269
Promotion system 4.2 14.4 36.9 37.3 7.2 3.2890
Awarding system for staff 3.4 17.7 35.3 34.6 9.0 3.2820
Salary system 4.9 19.5 34.8 37.1 3.7 3.1536
Job authorization and profit sharing system 4.3 22.9 41.5 26.0 5.4 3.0543

Job-security system 5.4 22.2 43.2 24.1 5.1 3.0177

5.1.4 Technological Capabilities

Figure 5.4 graphically depicts the competitive performance of Company A in the

technological capabilities factor. As itemised in Table 5.10, the results indicate strong

performance in ‗research and development (R&D)‘ (Company A score: 0.1001;

reasonable score: 0.1034; maximum score: 0.1381) but a low score in ‗consumer

satisfaction with the technological capabilities‘ (Company A score: 0.0984;

reasonable score: 0.1263; maximum score: 0.1370).

119
 Table ‎5-8 A comparison of staff satisfaction in different office

branches and age

Office Branches Corporate vision and mission
Strongly Dis Disagree Fair Agree Strongly Ag.
Head Office 3.2% 16.1% 45.2% 35.5%
Shenzhen 4.9% 26.8% 61.0% 7.3%
Guangzhou 19.4% 45.2% 35.5%
Shanghai 17.2% 51.7% 31.0%
Ningbo 7.1% 78.6% 14.3%
Beijing 21.4% 64.3% 14.3%
Changchun 1.9% 20.4% 77.8%
Chengdu 2.4% 19.5% 56.1% 22.0%
Total 0.4% 1.5% 15.6% 48.7% 33.8%

Working Corporate vision and mission

experience
V. dissat Dissat. Fair Satisfy V, Satisfy
Less than 3 yrs 0.7% 2.1% 11.2% 47.6% 38.5%
3-5 yrs 1.1% 18.4% 48.3% 32.2%
6-10 yrs 23.5% 55.9% 20.6%
11-15 yrs 40.0% 40.0% 20.0%
Total 0.4% 1.5% 15.6% 48.7% 33.8%

Company Branches Staff satisfaction over the job authorization and profit sharing
V. dissat Dissat. Fair Satisfy V, Satisfy
Head Office 24.1% 55.2% 20.7%
Shenzhen 22.5% 50.0% 22.5% 5.0%
Guangzhou 3.2% 3.2% 58.1% 25.8% 9.7%
Shanghai 7.1% 32.1% 35.7% 21.4% 3.6%
Ningbo 23.1% 46.2% 30.8%
Beijing 21.4% 60.7% 3.6% 14.3%
Changchun 8.0% 32.0% 50.0% 10.0%
Chengdu 5.3% 18.4% 50.0% 26.3%
Total 5.4% 22.2% 43.2% 24.1% 5.1%

Working Staff satisfaction over the job authorization and profit sharing
experience V. dissat Dissat. Fair Satisfy V, Satisfy
Less than 3 yrs 5.8% 15.9% 43.5% 27.5% 7.2%
3-5 yrs 6.0% 21.7% 45.8% 22.9% 3.6%
6-10 yrs 3.2% 48.4% 35.5% 12.9% 0%
11-15 yrs 0% 40.0% 40.0% 20.0% 0%
Total 5.4% 22.2% 43.2% 24.1% 5.1%

120
 Staff satisfaction
Office Branch Job authorization and profit sharing system
V. dissat. Dissat. Fair Satisfy V. Satisfy
Head Office 32.1% 46.4% 14.3% 7.1%
Shenzhen 17.9% 51.3% 23.1% 7.7%
Guangzhou 3.3% 13.3% 50.0% 26.7% 6.7%
Shanghai 7.1% 28.6% 35.7% 25.0% 3.6%
Ningbo 23.1% 76.9%
Beijing 21.4% 57.1% 14.3% 7.1%
Changchun 5.8% 26.9% 53.8% 13.5%
Cheungdu 2.5% 15.0% 50.0% 32.5%
Total 4.3% 22.9% 41.5% 26.0% 5.4%

Working Job authorization and profit sharing system

experience V. dissat Dissat. Fair Satisfy V. satisfy
Less than 3 yrs 3.6% 21.0% 36.2% 32.6% 6.5%
3-5 yrs 7.1% 19.0% 48.8% 19.0% 6.0%
6-10 yrs 0% 38.7% 48.4% 12.9% 0%
11-15 yrs 0% 40.0% 20.0% 40.0% 0%
Total 4.3% 22.9% 41.5% 26.0% 5.4%

Table 5.10 lists the score of Company A for each of the competitive attributes under

each technological capabilities criterion. Table 5.11 shows that Company A scored

high on a number of attributes, including: ‗the number of patents owned by the

corporate‘ (1.500), ‗diversification of R&D area and project‘ (1.1414),

‗diversification of products‘ (1.0946), ‗effective use of construction site‘ (0.9921) and

‗spending on IT from corporate profit‘ (0.9394). Company A had low scores in the

following attributes: ‗consumer satisfaction with the building design‘ (0.7715),

‗consumer satisfaction with the building quality‘ (0.7590), ‗spending on R&D from

corporate profit‘ (0.7273), ‗quality of building exceed the expectation of consumers‘

(0.6956) and ‗the number of patent in application‘ (0.6500).

121
 IT technology
0.1

4
0.1
0.1068
2
0.1

0 0.0787
0.0

0.1370 8
0.0
Consumer satisfaction 0.0682
6 Technological
to technology 0.0

4 0.1186 advancement
0.1263 0.0984 0.0
0.0553
2
0.0
0.0458
0

Maxi. score

Reasonable score
0.1001
0.1068
0.1034 Company A
0.1180
0.1294 0.1381
Construction technology
R&D

Figure ‎5-4 Radar diagram representing the competitive attributes score of

Company A in the technological capabilities factor

122
Table ‎5-9 Summary‎of‎scores‎of‎competitiveness‎criteria‎(the‎‘second’‎level)‎and‎

attributes‎(the‎‘third’‎level)‎under‎the‎technological‎capabilities‎factor

No. Attributes Score

1 No. of patents 1.5000
2 Diversification of R&D area & pro. 1.1414
3 Diversification of products 1.0946
4 Effective use of construction site 0.9921
5 Spending on IT from profit 0.9394

Criteria Score 6 Effective use of materials 0.9091

7 Application of IT technology 0.8864
8 Productivity of the construction fac. 0.8778
R&D 0.9680 9 Consumer satisfaction (CS) w/ landscaping 0.8680
10 QA of the products 0.8666
11 Existence of R&D staff/ department 0.8393
Construction 0.9053
12 CS with building design 0.8134
technology
13 Application of new tech. in corporate 0.8056
14 Application of new software 0.7955
IT application 0.8661
15 CS with surrounding facilities 0.7887
16 CS with recreational facilities 0.7829

Technological 0.8298 17 CS with interior design 0.7715

advancement
18 CS with quality 0.7591

Consumer satisfaction 19 Spending on R&D from profit 0.7273

at technology 0.7791 20 Quality over consumer expectation 0.6956
21 No of patents in application 0.6500

123
 Table ‎5-10 Details of scores of the best and worst five competitive

attributes under the technological capabilities factor

Best-performing Attributes

No. of patents None 1-2 items 3-4 items 5-6items 7 items or > Core

A（COMPANY A 87.5% 0.0% 0.0% 0.0% 12.5% 1.5000

B（Reasonable Score） 100.0% 0.0% 0.0% 0.0% 0.0% 1.0000

Score）
Diversity of market None Small amount/ Multi-types/
research Uncertain Certain

A（COMPANY A 0.0% 15.4% 84.6% 4.6923

B（Reasonable Score） 0.0% 44.4% 55.6% 4.1111
Score）
Diversification of products None Small amount/ Multi-types/
Uncertain Certain
A（COMPANY A 0.0% 0.0% 25.0% 0.0% 75.0% 4.5000

B（Reasonable Score） 0.0% 0.0% 44.4% 0.0% 55.6% 4.1111

Score）
Effective use of const. site V. poor Poor Fair Good V. good

A（COMPANY A 0.0% 0.0% 8.3% 66.7% 25.0% 4.1667

B（Reasonable Score） 0.0% 0.0% 20.0% 40.0% 40.0% 4.2000

Score）
Spending on IT from profit 0 <3% 3-5% 5-10% >10%

A（COMPANY A 0.0% 45.5% 27.3% 27.3% 0.0% 2.8182

B（Reasonable Score） 0.0% 50.0% 0.0% 50.0% 0.0% 3.0000

Score）

Worst-performing Attributes
Consumer satisfaction to V. dissat Dissat. Fair Satisfy V. satisfy Score
interior design of bldg
A（COMPANY A 2.1% 8.3% 26.9% 49.1% 13.6%

B（Reasonable Score） 0.0% 0.0% 0.0% 28.6% 71.4%

Score）
Consumer satis. to quality V. dissat Dissat. Fair Satisfy V. satisfy

A（COMPANY A 3.7% 8.5% 22.3% 50.5% 14.9% 3.6436

B（Reasonable Score） 0.0% 0.0% 0.0% 20.0% 80.0% 4.8000

Score）
Spending on R&D from profit 无 <3% 3-5% 5-10% >10%

A（COMPANY A 28.6% 57.1% 0.0% 14.3% 0.0% 2.0000

B（Reasonable Score） 0.0% 25.0% 75.0% 0.0% 0.0% 2.7500

Score）
Quality > consumer exp. L. under S. under Same Slightly over Largely over

A（COMPANY A 7.4% under 68.3% 24.3% 3.3388

B（Reasonable Score） 0.0% 0.0% 0.0% 20.0% 80.0% 4.8000

Score）
No.of patents under application None 1-2 3-4 5-6 7 or more

A（COMPANY A 75.0% 12.5% 0.0% 0.0% 12.5% 1.6250

B（Reasonable Score） 25.0% 50.0% 0.0% 0.0% 25.0% 2.5000

Score）

124
5.1.5 Consumer Satisfaction

The scores for each attribute under the competitive criteria ‗consumer satisfaction‘

are listed in Table 5.12. The attributes with the highest three scores relate to the

existence of landscaping on the property, architectural design, and property price. The

survey also shows that there is dissatisfaction amongst consumers with ‗the leisure

facilities of the property‘, ‗recreational facilities of the property‘ and ‗the handling of

consumer complaints by the company‘

Table ‎5-11 Summary‎of‎the‎scores‎of‎the‎attributes‎under‎the‎‘customer‎

satisfaction’‎criteria

Factor ％ v. dissat. Dissat Fair Satisfy V. Satis. Score

Landscaping environment 3.7 4.8 15.5 42.9 33.1 3.9680

满意 满意 满意
Building design 3.5 2.7 20.1 51.6 22.2 3.8636

Sales price of the property 4.5 3.5 26.7 50.9 14.4 3.6720

Services of sales person 3.8 3.8 30.6 47.7 14.2 3.6488

Quality of property 3.7 8.5 22.3 50.5 14.9 3.6436

Inner design of the property 2.1 8.3 26.9 49.1 13.6 3.6373

Surrounding environment 2.7 6.0 33.9 42.0 15.4 3.6152

Supporting facilities 4.3 12.1 35.3 34.0 14.3 3.4178

Recreational facilities 4.6 11.6 36.8 34.1 12.9 3.3925

Handling of complains 4.1 17.4 42.0 27.9 8.7 3.1963

125
5.1.6 Financial Competency

Figure 5.5 graphically represents the competitive performance of Company A in the

‗financial competency‘ factor. As summarised in Table 5.13, Company A performs

acceptably in ‗financing capabilities‘ (Company A score: 0.3265; reasonable score:

0.3567; maximum score: 0.4253) and the ‗capability of capital growth‘ (Company A

score: 0.3149; reasonable score: 0.2652; maximum score: 0.3718). This means the

company A has high level of capital growth, which might be explained by the good

operation performance of sale as China real estate market increasing dramatically

0.4253
0.450
0.3718
0
0.400 0.3567
0.3265
0
0.350 0.3149

0
0.2652
0.300

0
0.250

0
0.200
Maxi. score
0
0.150
Reasonable score
0
0.100
Company A
0
0.050

0
0.000
Financing Capital Growth
0 Capabilities

Figure ‎5-5 Comparison of competitive attribute scores of Company A in the

Figure 5.5 ‘financial‎competency’‎factor

Table 5.13 further tabulates the score of Company A in each of the competitive

attributes under the ‗financial competency‘ factor. Company A scored well in

‗average debt rate‘ (1.6), ‗annual growth rate of the share price‘ (1.5), ‗annual growth

126
rate of profit tax‘ (1.4), ‗annual growth rate of capital asset‘ (1.3538) and ‗average

ROI‘ (1.3235). However, it also scored low on a number of attributes: including:

‗level of understanding of the financial system‘ (0.9167), ‗average asset return rate‘

(0.8750), ‗sources and channels of corporate financing‘ (0.8571), ‗acquisition of land

loan‘ (0.8400) and ‗the total number of financing institutes‘ (0.7857).

Table ‎5-12 Summary‎of‎scores‎of‎competitiveness‎criteria‎(the‎‘second’‎

level)‎and‎attributes‎(the‎‘third’‎level)‎under‎the‎‘financial‎competency’‎

factor
No. Attributes Score
1 Average debt rate 1.6000
2 Annual growth rate of share prices 1.5000
3 Annual growth rate of profit tax 1.4000
4 Capital growth rate 1.3538
5 ROI 1.3235
6 Securities price growth rate 1.2250
7 Loan received for construction pr. 1.2143
8 Cash flow (average) 1.1250
9 Net capital profit 1.1000
10 Profit growth rate (average) 1.0526
11 Creditability offered by banks 1.0000
Criteria Score 12 Bad debt (average) 1.0000
13 Understanding of financial system 0.9167

Capital growth 1.1873 14 Capital gain rate 0.8750

15 Channels of corporate financing 0.8571

Financing 0.9153
16 Loan for land acquisition 0.8400

capabilities 17 0.7857

127
Table ‎5-13 Details of scores of the best and worst five competitive attributes under the

financial competency factor

Best-performing Attributes

Average debt rate <15% 15-30% 30-50% 50-70% >70% Score

A（COMPANY A Score） 0.0% 30.0% 60.0% 10.0% 0.0% 3.2000

B（Reasonable Score） 0.0% 0.0% 25.0% 50.0% 25.0% 2.0000

Share price growth rate <10％ 10-20％ 20-30％ 30-50％ >50％

A（COMPANY A Score） 30.0% 10.0% 10.0% 30.0% 20.0% 3.0000

B（Reasonable Score） 0.0% 100.0% 0.0% 0.0% 0.0% 2.0000

Profit growth rate Steady <5% 5-10% 10-15% >15%

A（COMPANY A Score） 0.0% 0.0% 0.0% 10.0% 90.0% 4.9000

B（Reasonable Score） 0.0% 0.0% 50.0% 50.0% 0.0% 3.5000

Capital growth rate Steady <10％ 10-20％ 20-30％ >30%

A（COMPANY A Score） 0.0% 0.0% 20.0% 20.0% 60.0% 4.4000

B（Reasonable Score） 0.0% 0.0% 75.0% 25.0% 0.0% 3.2500

ROI Steady <10％ 10-20％ 20-30％ >30%

A（COMPANY A Score） 0.0% 0.0% 0.0% 50.0% 50.0% 4.5000

B（Reasonable Score） 0.0% 0.0% 60.0% 40.0% 0% 3.4000

Worst-performing Attributes

Understanding of financial sys None Slightly Fair Largely All Score

A（COMPANY A Score） 0.0% 0.0% 0.0% 41.7% 58.3% 4.5833

B（Reasonable Score） 0.0% 0.0% 0.0% 0.0% 100.0% 5.0000

Aver. capital gain rate Steady <10％ 10-20％ 20-30％ >30%

A（COMPANY A Score） 0.0% 10.0% 50.0% 20.0% 20.0% 3.5000

B（Reasonable Score） 0.0% 0.0% 50.0% 0.0% 50.0% 4.0000

Channels of corporate financing None 1 2-3 4-5 6 or more

A（COMPANY A Score） 9.1% 27.3% 36.4% 9.1% 18.2% 3.0000

B（Reasonable Score） 0.0% 0.0% 50.0% 50.0% 0.0% 3.5000

Loan for land acquisition V. low Low Fair High V. high

A（COMPANY A Score） 0.0% 0.0% 0.0% 80.0% 20.0% 4.2000

B（Reasonable Score） 0.0% 0.0% 0.0% 0.0% 100.0% 5.0000

No. of financing institute None 1-3 4-6 7-9 10 or more

A（COMPANY A Score） 16.7% 25.0% 33.3% 16.7% 8.3% 2.7500

B（Reasonable Score） 0.0% 0.0% 50.0% 50.0% 0.0% 3.5000

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5.1.7 Market Share

The competitive performance of Company A in the ‗market share‘ factor is

graphically represented in Figure 5.6. As listed in Table 5.15, Company A had high

scores in a number of competitive criteria including: ‗consumer satisfaction with the

property sales‘ (Company A score: 0.1108; reasonable score: 0.0762; maximum score:

0.1535) and ‗property sales strategy and implementation‘ (Company A score: 0.1266;

reasonable score: 0.1228; maximum score: 0.1680).

Localisation

0.1511

0.1352

Consumer satisfaction
with the property sales 0.1309

0.1535 Market coverage

0.1474
0.0824
0.1108 0.0572
0.0762

Maxi. score

0.1171 Reasonable score

0.1228

0.1550 Company A
0.1680 0.1266
0.1716
Sales strategy & Land acquisition
implementation strategy &
implementation

Figure ‎5-6 Radar diagram representing the competitive attributes score of

Company‎A‎in‎the‎‘market‎share’‎factor

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However, Company A performed poorly in ‗market coverage‘ (Company A score:

0.0572; reasonable score: 0.0824; maximum score: 0.1474) as well as ‗land

acquisition strategy and implementation‘ (Company A score: 0.1171; reasonable

score: 0.1550; maximum score: 0.1716).

Tables 5.15 and 5.16 tabulate the score of Company A in each of the competitive

criteria and attributes under the ‗market share‘ factor. This shows that Company A

performs well in ‗growth rate of sales price of the property in similar type‘ (1.5561),

‗coverage of property development market in the region‘ (1.3187), ‗gross area of the

property in sales compared to others in the region‘ (1.1786), ‗total amount of sales

compared to others in the region (1.1786) and ‗the average property sales rate‘

(1.1493). Despite this, Company A has room for improvement in a number of

competitive attributes, including: land market coverage at the national level (0.5000),

market coverage of the rental and sale of industrial buildings at the regional level

(0.5000), variations between sales estimates and actual sales volume (0.4822), land

market coverage at the international level (0.4375), and land market coverage in other

provinces (0.4000).

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 Table ‎5-14 Summary‎of‎scores‎of‎competitiveness‎criteria‎(the‎‘second’‎

level)‎and‎attributes‎(the‎‘third’‎level)‎under‎the‎‘market‎share’‎factor
No. Attributes Score
1 Growth rate of sales price 1.5561
2 Local coverage of property develop‘t 1.3187
3 Gross area of the property sales 1.1786
4 Total amount of sales 1.1786
5 Average property sales rate 1.1493
6 Sales estimate 1.1072
7 Rental/sales of commercial bldgs. 1.0221
Criteria Score
8 Understanding of property markets 1.0000
9 Cope with the property markets trends 0.9890
Consumer satisfaction 1.4543
over sales 10 Consumer satisfaction to living env‘t 0.9860

Sales strategy & 11 Effectiveness of sales strategy 0.9578

1.0304
implementation 12 Price variations with similar property 0.9524
13 Rental/sales of residential bldgs. 0.9375
Localisation 0.9680
14 Consumer satisfaction to price 0.9180
15 Understanding of competitor 0.9162
Land acquisition strategy 0.7559
& implementation 16 Coverage of residential property m‘t 0.8791
17 Effectiveness of sales training 0.8766
Market coverage 0.6941
18 Bidding (success rate) 0.8572

No. Attributes Score

19 Coverage of commercial property m‘t 0.8571
20 Quality of land 0.8364
21 Consumer satisfaction to sales staff 0.7819
22 Effectiveness of land pricing strategy 0.7636
23 Coverage of office property m‘t 0.7041
24 Consumer s‘tion to complaint handling 0.6948

Criteria Score 25 Rental/sales of commercial bldgs. 0.6735

26 Total amount of land bank 0.6364
Consumer satisfaction 1.4543 27 Coverage of local industrial bldg m‘t 0.6000
over sales
28 Coverage of local hotel bldg m‘t 0.5769
Sales strategy & 1.0304
implementation 29 Coverage of local land m‘t 0.5750
30 Coverage of local hotel ppydevelop‘t 0.5385
Localisation 0.9680
31 Coverage of national land market 0.5000
32 Coverage of local industrial rental/ sales 0.5000
Land acquisition strategy 0.7559
& implementation 33 Sales variation (actual/estimate) 0.4822

Market coverage 34 Coverage of international land market 0.4375

0.6941
35 Coverage of land market (provinces) 0.4000

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 Table ‎5-15 Details of scores of the best and worst five competitive attributes

under‎the‎‘market‎share’‎factor
Best-performing Attributes

Growth rate of property sales price <1％ 1-10％ 10-20％ 20-30％ >30％ Score

A（COMPANY A Score） 0.0% 0.0% 0.0% 64.3% 35.7% 4.3571

B（Reasonable Score） 0.0% 40.0% 40.0% 20.0% 0.0% 2.8000

Coverage of property develop‘t <1％ 1-5％ 5-8％ 8-15％ >15％

A（COMPANY A Score） 30.8% 53.8% 15.4% 0.0% 0.0% 1.8462

B（Reasonable Score） 20.0% 40.0% 20.0% 20.0% 0.0% 2.4000

Gross area of the property sales <1％ 1-10％ 10-20％ 20-30％ >30％

A（COMPANY A Score） 14.3% 21.4% 21.4% 21.4% 21.4% 3.1429

B（Reasonable Score） 0.0% 33.3% 66.7% 0.0% 0.0% 2.6667

Total amount of sales <1％ 1-10％ 10-20％ 20-30％ >30％

A（COMPANY A Score） 14.3% 21.4% 21.4% 21.4% 21.4% 3.1429

B（Reasonable Score） 0.0% 33.3% 66.7% 0.0% 0.0% 2.6667

The average property sales rate V. slow Slow Fair Fast V. fast

A（COMPANY A Score） 0.0% 0.0% 7.1% 64.3% 28.6% 4.2143

B（Reasonable Score） 0.0% 0.0% 33.3% 66.7% 0.0% 3.6667

Worst-performing Attributes

Land coverage at national level <1％ 2-3％ 4-6％ 7-10％ >10％ Score

A（COMPANY A Score） 50.0% 33.3% 0.0% 0.0% 16.7% 2.0000

B（Reasonable Score） 0.0% 33.3% 0.0% 0.0% 66.7% 4.0000

Rental/sales of industrial bldgs. none <1％ 1-5％ 5-10％ >10％

A（COMPANY A Score） 100.0% 0.0% 0.0% 0.0% 0.0% 1.0000

B（Reasonable Score） 33.3% 33.3% 33.3% 0.0% 0.0% 2.0000

Variations (estimates& actual Largely>1 Slightly >1 Same Slightly <1 Largely <1
sales) volume
A（COMPANY A Score） 14.3% 35.7% 14.3% 28.6% 7.1% 1.9286
B（Reasonable Score） 0.0% 0.0% 33.3% 33.3% 33.3% 4.0000

Land coverage (international) None <0.5％ 0.5-1％ 1-1.5％ >1.5％

A（COMPANY A Score） 83.3% 16.7% 0.0% 0.0% 0.0% 1.1667

B（Reasonable Score） 33.3% 33.3% 0.0% 0.0% 33.3% 2.6667

Land coverage (provinces) <1％ 2-5％ 6-8％ 9-12％ >12％

A（COMPANY A Score） 50.0% 16.7% 16.7% 16.7% 0.0% 2.0000

B（Reasonable Score） 0.0% 0.0% 0.0% 0.0% 100.0% 5.0000

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 Table ‎5-16 Reasons‎for‎customer/owner’s‎decision‎to‎purchase‎from‎Company‎A

Standard of property management 18.3%

Brand name 16.5%
Existence of landscaping 11.6%
Reasonable price 11.6%
environment
The upsurge of property price 11.3%
Good transportation system 8.4%
Housing quality 5.9%
Housing design 5.6%
Ease to shops/markets 5.5%
Supporting facilities 2.5%
Advertisement 2.3%
Sales services 0.5%
Others 0.1%

This study found that customers/owners favour the products of Company A for a

number of reasons: the standard of property management (18.3%), the ‗brand name‘

of the company (16.5%) and the provision of landscaping and a ‗green‘ environment

(11.6%) (see Table 5.17). The results also show that customers/owners are satisfied

with the landscaping inside the property, the attractive architectural design and

reasonable property prices. However, consumer/owner satisfaction is generally lower

in northern regions such as Beijing and Changchun (see Table. 5.18).

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 Table ‎5-17 A comparison of customer/owner satisfaction in different regions
Customer/Owner Satisfaction

Customer/ owner satisfaction over the landscaping inside the property

Housing Type
V. dissatisfy Dissatisfy Fair Satisfy V. Satisfy

Low-rise 7.4% 3.2% 9.5% 50.5% 29.5%

Mid-rise 1.5% 4.5% 17.9% 46.3% 29.9%

High-rise 2.6% 2.6% 18.1% 42.6% 34.2%

House 15.4% 38.5% 46.2%

Duplex 10.0% 20.0% 20.0% 15.0% 35.0%

Mansion 12.5% 12.5% 50.0% 25.0%

Total 3.9% 4.2% 15.6% 43.9% 32.4%

Customer/Owner Satisfaction
City Customer/ owner satisfaction over the recreational facilities inside the property
V.Dissatisfy Dissatisfy Fair Satisfy V satisfy
Beijing 10.0% 40.0% 17.5% 30.0% 2.5%
Changchun 11.1% 13.9% 16.7% 27.8% 30.6%
Chengdu 1.5% 6.0% 49.3% 37.3% 6.0%
Guangzhou 1.3% 3.8% 39.7% 30.8% 24.4%
Shanghai 0% 1.4% 50.0% 36.1% 12.5%
Shenzhen 9.0% 17.9% 29.5% 38.5% 5.1%
Total 4.6% 11.6% 36.8% 34.1% 12.9%

Housing Type Customer/ owner satisfaction over the recreational facilities inside property
V. dissatisfy Dissatisfy Fair Satisfy V. Satisfy
Low-rise 8.7% 9.8% 30.4% 41.3% 9.8%
Mid-rise 1.5% 19.4% 40.3% 37.3% 1.5%
High-rise 3.2% 4.5% 43.9% 31.0% 17.4%
House 0% 15.4% 23.1% 46.2% 15.4%
Duplex 5.0% 30.0% 20.0% 25.0% 20.0%
Mansion 0% 25.0% 37.5% 12.5% 25.0%
Total 4.2% 11.0% 37.5% 34.6% 12.7%

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 Customer/Owner Satisfaction
Customer/ owner satisfaction over the complain handling
City
V. dissatisfy Dissatisfy Fair Satisfy V. Satisfy

Beijing 4.3% 13.0% 39.1% 34.8% 8.7%

Changchun 28.6% 28.6% 21.4% 14.3% 7.1%

Chengdu 0％ 18.8% 34.4% 31.3% 15.6%

Guangzhou 1.4% 8.7% 55.1% 26.1% 8.7%

Shanghai 5.6% 0％ 44.4% 50.0% 0％

Shenzhen 3.2% 30.6% 35.5% 22.6% 8.1%

Total 4.1% 17.4% 42.0% 27.9% 8.7%

5.1.8 Social Responsibility

Figure 5.7 graphically represents the findings of each of the competitive attributes of

Company A in regards to ‗social responsibility‘ factor. As listed in Table 5.19,

Company A achieved high scores in corporate image and reputation (Company A

score: 0.1234; reasonable score: 0.1169; maximum score: 0.1648), but performed

poorly in public relations (Company A score: 0.1307; reasonable score: 0.1487;

maximum score: 0.1554).

As summarised in Tables 5.19 and 5.20, Company A had high scores in the ‗number

of awards by government‘ (1.3750), the ‗number of awards from industry‘, (1.2954),

‗relationships with suppliers‘ (0.9744) ‗spending on charity from corporate profits‘

(0.9643) and ‗quality performance‘ (0.9445). However, it under-performed on five

competitive attributes: ‗relationship with the press‘ (0.8666), ‗relationship with the

public‘ (0.8222), ‗relationship with governmental departments‘ (0.8222), ‗brand

135
concept direction and strategy‘ (0.7333), as well as the ‗practicability of corporate

culture‘ (0.6888).

Qualification

0.1262
0.1262

Public 0.1118
relationship 0.1648
0.1487 Image and
0.1234 reputation
0.1307 0.1169
0.1554

0.0521

0.0962 0.0540
Maxi. score

0.1219 0.1157 Reasonable score

0.1402
Company A

Spending on
Corporate culture
charity

Figure ‎5-7 Radar diagram representing the competitive attributes

scores‎of‎Company‎A‎under‎the‎‘social‎responsibility’‎factor

136
 Table ‎5-18 Summary‎of‎scores‎of‎competitiveness‎criteria‎(the‎‘second’‎
No. Attributes Score
level)‎and‎attributes‎(the‎‘third’‎level)‎under‎the‎‘social‎responsibility’‎
1 Number‎of‎awards‎by‎the‎gov’t 1.3750
2 Number of awards from industry 1.2954
3
factor
Relationship with supplier 0.9744
4 Spending on charity from profits 0.9643
Criteria Score
5 Quality performance 0.9445
6 Credibility of contract exchange 0.9445
Image and 1.0556 7 Establishment of dept. for corporate brand 0.9259
reputation
8 Number of complains per month 0.9168

Spending on 0.9643 9 Relationship with sub-contractors 0.9048

charity
10 Relationship with clients/ customers 0.9047
11 Quality of R&D 0.88572
Qualification 0.8857
12 Development of corporate brands 0.8718
13 Relationship with the press 0.8666
Public 0.8791 14 Relationship with the public 0.8222
relationship
15 Relationship‎with‎the‎gov’t 0.8222

Corporate 0.7889 16 Brand concept, direction and strategy 0.7333

culture
17 Practicability of corporate culture 0.6889

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 Table ‎5-19 Details of scores of the best and worst five competitive attributes

under‎the‎‘social‎responsibility’‎factor
Best-performing Attributes

Number of awards (Gov‘t) None 1 time 2 times 3 times >3 times Score

A（COMPANY A Score） 12.5% 37.5% 25.0% 12.5% 12.5% 2.7500

B（Reasonable Score） 0.0% 100.0% 0.0% 0.0% 0.0% 2.0000

Number of awards (Indust) None 1 time 2-3 times 4-5 times 6 times or

A（COMPANY A Score） 0.0% 0.0% 12.5% 0.0% 87.5%

more 4.7500

B（Reasonable Score） 0.0% 0.0% 66.7% 0.0% 33.3% 3.6667

Relationship with suppliers V. bad Bad Fair Good V.good

A（COMPANY A Score） 0.0% 0.0% 0.0% 77.8% 22.2% 4.2222

B（Reasonable Score） 0.0% 0.0% 33.3% 0.0% 66.7% 4.3333

Spending on charity None <3％ 3-5％ 5-10％ >10％

A（COMPANY A Score） 12.5% 62.5% 12.5% 12.5% 0.0% 2.2500

B（Reasonable Score） 0.0% 66.7% 33.3% 0.0% 0.0% 2.3333

Quality performance None <30％ 30-60％ 60-90％ >90％

A（COMPANY A Score） 11.1% 77.8% 0.0% 0.0% 11.1% 3.7778

B（Reasonable Score） 0.0% 100.0% 0.0% 0.0% 0.0% 4.0000

Worst-performing Attributes

Relationship with the press V.）

bad Bad Fair Good V.good Score

A（COMPANY A Score） 0.0% 0.0% 0.0% 66.7% 33.3% 4.3333

B（Reasonable Score） 0.0% 0.0% 0.0% 0.0% 100.0% 5.0000

）
Relationship with the public V. bad Bad Fair Good V. good

A（COMPANY A Score） 0.0% 0.0% 11.1% 66.7% 22.2% 4.1111

B（Reasonable Score） 0.0% 0.0% 0.0% 0.0% 100.0% 5.0000

Relationship with gov‘t V. bad Bad Fair Good V. good

A（COMPANY A Score） 0.0% 0.0% 11.1% 66.7% 22.2% 4.1111

B（Reasonable Score） 0.0% 0.0% 0.0% 0.0% 100.0% 5.0000

Brand concept, direction and V. bad Bad Fair Good V. good

strategy
A（COMPANY A Score） 0.0% 0.0% 44.4% 44.4% 11.1% 3.6667

B（Reasonable Score） 0.0% 0.0% 0.0% 0.0% 100.0% 5.0000

Corporate culture V. bad Bad Fair Good V. good

A（COMPANY A Score） 0.0% 0.0% 66.7% 22.2% 11.1% 3.4444

B（Reasonable Score） 0.0% 0.0% 0.0% 0.0% 100.0% 5.0000

138
5.1.9 Regional Competitiveness

Figure 5.8 graphically represents the performance of Company A in relation of its

regional competitiveness. As shown in Table 5.21, Company A has a strong

competitive advantage in the population factor in the area that they do business

(Company A score: 0.1518; reasonable score: 0.1307; maximum score: 0.1938).

Population Factor
0.25

0.1938
0.20

0.1518
0.15 0.1307

0.10

Maxi. score
0.05
Reasonable score

0.00
COMPANY A

0.1662 0.1696 0.1853

0.2222 0.1675
0.2139
Infrastructure and
Strategies Urban Economy

Figure ‎5-8 Radar diagram representing the competitive attributes scores of

Company‎A‎in‎the‎‘regional‎competitiveness’‎factor

Tables 5.21 and 5.22 tabulate the scores of Company A in each of the competitive

criteria and attributes under the ‗regional competitiveness‘ factor. The results show

that Company A has high scores in ‗stability of local government policy‘ (1.2500), ‗a

stable population growth‘ (1.2308) and a positive ‗change in population density‘

(1.1543). However, Company A also faces obstacles, for example: slow urban

139
 economic development (0.9333), problems with regional land policy and the legality

of land acquisition (0.8000) and the difference between the growth rate of property

prices and salaries (0.7936).

Table ‎5-20 Summary‎of‎scores‎of‎competitiveness‎criteria‎(the‎‘second’‎level)‎and‎

attributes‎(the‎‘third’‎level)‎under‎the‎‘regional‎competitiveness’‎factor
No. Attributes R.I.
1 Stability‎of‎local‎gov’t policy 1.2500
2 A stable population growth 1.2308
3 Change in population density 1.1543
4 Change in labour market 1.1446
5 Change in inner immigration 1.1200
6 The openness of info. exchange 1.0831
Criteria R.I.
7 The openness of commercial develop‘t 1.0629
8 Growth rate of urban GDP 1.0400
Population 1.1612
factor
9 The effectiveness of social security system 1.0286
10 Educational and medical system 0.9920
Infrastructure & 0.9926 11 Transportation system 0.9400
strategies
12 Urban‎economic‎develp’t 0.9333

0.9157 13 Regional land policy and legality 0.8000

Urban economy
14 Difference between the growth rate of 0.7936
property price and the salary

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 Table ‎5-21 Details of scores of the best and worst competitive attributes under

the‎‘regional‎competitiveness’‎factor

Best-performing Attributes
Stability of local gov‘t policy V. Unstable Unstable Fair Stable V.Stable Score

A（COMPANY A Score） 0.0% 12.5% 12.5% 62.5% 12.5% 3.7500

B（Reasonable Score） 0.0% 60.0% 0.0% 20.0% 20.0% 3.0000

Population growth R. Decline M. Decline Fair M. Growth R. Growth

A（COMPANY A Score） 0.0% 0.0% 16.7% 66.7% 16.7% 4.0000

B（Reasonable Score） 0.0% 0.0% 75.0% 25.0% 0.0% 3.2500

Worst-performing Attributes
Regional land policy and Illegal Minority Half legal Majority All legal Score
legality legal legal
使用权
A（COMPANY A Score） 0.0% 0.0% 0.0% 80.0% 20.0% 4.2000

B（Reasonable Score） 0.0% 0.0% 0.0% 0.0% 100.0% 5.0000

Diff. between the growth rate of
R. Decline M. Decline Fair M. Growth R. Growth
property price & salary
A（COMPANY A Score） 4.8% 42.9% 14.3% 4.8% 33.3% 3.5714

B（Reasonable Score） 0.0% 66.7% 16.7% 16.7% 0.0% 4.5000

5.2 DISCUSSION OF RESULTS

5.2.1 Introduction

In Chapter 4 a radar chart of seven indicators which were used to evaluate the overall

competitiveness of real estate firms was presented. These indicators included:

management competency, regional competitiveness, organisational competency,

social responsibility, technological capabilities, market share and financial

competency. Through a questionnaire survey and interviews with scholars and

industry practitioners, the overall scores of Company A together with reasonable and

maximum scores of the industry were determined. To determine the credibility of

the results, the goal of this chapter is to re-examine the results reported in Chapter 4

141
and evaluate the deviation of each indicator. The relationship of each indicator to the

competitiveness of real estate firms is highlighted.

5.2.2 Design of Re-visiting Interviews

A second round of interviews was necessary to assess the interviewees‘ opinion of

the results of the research. These re-visiting interviews had to be well designed to

produce sound results. The interviews were conducted after the initial results of the

research were available. To assess the interviewees‘ appreciation of the research, a

copy of a summary of the research together with a questionnaire were sent to the

interviewees who participated in the original survey. The interviewees were invited to

finish the questionnaire immediately after reading the results of the research. The

questionnaire included both structured and open-ended questions. In the structured

questions, the interviewees were requested to provide their appraisal of each result

according to a five-point Likert scale (1 = ‗not satisfied at all‘ to 5 = ‗totally

satisfied‘). The open questions were designed assess the interviewees‘ impression of

general issues. These questions included: (1) what do you think of the results of the

research? (2) Based on your experience, what is the gap between the results of the

research and reality? (3) What do think of the method adopted in the research? (4)

What are the limitations and drawbacks of this type of research? and, (5) what

measures could be taken to address these limitations?

As stated in Chapter 2, a pilot study was carried out before conducting the

questionnaire survey. Prior to sending them out, the first version of the questionnaires

142
were pre-tested and reviewed by industry experts and academics. These interviews

served two purposes; first, to pilot the questionnaires before using them, and second,

to ensure the suitability and comprehensibility of the questions. The interviewees

comprised three senior managers and three academics. The aim was to ensure that

each question was stated appropriately so that respondents could clearly understand

the concept. A debrief was given to the respondents to ensure that they interpreted the

questions as intended. At the end of this consultation process, improvements were

made to the questionnaires and they were then ready for the survey.

In total, 350 copies of the results were sent out to the interviewees in different

divisions and departments of Company A, and 265 replies were received. This

reflects a response rate of 75.7%, which is relative high. All returned questionnaires

were edited and analysed using the statistical package for social science (SPSS).

5.2.3 Results of the Re-examination

After receiving the draft evaluation results of the research, a round of returning

interviews was conducted to assess the validity of the results. The evaluation results

were sent to interviewees who had participated in the previous survey. The

interviewees were invited to express their opinion on the satisfaction of the evaluation

result using a five-point Likert scale (1 = ‗not satisfied at all‘ to 5 = ‗totally satisfied‘).

The population distribution of the responses is represented as the Figure 5.9.

143
Figure ‎5-9 the population distribution of interviewees

The interviewees are divided into five classes: Director/CEO/Senior Manager/

Experts, Assistant Direct/Chief Supervisor/General Manager, Division

Manager/Division Supervisor, Division Manager/Division Supervisor, Department

manager/Supervisor and General Clerk, which represent 1.9%, 6.0%, 12.8%, 23.8%

and 55.5% of the respondents respectively. This is a reasonable cross section of the

company, which would favour a reliable result.

Table ‎5-22 Summary of the results of the re-interview

Degree of satisfaction
Indicators of 1 2 3 4 5 above 3
competitiveness above
not at all low moderate high very high
average
Management
2.30% 9.60% 19.10% 47.50% 21.50% 88.10%
competency
Regional
3.20% 6.60% 22.30% 55.60% 12.30% 90.20%
competitiveness
Social responsibility 4.80% 11.50% 30.60% 43.60% 9.50% 83.70%

144
Market share 1.10% 3.50% 26.70% 55.30% 13.40% 95.40%
Financial
2.20% 4.50% 19.40% 46.80% 27.10% 93.30%
competency
Technological
3.10% 8.30% 32.40% 42.50% 13.70% 88.60%
capabilities
Organisational
2.40% 6.50% 27.30% 51.60% 12.20% 91.10%
competency

5.2.3.1 Survey results of structure questions

The response results of the structured questions from the re-visiting interviews are

summarised as Table 5.23. The satisfaction rate ranged from 83.7% to 95%. This

indicates that the results of the competitive evaluation are credible from the

perspective of the interviewees. Furthermore, it is can be seen that the evaluation

results for market share, financial competency and organisational competency had a

particularly high creditability with approval rates of 95.4%, 93.3% and 91.1%

respectively. Twenty seven percent of respondents had a ―very high‖ evaluation of

the financial competency results, which is probably explained by the fact that finance

is perhaps the leading core competency in what is a finance-intensive industry.

Furthermore, the indicators of financial competency are largely quantitative, and so

an evaluation can be more precise. There were a similar number of interviewees who

had a high level of satisfaction with the regional competitiveness and market share

results; 55.6% and 55.3% respectively. This can be attributed to the local nature of

the real estate industry, where regional competitiveness and market share are the

leading indicators of success in the area.

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5.2.3.2 The detailed results of the questionnaire survey for each item are as

following:

5.2.3.2.1 Management Competency

Table ‎5-23 Summary‎survey‎results‎of‎“management‎competency

Degree of satisfaction
Indicators of
management 1 2 3 4 5 above 3
competency above
not at all low moderate high very high
average
strategic
3.2% 8.9% 25.30% 45.20% 17.40% 87.90%
management
time management 2.80% 9.50% 26.30% 48.60% 12.80% 87.70%
cost management 1.50% 8.60% 30.20% 43.40% 16.30% 89.90%
quality management 1.30% 5.10% 22.60% 45.80% 25.20% 93.60%
risk management 1.60% 4.20% 35.20% 36.50% 22.50% 94.20%
product innovation 3.80% 8.30% 36.30% 40.90% 10.70% 87.90%
facility management 2.10% 4.50% 30.60% 39.90% 22.90% 93.40%
environment
3.30% 5.60% 32.60% 37.80% 20.70% 91.10%
management
safety management 2.10% 3.20% 28.50% 45.80% 20.40% 94.70%
contract management 2.40% 4.10% 29.50% 40.70% 23.30% 93.50%
collaboration 3.90% 5.30% 25.20% 40.90% 23.70% 89.80%

The survey results for management competency are shown in Table 5.24. The

satisfaction rate ranges from 87.7% to 94.7. This indicates that the evaluation results

for management competency were recognised by the interviewees as being credible.

In terms of the specific indicators, safety management and risk management were

accorded the highest ratings with 94.7% and 94.2% of interviewees‘ support

respectively. The results for quality management, contract management and facility

management also received relative high recognition with scores of 93.6%, 93.5% and

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93.4% respectively. These were followed by environment management which

achieved 91.1%. Quality management received the most ―very high‖ ratings, with

collaboration and contract management ranked second and third in this column. By

contrast, cost management got the most ―low‖ votes with 9.5%, which indicates that

the evaluation results for cost management are not as sound as others. A more precise

method might be needed to measure the cost management performance of real estate

developers in future studies.

5.2.3.2.2 Organisational Competency

The re-survey results for organisational competency are summarised in Table 5.25.

As exhibited in that table, training was the most successful indicator, which had the

support of 90.8% of interviewees. Organisational development had the most ―very

high‖ scores, while staff satisfaction and training ranked second and third. Staff

satisfaction and the use of human resources had the most ―low‖ scores. The relatively

high percentage of ―low‖ scores in this section reflects a comparatively low level of

satisfaction in the research results. This may be caused by the higher variability of

evaluation results derived from qualitative indicators. All of the indicators in

organisational competency are qualitative. To mitigate the fluctuation of assessment

results and improve the accuracy of measurements, a more complicated qualitative

evaluation method should probably be used in future study. Despite the low support

rate of interviewees, the satisfaction rate is still more than 80%, which indicates that

the research results are still generally reliable.

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 Table ‎5-24 Summary survey result of organizational competency

Indicators of Degree of satisfaction

organisational 1 2 3 4 5 above 3
competency not at all low moderate high very high above average
organisational
4.2% 9.0% 28.30% 34.20% 24.30% 86.80%
development
training 2.80% 6.40% 27.60% 41.30% 21.90% 90.80%
use of human
4.30% 10.00% 32.00% 37.40% 16.30% 85.70%
resources
staff
5.30% 14.10% 22.60% 35.80% 22.20% 80.60%
satisfaction

5.2.3.2.3 Technological Capabilities

Technological capabilities include such indicators as IT technology, technology

advancement, R&D, construction technology and consumer satisfaction with

technology. As shown in the Table 5.26, all of these indicators have more than a 91%

positive rating by interviewees (i.e. a score of 3 or above), ranging from 91.6% to

95.5%. It can be concluded that the assessment results for technological competency

are effective and reliable according from the perspective of the interviewees.

Construction technology had the highest overall score. That is likely because

construction technology is viewed as a key core competency for real estate

developers. Due to the tangible nature of technology in the real estate industry, the

evaluation of its performance is relative easy and objective.

Table ‎5-25 Summary survey results of technological competency

Indicators of Degree of satisfaction

technological 1 2 3 4 5 above 3
competency not at all low moderate high very high above average
IT technology 2.1% 5.4% 26.70% 38.90% 26.90% 92.50%

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technology
2.80% 4.80% 28.30% 39.00% 25.10% 92.40%
advancement
R&D 3.20% 5.20% 24.80% 40.20% 26.60% 91.60%
construction
1.30% 3.20% 23.90% 41.30% 30.30% 95.50%
technology
consumer
satisfaction to 2.30% 4.20% 28.40% 38.70% 26.40% 93.50%
technology

5.2.3.2.4 Financial Competency

Financial competency is important for any enterprise and especially so for one in a

capital intensive industry such as real estate industry. Unlike mature real estate

financial markets, there are various financial intermediaries provide abundant

financing products besides traditional lending for property enterprises, such as public

stock issuance, project financing, corporate bond, equity financing, industry fund and

real estate trust. Unfortunately, real estate financial market in China is still immature

and can provide only limited financing products like lending from banking, the real

estate developers have little chance to access other financing channels like their

counterparts in mature market (Liu liming, 2007) . Therefore, the financial

competency is an even more important factor of competitiveness for Chinese real

estate developers. Financial competency is principally measured through two

aspects: financing capability and capital growth. Because of the quantitative nature of

these two indicators, their assessment is relatively objective and accurate. Not

surprisingly, the interviewees expressed very high recognition for these two

indicators. As shown in the Table 5.27, financing capability and capital growth

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received 94.2% and 93.7% of interviewees‘ support respectively. This means the

interviewees are strongly agree with the result of evaluation of these two factors for

company A. In other words, most of interviewees also reckon that company A has

relative high capital growth as well as low capabilities of financing.

Table ‎5-26 Summary of survey results of financial competency

Degree of satisfaction
Indicators of finance
1 2 3 4 5 above 3
competency
not at all low moderate high very high above average
financing capability 2.0% 3.8% 29.00% 43.20% 22.00% 94.20%
capital growth 2.80% 3.50% 30.20% 43.40% 20.10% 93.70%

5.2.3.2.5 Market Share

The results of the re-visiting interviews relating to market share are shown Table 5.28.

All indicators in this section received high positive ratings ranging from 89.2% to

91.6%. Consumer satisfaction with property sales and acquisition strategy and

implementation were considered as the most reliable indicators scoring 91.6% and

91.5% respectively. However, market coverage received the most ―very high‖ votes

at 29.7%. This was followed by the land acquisition strategy & implementation,

while consumer satisfaction with the property sales had the least ―very high‖

assessments. This may reflect that the interviewees‘ perceptions of their customers‘

satisfaction is relatively low. As well, there was relatively high variability between

the opinions of interviewees‘ in this section.

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 Table ‎5-27 Summary of the survey results of market share

Degree of satisfaction
Indicators of market 1 2 3 4 5 above 3
share above
not at all low moderate high very high
average
localisation 4.30% 5.20% 27.60% 35.50% 27.40% 90.50%
market coverage 4.50% 6.30% 28.30% 31.20% 29.70% 89.20%
land acquisition strategy
3.60% 4.90% 27.10% 36.40% 28.00% 91.50%
& implementation
sales strategy &
4.30% 4.60% 28.00% 36.00% 27.10% 91.10%
implementation
consumer satisfaction
3.30% 5.10% 32.50% 35.50% 23.60% 91.60%
with the property sales

5.2.3.2.6 Social Responsibility

Social responsibility is becoming an increasingly important issue attracting a lot of

attention. The level of corporate social responsibility is also a key factor affecting the

competitiveness of real estate firms. Because assessment methods for social

responsibility are relatively immature, a collection of qualitative and quantitative

indicators was adopted to evaluate performance in this area. This method of

evaluation was validated by the results of the re-visiting interviews. As shown in

Table 5.29, the satisfaction rate for all social responsibility indicators is above 88%.

Table ‎5-28 Summary of the survey results of social responsibility

Degree of satisfaction
Indicators of social
1 2 3 4 5 above 3
responsibility
not at all low moderate high very high above average
qualification 3.5% 7.8% 35.40% 29.50% 23.80% 88.70%
image and reputation 4.20% 6.40% 31.20% 30.00% 28.20% 89.40%

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spending on charity 3.60% 5.90% 26.40% 34.10% 30.00% 90.50%
corporate culture 5.30% 5.20% 28.80% 32.10% 28.60% 89.50%
public relationship 4.60% 5.70% 30.10% 33.60% 26.00% 89.70%

5.2.3.2.7 Regional Competitiveness

Regional competitiveness focuses on the overall social, economic and institutional

situation across the geographical area including such things as the state of the urban

economy and infrastructure. As these indicators are relatively objective in nature,

their performance can be measured with reasonable precision. Not surprisingly, the

interviewees‘ opinions were quite consistent with all three indicators receiving in

excess of 91% positive ratings.

Table ‎5-29 Summary of the survey results of regional competition

Degree of satisfaction
Indicators of regional
1 2 3 4 5 above 3
competitiveness
not at all low moderate high very high above average
population factor 2.8% 5.6% 27.60% 40.80% 23.20% 91.60%
urban economy 2.40% 6.20% 29.20% 38.20% 24.00% 91.40%
infrastructure and
3.50% 4.80% 30.20% 38.50% 23.00% 91.70%
strategies

5.2.3.3 Survey results of open questions

In contrast to the structured questions which have a limited number of possible

answers, the responses to the open questions are widely variable. To illustrate the

general nature of the responses received, some representative and insightful answers

have been selected for presentation.

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(1) What do you think of the results of the research?

 Positive answers

 The results of the research are valuable and useful for developers in practical

operation.

 The results of the research reflect the actual situation of Chinese real estate

developers.

 The research has provided a comprehensive competition evaluation method for

developers.

 Negative answers

 The results of the research deviate from realistic circumstances in some aspects.

 The results of the research provide little useful information for the real estate

development industry.

 Since a comprehensive competition valuation system still leaves much to be

desired, some other simple methods should use in future research.

(2) Based on your experience, what differences do you see between the results of

research and reality?

 The difference between the results of the research and reality are mainly

concentrated on the assessment of qualitative indicators, such as social

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 responsibility and organisational competency. This is because these indicators

are very subjective and their evaluation may vary between people because of

their different perspectives.

(3) What do think of the methods adopted in the research?

 Positive answers

 The research methods adopted are suitable and scientific.

 The methods are very comprehensive and extensive combining qualitative and

quantitative evaluation indicators.

 Negative answers

 The evaluation methods are a bit complicated and verbose.

 Some other simple methods should be considered as alternatives for practical use.

(4) What sort of limitations and drawbacks do you see in the research?

 The use of too many indicators may cause a loss focus and attention.

 The evaluation of qualitative indicators might be improved using more precise

quantitative assessment methods.

(5) What measures can be taken to avoid these limitations?

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 In order to improve the representativeness of the indicators, they should be

refined by repeated sifting.

 To mitigate fluctuations in the values of qualitative indicators, more advanced

scientific research methods should be adopted in future study, such as the

analytic hierarchy process (AHP), the analytic network process (ANP) and so on.

5.3 SUMMARY

This chapter presented the detailed results of the evaluation of competitiveness of

Company A using the evaluation method introduced in Chapters 3 and 4. The results

clearly highlighted Company A‘s competitive strengths and weaknesses. Corporate

competitiveness is influenced by the circumstances and condition of the market. Such

competitiveness not only reflects the differences between the company being

considered and its competitors, but also the difference between the industry in which

the company operates and other industries. The level of competitiveness may also

reflect the stage of development of the company. The full potential for growth of a

company and the enhancement of its competitiveness require a sound business

environment in a healthy and growing industry.

The latter part of this chapter described a round of re-interviews that were conducted

to determine the reliability of the competitive evaluation results. Most of the

interviewees (above 83%) were satisfied with the results of the research which leads

to the conclusion that they are both credible and effective.

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CHAPTER 6. CONCLUSIONS

6.1 OVERVIEW

Real estate, or property development, is considered one of the pillar industries of the

Chinese economy. As a result of the opening up of the economy as well as the

―macro-control‖ policy of the Central Chinese Government to moderate the frenetic

pace of growth of the economy, the real estate industry has faced fierce competition

and ongoing change. Real estate firms in China must improve their competitiveness

in order to maintain market share or even survive in this fiercely competitive

environment.

The purposes of this research are to provide a comprehensive competition evaluation

system for Chinese real estate developers which will enable them to assess their

competitive strengths and weaknesses and formulate a suitable competition

enhancement strategy. A thoroughly literature review, a series of interviews and a

questionnaire survey were conducted to formulate the evaluation system, identify the

factors affecting the competitiveness of real estate developers, and verify the

effectiveness of the evaluation system by a case study. This chapter summarises the

conclusions of the study and presents recommendations for further study. The

research objectives are first reviewed. The general conclusions of the research are

then summarised, followed by an evaluation of the value of the study. Finally,

directions for further study are recommended.

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6.2 REVIEW OF OBJECTIVES

As stated in Chapter 1, the primary purpose of this research is to evaluate and analyse

the competitiveness of real estate developers in China. To achieve this goal, some

specific targets were identified. The first objective was to determine a suitable

measurement method for the competitiveness of real estate developers.

Second objective was to determine competition attributes for evaluation.

The third goal was to verify the effectiveness of evaluation method by conducting a

case study.

The ultimate goal of this study was to provide managers of real estate development

firms with useful tools for improving their companies‘ competitiveness.

6.3 GENERAL CONCLUSION

Three rounds of a questionnaire survey were carried out to achieve the objectives of

the study, including: identifying appropriate competitive attributes; investigating the

status of the company in the case study; and determining the effectiveness of the

research results. Through these rounds of survey, the competition evaluation system

was first established, then its procedures were illustrated, and finally the results of the

research were validated. The results were discussed in detail in Chapters 3 through 5.

The general conclusions are as follows:

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6.3.1 Competition Evaluation Method for Real Estate Developers

This study developed comprehensive indicators competitiveness evaluation method

tailored to the Chinese real estate industry. Following a thorough literature review, it

was determined that there are three dimensions to competitiveness, namely: micro,

meso and macro. These levels can also be expressed as: firm or organisation

competitiveness, industry competitiveness, and national competitiveness. The concept

of competitiveness as relevant to this study is at the micro level – i.e. firm or

organisation competitiveness. At this level, there are many theories concerning

competitiveness from a number of different economic perspectives, such as:

competitive advantage and strategy model, resource based view and core competence

approach, and strategic management approach. Based from these varied theories of

competitiveness, different evaluation methods have been formulated, such as: cost-

benefit analysis, resource-based viewpoints, ranking style and so on.

Various methods of assessing the competitiveness of real estate developers were also

presented. These were derived from basic methods. It was found that many existing

evaluation methods are based on the specific conditions in some industries, and are

applied under different market, environment and industrial backgrounds. However,

given the specific characteristics of the real estate industry - such as localisation,

complicated and long contractual processes, resource intensiveness, and high risk

accompanied by high potential return - the comprehensive indicators competition

evaluation method is clearly the most suitable for this industry. This is supported by

industry experts and practitioners, the majority of who agreed that the comprehensive

158
attributes evaluation system is appropriate for evaluating the competitiveness of real

estate developers.

6.3.2 Competition Attributes for the Real Estate Industry

Based on an extensive literature review, seven important features that influence

competitiveness in the real estate industry were identified. These include:

management competency, organizing competency, technological capability, financial

competency, market share, social responsibility and regional competitiveness. Under

each of these key factors (level 1), there is a group of evaluation criteria (level 2). For

example, under the competitive factor ―market share‖ there are five criteria (i.e.,

localisation; market coverage; land acquisition strategy and implementation; property

sales strategy and implementation; and, consumer satisfaction).

Based on the assessment requirements, a set of competition attributes (level 3) were

established one level below the evaluation criteria (level 2). For example, under ‗land

acquisition strategy and implementation‘, there are four attributes: rate of land

acquisition, quantity of land bank, quality of land bank, and land acquisition/pricing

strategy. The competitiveness framework developed in this research is based on the

core competitive factors that are unique to real estate development. The

competitiveness model also addresses the five unique stages of property development

(i.e., land acquisition, design and development, construction, sales, and property

management) in order to develop a comprehensive competitiveness framework for

the real estate developer.

159
First, basic attributes were selected from a critical review of existing literature. This

preliminary list of attributes was then sent to industry experts and practitioners for

their review. This is a multi-disciplined, experienced group drawn from different

corners of the real estate industry. The final version of the attributes as well as their

weight of importance was then determined by using a survey of people from the

industry.

Based on the results of the interviews and questionnaires, the most important of the

seven key factors were identified as: financial competency, market share and

management competency. At ‗level 2‘, financing capabilities, land acquisition

strategy and implementation, and cost management were the top three criteria with

levels of importance of 0.84, 0.79 and 0.78 respectively. While in ‗level 3‘ the top

competition attributes were identified as: loan received for land acquisitions, the total

amount of land bank, the quality of land bank, and land acquisition pricing strategy.

Complete details of the result of the survey can be found in Chapter 4.

6.3.3 Results of the Case Study

After formulating the competition evaluation method and setting up the evaluation

attributes, a case study was conducted to illustrate the procedure of evaluation and to

verify the effectiveness of the evaluation method for real estate developers. The

results of case study are summarised below.

―Financial competency‖ and ―regional competitiveness‖ were found to be the most

favourable competitive factors for Company A, providing it with a high degree of

160
competitiveness. Its strong financial competency is due to its solid balance sheet (the

result of historically strong corporate profits and retained earnings). However, the

results also revealed that there is room for improvement in terms of the variety of

financing channels and the scale of corporate financing. Limited financing channels

affect the competitiveness of many Chinese real estate developers. Hence, it is very

important for Chinese developers to improve their financial sophistication and

explore alternative financing channels.

Company A‘s favourable regional competitiveness derives from strong local demand

for property to satisfy a population expansion resulting from the process of

urbanisation. However, this also reflects the fact that the company is dependent on a

strong local business environment. It needs to aware of the risks associated with

dependence on such a narrow market. Nonetheless, local strategies must be central to

development planning in order to enhance the regional competitiveness of real estate

firms.

The research also suggests that ―management competency‖ and ―market share‖ are

the second most important competitive advantages of Company A. The prominence

of management competency is due to effective cost, environmental, time, safety and

contractual management. The company also scores well in terms of market share

because of its effective sales strategy and post-sales customer satisfaction.

The ability to increase sales prices, excellent regional sales performance and strong

customer satisfaction are the underpinnings of Company A‘s comparative advantage.

161
However, the research also reveals problems with its strategic management and land

policy. The results suggest that the expansion of the company‘s land bank may be

inadequate. An efficient land bank strategy plays a key role is a developer‘s long-

term operations. Developers must establish a long-term land bank strategy in order to

remain competitive in the future.

This study also found that Company A had a lower score in a few other competitive

factors such as ―organizing competency‖, ―technological capabilities‖ and ―social

responsibility‖. Inadequate organizing competency could lead to an imbalance in the

company. Issues related to delegation of authority, profit sharing, job security and

compensation could lead to staff dissatisfaction and increased staff turnover. The

highest level of dissatisfaction was found in the middle to junior ranks of the

company. The low score in technological capabilities was mainly due to

dissatisfaction from customers with the company‘s level of innovation. A modern

maintenance system and some cutting-edge building facilities would help to improve

customer satisfaction in this area. The research revealed that there is also much room

for improvement in the development of the corporate culture as relates to public

relations. These failings are common amongst Chinese real estate developers who

have a long way to go to develop their management competencies and technological

capabilities, despite much attention having been paid to these areas in the past.

In conclusion, the research reveals that Company A has a strong competitive edge in

terms of its capital/finance, local development and sales promotion. However, the

results also argue that there is still room for improvement in the management of its

162
human resources, development of the corporate culture and strategy, and resource

allocation. Attention must also be paid to the management of its land bank. The

research also showed that there are quite different perceptions about the performance

of the company from different people within it. This suggests that improved

communications between different levels of management is needed to assure a clear

corporate vision and consistent strategic direction.

The main objective of the management of a company is to develop and strengthen the

firm‘s competitiveness and to employ its resources effectively for production and

business activities. The company‘s processes and the employment of its resources

have a significant effect on its performance and strengthen its competitiveness.

Corporate competitiveness is a comprehensive, inter-related framework that derives

from every aspect of the business.

Due to the uniqueness of the property industry, the core competitive factors of

property development are different from other industries. Capabilities related to

financial capital, marketing, organisational and resource management are the key to

competitiveness in property development. As the industry matures, capital and land

management will move to the fore, but strength in organisational management, sales

and strategic flexibility will also remain critical underpinnings of the competitiveness

of property development firms.

In summary, this study has validated the following process:

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 Develop a health-check system that enables real estate developers to self-assess

their competitive advantages and weaknesses.

 Integrate qualitative and quantitative indicators into a comprehensive competition

evaluation system to provide an overall evaluation of the competitiveness of the

property developer.

 Establish a verified evaluation of attributes in order to determine the

competitiveness of the real estate developer.

 Conduct a case study to validate the assessment method using data collected

from a leading property developer.

 Provide constructive suggestions for improving the competitiveness of Chinese

real estate developers based on the identified strengths and weaknesses of the

case study. This can provide a reference for scholars and practitioners for further

work.

6.4 PRACTICAL VALUE OF THE RESEARCH

The method developed in this study bridges a gap in the research of the

competitiveness of real estate developers. It employed an empirical study to explore

and contribute to the body of knowledge in this area by developing a comprehensive

indicators competition evaluation system for Chinese real estate developers. The

contribution to theory includes a comprehensive indicators evaluation method and

extensive competition attributes. The competition evaluation method presented in

164
this paper is a model-procedure for assessing a real estate developers‘

competitiveness. This model-procedure drew on various existing competitiveness

assessment methods applied in different way to address the specific characteristics of

the industry. It can be used to guide the process of competitiveness evaluation.

Furthermore, this model-procedure brings together assessment approaches that can

measure distinctly different processes in a structured model.

In addition to the contribution to theory, this study provides a useful, practical

analytical tool to assist practitioners in the real estate industry to make appropriate

strategic decisions for maintaining and enhancing the competitiveness of their firms.

By using the model-procedure, senior management of a real estate development

company can self-assess its competitiveness through a quantitative measure. This

measure is particularly useful for leading companies as they are already the

benchmark for other companies in China. Without such a model-procedure, these

leading companies have difficulties to make sustainable improvements in terms of

competitiveness. Through using this method real estate developers can better

understand their current competitive position and accordingly create suitable

development strategies. This tool is particularly focused on real estate developers in

China.

The research findings are more supportive of the resource-based view (RBV) and

core competence approach than Porter‘s competitive advantage approach. As

maintained by Haan et al. (2002), an important shortcoming of Porter (1990) is that

the theory for corporate competitiveness does not address the internal mechanisms by

165
which a company converts the influence of a challenging external environment into

useful abilities. The academic and industry communities can benefit from this

research. The ranking of competitiveness factors provides practitioners with an

insight into those that most influence competitiveness in the real estate market in

China. In addition, the finding of the research can assist policy makers in directing

governmental efforts to improve the performance of the real estate industry.

The application of the evaluation system has been demonstrated through a case study

of one of China‘s leading developers. This involved extensive constructive

discussions with professionals and managers in the company. Although the data used

was collected in China, the study provides valuable references for examining the

competitiveness of real estate developers‘ in overseas markets as well.

6.5 RECOMMENDATIONS FOR FURTHER STUDY

Despite its achievements, this research has several limitations that should be

addressed in future studies. The first is the limited number of experts and respondents

involved in the survey. The findings only reflect respondents from a small sampling

of developers located in a few large cities in China (i.e. Beijing, Shanghai,

Guangzhou and Shenzhen). A larger sample size should be included in further studies

to ensure that the results can be generalised.

In addition, in analysing the survey data, qualitative data were converted into ratings

and statistical methods were employed to combine both quantitative and qualitative

data. This may not be the best way of handling data as qualitative data and

166
quantitative data may not be comparable. More supplicated analytical methods, such

as the analytic hierarchy process (AHP) or the analytic network process (ANP)

should be considered as an improvement on the research method in future studies.

Another limitation of this study is that only factors affecting the firm‘s past

competitiveness were considered. These factors are not necessarily applicable to

ensuring that the firm will be competitive in the future. Therefore, it is suggested that

the measured results should be further evaluated and validated in future study to

confirm this. New factors should also be included.

The assessment framework, which comprises a hierarchical structure of indicators

and links among these indicators, can be further developed into a computer software

system to facilitate its easy use of real estate developers.

The framework developed in this study, also it is developed based on a specific

leading real estate developer in China, could be generally applicable to other

companies elsewhere in the world. Again, further research work is needed to evaluate

the general usefulness of this assessment framework.

Lastly, more empirical studies of developers‘ competitiveness should be initiated in

future study, including developers from different sub-types such as residential

developers, commercial developers, industrial building developers, regional

developers, cross-border developers and so on.

167
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 APPENDICES. QUESTIONNAIRE SAMPLES

A1-1. QUESTIONNAIRE ON REAL ESTATE DEVELOPMENT

ENTERPRISES [HUMAN RESOURCES]

Part I Background Information

1. Your length of service in the real estate sector：

□ less than 3 years □ 3 to 5 years □ 6 to 10 years
□11 to 15 years □ 16 to 20 years □ more than 20 years
2. Your length of service in China Oversea Property (Including length of service in
other China Oversea Property companies)
□ less than 3 years □ 3 to 5 years □ 6 to 10 years
□ 11 to 15 years □ 16 to 20 years □ more than 20 years
3. Your current position: □ manager □ deputy manager □ supervisor
□__________Others

Part II Assessment of competitive factors in China Oversea Property

1. In China‎Oversea‎Property‎you’re‎working‎for (hereinafter the same, and referred

to‎as‎‘it’‎),‎the‎fairness‎of‎its‎enterprise’s‎organisational‎structure‎
□ unfair □not very fair □average □relatively fair □very fair
2. The effectiveness of its training programmes and resources
□ineffective □not very effective □average □relatively effective □very effective
3. Its human resource development strategies
□unsound □ not very sound □ average □relatively sound □very sound
4. During the past 1 to 5 years, the average salary growth rate of its employees
□ in decline □ remain unchanged □ 0–5% □ 5-10% □ 10-15% □15% or
higher
5. The average growth rate of its gross output value per capita
□in sharp decline □in gradual decline □basically unchanged □in
gradual increase □in sharp increase

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6. The average growth rate of its profit per capita
□ in sharp decline □ in gradual decline □ basically unchanged □ in gradual
increase □in sharp increase
7. The ratio of technical staff to total employment of the organisation (technical staff:
total employment of the organisation)
□ less than 0.1:1 □ 0.25: 1 □ 0.5:1 □ 0.75:1 □ 1: 1
8. The ratio of managers rising from grass-roots (managers rising from grass-
roots: external managers)
□less than 0.1:1 □ 0.25: 1 □ 0.5:1 □ 0.75: □ 1: 1 or higher
9. The ratio of human resources cost to total business cost (human resources cost:
total business cost)
□less than 0.1:1 □ 0.25: 1 □ 0.5:1 □ 0.75:1 □1: 1 or higher
10. The fairness of its personnel recruiting procedures
□unfair □not very fair □average □relatively fair □ very fair
11. Its career/skills training programs for skilled and unskilled workers
□none □not very sound □average □relatively sound □very sound
12. The fairness of its bonus system
13. □ unfair □not very fair □average □relatively fair □very fair
14. The soundness of its accident insurance system
□ unsound □ not very sound □average □ relatively sound
□very sound
15. The soundness of its Payment System including earnings
□ unsound □not very sound □average □relatively sound □very sound
16. The soundness of its employment security scheme, e.g. that of Equity /purchase
programmes and employee ownership
□ none □not very sound □average □relatively sound □very sound
17. The soundness of its authorisation and profit-sharing schemes
□none □not very sound □average □relatively sound □very sound
18. The completeness of communications including information-sharing and
employee interactiveness
□none □not very complete □average □relatively complete □very complete
19. The average record number of its employee disputes in the past 3 years
□ none □1-5 times per month □6-10 per month □11-20 per month □21 times or
more per month

198
20. The soundness of establishment of its the appeal procedure, the formal dispute
resolution, and problem-solving group
□ none □ not very sound □average □relatively sound □very sound
21. The establishment of its organisational culture that facilitates the establishment
of its project objectives by concerted efforts
□ none □not very sound □average □relatively sound □very sound
22. The soundness of its policies of internal promotion and job rotation
□none □not very sound □average □relatively sound □very sound
23. The average personnel turnover rate per year in the past 1 to 5 years
□ 0–5% □ 5-10% □ 10-15% □ 16-20% □20% or higher
24. The average personnel turnover growth rate per year in the past 1 to 5 years
□in sharp decline □in gradual decline □basically unchanged □in gradual increase □in
sharp increase
25. The ratio of qualified professionals in middle-and top-level management
within its organisation
□less than 10％ □ 10-20% □ 20-30% □30-50% □50-70% □70% or higher
26. Of the qualified professionals in middle-and top-level management, the ratio of
qualified professionals with intermediate and advanced credentials
□less than 10％ □ 10-20% □20-30% □30-50% □50-70% □70% or higher
27. The ratio of college diploma holders to its total employment
□less than 10％ □10-20% □20-30% □30-50% □50-70% □70% or higher
You have finished the Questionnaire, thank you very much for your participation and
support!

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 A2. QUESTIONNAIRE ON REAL ESTATE DEVELOPMENT

ENTERPRISES [EMPLOYEE SATISFACTION]

Part I Background Information

1. Gender □ male □ female

2. Age □ 20-24 □ 25-29 □ 30-34 □ 35-39 □ 40-44 □ 45-49 □ 50-54 55 or over
3. Educational history
□ senior high graduate or below □ associate degree □ bachelor □master □
doctor □ others___________________
4. Your length of service in the real estate sector
□ less than 3 years □ 3 to 5 years □ 6 to 10 years
□11 to 15 years □ 16 to 20 years □ more than 20 years
5. Your length of service in China Oversea Property (Including length of service in
other China Oversea Property companies)
□ less than 3 years □ 3 to 5 years □ 6 to 10 years
□11 to 15 years □ 16 to 20 years □ more than 20 years
6. Your current position □ manager □ deputy manager □ supervisor
□__________Others

Part II Satisfaction

1. Your satisfaction with current corporation strategic objectives, development and

expansion
□ no satisfaction □ relatively low □ average □relatively high □very high
2. Your satisfaction with corporation concepts and outlook
□ no satisfaction □ relatively low □ average □relatively high □very high
3. Your satisfaction with current cultural activities e.g. employee commendations
and celebrations
□ no satisfaction □ relatively low □ average □relatively high □very high
4. Your satisfaction with current career and skill training programmes ( skilled and
unskilled workers)

200
 □ no satisfaction □ relatively low □ average □relatively high □very high
5. Your satisfaction with current employee bonus system
□ no satisfaction □ relatively low □ average □relatively high □very high
6. Your satisfaction with current employee accident insurance
□ no satisfaction □ relatively low □ average □relatively high □very high
7. Your satisfaction with current employee payment system
□ no satisfaction □ relatively low □ average □relatively high □very high
8. Your satisfaction with current communications including information-sharing
and employee interactiveness
□ no satisfaction □ relatively low □ average □relatively high □very high
9. Your satisfaction with its current employment security scheme, e.g. that of
Equity /purchase programmes and employee ownership
□ no satisfaction □ relatively low □ average □relatively high □very high
10. Your satisfaction with its current authorisation and profit-sharing schemes
□ no satisfaction □ relatively low □ average □relatively high □very high
11. Your satisfaction with its current policies of internal promotion and job
rotation
□ no satisfaction □ relatively low □ average □relatively high □very high
12. Your overall satisfaction with surrounding working environment
□ no satisfaction □ relatively low □ average □relatively high □very high

201
A3. QUESTIONNAIRE ON CONSUMER SATISFACTION TOWARDS REAL

ESTATE DEVELOPMENT ENTERPRISES

Part I Background Information

1. Gender □ male □ female

2. age □ 20-24 □ 25-29 □ 30-34 □ 35-39 □ 40-44 □ 45-49 □
50-54 55 or over
3. Educational history
□ senior high graduate or below □associate degree □bachelor □master
□ doctor others___________________
4. The name and the area where your current residence is located : ____________
(city)______________(name)
5. The type of your current residence
□ multi-floored building □ medium-high building □ high building
□ garden house □ townhouse or superimposed house □ detached house
□ others
6. The living area of current residence： ( square meters per unit, built-up area)
□< 35 □35-50 □ 50-70 □70-90 □90-110
□ 110-130 □130-160 □160-200 □200-300 □>300

Part II Your satisfaction towards real estate development enterprises

1. The reasons behind your choosing this residence (please choose three major reasons)
□reasonable price □convenient transportation □convenient shopping
□developer brand □greening environment □sales service □residence quality
□advertisement □appreciation potential □housing design □estate management
service □ancillary facilities □___________ others
2. When purchasing this residence, your satisfaction towards service provided by the
salespersons
□no satisfaction □relatively low □average □relatively high □very high
3. Your satisfaction towards the purchasing price of your residence
□no satisfaction □relatively low □average □relatively high □very high

202
4. Your satisfaction towards quality of your residence
□no satisfaction □relatively low □average □relatively high □very high
5. Does the quality of your residence exceeds your expectations?
□ less than expected □ expected □ more than expected
6. Your satisfaction towards indoor design and layout of your residence?
□no satisfaction □relatively low □average □relatively high □very high
7. Your satisfaction towards indoor design and its layout?
□no satisfaction □relatively low □average □relatively high □very high
8. Your satisfaction towards ancillary living facilities (clubs, supermarkets, clinics)
within this residential property
□no satisfaction □relatively low □average □relatively high □very high
9. Your satisfaction towards greening environment within this residential property
□no satisfaction □relatively low □average □relatively high □very high
10. Your satisfaction towards recreational and sporting facilities within this residential
property
□no satisfaction □relatively low □average □relatively high □very high
11. Your satisfaction towards neighbourhood
□no satisfaction □relatively low □average □relatively high □very high
12. The number of your complaints submitted to the developer towards this residential
property
□ none □ 1-2 □ 3-4 □ many times
13. If ever complained, which area is your complaints targeted at?
□ residence quality □ sales service □ residential greening environment
□ estate management □ indoor design □ developer credibility
□ recreational and sporting facilities □ ancillary living facilities □residence layout
□ others___
14. If ever complained, your satisfaction towards‎the‎developer’s‎feedback‎‎‎‎
□no satisfaction □relatively low □average □relatively high □very high
15. After purchasing this residence, your recommendation of the residential property
developed by the same developer to your relatives or friends
□ none □ 1-2 □ 3-4 □ many times
16. If buy a new house, will you consider purchasing the residence of the same
developer
□certainly not □possibly yes □definitely yes

203
 B1.QUESTIONNAIRE ON REAL ESTATE DEVELOPMENT ENTERPRISES

Part I Background Information

1. Your length of service in the real estate sector

□less than 3 years □3 to 5 years □ 6 to 10 years
□11 to 15 years □16 to 20 years □more than 20 years
2. Your length of service in China Oversea Property (Including length of service in other China
Oversea Property companies)
□less than 3 years □3 to 5 years □ 6 to 10 years
□11 to 15 years □16 to 20 years □more than 20 years
3. Your current position
president chief executive chairman general manager others
4. The company you currently work in
China Oversea Land& Investment Ltd. cohl Shen Zhen Subsidiary Guang
Zhou Subsidiary Shang Hai Subsidiary Ning Bo Subsidiary Bei Jing Subsidiary
Chuang Chun Subsidiary Cheng Du Subsidiary Chong Qing Subsidiary
5. Your name ： Telephone number: (used only for sampled returned
visits)
Part II Assessment of integrated factors

Please give an integrative assessment of the importance of general factors of the real estate
development enterprises (the lower the score, the less the importance)

General factor 1 point 2 points 3 points 4 points 5 points

Human resources
Financial funds
Investment/land
Design/planning/R&D
Project
management/engineering
Marketing planning
IT information
Integrative management

Part III Assessment of competitiveness

204
Competitiveness
Factor assessment
factors
Corporate management and culture
sound and clear corporation concepts and outlook
Importance 1 point 2 points 3 points 4 points 5 points
The
identification
<15% 15%-30% 30%-50% 50%-70% >70%
strength of total
employment
Sound and clear corporation strategic objectives, development and expansion
Importance 1 point 2 points 3 points 4 points 5 points
The
identification
<15% 15%-30% 30%-50% 50%-70% >70%
strength of total
employment
Effective corporate brand concepts, brand objectives, and brand strategies
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of
the total <15% 15%-30% 30%-50% 50%-70% >70%
employment
4. The sound regulations of brand management
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of
the total <15% 15%-30% 30%-50% 50%-70% >70%
employment
5. its credibility in contract submissions
Importance 1 point 2 points 3 points 4 points 5 points
30%less 90%
contract disputes none 30-60% 60-90%
than over
6. the annual number of industry awards
Importance 1 point 2 points 3 points 4 points 5 points
Average annual over
none 1time 2-3times 3-5times
awards 5times
7. the share of its real estate development profits used for charity
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio none <3% 3%-5% 5%-10% >10%
8. the average annual number of complaints and penalties on environment and health care received
Importance 1 point 2 points 3 points 4 points 5 points
10or
Annual times none 1-3 4-6 7-9
more
Public relations
9. the satisfaction with developing partners
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of
the total <15% 15%-30% 30%-50% 50%-70% >70%
employment
10. the satisfaction with governmental agencies
Importance 1 point 2 points 3 points 4 points 5 points

205
Satisfaction of
the total <15% 15%-30% 30%-50% 50%-70% >70%
employment
11. the satisfaction with subcontractors
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of
the total <15% 15%-30% 30%-50% 50%-70% >70%
employment
12. the satisfaction with suppliers
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of
the total <15% 15%-30% 30%-50% 50%-70% >70%
employment
13. the satisfaction with the public
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of
the total <15% 15%-30% 30%-50% 50%-70% >70%
employment

human resources
14. the fairness of enterprise organisational structure
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of
the total <15% 15%-30% 30%-50% 50%-70% >70%
employment
15. the effectiveness of human resources development strategies
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of
the total <15% 15%-30% 30%-50% 50%-70% >70%
employment
16. the average salary growth rate of its employees
Importance 1 point 2 points 3 points 4 points 5 points
Rational growth remain
<5% 5%-10% 10%-15% >15%
rate steady
17. The average growth rate of its gross output value per capita
Importance 1 point 2 points 3 points 4 points 5 points
Rational growth remain
<5% 5%-10% 10%-15% >15%
rate steady
18. The ratio of managers rising from grass-roots
Importance 1 point 2 points 3 points 4 points 5 points
1 : 1 or
Rational ratio <0.1 :1 0.25 : 1 0.5 : 1 0.75 : 1
above
19. The average personnel turnover rate per year
Importance 1 point 2 points 3 points 4 points 5 points
20% or
Rational ratio <5% 5%-10% 10%-15% 15-20%
above
20. the ratio of qualified professionals in middle-and top-level management within its organisation
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio <10% 10%-20% 20%-30% 30%-50% >50%
21. the sustainable pleasant working environment of the enterprise

206
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of
the total <15% 15%-30% 30%-50% 50%-70% >70%
employment

Financial funds
22. the average total assets growth rate per year
Importance 1 point 2 points 3 points 4 points 5 points
remain
Rational ratio 1%-10% 10%-20% 20%-30% >30%
steady
23. the average profit growth rate per year
Importance 1 point 2 points 3 points 4 points 5 points
remain
Rational rate 1%-5% 5%-10% 10%-15% >15%
steady
24. the growth rate of its stock‘s market value
Importance 1 point 2 points 3 points 4 points 5 points
remain
Rational rate 1%-10% 10%-20% 20%-30% >30%
steady
25. the average liability rate on assets
Importance 1 point 2 points 3 points 4 points 5 points
Rational rate <30% 30%-50% 50%-70% 70%-90% >90%
26. (ROI) the average rate of its Return On Investment (ROI)
Importance 1 point 2 points 3 points 4 points 5 points
remain
Rational rate 1%-10% 10%-20% 20%-30% >30%
steady

Investment/land
27. the ratio of housing prices to income that is beneficial to the enterprise‘s competitiveness(during
the past 1-5 years)
Importance 1 point 2 points 3 points 4 points 5 points
in sharp in gradual in gradual in sharp
ratio steady
decline decline increase increase
28. The regional/urban growth rate of GDP in the local area/city that is beneficial to the enterprise‘s
competitiveness (during the past 1-5 years)
Importance 1 point 2 points 3 points 4 points 5 points
in sharp in gradual in gradual in sharp
growth steady
decline decline increase increase
29. the regional/urban transport development in the local area /city that is beneficial to the
enterprise‘s competitiveness (during the past 1-5 years)
Importance 1 point 2 points 3 points 4 points 5 points
developed developed highly
Development
none underdevelop to a moderate to a medium- developed
level
ed degree high degree
30. The consistency of the local government policies in the local area /city that is beneficial to the
enterprise‘s competitiveness(during the past 1-5 years)
Importance 1 point 2 points 3 points 4 points 5 points
not very relatively very
consistency average
inconsistent steady steady steady
31 the effective land policy i.e. the acquisition of lawful land tenancy

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Importance 1 point 2 points 3 points 4 points 5 points
identification <15% 15%-30% 30%-50% 50%-70% >70%
32.the market share in the local land auction market
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio <1% 2%-5% 6%-8% 9%-11% >12%
33. the market share in the national land auction market
Importance 1 point 2 points 3 points 4 points 5 points
10% or
Rational ratio <1% 2%-3% 4%-6% 7%-9%
above
34. the market share in the international land auction market
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio none <0.5％ 0.5%-1% 1%-1.5% >1.5%
35. the ratio of the bidding performance on the land market to successful land acquisition
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio <10％ 10%-25% 25%-50% 50%-75% >75%

Design/planning/R&D/IT information
36. discrepancies of product orientation
Importance 1 point 2 points 3 points 4 points 5 points
little big complete
Difference degree none appropriate
difference difference difference
difference
37. the ratio of investment in R&D to total profit
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio none <3% 3%-5% 5%-10% >10%
38. the ratio of investment to the total profit in IT
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio none <3% 3%-5% 5%-10% >10%

Project management/engineering
39. the average ratio of projects accomplished on schedule
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio <50% 50%-60% 60%-70% 70%-90% >90%
40. records in its project cost to total project contract price
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio <15% 15%-30% 30%-50% 50%-70% >70%
41. the average ratio of the total project cost cut-down to the total contract price
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio none <25% 25%-50% 50%-75% >75%
42. the ratio of successful project claims
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio none <25% 25%-50% 50%-75% >75%
43. the number of the major quality accidents in its engineering projects
Importance 1 point 2 points 3 points 4 points 5 points
Rational annual 51or
none 1-20 20-35 35-50
times more

Marketing planning
44. the knowledge of local real estate sector

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 Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of
the total <15% 15%-30% 30%-50% 50%-70% >70%
employment
45. the knowledge of local competitors
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of
the total <15% 15%-30% 30%-50% 50%-70% >70%
employment
46. the accumulative share of the local real estate developments
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio <1% 1%-5% 5%-8% 8%-15% >15%
47. the total share of residence development market
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio none <1% 1%-5% 5%-10% >10%
48. the total share of the local related property sales and rentals
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio none <1% 1%-5% 5%-10% >10%
49. the total share of residence sales and rentals
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio none <1% 1%-5% 5%-10% >10%
50. the effective property marketing strategies
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of
the total <15% 15%-30% 30%-50% 50%-70% >70%
employment
51. the discrepancy between sale figures and predicated sale figures
Importance 1 point 2 points 3 points 4 points 5 points
relatively relatively
Rational ratio very low very high
low unchanged high
52. average growth rate of the distributed sales of the related property per unit
Importance 1 point 2 points 3 points 4 points 5 points
Reasonable
<1% 1%-10% 10%-20% 20%-30% >30%
growth rate
53. satisfaction with housing purchase price
Importance 1 point 2 points 3 points 4 points 5 points
consumer
<15% 15%-30% 30%-50% 50%-70% >70%
satisfaction
54. satisfaction with property quality
Importance 1 point 2 points 3 points 4 points 5 points
consumer
<15% 15%-30% 30%-50% 50%-70% >70%
satisfaction
55. satisfaction with developer feedback complaints
Importance 1 point 2 points 3 points 4 points 5 points
consumer
<15% 15%-30% 30%-50% 50%-70% >70%
satisfaction
You have finished the Questionnaire, thank you very much for your participation and
support!

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 B2-1. QUESTIONNAIRE ON REAL ESTATE DEVELOPMENT

ENTERPRISES [HUMAN RESOURCES]

Part I Background Information

1. Your length of service in the real estate sector

□less than 3 years □3 to 5 years □ 6 to 10 years
□11 to 15 years □16 to 20 years □more than 20 years
2. Your length of service in China Oversea Property (Including length of service in other China
Oversea Property companies)
□less than 3 years □3 to 5 years □ 6 to 10 years
□11 to 15 years □16 to 20 years □ more than 20 years
3. Your current position: deputy general manager director architect in
chief general manager assistant consultant other
4. The company you currently work in China Oversea Land& Investment Ltd（688）.
cohl Shen Zhen Subsidiary Guang Zhou Subsidiary Shang Hai Subsidiary
Ning Bo Subsidiary Bei Jing Subsidiary Chuang Chun Subsidiary Cheng Du
Subsidiary Chong Qing Subsidiary
5. Your name ： Telephone number: (used only for sampled returned
visits)
Part II Assessment of integrated factors

Please give an integrative assessment of the importance of general factors of the real estate
development enterprises (the lower the score, the less the importance)

General factor 1 point 2 points 3 points 4 points 5 points

Human resources
Financial funds
Investment/land
Design/planning/R&D
Project
management/engineering
Marketing planning
IT information
Integrative management

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 Part III Assessment of competitiveness

Competitiveness
Factor assessment
factors
1. the fairness of its enterprise‘s organisational structure
Importance 1 point 2 points 3 points 4 points 5 points
The identification
strength of total <15% 15%-30% 30%-50% 50%-70% >70%
employment
2. the effectiveness of training programmes and resources
Importance 1 point 2 points 3 points 4 points 5 points
The identification
strength of total <15% 15%-30% 30%-50% 50%-70% >70%
employment
3. the effectiveness of human resource development strategies
Importance 1 point 2 points 3 points 4 points 5 points
The identification
strength of total <15% 15%-30% 30%-50% 50%-70% >70%
employment
4. the average salary growth rate of its employees
Importance 1 point 2 points 3 points 4 points 5 points
Rational growth
unchanged <5% 5%-10% 10%-15% >15%
rate
5. the average growth rate of gross output value per capita
Importance 1 point 2 points 3 points 4 points 5 points
Rational growth
unchanged <5% 5%-10% 10%-15% >15%
rate
6. the average growth rate of its profit per capita
Importance 1 point 2 points 3 points 4 points 5 points
Rational growth
unchanged <5% 5%-10% 10%-15% >15%
rate
7. the ratio of technical staff to total employment of the organisation
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio <0.1 :1 0.25 : 1 0.5 : 1 0.75 : 1 1:1
8. the ratio of managers rising from grass-roots (managers rising from grass-roots: external managers)
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio <0.1 :1 0.25 : 1 0.5 : 1 0.75 : 1 1: 1or above
9. the ratio of human resources cost to total business cost
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio <0.1 :1 0.25 : 1 0.5 : 1 0.75 : 1 1: 1or above
10. the fairness of its personnel recruiting procedures
Importance 1 point 2 points 3 points 4 points 5 points
The identification
strength of total <15% 15%-30% 30%-50% 50%-70% >70%
employment
11. the career/skills training programs for skilled and unskilled workers
Importance 1 point 2 points 3 points 4 points 5 points

211
The identification
strength of total <15% 15%-30% 30%-50% 50%-70% >70%
employment
12. the fairness of its bonus system
Importance 1 point 2 points 3 points 4 points 5 points
The identification
strength of total <15% 15%-30% 30%-50% 50%-70% >70%
employment
13. the soundness of its accident insurance system
Importance 1 point 2 points 3 points 4 points 5 points
The identification
strength of total <15% 15%-30% 30%-50% 50%-70% >70%
employment
14. the soundness of its Payment System including earnings
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of the
<15% 15%-30% 30%-50% 50%-70% >70%
total employment
15. the soundness of its employment security scheme, e.g. that of Equity /purchase programmes and employee
ownership
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction <15% 15%-30% 30%-50% 50%-70% >70%
16. the soundness of its authorisation and profit-sharing schemes
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of the
<15% 15%-30% 30%-50% 50%-70% >70%
total employment
17. the completeness of communications including information-sharing and employee interactiveness
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of the
<15% 15%-30% 30%-50% 50%-70% >70%
total employment
18. the average record number of its employee disputes
Importance 1 point 2 points 3 points 4 points 5 points
21 times or
Rational times none 1-5times 6-10 times 11-20 times
more
19. the soundness of establishment of its the appeal procedure, the formal dispute resolution, and problem-solving group
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of the
<15% 15%-30% 30%-50% 50%-70% >70%
total employment
20.the establishment of its organisational culture that facilitates the establishment of its project objectives by concerted
efforts
Importance 1 point 2 points 3 points 4 points 5 points
The identification
strength of total <15% 15%-30% 30%-50% 50%-70% >70%
employment
21. the soundness of its policies of internal promotion and job rotation
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction of the
<15% 15%-30% 30%-50% 50%-70% >70%
total employment
22. the average personnel turnover rate
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio <5% 5%-10% 10%-15% 15-20% 20% or more

212
23. the average personnel turnover growth rate per year
Importance 1 point 2 points 3 points 4 points 5 points
in sharp in gradual basically in gradual in sharp
Reasonable growth
decline decline unchanged increase increase
24. the ratio of qualified professionals in middle-and top-level management within its organisation
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio <10% 10%-20% 20%-30% 30%-50% >50%
25. the ratio of qualified professionals with intermediate and advanced credentials
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio <10% 10%-20% 20%-30% 30%-50% >50%
26. the ratio of college diploma holders to its total employment
Importance 1 point 2 points 3 points 4 points 5 points
Rational ratio <10% 10%-20% 20%-30% 30%-50% >50%
27. the sustainable and pleasant working environment
Importance 1 point 2 points 3 points 4 points 5 points
Satisfaction <15% 15%-30% 30%-50% 50%-70% >70%

213
 C. QUESTIONNAIRE ON REAL ESTATE DEVELOPMENT ENTERPRISES

Part I Background Information

Your length of service in the real estate sector：

□ less than 3 years □ 3 to 5 years □ 6 to 10 years

□11 to 15 years □ 16 to 20 years □ more than 20 years
1. Educational history bachelor master other
2. Name： Phone number:

Part II Factor assessment (Level 1)

Competitiveness factors
Description 1 point 2 points 3 points 4 points 5 points
(Level 1)
Strategic management, time management,
cost management quality management,
1. Management risk management, environmental
management, safety management, contract
management, management coordination
Organisation running, training, human
2.Organisational
resources applications 、 personal
capacity
satisfaction
IT application, innovation, research and
3.Technical capacity
development, engineering and technology
4.financing capacity Financing capacity, growth capacity
Localisation, market share, marketing
5.Market power
strategy, customer satisfaction
Qualifications, scope of business, image,
6.Social influence and reputation, the project public welfare,
culture, public relations
7.Regional / Urban Demographic factors, economics,
Competitiveness infrastructure and policy
Part III Factor assessment (Level 2 )

1. Management
Competitiveness
Description 1 point 2 points 3 points 4 points 5 points
factors(Level 2 )
1.1Strategic Corporate philosophy and vision, strategic
management objectives, expansion strategies
Time management methods and systems，
1.2 time management ability to complete and sell projects on
schedule

214
 Cost control method and system、Ability
to complete the project at cost、building
1.3 cost management
cost-cutting capacity 、 Marketing cost
control ability
Quality management method and
1.4 quality management system 、 Quality planning, quality
incidents、quality of service satisfaction
1.5 risk management Risk management method and system
Environmental systems, environmental
1.6 environmental
programs, environmental complaints and
management
punishment
Safety procedures, site accident、accident
1.7 safety management
resolution
1.8 contract Contract management system, contract
management claims, ability to complete the contract
1.9 management coordination to designer, contractor,
coordination Supervisor, and government

2. Organisational capacity
Competitiveness
Description 1 point 2 points 3 points 4 points 5 points
factors(Level 2 )
Organisational structure, human resource
2.1 Organisation development strategy, staff recruitment,
running, rotation and promotion, salary, equity,
information sharing
Training programs and resources, training
2.2 training
differentiation
Per capita GDP, per capita profit、Wages
growth、The proportion of junior officers
2.3 human resources
promoted to manager、The proportion of
applications
college staff 、 Annual staff turnover
rate、employee disputes
Philosophy, strategy acceptance, cultural
activities satisfaction, pay satisfaction,
2.4 personal satisfaction
motivation system satisfaction,
information sharing satisfaction

3. Technical capacity
Competitiveness
Description 1 point 2 points 3 points 4 points 5 points
factors(Level 2 )
Range of IT applications, software
3.1 IT technology
development and applications, enterprise
application
support
3.2 technological
Patent number, extent of new technology
innovation

215
 Units and staffing, business support,
3.3 R&D project orientation diversification, product
differentiation
Construction equipment production 、
3.4 engineering Construction site availability,
technologies consumption of materials and equipment,
product acceptance by other
3.5 acquisition
Material ordering, ability to contract price
competence

4. financing capacity
Competitiveness
Description 1 point 2 points 3 points 4 points 5 points
factors(Level 2 )
Bank credit, loan sources, Land line of
4.1financing capacity credit 、 Project line of credit 、 Market
situation
Asset growth rate, profit growth rate, the
total capital growth rate, share price
4.2 growth ability
growth rate, return on investment, return
of assets

5. Market power
Competitiveness
Description 1 point 2 points 3 points 4 points 5 points
factors(Level 2 )
Overall ability to adapt to local、Mastery
5.1 localisation of the local real estate、Master degree on
local competitors
Land share、development share、 rental
5.2 market share
and scales share
5.3land acquisition
Successful bid rate, the land reserve, land
strategies and
quality, access to pricing strategies
implementation
Effectiveness of marketing planning,
5.4 Sales strategy and marketing training, sales forecasting, sales
execution rate, with regional differences in the
property , price growth rate
Sales and service satisfaction, price
5.5 Consumer satisfaction, satisfaction with the
satisfaction in neighbourhood atmosphere, the amount of
marketing complaints, feedback satisfaction, the
possibility of re-purchase

social impact
Competitiveness
Description 1 point 2 points 3 points 4 points 5 points
factors(Level 2 )
6.1 credentials Development of qualifications,

216
 professional qualifications of senior
managers
business scope of sub-sectors , business
6.2 business scope
scope of sub-regional
Submit contract integrity, quality
6.3 Image and
performance, bank credit, industry awards,
reputation
the total of complaints
6.4 Public welfare Number of public projects、the ratio of
projects profit for the public share
Brand concept and strategy, brand
department settings, the use of cultural
6.5 Corporate Culture
facilities, cultural activities satisfaction of
enterprise's staff
communication satisfaction with project
6.6 public relations partners, government, contractors, the
media and the public

7. Regional / Urban Competitiveness

Competitiveness
Description 1 point 2 points 3 points 4 points 5 points
factors(Level 2 )
Population growth, population density,
7.1 demographic factors
labour market, immigration
Urban economic development, GDP,
7.2Economic factors
growth, income ratio
Transport facilities, education and health
facilities, regional stability、Government
7.3 Infrastructure and
policy stability, improved social security
government policy
system, information openness, degree of
commercial development, land policy

217