Hmlet's early internationalisation

Introduction

Internationalisation is the process of expanding the company across the multinational countries, in order to retain more clients and generate revenue in long run. Through the internationalisation process, it is possible for the firm to manage their international operations and gain high competitive advantage in the market which in turn helps the organisation to sustain in the market and secure future development. The organisational representatives try to develop creative business strategic planning in order to manage the operations across different markets and also manage their stakeholders to make the business profitable. The study focuses on analysing the internationalisation process of the company Hmlet, being a company in co-living space service market and explores the growth strategies of the company in order to expand their business across the diverse markets around the globe. Through this study, it is also possible to identify possible challenges for Hmlet in running their operations in the Asian markets as well as suggesting alternative strategies to emerge as a strong player in the co-living space service market across the globe.

Organisational background

Hmlet is a providers of co-living space service by simplifying the housing for the people reallocating or living in Australia, Singapore and Tokyo. The organisation provides an efficient co-living space services to the customers, where shared housing practice is increasing over the period of time. The services of the company Hmlet mainly include offering rooms and full apartments for rent and letting the members to share their flats and have access to the monthly events. In the apartments, there are different events such as networking sessions, book clubs, cocktails evenings and yoga classes which further enable the users to get access to a safe and secure home for living at affordable price (Hmlet, 2021a). The members can share the apartment with the cooperative renting system, so that the bachelors can live safely in a suitable environment. The company has been found in 2016 and it is successful to rapidly build the portfolio of co-living properties in Singapore, Hong Kong as well as Sydney and Tokyo. In these large cities, providing the rentals and cooperative renting system is effective for retaining the customers towards the apartments and enjoy safe home and other events in the apartments. The co-living space properties are popular among the expatriates and the section of local communities. The characteristics of these services are offering short term and long term contract for rental options, having furnished rooms and apartments at more flexible terms and condition than the traditional leases and agreements for rentals. Apart from that, the members can enjoy the flat spaces, rooms and other utilises and services cooperatively and there are common areas such as shared kitchen, lounges etc. Hmlet aims at expanding their services backed by a large pool of financial resource approximately US $48 million and the company had raised this in 2018 and 2019 from the investor such as Burda capital, Sequoia India and Mitsubishi Estate Company (Hmlet, 2021b).

Main drivers of internationalisation for Hmlet

Hmlet is hereby efficient to run their business across the global markets, where the organisation is able to meet the customer’s requirements and create values for them. It is possible for the organisation to maximise client satisfaction and sustain in the market of co-living space providing (Karamitsos, Papadaki and Al Barghuthi, 2018). The major drivers of the organisation are service efficiency, price management, business innovation and client management.

Service efficiency

Service efficacy is the major driver of the business in running their operations, where Hmlet focuses on providing efficient to services in co-living space providing market. In the recent era of globalisation, there is increasing numbers of expatriates as well as migrant workers, who are searching for good housing facilities with safety and security. Additionally, there are other individuals including bachelors and friends who are coming to the new place and searching for home or apartments as a shared rent basis, so that they can afford a share of the rent of the apartment. The demand for such shared renting services is increasing year by year due to migrant workers and job opportunities in abroad (Hmlet, 2021a). Hence, the business mainly focuses on providing efficient co-living space services to the customers for managing them efficiently.

Price management

Price management is another driver for managing their services, where the company focuses on setting affordable price with diverse facilities, so that they can afford the houses. Setting affordable price is hereby effective strategic planning to retain more customers in the new place and deliver them the best co-living space services in long run. Along with the pricing offers, there are other services such as access of the events in the apartment, resources, common areas such as lounge and kitchen etc.

Business innovation

The innovation in managing the services is another driver to sustain in the market and expand the organisation successfully (Wirawan, Yudoko and Lestari, 2017). The major innovations include providing safe home and security at the apartment, as well as protecting the individuals from any hazardous situation, access to the common space in the apartment, shared renting options and access to different events in the apartment such as book clubs, cocktail parties and networking sessions. Flexibility at the apartment and meeting the client’s needs are the success factors of the organisation for running the operations successfully.

Client management

The company Hmlet focuses on managing the clients across the international market and ensure developing strong customer relationship management in order to build trust and respect among the clients. Strengthening the client base through providing the best co-living space service is the major aim of Hmlet, where the organisation is able to ensure quality of services and create values for the clients by meeting their preferences and needs. Continuous communication with the clients and online support through 24*7 monitoring and supervision are also there for protecting the customers and retaining more clients in long run (Hmlet, 2021b).

Critically analysing Hmlet's international growth strategy for Singapore, Hong Kong and Tokyo

Hmlet's international growth strategy for Singapore, Hong Kong and Tokyo are such as providing diverse co-living space services. In order to expand the services across Singapore, Hong Kong and Tokyo, the company provides the best space services at affordable price, where shared rental process is being implemented and it is considered as an innovative strategy to retain more clients (Puķīte and Geipele, 2017). Moreover, the company focuses on other events at the apartments, where the customers can access their services including book clubs, cocktail evenings, pool side parties and get-togethers in the apartment for social networking. These are effective for Hmlet to provide the safe and secure place to stay and enjoy the environment along with diverse events. The organisation recently focuses on diverse services such as interior decorations, furniture and property management, where the company aims at investing in developing good estate property. Property management through quality supervision and continuous monitoring process are being implemented in the apartments. Additionally, the experts at Hmlet are able to engage in the interior decorations and furniture design so that they can provide the best apartments and co-living services to the customers. International growth strategy of the organisation are hereby providing innovative services in the co-living space industry as well as managing the estate property in long run to sustain in the market (Hmlet, 2021c).

Additionally, the shared renting process is being implemented, which is another major strategic tactic of Hmlet in order to expand their services across Singapore, Hong Kong and Tokyo. The company also aims at expanding their operations in the Asian markets including Malaysia and Thailand, so that the market presence and visibility can be maximised (Walker et al., 2018). Additionally, the strategy of arranging the investors and raise capital for further investment is another strategic planning of Hmlet, where it is possible for the firm to manage their investors and generate profit in long run by property management and providing co-living space services to the customers. The Burda Capital, Sequoia India and Mitsubishi Estate Company are the investors of Hmlet to raise fund and run the operations internationally. The presence of the estate property across the international markets Hong Kong, Tokyo, Australia and Singapore are beneficial for the firm to run their operations and retain more clients for having the best place to stay safely. The safety and security of the apartments are also maintained through continuous monitoring process and the staff members and employees at the apartments are also efficient to handle the clients so that they can access the common spaces and events. Through these strategic planning, the company is trying to expand their business and ensure future sustainable growth (Hmlet, 2021c).

Possible challenges for Hmlet in Asian markets

Hmlet aims at expanding their business across the Asian markets, in order to access the market share in the estate industry and gain profitability in long run by providing rental services to a huge customer’s base. In this context, the organisation faces several challenges in running their business in the Asian markets which are explained further. Until 2019, there was high occupancy rate in Hmlet property across the international markets, but this COVID 19 situation deteriorates the demand for the properties on rental basis. Hmlet is in still in the expansion mode in 2020 in order to run their operations across the international markets to maintain the brand presence and improve visibility in the co-living space service industry. The issue in management due to such pandemic era is also another critical phase for Hmlet, where the organisation must rethink about drastic changes in the strategies. There is lack of staff members available in the company due to COVID 19 situation and following the government rules of lock down and social distancing. Due to low demand of the customers in such pandemic era, the company fails to generate revenue and the profit volume is being hampered over the period of time (Kazak, Simeunović and Hendricks, 2019). On the other hand, debt management also become critical for Hmlet due to such lack of financial management. In May 2021, Hmlet received a US $6 million injection, for maintaining the existing investors such as Burda Capital, Sequoia India and Mitsubishi Estate Company. It also exited the Australian market, closing its operation, going into voluntary liquidation and walking out of seven lengthy head leases as well as leaving at least Australian $ 508000 in unpaid debts (Hmlet, 2021c).

Suggested strategies to emerge as a strong player in the co-living space service market

The organisation Hmlet must focus on employee management in order to run their international operations. Hiring experienced staff member in the estate management services as well as customer handling team are essential for Hmlet to sustain in the market and provide the best quality services. It is important for the firm to provide training to all the staff members and improve their abilities to manage the customers and also supervise the whole areas of the apartment for better management.

Hmlet must promote the services through social media advertisement so that diverse social communities across Singapore, Hong Kong and Tokyo, Malaysia and Thailand, so that the individuals can identify their services and choose the best co-living space services for safe staying. In this regard, the organisation website development along with social media marketing by utilising Facebook, YouTube and Twitter would be beneficial for the firm to share important information related to the co-living space services, pricing offers and customer’s management.

Hmlet needs to strengthen their stakeholder’s base by providing high return on the investment. Hereby, the major stakeholders engaged with Hmlet are the investors and shareholders of the company, employees and management team and the customers. The company must provide high return on the investment of the shareholders and investors after generating profitability. The employees and managers must be managed well with incentives, structured salary and safety at the workplace. Providing the innovative co-living space services along with good interior design, furniture, different events at the apartment would be beneficial to create values for the customers and attract more audiences in long run.

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Reference List

Hmlet, 2021a. About us. [Online] Available at: https://www.hmlet.com/en/about-us [Accessed on 22 October 2021].

Hmlet, 2021b. Corporate housing. [Online] Available at: https://www.hmlet.com/en/corporate [Accessed on 22 October 2021].

Karamitsos, I., Papadaki, M. and Al Barghuthi, N.B., 2018. Design of the blockchain smart contract: A use case for real estate. Journal of Information Security, 9(03), p.177.

Kazak, J.K., Simeunović, N. and Hendricks, A., 2019. Hidden Public Value Identification of Real Estate Management Decisions. Real Estate Management and Valuation, 27(4), pp.96-104.

Puķīte, I. and Geipele, S., 2017. Determining customer satisfaction in the real estate management sector in Riga. Baltic Journal of Real Estate Economics and Construction Management, 5(1), pp.226-237.

Walker, T., Krosinsky, C., Hasan, L.N. and Kibsey, S.D. eds., 2018. Sustainable Real Estate: Multidisciplinary Approaches to an Evolving System. Berlin: Springer.

Wirawan, C., Yudoko, G. and Lestari, Y.D., 2017. Product-service system for Indonesian industrial estate firms: A conceptual framework. In 2017 IEEE International Conference on Industrial Engineering and Engineering Management (IEEM) (pp. 1812-1816). IEEE.