The real estate concept is very different in Great Britain. It consists of a system of bidding and auction. Still this obstacle did not stop Countrywide's management from seeing a wave of change. Many other companies had already seen Great Britain as an entry point into the rest of Europe. These success stories are Safeway, Wal-Mart and Pizza Hut to name a few. The means to acquiring a ready-made company within Great Britain was the next step. At this point, it was understood that independently opening a Countrywide branch there would be too risky. The strategy was to acquire or create a joint venture with a company that already existed where Countrywide could slowly take over meanwhile slowly introducing that workforce to American mortgage knowledge and skills (Globalhomeloans.com, 2005). The irony in this situation is that Countrywide may have been cocky. After all, the situation is very favorable and almost safe. The country where they were doing business speaks the same language and has similar core values to America, right? Countrywide chose to partner with Barclay's to create a new company called Global Home Loans. These opportunities will allow loan servicing to remain efficient and competitive as the market changes.
Market Place and Strategy
Still it is important that a company do its homework about a particular demographic before moving forward. It is human nature to learn from mistakes but still is advantageous to avoid costly errors if not all possible. An organization needs to understand that how they present themselves via the web site can impact people on social and economical levels. Their product can become a device for change especially in developing nations like China or India. Even with careful research of cultural differences, an organization must be mindful of how far reaching their involvement is with their host country and the people of that country. Even without knowing it, an organization brings its values and standards of operations with it when gaining presence in a country. This can act as motivation for the employees from that country. It can allow them to prosper and benefit from better working conditions. How does the host country feel about such progress? An American company changing lives? This can be a double-edged sword. This is the one reason why it is very important the organization remain respectful of the host country's culture differences especially if the web site caters to this idea. The organization will profit in the long run.
Countrywide is a larger corporation with many aspects of the home loan process and mortgage product under a large umbrella. Each part of the umbrella works independent of each other to come together in the end as a successful, nationally known service. Currently Countrywide is ranked number three in the marketplace when it comes to share of that market place and portfolio size. Because Countrywide is such a large corporation with different areas focusing on different parts of the loan process, Countrywide has many different strategies being used simultaneously. Globally speaking Countrywide is far from developing global opportunities for the organization. Much of the company's strategy has remained centered on the loan servicing of the American portfolio and continued focus on the refinancing production while the rates have been so low the last few years. Much of Countrywide's deliberate choice to remain out of the global market has been drawn from detailed market research of other cultures and those cultures' perception of housing. As a result Countrywide did remain careful in its choice to create a joint venture in Great Britain. Global Home Loans was born out of this strategy and careful thought process. Because Countrywide has recently acquired Treasury Bank in Virginia, their relationships with other banks is growing quickly especially in Europe. Now it is obvious that Countrywide could financially benefit from these relationships and relocate some operating functions overseas. It has been Countrywide's practice to remain conservative in its decisions but recently in the last months it has become apparent that its playing field is changing. In order to continue its growth at home, the company needs to focus on opportunities abroad and utilizing possible resources in other ...
Overall it has been Countrywide's practice to remain conservative when it comes to strategy. Every move made by the company is well researched and calculated. As a result, any opportunity to focus on markets outside the United States has remained as a joint venture only. Countrywide has chosen this format of entry because it minimizes the risk involved for the company. Also as a joint venture Countrywide also limits its involvement with the joint venture's operations. For an example, Global Home Loans before interaction with them was a completely owned and operated British company located outside of London (Globalhomeloans.com, 2005). As a joint venture, Countrywide has money and interests invested in the global success but Countrywide does not own the company. Much of its operations remain intact from the beginning and many of its employees have stayed on. Another feature of the joint venture is that Countrywide benefits because it gets to be involved on the global scale but does not have to deal with the politics, law and tax issues other ways of entry may have. Countrywide still has a great say in the operations of this venture and in fact have managing directors on site to assist in everyday issues but should the venture turn sour, the loss will not cripple the company. This venture has been success in introducing Countrywide to the world market of housing.
Many discoveries have been made as a result. In other countries, homeownership is seen differently. In fact many people are afraid of it and believe only the upper class are able to own land or other property. In Great Britain there were two obstacles. First of all the perception that the middle class could not own property, their only choice was to rent and that for many generations this had been the choice for many people. A lot of times, property is handed down from generation to generation; there is never any question of ownership. Secondly the way that real estate bought and sold is different from the United States. The land is offered at auction and is bought and paid for upfront. The idea of a home loan was farfetched ten years ago. Countrywide later found out the same perceptions exist in other countries like France and Italy (Globalhomeloans.com, 2005). Much of Europe had subsisted on this way of doing things and it seemed this was going to be a hard mold to break. But times are changing with the European concept of debt because of the Euro has opened many borders for those countries. Also technology has placed a great role in expanding this idea of debt and wanting to have credit cards. Cell phone and computers have changed the European and British perception of the world. No longer is buying Levi's a matter of going to the store but surfing the web. The idea that a person can work in Belgium and live in Paris is not so farfetched. Cell phones and computers, efficient train schedules make these opportunities possible today where ten years ago a company would look to local employees.
It is the younger generation that is thinking outside the old world and starting to realize there is consumer power with credit. There are opportunities that did not exist before because of technology. This too has had a backlash, but the concept of credit is new to many cultures. Still money is a great tool and the ability to obtain financing can be powerful. Countrywide's venture in England has opened relationships with banks in France, Germany, Italy as well as financial institutions in Asia, mainly Taiwan and South Korea (Globalhomeloans.com, 2005). These relationships with banks only open the door to understanding their need for housing and how Countrywide's role can make that need a reality. Of course, in understanding that need comes further market research and constructing processes to make a presence possible in those markets. It is important to see the differences and work from them. What will this mean for Countrywide's operations? Will this mean another joint venture or an opportunity where entry requires the company's full involvement? Will the infrastructure be available?
Countrywide's Operating Practices
Countrywide is in a pickle. For thirty years, the company has been a California company through and through. It was founded on American principles that anything is possible if you dream it. Still due to political and economical reasons, the company is finding that it will need to relocate a lot if its operations inside its home state. The cost of doing business in California is too costly in comparison to other western states such as Arizona and Nevada. It is also focusing on expanding its operations out of its existing offices in Plano, Texas. This will mean great growth…
These opportunities will allow loan servicing to remain efficient and competitive as the market changes.
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