• Concordia University Chicago

• MBA 6300

CASE STUDY: DOMUS DEVELOPMENTS: TO BUILD OR NOT TO BUILD?

Asang Christian Ngwa A.

Q1018234

Concordia University Chicago

Berlin school of business and innovation

Accounting for decision making (MBA 6300)

Prof. Dr. Christos Lemonakis

06/12/2021

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CASE STUDY: DOMUS DEVELOPMENTS: TO BUILD OR NOT TO BUILD?

INTRODUCTION

Domus is a family-owned residential construction company with its headquarters in London, Ontario that

was founded in the year 2000. It built a reputation for itself by concentrating on innovative and highquality home designs. This coupled with its ability to provide landowners with quick returns on

investments has catapulted Domus to high levels of success and multiple awards over the years. Inspired

by the success and popularity of modern loft residences in the Toronto Market, in 2008 Domus acquired

a large piece of land on which it planned to build London’s first modern residence known as the North

point loft (North point). The ambitious project would consist of 51 highly customizable modern lofts to

cater for the needs of specific high-end buyers. The project however would later be suspended due to

the catastrophic financial downturn of the 2008 global financial crisis that hit the housing market

severely. Now 5 years after the project was suspended, Domus is considering whether to relaunch the

project or not. In this the case study we aim to re-evaluate the feasibility of the project and help Domus

decide whether to go ahead and relaunch the project or just sell of the piece of land instead since it has

gained value over time.

CORPORATE STRENGTH AND WEAKNESSES

Over the years, Domus has grown and gained some well-established corporate strengths that might work

to its advantage with regards to this project. It has built a strong reputation within the industry as it is

well respected for its innovative and quality designs. This might act in Domus’ favor when negotiating or

looking for investors for its projects. It has built trust among landowners and customers as it provides

designs and quality that satisfy customer expectations and at the same time provide landowners with

quick return on investments. This means they have built a degree of trust within the community that

makes it able to quickly sell off their apartments as customer are readily prepared to pay for their

properties. The multiple awards they have received over the years only goes to solidify them with a

badge of honor within the industry that gives Domus a competitive advantage over other companies

within the London area. With its headquarters in London, Ontario, Domus finds itself in a buzzling city

center with a diverse demographic and an above average annual income which means there would be a

market for their modern residential buildings. One of the main weaknesses the firm faces is its lack of

experiences in the provision of high-end modern lofts thus the North point Loft project would be a

make-or-break project for them as they adventure into providing such expensive lofts for their

customers. Also, its reliance on external labour for its projects means they have to spend more time on

orienting workers on every new project. They are also dependent on the overall fluctuations in labour

cost and availability of labour for its projects at any given time thus meeting project timeliness are bound

to be very uncertain.

POTENTIAL CUSTOMERS

The North point project was targeted at well to do Londoners with above average annual income. With

its location just a few minutes from the Northwest London’s largest suburban commercial area, this was

an ideal residential location for retirees and people who wanted a quiet leaving area away from the

buzzing noise of the city, with a good view of the city and yet close enough for them to easily access