Analysis Of Wework Company: Strategy, Benefits, And Challenges
The Sharing Economy has revolutionized the way we commute, live and work. With the onset of the technological revolution, the professional workspace has evolved to cater to personal and professional needs. Office spaces adopting archaic, individualised cubicle-based workspaces are now rendered impractical in an age where collaboration is key. One prominent gamechanger redefining co-sharing workspaces is WeWork. Their Business to Consumer operating strategy, benefits, challenges, viability, and strategies to curb issues will be discussed in depth in this essay.
About WeWork
WeWork was founded in 2010 by Miguel McKelvey and Adam Neumann in New York, United States with the aim to “Create a world where people work to make a life, not just a living. ” Their value proposition is “providing pleasing, collaborative physical work spaces in prominent cities worldwide”. Services provided include wireless internet access, printers, food/drinks, private phone booths, common and private areas, office supplies/services, meeting rooms, nap pods and 24/7 access. An in-house design team caters to a variety of office needs for individuals, start-ups, satellite offices, networking event setups, and headquarter style configuration. Partaking in this platform is ideal for companies/individuals with businesses operating worldwide and want flexibility in staff workspaces. Firms can enjoy savings with reduced investment in costly real estate spaces, increased staff productivity, staff satisfaction with flexible working arrangements, more staff networking opportunities and enhanced social support for independent professionals.
The WeWork Difference
One differential competitive strategy used by WeWork is the provision of affordable plans for stakeholders (mainly companies) catering to the everchanging workplace dynamics. While some companies such as PricewaterhouseCoopers (PwC) have embarked on costly in-house office fitout modifications, most companies prefer to adopt WeWork’s flexible, cost effective and attractive workspace layout. Research on Singapore’s office spaces indicate that Grade A (premium) office rental rates in the business district are set to increase significantly over the next few years from the current high of SGD8. 82 per square foot. WeWork’s reasonably priced plans range from $450 to $620 for a hot desk, $630 to $825 for a dedicated desk and $1, 100 to $2, 700 for a private office per month in Singapore. Multinational Companies (MNCs) such as American Express and Aetna Insurance have saved millions on real estate costs after switching to co-sharing workspaces with companies including IBM, Microsoft, Blackrock, and Deloitte now utilising WeWork’s Singapore spaces. WeWork capitalises on its affordable options and brand reputation built by the trust of established current MNC clients in them to move towards further expansion.
History of Coworking Spaces
The concept was pioneered in the 70s by Armand Beliveau, an IBM employee who believed that office spaces should be redesigned with walls and cubicles removed and further explored in a Research Paper which showed a preference of co-sharing workspaces by the sample surveyed. Over time, concepts such as Liquid Space, Coworking, and WeWork have evolved and transformed office workspaces today.
The Future
A Global Coworking Survey by DeskMag estimates that 1. 7 million people will be utilising coworking spaces by end 2018. Real Estate Firm CBRE’s Asia Pacific Occupier Survey 2017 also indicates that 64% of MNCs plan to adopt co-working spaces by 2020 to enjoy cost savings, leasing flexibility, collaboration and layout flexibility while expanding their real estate portfolios. In essence, the industry is expected to grow substantially.
Impact
Beyond cost savings, people can enjoy networking opportunities and greater job control leading to better work life balance. Workers can interact freely with flexibility in sitting arrangement, gain inspiration for new ideas (especially for creatives) and solve work problems collectively. Moreover, people can take charge of their work schedules and enjoy better work-life balance. Spaces such as Grind and WeWork locate themselves in strategic city and heartland sites that save people commuting time, allowing for them to focus on their work. This time saving allows for people to enjoy better work-life balance, enjoy higher standard of living and create a more satisfied and productive society at large.
The Downside
Some problems coworking spaces may grapple with include space utilisation issues, but more prominently the regulations governing such spaces. These disruptors may also contribute to the gentrification of older neighbourhoods by increasing the prices of properties and displacing small businesses and residents. In Australia, China, London and Singapore, legislation is lagging in controlling the risks aforementioned. To curb the possible problems, governments should analyse the growth patterns of such spaces in comparison to other countries, seek feedback from the public and conduct impact studies prior to tightening their legislative framework which may drive space providers out.
Future Direction
Providers should conduct detailed research in advance and avoid exploiting systematic loopholes before making a foray into a new market. Instead, co-operation with the local government and transparency in potential expansion plans will provide authorities with more leeway in urban planning (e. g. in Singapore’s Urban Master Plan). Respecting land use planning regulations are important too. Providers making a foray into the Singapore market should ensure compliance with authorities and regulations such as the Building Control, Planning and Competition Acts (Singapore Statutes). For instance, providers should ensure workspaces meet regulatory compliance checks and keep prices competitive but economically viable. They should avoid challenging legislation, or risk facing blacklisting/fines/restricted growth. Moving forward, coworking space providers should seek a good understanding of the country’s culture and practices, and be prepared to adapt/adjust their approach accordingly to prevent clashes in ideology/practice or conduct a pilot before full implementation as done in Amsterdam. Ultimately, striking a fine balance between the government’s agenda, user requirements and providers goals is critical to ensure that society at large can benefit on the whole.
