Case Study Description of Keller Williams Realty (A)
Describes the economic and cultural models that have led to the success of Keller Williams Realty. By 2006, Keller Williams was one of the most profitable real estate companies in the United States (if not the most profitable); in addition, it was on its way to becoming one of the largest in terms of number of agents (over 70,000). Describes the factors that led to this company's success--including its operational model, compensation model, profit sharing model, and culture. Readers are asked to evaluate how these factors contribute to the company's success and whether they will continue to enhance the company's growth going forward. In addition, explores the critical role that culture and organizational practices can have on a company's operating performance.
Swot Analysis of "Keller Williams Realty (A)" written by James N. Baron, Brian Tayan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Keller Williams facing as an external strategic factors. Some of the topics covered in Keller Williams Realty (A) case study are - Strategic Management Strategies, Organizational structure, Strategy execution and Organizational Development.
Some of the macro environment factors that can be used to understand the Keller Williams Realty (A) casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , increasing transportation and logistics costs,
technology disruption, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Keller Williams Realty (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Keller Williams Realty (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Keller Williams, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Keller Williams operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Keller Williams Realty (A) can be done for the following purposes –
1. Strategic planning using facts provided in Keller Williams Realty (A) case study
2. Improving business portfolio management of Keller Williams
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Keller Williams
Strengths Keller Williams Realty (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Keller Williams in Keller Williams Realty (A) Harvard Business Review case study are -
Organizational Resilience of Keller Williams
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Keller Williams does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Keller Williams in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Keller Williams has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Cross disciplinary teams
– Horizontal connected teams at the Keller Williams are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Operational resilience
– The operational resilience strategy in the Keller Williams Realty (A) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Highly skilled collaborators
– Keller Williams has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Keller Williams Realty (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Keller Williams has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Keller Williams Realty (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Low bargaining power of suppliers
– Suppliers of Keller Williams in the sector have low bargaining power. Keller Williams Realty (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Keller Williams to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Keller Williams digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Keller Williams has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Diverse revenue streams
– Keller Williams is present in almost all the verticals within the industry. This has provided firm in Keller Williams Realty (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Keller Williams has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Keller Williams to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Organizational Development industry
– Keller Williams Realty (A) firm has clearly differentiated products in the market place. This has enabled Keller Williams to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Keller Williams to invest into research and development (R&D) and innovation.
Weaknesses Keller Williams Realty (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Keller Williams Realty (A) are -
Increasing silos among functional specialists
– The organizational structure of Keller Williams is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Keller Williams needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Keller Williams to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Keller Williams has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Keller Williams supply chain. Even after few cautionary changes mentioned in the HBR case study - Keller Williams Realty (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Keller Williams vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Keller Williams has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Skills based hiring
– The stress on hiring functional specialists at Keller Williams has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, James N. Baron, Brian Tayan suggests that, Keller Williams is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High operating costs
– Compare to the competitors, firm in the HBR case study Keller Williams Realty (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Keller Williams 's lucrative customers.
Interest costs
– Compare to the competition, Keller Williams has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow decision making process
– As mentioned earlier in the report, Keller Williams has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Keller Williams even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Keller Williams is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Keller Williams Realty (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Keller Williams Realty (A), it seems that the employees of Keller Williams don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities Keller Williams Realty (A) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Keller Williams Realty (A) are -
Leveraging digital technologies
– Keller Williams can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Better consumer reach
– The expansion of the 5G network will help Keller Williams to increase its market reach. Keller Williams will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Keller Williams can use these opportunities to build new business models that can help the communities that Keller Williams operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Creating value in data economy
– The success of analytics program of Keller Williams has opened avenues for new revenue streams for the organization in the industry. This can help Keller Williams to build a more holistic ecosystem as suggested in the Keller Williams Realty (A) case study. Keller Williams can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Keller Williams in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Loyalty marketing
– Keller Williams has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Keller Williams to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Keller Williams to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Keller Williams to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Keller Williams has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Keller Williams Realty (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Keller Williams to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Keller Williams in the consumer business. Now Keller Williams can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Keller Williams can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Keller Williams can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Keller Williams can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats Keller Williams Realty (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Keller Williams Realty (A) are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Keller Williams needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Keller Williams has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Keller Williams needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Shortening product life cycle
– it is one of the major threat that Keller Williams is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Keller Williams needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Keller Williams can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Keller Williams business can come under increasing regulations regarding data privacy, data security, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Keller Williams Realty (A), Keller Williams may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Keller Williams will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Regulatory challenges
– Keller Williams needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Stagnating economy with rate increase
– Keller Williams can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Keller Williams can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Keller Williams Realty (A) .
Increasing wage structure of Keller Williams
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Keller Williams.
Weighted SWOT Analysis of Keller Williams Realty (A) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Keller Williams Realty (A) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Keller Williams Realty (A) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Keller Williams Realty (A) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Keller Williams Realty (A) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Keller Williams needs to make to build a sustainable competitive advantage.