Case Study Description of Ziroom: Creating Quality Rental Living
Beijing has a huge second-hand housing rental market, while the tenants are often unable to get satisfactory properties. Because the real estate brokerage companies only assist with handling procedures, the tenants' requirements for quality, furnishing and services of properties are inadequately considered. Therefore, traditional modes of leasing have been significantly out of date. In this context, Homelink launched Ziroom business in May 2011, beginning its new exploration in the rental industry. Under the leadership of Mr. Xiong Lin, general manager of Ziroom, who had rich experience in this field, Ziroom created Ziroom Friendly Home and Ziroom Apartment under the same brand of Ziroom and operated them in a B2C mode. Ziroom owns the properties and processes them into standard products before selling online at Ziroom.com and providing various follow-up services during the lease term. Ziroom focuses on product, service and O2O, covering all the key links of tenants' rental experience. By the end of 2013, Ziroom had collected a total of over 20,000 properties, including over 60,000 Ziroom Friendly Home rooms and 6 stand-alone buildings of Ziroom apartments that are distributed in more than 2,000 real estates in Beijing. With the cumulative occupancy rate remaining at 90% and the renewal rate at over 60%, Ziroom provides rental services to 10 million Ziroomers. At present, Xiong Lin is faced with a number of challenges. For example, Ziroom's rent is a little bit high for a portion of young people in need of shared leasing; the future development of Ziroom may be affected by the changes in rents, real estate purchase restrictions, and the increase of Ziroom properties. Ziroom aims to establish a super-large enterprise based on O2O platforms that integrate asset management, housing and extension services, as well as information and data services, managing tens of thousands of properties in China. Today, Ziroom is continuing its entrepreneurial efforts.
Swot Analysis of "Ziroom: Creating Quality Rental Living" written by Chunling Yu, Chuanjiang Mao includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ziroom Properties facing as an external strategic factors. Some of the topics covered in Ziroom: Creating Quality Rental Living case study are - Strategic Management Strategies, Supply chain and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Ziroom: Creating Quality Rental Living casestudy better are - – there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , technology disruption, increasing household debt because of falling income levels, geopolitical disruptions,
central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Ziroom: Creating Quality Rental Living
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ziroom: Creating Quality Rental Living case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ziroom Properties, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ziroom Properties 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 Ziroom: Creating Quality Rental Living can be done for the following purposes –
1. Strategic planning using facts provided in Ziroom: Creating Quality Rental Living case study
2. Improving business portfolio management of Ziroom Properties
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ziroom Properties
Strengths Ziroom: Creating Quality Rental Living | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ziroom Properties in Ziroom: Creating Quality Rental Living Harvard Business Review case study are -
Ability to lead change in Sales & Marketing field
– Ziroom Properties is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Ziroom Properties in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Ziroom Properties in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Ziroom Properties has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ziroom: Creating Quality Rental Living 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.
Operational resilience
– The operational resilience strategy in the Ziroom: Creating Quality Rental Living 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.
Successful track record of launching new products
– Ziroom Properties has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ziroom Properties has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that Ziroom Properties 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.
Innovation driven organization
– Ziroom Properties is one of the most innovative firm in sector. Manager in Ziroom: Creating Quality Rental Living Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Ziroom Properties in the sector have low bargaining power. Ziroom: Creating Quality Rental Living has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ziroom Properties to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Ziroom Properties
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ziroom Properties does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Ziroom Properties 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 Ziroom: Creating Quality Rental Living HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Ziroom Properties is present in almost all the verticals within the industry. This has provided firm in Ziroom: Creating Quality Rental Living 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
– Ziroom Properties has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ziroom Properties to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Ziroom: Creating Quality Rental Living | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ziroom: Creating Quality Rental Living are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ziroom: Creating Quality Rental Living, it seems that the employees of Ziroom Properties 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.
Capital Spending Reduction
– Even during the low interest decade, Ziroom Properties 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.
Low market penetration in new markets
– Outside its home market of Ziroom Properties, firm in the HBR case study Ziroom: Creating Quality Rental Living needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Ziroom: Creating Quality Rental Living, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Need for greater diversity
– Ziroom Properties 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.
Slow decision making process
– As mentioned earlier in the report, Ziroom Properties 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. Ziroom Properties 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.
Aligning sales with marketing
– It come across in the case study Ziroom: Creating Quality Rental Living that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Ziroom: Creating Quality Rental Living can leverage the sales team experience to cultivate customer relationships as Ziroom Properties is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ziroom Properties is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ziroom: Creating Quality Rental Living can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Ziroom: Creating Quality Rental Living 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 Ziroom Properties 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ziroom: Creating Quality Rental Living, in the dynamic environment Ziroom Properties has struggled to respond to the nimble upstart competition. Ziroom Properties has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Ziroom Properties has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Ziroom: Creating Quality Rental Living should strive to include more intangible value offerings along with its core products and services.
Opportunities Ziroom: Creating Quality Rental Living | 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 Ziroom: Creating Quality Rental Living are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ziroom Properties can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Ziroom Properties 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 Ziroom: Creating Quality Rental Living - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ziroom Properties to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Ziroom Properties can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Ziroom Properties can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ziroom: Creating Quality Rental Living suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Loyalty marketing
– Ziroom Properties 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.
Manufacturing automation
– Ziroom Properties can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ziroom Properties can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Ziroom Properties can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Better consumer reach
– The expansion of the 5G network will help Ziroom Properties to increase its market reach. Ziroom Properties 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.
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 Ziroom Properties in the consumer business. Now Ziroom Properties can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Ziroom Properties can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ziroom Properties can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Ziroom: Creating Quality Rental Living, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ziroom Properties in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ziroom Properties 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 Ziroom Properties to hire the very best people irrespective of their geographical location.
Threats Ziroom: Creating Quality Rental Living External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ziroom: Creating Quality Rental Living are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ziroom Properties in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Ziroom Properties in the Sales & Marketing sector and impact the bottomline of the organization.
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. Ziroom Properties needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Ziroom Properties high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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.
Stagnating economy with rate increase
– Ziroom Properties 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Ziroom Properties.
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. Ziroom Properties 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ziroom Properties with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Ziroom Properties
– 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 Ziroom Properties.
Shortening product life cycle
– it is one of the major threat that Ziroom Properties is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ziroom Properties 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 Ziroom: Creating Quality Rental Living .
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.
Weighted SWOT Analysis of Ziroom: Creating Quality Rental Living 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 Ziroom: Creating Quality Rental Living 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 Ziroom: Creating Quality Rental Living 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 Ziroom: Creating Quality Rental Living 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 Ziroom: Creating Quality Rental Living 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 Ziroom Properties needs to make to build a sustainable competitive advantage.