Making Lemonade in Chicago's Troubled Neighborhoods SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Making Lemonade in Chicago's Troubled Neighborhoods
This case focuses on the complexities of building a real estate portfolio in two low-income neighborhoods of Chicago, Roseland and Englewood, during the foreclosure crises in 2011.
Authors :: Nicolas P. Retsinas, Jazzmin Lamas, Lisa Strope
Swot Analysis of "Making Lemonade in Chicago's Troubled Neighborhoods" written by Nicolas P. Retsinas, Jazzmin Lamas, Lisa Strope includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Neighborhoods Roseland facing as an external strategic factors. Some of the topics covered in Making Lemonade in Chicago's Troubled Neighborhoods case study are - Strategic Management Strategies, Financial management, Social enterprise and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Making Lemonade in Chicago's Troubled Neighborhoods casestudy better are - – cloud computing is disrupting traditional business models, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing energy prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Making Lemonade in Chicago's Troubled Neighborhoods
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Making Lemonade in Chicago's Troubled Neighborhoods case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Neighborhoods Roseland, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Neighborhoods Roseland 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 Making Lemonade in Chicago's Troubled Neighborhoods can be done for the following purposes –
1. Strategic planning using facts provided in Making Lemonade in Chicago's Troubled Neighborhoods case study
2. Improving business portfolio management of Neighborhoods Roseland
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Neighborhoods Roseland
Strengths Making Lemonade in Chicago's Troubled Neighborhoods | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Neighborhoods Roseland in Making Lemonade in Chicago's Troubled Neighborhoods Harvard Business Review case study are -
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Neighborhoods Roseland digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Neighborhoods Roseland 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.
Effective Research and Development (R&D)
– Neighborhoods Roseland has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Making Lemonade in Chicago's Troubled Neighborhoods - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Neighborhoods Roseland 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.
Successful track record of launching new products
– Neighborhoods Roseland has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Neighborhoods Roseland 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.
Innovation driven organization
– Neighborhoods Roseland is one of the most innovative firm in sector. Manager in Making Lemonade in Chicago's Troubled Neighborhoods Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Strategy & Execution field
– Neighborhoods Roseland 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 Neighborhoods Roseland in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Neighborhoods Roseland has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Neighborhoods Roseland to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Making Lemonade in Chicago's Troubled Neighborhoods 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.
Cross disciplinary teams
– Horizontal connected teams at the Neighborhoods Roseland 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.
Training and development
– Neighborhoods Roseland has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Making Lemonade in Chicago's Troubled Neighborhoods 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.
Diverse revenue streams
– Neighborhoods Roseland is present in almost all the verticals within the industry. This has provided firm in Making Lemonade in Chicago's Troubled Neighborhoods 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Making Lemonade in Chicago's Troubled Neighborhoods firm has clearly differentiated products in the market place. This has enabled Neighborhoods Roseland to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Neighborhoods Roseland to invest into research and development (R&D) and innovation.
Weaknesses Making Lemonade in Chicago's Troubled Neighborhoods | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Making Lemonade in Chicago's Troubled Neighborhoods are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Neighborhoods Roseland is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Making Lemonade in Chicago's Troubled Neighborhoods can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Making Lemonade in Chicago's Troubled Neighborhoods 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 Making Lemonade in Chicago's Troubled Neighborhoods can leverage the sales team experience to cultivate customer relationships as Neighborhoods Roseland is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Nicolas P. Retsinas, Jazzmin Lamas, Lisa Strope suggests that, Neighborhoods Roseland 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.
Skills based hiring
– The stress on hiring functional specialists at Neighborhoods Roseland 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Neighborhoods Roseland needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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 Neighborhoods Roseland supply chain. Even after few cautionary changes mentioned in the HBR case study - Making Lemonade in Chicago's Troubled Neighborhoods, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Neighborhoods Roseland vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Making Lemonade in Chicago's Troubled Neighborhoods, is just above the industry average. Neighborhoods Roseland needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to strategic competitive environment developments
– As Making Lemonade in Chicago's Troubled Neighborhoods HBR case study mentions - Neighborhoods Roseland takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Neighborhoods Roseland is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Neighborhoods Roseland needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Neighborhoods Roseland to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Neighborhoods Roseland 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 - Making Lemonade in Chicago's Troubled Neighborhoods should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Neighborhoods Roseland 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.
Opportunities Making Lemonade in Chicago's Troubled Neighborhoods | 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 Making Lemonade in Chicago's Troubled Neighborhoods are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Neighborhoods Roseland can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Neighborhoods Roseland in the consumer business. Now Neighborhoods Roseland can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Neighborhoods Roseland can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Making Lemonade in Chicago's Troubled Neighborhoods 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Neighborhoods Roseland can use these opportunities to build new business models that can help the communities that Neighborhoods Roseland operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Neighborhoods Roseland is facing challenges because of the dominance of functional experts in the organization. Making Lemonade in Chicago's Troubled Neighborhoods case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Neighborhoods Roseland to increase its market reach. Neighborhoods Roseland 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.
Using analytics as competitive advantage
– Neighborhoods Roseland 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 Making Lemonade in Chicago's Troubled Neighborhoods - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Neighborhoods Roseland to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Neighborhoods Roseland can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Neighborhoods Roseland to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Neighborhoods Roseland in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Loyalty marketing
– Neighborhoods Roseland 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Neighborhoods Roseland 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. Neighborhoods Roseland 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Neighborhoods Roseland 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, Making Lemonade in Chicago's Troubled Neighborhoods, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Making Lemonade in Chicago's Troubled Neighborhoods External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Making Lemonade in Chicago's Troubled Neighborhoods are -
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Making Lemonade in Chicago's Troubled Neighborhoods, Neighborhoods Roseland may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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 Neighborhoods Roseland business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Neighborhoods Roseland demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Neighborhoods Roseland with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Neighborhoods Roseland is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Neighborhoods Roseland 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 Strategy & Execution industry regulations.
Stagnating economy with rate increase
– Neighborhoods Roseland 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.
Environmental challenges
– Neighborhoods Roseland 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. Neighborhoods Roseland can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Neighborhoods Roseland needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Neighborhoods Roseland
– 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 Neighborhoods Roseland.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Neighborhoods Roseland can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Neighborhoods Roseland in the Strategy & Execution industry. The Strategy & Execution 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.
Weighted SWOT Analysis of Making Lemonade in Chicago's Troubled Neighborhoods 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 Making Lemonade in Chicago's Troubled Neighborhoods 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 Making Lemonade in Chicago's Troubled Neighborhoods 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 Making Lemonade in Chicago's Troubled Neighborhoods 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 Making Lemonade in Chicago's Troubled Neighborhoods 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 Neighborhoods Roseland needs to make to build a sustainable competitive advantage.
