Case Study Description of Rosetree Mortgage Opportunity Fund
In December 2008, in the midst of the worst financial crisis since the Great Depression, Rosetree Capital Management was evaluating the purchase of a pool of U.S. residential mortgages. The firm had formed an investment vehicle to acquire troubled residential mortgages from banks and other motivated sellers. The idea was to purchase mortgage loans at a discount and to work with individual borrowers to restructure their debts. Performing mortgages could then potentially be resold in the secondary market. The case provides cash flow projections in various economic scenarios that are revealing of the economics of troubled mortgages and home foreclosure. Rosetree needed to decide whether and how much to bid for the loans.
Swot Analysis of "Rosetree Mortgage Opportunity Fund" written by Victoria Ivashina, Andre F. Perold includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rosetree Mortgages facing as an external strategic factors. Some of the topics covered in Rosetree Mortgage Opportunity Fund case study are - Strategic Management Strategies, Crisis management, Financial analysis, Financial management, Recession, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Rosetree Mortgage Opportunity Fund casestudy better are - – increasing government debt because of Covid-19 spendings, increasing commodity prices, increasing transportation and logistics costs, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels,
wage bills are increasing, technology disruption, etc
Introduction to SWOT Analysis of Rosetree Mortgage Opportunity Fund
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Rosetree Mortgage Opportunity Fund case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rosetree Mortgages, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rosetree Mortgages 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 Rosetree Mortgage Opportunity Fund can be done for the following purposes –
1. Strategic planning using facts provided in Rosetree Mortgage Opportunity Fund case study
2. Improving business portfolio management of Rosetree Mortgages
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Rosetree Mortgages
Strengths Rosetree Mortgage Opportunity Fund | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rosetree Mortgages in Rosetree Mortgage Opportunity Fund Harvard Business Review case study are -
Successful track record of launching new products
– Rosetree Mortgages has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Rosetree Mortgages 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 Rosetree Mortgages 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.
Highly skilled collaborators
– Rosetree Mortgages 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 Rosetree Mortgage Opportunity Fund HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Rosetree Mortgages 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 Rosetree Mortgage Opportunity Fund - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Rosetree Mortgages digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rosetree Mortgages 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.
Strong track record of project management
– Rosetree Mortgages is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Rosetree Mortgages 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Rosetree Mortgage Opportunity Fund firm has clearly differentiated products in the market place. This has enabled Rosetree Mortgages to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Rosetree Mortgages to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Rosetree Mortgages in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Rosetree Mortgage Opportunity Fund 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.
Ability to lead change in Finance & Accounting field
– Rosetree Mortgages 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 Rosetree Mortgages in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Rosetree Mortgages is one of the most innovative firm in sector. Manager in Rosetree Mortgage Opportunity Fund Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Rosetree Mortgage Opportunity Fund | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rosetree Mortgage Opportunity Fund are -
No frontier risks strategy
– After analyzing the HBR case study Rosetree Mortgage Opportunity Fund, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
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 Rosetree Mortgages supply chain. Even after few cautionary changes mentioned in the HBR case study - Rosetree Mortgage Opportunity Fund, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Rosetree Mortgages vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Rosetree Mortgages 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 - Rosetree Mortgage Opportunity Fund should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Rosetree Mortgage Opportunity Fund, is just above the industry average. Rosetree Mortgages 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.
Increasing silos among functional specialists
– The organizational structure of Rosetree Mortgages is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Rosetree Mortgages needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rosetree Mortgages to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Rosetree Mortgages 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Rosetree Mortgages 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 bargaining power of channel partners
– Because of the regulatory requirements, Victoria Ivashina, Andre F. Perold suggests that, Rosetree Mortgages 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 cash cycle compare to competitors
Rosetree Mortgages has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Aligning sales with marketing
– It come across in the case study Rosetree Mortgage Opportunity Fund 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 Rosetree Mortgage Opportunity Fund can leverage the sales team experience to cultivate customer relationships as Rosetree Mortgages is planning to shift buying processes online.
Need for greater diversity
– Rosetree Mortgages 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.
Opportunities Rosetree Mortgage Opportunity Fund | 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 Rosetree Mortgage Opportunity Fund are -
Learning at scale
– Online learning technologies has now opened space for Rosetree Mortgages 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.
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. Rosetree Mortgages can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Rosetree Mortgages in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
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 Rosetree Mortgages in the consumer business. Now Rosetree Mortgages can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Rosetree Mortgages 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 Rosetree Mortgage Opportunity Fund - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rosetree Mortgages to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Rosetree Mortgages can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Rosetree Mortgages can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Rosetree Mortgage Opportunity Fund 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.
Better consumer reach
– The expansion of the 5G network will help Rosetree Mortgages to increase its market reach. Rosetree Mortgages 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.
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 Rosetree Mortgages 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.
Developing new processes and practices
– Rosetree Mortgages can develop new processes and procedures in Finance & Accounting 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Rosetree Mortgages 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, Rosetree Mortgage Opportunity Fund, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Rosetree Mortgages 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.
Creating value in data economy
– The success of analytics program of Rosetree Mortgages has opened avenues for new revenue streams for the organization in the industry. This can help Rosetree Mortgages to build a more holistic ecosystem as suggested in the Rosetree Mortgage Opportunity Fund case study. Rosetree Mortgages can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Rosetree Mortgage Opportunity Fund External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Rosetree Mortgage Opportunity Fund are -
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 Rosetree Mortgages in the Finance & Accounting sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Rosetree Mortgages 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Rosetree Mortgages in the Finance & Accounting industry. The Finance & Accounting 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Rosetree Mortgages with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Rosetree Mortgages 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.
Increasing wage structure of Rosetree Mortgages
– 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 Rosetree Mortgages.
Environmental challenges
– Rosetree Mortgages 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. Rosetree Mortgages can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Technology acceleration in Forth Industrial Revolution
– Rosetree Mortgages has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Rosetree Mortgages needs to keep up with the evolution of technology in the Finance & Accounting 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Rosetree Mortgage Opportunity Fund, Rosetree Mortgages may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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. Rosetree Mortgages 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.
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.
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 Rosetree Mortgages business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Rosetree Mortgage Opportunity Fund 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 Rosetree Mortgage Opportunity Fund 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 Rosetree Mortgage Opportunity Fund 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 Rosetree Mortgage Opportunity Fund 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 Rosetree Mortgage Opportunity Fund 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 Rosetree Mortgages needs to make to build a sustainable competitive advantage.