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 - – cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, technology disruption, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic ,
increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, 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 -
Analytics focus
– Rosetree Mortgages is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Victoria Ivashina, Andre F. Perold can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
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.
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.
Ability to recruit top talent
– Rosetree Mortgages is one of the leading recruiters in the industry. Managers in the Rosetree Mortgage Opportunity Fund are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Organizational Resilience of Rosetree Mortgages
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Rosetree Mortgages does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Learning organization
- Rosetree Mortgages is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Rosetree Mortgages is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Rosetree Mortgage Opportunity Fund Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Rosetree Mortgages has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Rosetree Mortgages to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
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 -
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.
Capital Spending Reduction
– Even during the low interest decade, Rosetree Mortgages 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 Rosetree Mortgages, firm in the HBR case study Rosetree Mortgage Opportunity Fund needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Rosetree Mortgage Opportunity Fund, it seems that the employees of Rosetree Mortgages 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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Rosetree Mortgage Opportunity Fund 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 Rosetree Mortgages 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Rosetree Mortgage Opportunity Fund HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Rosetree Mortgages has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Rosetree Mortgage Opportunity Fund, in the dynamic environment Rosetree Mortgages has struggled to respond to the nimble upstart competition. Rosetree Mortgages has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
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 -
Manufacturing automation
– Rosetree Mortgages can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Rosetree Mortgages 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 Rosetree Mortgages to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Rosetree Mortgages can use these opportunities to build new business models that can help the communities that Rosetree Mortgages operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Building a culture of innovation
– managers at Rosetree Mortgages can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Rosetree Mortgages can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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.
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 -
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.
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. Rosetree Mortgages needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Rosetree Mortgages can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 .
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 Rosetree Mortgages.
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.
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.
Stagnating economy with rate increase
– Rosetree Mortgages 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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Rosetree Mortgages is facing in Finance & Accounting 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, Rosetree Mortgages 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 Rosetree Mortgage Opportunity Fund .
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.