Case Study Description of Century21 Sussex and Reilly Residential
This case explores recent dynamics of the real estate industry from the point of view of Sussex and Reilly, a Chicago real estate company serving the city market. The case includes national trends related to the use of the Internet; the appearance and growth of new competitors, many of them national firms using the Internet; and changes in the market conditions of residential real estate. The particular period when the case takes place, June 2005 to July 2007, was a time of turmoil in terms of technologies, business models, legal issues, and market conditions. While originally the case concentrated on the effects of the Internet on residential real estate, it became more complicated because of the beginning of a very severe crisis compared by many to the Great Depression. Founded in 2000, Sussex and Reilly was a dynamic, young firm, providing services to developers and commercial and residential clients in Chicago. In 2006, Sussex and Reilly's residential division employed 250 agents and had four offices in some of Chicago's most affluent neighborhoods.
Swot Analysis of "Century21 Sussex and Reilly Residential" written by Martha A. Martinez includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sussex Residential facing as an external strategic factors. Some of the topics covered in Century21 Sussex and Reilly Residential case study are - Strategic Management Strategies, Internet, Marketing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Century21 Sussex and Reilly Residential casestudy better are - – central banks are concerned over increasing inflation, technology disruption, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, wage bills are increasing, supply chains are disrupted by pandemic , there is backlash against globalization,
digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Century21 Sussex and Reilly Residential
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Century21 Sussex and Reilly Residential case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sussex Residential, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sussex Residential 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 Century21 Sussex and Reilly Residential can be done for the following purposes –
1. Strategic planning using facts provided in Century21 Sussex and Reilly Residential case study
2. Improving business portfolio management of Sussex Residential
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 Sussex Residential
Strengths Century21 Sussex and Reilly Residential | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sussex Residential in Century21 Sussex and Reilly Residential Harvard Business Review case study are -
Innovation driven organization
– Sussex Residential is one of the most innovative firm in sector. Manager in Century21 Sussex and Reilly Residential Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Sussex Residential 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.
Ability to recruit top talent
– Sussex Residential is one of the leading recruiters in the industry. Managers in the Century21 Sussex and Reilly Residential are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Sussex Residential has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sussex Residential to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Sussex Residential has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Century21 Sussex and Reilly Residential 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.
Successful track record of launching new products
– Sussex Residential has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sussex Residential 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.
Analytics focus
– Sussex Residential 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 Martha A. Martinez 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.
High switching costs
– The high switching costs that Sussex Residential 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.
Low bargaining power of suppliers
– Suppliers of Sussex Residential in the sector have low bargaining power. Century21 Sussex and Reilly Residential has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sussex Residential to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Sussex Residential in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Sussex Residential
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sussex Residential does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Sussex Residential 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 Century21 Sussex and Reilly Residential HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Century21 Sussex and Reilly Residential | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Century21 Sussex and Reilly Residential are -
Lack of clear differentiation of Sussex Residential products
– To increase the profitability and margins on the products, Sussex Residential needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Sussex Residential 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. Sussex Residential 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.
Interest costs
– Compare to the competition, Sussex Residential 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Century21 Sussex and Reilly Residential 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 Sussex Residential 's lucrative customers.
Slow to strategic competitive environment developments
– As Century21 Sussex and Reilly Residential HBR case study mentions - Sussex Residential 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.
High cash cycle compare to competitors
Sussex Residential 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.
Capital Spending Reduction
– Even during the low interest decade, Sussex Residential has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High bargaining power of channel partners
– Because of the regulatory requirements, Martha A. Martinez suggests that, Sussex Residential 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Century21 Sussex and Reilly Residential, is just above the industry average. Sussex Residential 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Sussex Residential 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.
Increasing silos among functional specialists
– The organizational structure of Sussex Residential is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Sussex Residential needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sussex Residential to focus more on services rather than just following the product oriented approach.
Opportunities Century21 Sussex and Reilly Residential | 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 Century21 Sussex and Reilly Residential are -
Learning at scale
– Online learning technologies has now opened space for Sussex Residential 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.
Developing new processes and practices
– Sussex Residential can develop new processes and procedures in Strategy & Execution 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.
Building a culture of innovation
– managers at Sussex Residential 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 Strategy & Execution segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sussex Residential 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, Century21 Sussex and Reilly Residential, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sussex Residential can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Sussex Residential 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. Sussex Residential 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.
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 Sussex Residential in the consumer business. Now Sussex Residential can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Sussex Residential to increase its market reach. Sussex Residential 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.
Manufacturing automation
– Sussex Residential can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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 Sussex Residential 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 Sussex Residential to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Sussex Residential has opened avenues for new revenue streams for the organization in the industry. This can help Sussex Residential to build a more holistic ecosystem as suggested in the Century21 Sussex and Reilly Residential case study. Sussex Residential can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sussex Residential is facing challenges because of the dominance of functional experts in the organization. Century21 Sussex and Reilly Residential 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.
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 Sussex Residential 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.
Threats Century21 Sussex and Reilly Residential External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Century21 Sussex and Reilly Residential 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 Sussex Residential in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Sussex Residential
– 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 Sussex Residential.
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. Sussex Residential can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sussex Residential 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 Century21 Sussex and Reilly Residential .
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. Sussex Residential 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.
Environmental challenges
– Sussex Residential 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. Sussex Residential can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Shortening product life cycle
– it is one of the major threat that Sussex Residential is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Century21 Sussex and Reilly Residential, Sussex Residential 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sussex Residential 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.
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. Sussex Residential needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Sussex Residential.
High dependence on third party suppliers
– Sussex Residential 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.
Regulatory challenges
– Sussex Residential 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.
Weighted SWOT Analysis of Century21 Sussex and Reilly Residential 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 Century21 Sussex and Reilly Residential 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 Century21 Sussex and Reilly Residential 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 Century21 Sussex and Reilly Residential 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 Century21 Sussex and Reilly Residential 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 Sussex Residential needs to make to build a sustainable competitive advantage.