Centaline Property Agency: Tactics for the Virtual Marketplace SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Centaline Property Agency: Tactics for the Virtual Marketplace
Since 1995, Centaline's business had evolved from being a pure provider of estate brokerage services, to a combined provider of both estate brokerage services and timely property information to prospective customers. Although the company had been successful in pioneering the concept of disseminating information to customers through the Internet free-of-charge since 1998, it was now facing fierce competition from other local real estate agencies. Centaline's main market competitor, Midland Realty Ltd., for example, started providing similar services to customers with the extensive use of IT, and vertical portal Propertystreet.net recently introduced a one-stop property shop incorporating information provided from various real estate agencies in Hong Kong. This case explores web-based business strategies and issues. Also allows for a discussion of how the WWW changes the nature of "reach, richness, and affiliation" and how that affects the balance of power between industry players and buyers. This case demonstrates that while new concepts enrich our understanding of e-business, the same types of tools and analysis that work in traditional businesses are still applicable and effective.
Authors :: Ali F. Farhoomand, Frederik Pretorius, Connie Sim, Andrew Lee
Swot Analysis of "Centaline Property Agency: Tactics for the Virtual Marketplace" written by Ali F. Farhoomand, Frederik Pretorius, Connie Sim, Andrew Lee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Centaline's Estate facing as an external strategic factors. Some of the topics covered in Centaline Property Agency: Tactics for the Virtual Marketplace case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Centaline Property Agency: Tactics for the Virtual Marketplace casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google,
there is increasing trade war between United States & China, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Centaline Property Agency: Tactics for the Virtual Marketplace
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Centaline Property Agency: Tactics for the Virtual Marketplace case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Centaline's Estate, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Centaline's Estate 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 Centaline Property Agency: Tactics for the Virtual Marketplace can be done for the following purposes –
1. Strategic planning using facts provided in Centaline Property Agency: Tactics for the Virtual Marketplace case study
2. Improving business portfolio management of Centaline's Estate
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 Centaline's Estate
Strengths Centaline Property Agency: Tactics for the Virtual Marketplace | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Centaline's Estate in Centaline Property Agency: Tactics for the Virtual Marketplace Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Centaline Property Agency: Tactics for the Virtual Marketplace Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Successful track record of launching new products
– Centaline's Estate has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Centaline's Estate 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.
Diverse revenue streams
– Centaline's Estate is present in almost all the verticals within the industry. This has provided firm in Centaline Property Agency: Tactics for the Virtual Marketplace 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
– Centaline Property Agency: Tactics for the Virtual Marketplace firm has clearly differentiated products in the market place. This has enabled Centaline's Estate to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Centaline's Estate to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Centaline's Estate 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.
High brand equity
– Centaline's Estate has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Centaline's Estate to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Centaline's Estate in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Centaline's Estate
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Centaline's Estate does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Centaline's Estate 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
– Centaline's Estate is one of the leading recruiters in the industry. Managers in the Centaline Property Agency: Tactics for the Virtual Marketplace are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Centaline's Estate has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Centaline Property Agency: Tactics for the Virtual Marketplace 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.
Ability to lead change in Strategy & Execution field
– Centaline's Estate 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 Centaline's Estate in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Centaline Property Agency: Tactics for the Virtual Marketplace | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Centaline Property Agency: Tactics for the Virtual Marketplace are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Centaline Property Agency: Tactics for the Virtual Marketplace, it seems that the employees of Centaline's Estate 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Centaline Property Agency: Tactics for the Virtual Marketplace, is just above the industry average. Centaline's Estate 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.
Skills based hiring
– The stress on hiring functional specialists at Centaline's Estate 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.
Increasing silos among functional specialists
– The organizational structure of Centaline's Estate is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Centaline's Estate needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Centaline's Estate to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Centaline Property Agency: Tactics for the Virtual Marketplace 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 Centaline's Estate has relatively successful track record of launching new products.
Lack of clear differentiation of Centaline's Estate products
– To increase the profitability and margins on the products, Centaline's Estate needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Centaline Property Agency: Tactics for the Virtual Marketplace 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 Centaline's Estate 's lucrative customers.
Interest costs
– Compare to the competition, Centaline's Estate 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.
Products dominated business model
– Even though Centaline's Estate 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 - Centaline Property Agency: Tactics for the Virtual Marketplace should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Centaline's Estate 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, Centaline's Estate 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.
Opportunities Centaline Property Agency: Tactics for the Virtual Marketplace | 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 Centaline Property Agency: Tactics for the Virtual Marketplace are -
Manufacturing automation
– Centaline's Estate 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.
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. Centaline's Estate can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Centaline's Estate 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. Centaline's Estate 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Centaline's Estate 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Centaline's Estate 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 Centaline's Estate to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Centaline's Estate 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.
Using analytics as competitive advantage
– Centaline's Estate 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 Centaline Property Agency: Tactics for the Virtual Marketplace - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Centaline's Estate 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. Centaline's Estate can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Centaline's Estate 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.
Learning at scale
– Online learning technologies has now opened space for Centaline's Estate 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Centaline's Estate 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Centaline's Estate can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Centaline's Estate has opened avenues for new revenue streams for the organization in the industry. This can help Centaline's Estate to build a more holistic ecosystem as suggested in the Centaline Property Agency: Tactics for the Virtual Marketplace case study. Centaline's Estate can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Centaline Property Agency: Tactics for the Virtual Marketplace External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Centaline Property Agency: Tactics for the Virtual Marketplace 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. Centaline's Estate will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Centaline's Estate with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Centaline's Estate business can come under increasing regulations regarding data privacy, data security, etc.
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 Centaline's Estate in the Strategy & Execution sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Centaline's Estate is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Centaline's Estate 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Centaline Property Agency: Tactics for the Virtual Marketplace, Centaline's Estate 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 .
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 Centaline's Estate.
Consumer confidence and its impact on Centaline's Estate 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 Centaline's Estate
– 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 Centaline's Estate.
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. Centaline's Estate needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Centaline Property Agency: Tactics for the Virtual Marketplace 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 Centaline Property Agency: Tactics for the Virtual Marketplace 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 Centaline Property Agency: Tactics for the Virtual Marketplace 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 Centaline Property Agency: Tactics for the Virtual Marketplace 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 Centaline Property Agency: Tactics for the Virtual Marketplace 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 Centaline's Estate needs to make to build a sustainable competitive advantage.