The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College
The case centers on Christ Church's Treasurer, James Lawrie, who is contemplating his options for investing a portion of the College's endowment in real estate. Approximately 1/3 of the total $690 million endowment was allocated towards real estate, much higher than the typical 4% allocation by his American counterparts. Differing from many US endowments, real estate has remained a vital part of the Christ Church endowment since its founding in the mid-16th century. The College began with significant real estate holdings originally received from Henry VIII, which seeded the College's endowment. In the early 1980s, real estate represented 70% of the endowment's holdings and from 2002-2015, Christ Church's direct investments returned c.10% annually. Lawrie contemplates the future role of real estate in the College's portfolio, assesses the performance of the "US Endowment Model" and compares Christ Church's performance against others as he weighs a variety of investment strategies including; redevelopment, land sales, specialist funds, pooling capital with the other Oxford Colleges, and taking on more debt considering the once-in-a-generational low interest rates.
Authors :: David Chambers, Elroy Dimson, Arthur I Segel, Eva Steiner
Swot Analysis of "The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College" written by David Chambers, Elroy Dimson, Arthur I Segel, Eva Steiner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Christ Endowment facing as an external strategic factors. Some of the topics covered in The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College casestudy better are - – wage bills are increasing, there is backlash against globalization, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion,
central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Christ Endowment, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Christ Endowment 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 The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College can be done for the following purposes –
1. Strategic planning using facts provided in The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College case study
2. Improving business portfolio management of Christ Endowment
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 Christ Endowment
Strengths The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Christ Endowment in The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Cross disciplinary teams
– Horizontal connected teams at the Christ Endowment 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.
Effective Research and Development (R&D)
– Christ Endowment 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 The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Christ Endowment 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 Christ Endowment is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Christ Endowment is one of the most innovative firm in sector. Manager in The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Finance & Accounting field
– Christ Endowment 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 Christ Endowment in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Christ Endowment
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Christ Endowment does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Christ Endowment in the sector have low bargaining power. The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Christ Endowment to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Christ Endowment 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Christ Endowment digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Christ Endowment 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.
Training and development
– Christ Endowment has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College 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 recruit top talent
– Christ Endowment is one of the leading recruiters in the industry. Managers in the The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College, it seems that the employees of Christ Endowment 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.
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 Christ Endowment supply chain. Even after few cautionary changes mentioned in the HBR case study - The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Christ Endowment vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College, is just above the industry average. Christ Endowment 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.
Capital Spending Reduction
– Even during the low interest decade, Christ Endowment 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.
No frontier risks strategy
– After analyzing the HBR case study The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College, 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.
Increasing silos among functional specialists
– The organizational structure of Christ Endowment is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Christ Endowment needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Christ Endowment to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Christ Endowment 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.
Low market penetration in new markets
– Outside its home market of Christ Endowment, firm in the HBR case study The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Christ Endowment 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.
Slow decision making process
– As mentioned earlier in the report, Christ Endowment 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. Christ Endowment 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, Christ Endowment has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College | 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 The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College are -
Building a culture of innovation
– managers at Christ Endowment 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Christ Endowment can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Christ Endowment can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Christ Endowment 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Christ Endowment 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. Christ Endowment 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Christ Endowment is facing challenges because of the dominance of functional experts in the organization. The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Christ Endowment to increase its market reach. Christ Endowment 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Christ Endowment 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.
Leveraging digital technologies
– Christ Endowment 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Christ Endowment 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, The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Christ Endowment 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 Christ Endowment to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Christ Endowment 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 The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Christ Endowment to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Christ Endowment has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Threats The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College are -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Christ Endowment 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 The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College .
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 Christ Endowment 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 Christ Endowment in the Finance & Accounting sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Christ Endowment with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Christ Endowment 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. Christ Endowment can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Christ Endowment 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.
Regulatory challenges
– Christ Endowment 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 Finance & Accounting industry regulations.
Technology acceleration in Forth Industrial Revolution
– Christ Endowment has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Christ Endowment 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.
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. Christ Endowment 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.
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. Christ Endowment can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Christ Endowment needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Weighted SWOT Analysis of The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College 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 The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College 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 The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College 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 The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College 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 The Role of Real Estate in Endowment Portfolios: The Case of Christ Church College 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 Christ Endowment needs to make to build a sustainable competitive advantage.
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