To Buy or What to Buy: Your First Home SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of To Buy or What to Buy: Your First Home
Peter and Kate Rose are a young couple looking to buy their first home in the Boston area. They have narrowed down a target list to three homes, but are also considering whether it makes sense to buy a home in the first place. They must make decisions regarding which home to buy, a price, a broker, a mortgage package, and how to source a down payment. Both quantitative and qualitative factors are considered in their decision making.
Authors :: Charles F Wu, Steven Hirsch, Beatrice Liem, Kevin Ryan
Swot Analysis of "To Buy or What to Buy: Your First Home" written by Charles F Wu, Steven Hirsch, Beatrice Liem, Kevin Ryan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Buy Home facing as an external strategic factors. Some of the topics covered in To Buy or What to Buy: Your First Home case study are - Strategic Management Strategies, Financial management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the To Buy or What to Buy: Your First Home casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, supply chains are disrupted by pandemic , there is increasing trade war between United States & China,
talent flight as more people leaving formal jobs, wage bills are increasing, etc
Introduction to SWOT Analysis of To Buy or What to Buy: Your First Home
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in To Buy or What to Buy: Your First Home case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Buy Home, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Buy Home 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 To Buy or What to Buy: Your First Home can be done for the following purposes –
1. Strategic planning using facts provided in To Buy or What to Buy: Your First Home case study
2. Improving business portfolio management of Buy Home
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 Buy Home
Strengths To Buy or What to Buy: Your First Home | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Buy Home in To Buy or What to Buy: Your First Home Harvard Business Review case study are -
Effective Research and Development (R&D)
– Buy Home 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 To Buy or What to Buy: Your First Home - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Buy Home in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Buy Home is one of the leading recruiters in the industry. Managers in the To Buy or What to Buy: Your First Home 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 switching costs
– The high switching costs that Buy Home 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.
Operational resilience
– The operational resilience strategy in the To Buy or What to Buy: Your First Home 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Buy Home digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Buy Home 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.
Sustainable margins compare to other players in Finance & Accounting industry
– To Buy or What to Buy: Your First Home firm has clearly differentiated products in the market place. This has enabled Buy Home to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Buy Home to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Buy Home in the sector have low bargaining power. To Buy or What to Buy: Your First Home has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Buy Home to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Buy Home has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in To Buy or What to Buy: Your First Home 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 Finance & Accounting field
– Buy Home 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 Buy Home in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Buy Home has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Buy Home to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Buy Home 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 To Buy or What to Buy: Your First Home HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses To Buy or What to Buy: Your First Home | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of To Buy or What to Buy: Your First Home are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Buy Home is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study To Buy or What to Buy: Your First Home can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Buy Home 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. Buy Home 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.
No frontier risks strategy
– After analyzing the HBR case study To Buy or What to Buy: Your First Home, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Buy Home needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High bargaining power of channel partners
– Because of the regulatory requirements, Charles F Wu, Steven Hirsch, Beatrice Liem, Kevin Ryan suggests that, Buy Home is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High cash cycle compare to competitors
Buy Home 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 operating costs
– Compare to the competitors, firm in the HBR case study To Buy or What to Buy: Your First Home 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 Buy Home 's lucrative customers.
Aligning sales with marketing
– It come across in the case study To Buy or What to Buy: Your First Home that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case To Buy or What to Buy: Your First Home can leverage the sales team experience to cultivate customer relationships as Buy Home is planning to shift buying processes online.
Interest costs
– Compare to the competition, Buy Home 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.
Need for greater diversity
– Buy Home 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.
Low market penetration in new markets
– Outside its home market of Buy Home, firm in the HBR case study To Buy or What to Buy: Your First Home needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities To Buy or What to Buy: Your First Home | 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 To Buy or What to Buy: Your First Home are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Buy Home 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, To Buy or What to Buy: Your First Home, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Buy Home can use these opportunities to build new business models that can help the communities that Buy Home operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Loyalty marketing
– Buy Home 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.
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. Buy Home 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. Buy Home 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.
Buying journey improvements
– Buy Home can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. To Buy or What to Buy: Your First Home 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.
Learning at scale
– Online learning technologies has now opened space for Buy Home 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Buy Home 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 Buy Home to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Buy Home has opened avenues for new revenue streams for the organization in the industry. This can help Buy Home to build a more holistic ecosystem as suggested in the To Buy or What to Buy: Your First Home case study. Buy Home 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, Buy Home is facing challenges because of the dominance of functional experts in the organization. To Buy or What to Buy: Your First Home 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.
Using analytics as competitive advantage
– Buy Home 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 To Buy or What to Buy: Your First Home - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Buy Home to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Buy Home 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 Buy Home can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Buy Home to increase its market reach. Buy Home 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.
Threats To Buy or What to Buy: Your First Home External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study To Buy or What to Buy: Your First Home are -
Stagnating economy with rate increase
– Buy Home 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.
Increasing wage structure of Buy Home
– 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 Buy Home.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Buy Home with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Buy Home can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Shortening product life cycle
– it is one of the major threat that Buy Home is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Buy Home needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Buy Home 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Buy Home 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 To Buy or What to Buy: Your First Home .
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 Buy Home.
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 Buy Home business can come under increasing regulations regarding data privacy, data security, etc.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study To Buy or What to Buy: Your First Home, Buy Home 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 .
Weighted SWOT Analysis of To Buy or What to Buy: Your First Home 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 To Buy or What to Buy: Your First Home 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 To Buy or What to Buy: Your First Home 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 To Buy or What to Buy: Your First Home 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 To Buy or What to Buy: Your First Home 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 Buy Home needs to make to build a sustainable competitive advantage.