Redfin: Redefine Real Estate, Chinese Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Redfin: Redefine Real Estate, Chinese Version
Founded in 2004, Redfin envisioned a light-touch model in which clients self-served using the digitized platform in exchange for a significantly lower fee than traditional agents. Realizing the narrow appeal of its initial model, Redfin had made significant changes to its strategy while maintaining some key distinctive choices. As of 2016, Redfin served in more than 80 markets throughout the U.S., employed over 700 full-time agents, and had grown over 40% annually since 2014. With additional capital raised through an IPO, Kelman faced decisions on how to allocate these resources in order to grow. Should Redfin adjust its advertising strategy? Should it reconsider the policy of hiring lead agents only as full-time employees? Should Redfin purchase homes and hold inventories?
Swot Analysis of "Redfin: Redefine Real Estate, Chinese Version" written by Hong Luo, Huafeng Yu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Redfin Agents facing as an external strategic factors. Some of the topics covered in Redfin: Redefine Real Estate, Chinese Version case study are - Strategic Management Strategies, Entrepreneurship, Growth strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Redfin: Redefine Real Estate, Chinese Version casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, there is backlash against globalization, cloud computing is disrupting traditional business models, technology disruption, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies,
wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Redfin: Redefine Real Estate, Chinese Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Redfin: Redefine Real Estate, Chinese Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Redfin Agents, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Redfin Agents 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 Redfin: Redefine Real Estate, Chinese Version can be done for the following purposes –
1. Strategic planning using facts provided in Redfin: Redefine Real Estate, Chinese Version case study
2. Improving business portfolio management of Redfin Agents
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 Redfin Agents
Strengths Redfin: Redefine Real Estate, Chinese Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Redfin Agents in Redfin: Redefine Real Estate, Chinese Version Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Redfin Agents in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Redfin Agents
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Redfin Agents does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Redfin Agents 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 Redfin: Redefine Real Estate, Chinese Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Redfin Agents 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 Redfin Agents is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Redfin: Redefine Real Estate, Chinese Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Strategy & Execution field
– Redfin Agents 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 Redfin Agents in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Redfin Agents 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)
– Redfin Agents 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 Redfin: Redefine Real Estate, Chinese Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Redfin Agents has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Redfin: Redefine Real Estate, Chinese Version 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
– Redfin Agents is one of the leading recruiters in the industry. Managers in the Redfin: Redefine Real Estate, Chinese Version 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
– Redfin Agents has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Redfin Agents to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Strategy & Execution industry
– Redfin: Redefine Real Estate, Chinese Version firm has clearly differentiated products in the market place. This has enabled Redfin Agents to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Redfin Agents to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Redfin Agents has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses Redfin: Redefine Real Estate, Chinese Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Redfin: Redefine Real Estate, Chinese Version are -
Need for greater diversity
– Redfin Agents 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.
High cash cycle compare to competitors
Redfin Agents 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.
Lack of clear differentiation of Redfin Agents products
– To increase the profitability and margins on the products, Redfin Agents needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Redfin: Redefine Real Estate, Chinese Version HBR case study mentions - Redfin Agents 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Redfin: Redefine Real Estate, Chinese Version, is just above the industry average. Redfin Agents 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Redfin Agents is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Redfin: Redefine Real Estate, Chinese Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 Redfin Agents supply chain. Even after few cautionary changes mentioned in the HBR case study - Redfin: Redefine Real Estate, Chinese Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Redfin Agents vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Redfin: Redefine Real Estate, Chinese Version 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 Redfin Agents 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Redfin: Redefine Real Estate, Chinese Version, it seems that the employees of Redfin Agents 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.
Low market penetration in new markets
– Outside its home market of Redfin Agents, firm in the HBR case study Redfin: Redefine Real Estate, Chinese Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Redfin Agents 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. Redfin Agents 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.
Opportunities Redfin: Redefine Real Estate, Chinese Version | 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 Redfin: Redefine Real Estate, Chinese Version are -
Creating value in data economy
– The success of analytics program of Redfin Agents has opened avenues for new revenue streams for the organization in the industry. This can help Redfin Agents to build a more holistic ecosystem as suggested in the Redfin: Redefine Real Estate, Chinese Version case study. Redfin Agents can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Redfin Agents 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 Redfin: Redefine Real Estate, Chinese Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Redfin Agents to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Redfin Agents 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Redfin Agents is facing challenges because of the dominance of functional experts in the organization. Redfin: Redefine Real Estate, Chinese Version 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.
Leveraging digital technologies
– Redfin Agents 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.
Buying journey improvements
– Redfin Agents can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Redfin: Redefine Real Estate, Chinese Version 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.
Better consumer reach
– The expansion of the 5G network will help Redfin Agents to increase its market reach. Redfin Agents 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.
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. Redfin Agents 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 Redfin Agents 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Redfin Agents 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, Redfin: Redefine Real Estate, Chinese Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Redfin Agents 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.
Building a culture of innovation
– managers at Redfin Agents 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Redfin Agents can use these opportunities to build new business models that can help the communities that Redfin Agents operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats Redfin: Redefine Real Estate, Chinese Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Redfin: Redefine Real Estate, Chinese Version are -
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.
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. Redfin Agents 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. Redfin Agents needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Environmental challenges
– Redfin Agents 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. Redfin Agents can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Redfin Agents in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Redfin Agents 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.
Technology acceleration in Forth Industrial Revolution
– Redfin Agents has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Redfin Agents needs to keep up with the evolution of technology in the Strategy & Execution 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.
Increasing wage structure of Redfin Agents
– 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 Redfin Agents.
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 Redfin Agents business can come under increasing regulations regarding data privacy, data security, 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 Redfin: Redefine Real Estate, Chinese Version, Redfin Agents 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 .
Consumer confidence and its impact on Redfin Agents demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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 Redfin Agents.
Weighted SWOT Analysis of Redfin: Redefine Real Estate, Chinese Version 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 Redfin: Redefine Real Estate, Chinese Version 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 Redfin: Redefine Real Estate, Chinese Version 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 Redfin: Redefine Real Estate, Chinese Version 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 Redfin: Redefine Real Estate, Chinese Version 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 Redfin Agents needs to make to build a sustainable competitive advantage.
