Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge
Nearly 30 years after it was first incorporated to help stabilize and improve older, declining parts of the city, Neighborhood Housing Services (NHS) of Chicago had become among the best-known and most-respected organizations of its kind. Its combination of low-interest lending to homebuyers and home renovators, as well as its neighborhood improvement efforts, had won it credit for helping to maintain or revive parts of Chicago during a time when the city was losing population and private financial institutions were loathe to make conventional loans in its poorer neighborhoods. But, in the late 1990s, NHS Chicago finds it is facing a struggle to survive. Poorer neighborhoods, long-starved of credit, find themselves flooded by lending offers from a new generation of so-called "subprime" lenders. NHS efforts to improve the nine Chicago neighborhoods in which it has offices are threatened both by mortgage foreclosures which result from such high-interest loans, and by a decline in NHS Chicago's own lending business, which has difficulty competing with well-advertised "subprimes". This case raises the question of what strategy NHS Chicago, under pressure from a major foundation which had historically helped support it, should adopt to right itself financially and whether and how it should continue the mission for which it was founded. Case discussion may include both an examination of data-including trends in its revenues and expenses-and of prospective long-term organizational strategies. HKS Case Number 1659.0
Authors :: Howard Husock, William Apgar, Christine W. Letts
Swot Analysis of "Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge" written by Howard Husock, William Apgar, Christine W. Letts includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nhs Chicago facing as an external strategic factors. Some of the topics covered in Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge case study are - Strategic Management Strategies, Financial management, International business, Policy, Strategic planning, Sustainability and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, technology disruption, central banks are concerned over increasing inflation, geopolitical disruptions, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies,
increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nhs Chicago, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nhs Chicago 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 Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge can be done for the following purposes –
1. Strategic planning using facts provided in Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge case study
2. Improving business portfolio management of Nhs Chicago
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 Nhs Chicago
Strengths Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nhs Chicago in Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge Harvard Business Review case study are -
Ability to recruit top talent
– Nhs Chicago is one of the leading recruiters in the industry. Managers in the Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Nhs Chicago
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nhs Chicago does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Finance & Accounting field
– Nhs Chicago 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 Nhs Chicago in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Nhs Chicago is one of the most innovative firm in sector. Manager in Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Nhs Chicago in the sector have low bargaining power. Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nhs Chicago to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Nhs Chicago 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 Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge - 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 Nhs Chicago in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Nhs Chicago 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 Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Nhs Chicago 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.
Cross disciplinary teams
– Horizontal connected teams at the Nhs Chicago 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge firm has clearly differentiated products in the market place. This has enabled Nhs Chicago to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Nhs Chicago to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge 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.
Weaknesses Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge are -
Slow decision making process
– As mentioned earlier in the report, Nhs Chicago 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. Nhs Chicago 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, Nhs Chicago 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
– Nhs Chicago 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.
Capital Spending Reduction
– Even during the low interest decade, Nhs Chicago 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.
Aligning sales with marketing
– It come across in the case study Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge 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 Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge can leverage the sales team experience to cultivate customer relationships as Nhs Chicago is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Nhs Chicago 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Howard Husock, William Apgar, Christine W. Letts suggests that, Nhs Chicago 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 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 Nhs Chicago supply chain. Even after few cautionary changes mentioned in the HBR case study - Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nhs Chicago vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge HBR case study mentions - Nhs Chicago takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High cash cycle compare to competitors
Nhs Chicago 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 Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge 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 Nhs Chicago 's lucrative customers.
Opportunities Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge | 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 Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge are -
Learning at scale
– Online learning technologies has now opened space for Nhs Chicago 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.
Creating value in data economy
– The success of analytics program of Nhs Chicago has opened avenues for new revenue streams for the organization in the industry. This can help Nhs Chicago to build a more holistic ecosystem as suggested in the Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge case study. Nhs Chicago can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Nhs Chicago can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Nhs Chicago can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nhs Chicago can use these opportunities to build new business models that can help the communities that Nhs Chicago operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nhs Chicago in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nhs Chicago can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Nhs Chicago can develop new processes and procedures in Finance & Accounting 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nhs Chicago 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 Nhs Chicago to hire the very best people irrespective of their geographical location.
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 Nhs Chicago 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.
Better consumer reach
– The expansion of the 5G network will help Nhs Chicago to increase its market reach. Nhs Chicago 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nhs Chicago is facing challenges because of the dominance of functional experts in the organization. Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nhs Chicago 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, Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge 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.
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. Nhs Chicago can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Nhs Chicago 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.
Stagnating economy with rate increase
– Nhs Chicago 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge, Nhs Chicago 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 .
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 Nhs Chicago business can come under increasing regulations regarding data privacy, data security, etc.
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. Nhs Chicago 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.
Increasing wage structure of Nhs Chicago
– 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 Nhs Chicago.
High dependence on third party suppliers
– Nhs Chicago 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.
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 Nhs Chicago.
Technology acceleration in Forth Industrial Revolution
– Nhs Chicago has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Nhs Chicago 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.
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 Nhs Chicago 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.
Weighted SWOT Analysis of Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge 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 Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge 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 Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge 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 Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge 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 Seeking Sustainability: Neighborhood Housing Services of Chicago Faces Financial Challenge 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 Nhs Chicago needs to make to build a sustainable competitive advantage.
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