Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market
Jon Pastor and Lawrence Zhou were inspired by the same problem: the Internet was surprisingly unhelpful in the hunt for an apartment. The online apartment rental market was fragmented, opaque, and wrought with misinformation. The leader in this space was the website Craigslist, which was the most highly trafficked classifieds site in the world and the tenth most visited site in the United States despite introducing almost no innovations in its 15 years of existence. Having suffered as consumers, Jon and Lawrence saw this chaotic space as fertile ground for entrepreneurship. But the routes these entrepreneurs chose to take were different. "Killing Craigslist" explores the business Jon and Lawrence built to improve the online rental experience, and examines strategies to attract users and monetize their sites, all in shadow of a deeply entrenched incumbent.
Authors :: Peter A. Coles, Joshua Gans, Wei-Yuan Yu
Swot Analysis of "Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market" written by Peter A. Coles, Joshua Gans, Wei-Yuan Yu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Craigslist Jon facing as an external strategic factors. Some of the topics covered in Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market case study are - Strategic Management Strategies, Economics, Entrepreneurial management, Internet and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market casestudy better are - – there is increasing trade war between United States & China, technology disruption, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, wage bills are increasing, increasing household debt because of falling income levels,
increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Craigslist Jon, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Craigslist Jon 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 Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market can be done for the following purposes –
1. Strategic planning using facts provided in Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market case study
2. Improving business portfolio management of Craigslist Jon
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Craigslist Jon
Strengths Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Craigslist Jon in Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market 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.
High brand equity
– Craigslist Jon has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Craigslist Jon to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Craigslist Jon 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.
Successful track record of launching new products
– Craigslist Jon has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Craigslist Jon has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Highly skilled collaborators
– Craigslist Jon 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 Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Craigslist Jon 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 Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Craigslist Jon is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Peter A. Coles, Joshua Gans, Wei-Yuan Yu can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Superior customer experience
– The customer experience strategy of Craigslist Jon in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Craigslist Jon in the sector have low bargaining power. Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Craigslist Jon to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Craigslist Jon
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Craigslist Jon does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Craigslist Jon is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market firm has clearly differentiated products in the market place. This has enabled Craigslist Jon to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Craigslist Jon to invest into research and development (R&D) and innovation.
Weaknesses Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market are -
Need for greater diversity
– Craigslist Jon 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.
Lack of clear differentiation of Craigslist Jon products
– To increase the profitability and margins on the products, Craigslist Jon needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Craigslist Jon 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. Craigslist Jon 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Craigslist Jon is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market 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 to strategic competitive environment developments
– As Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market HBR case study mentions - Craigslist Jon 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.
Interest costs
– Compare to the competition, Craigslist Jon 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.
Aligning sales with marketing
– It come across in the case study Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market 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 Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market can leverage the sales team experience to cultivate customer relationships as Craigslist Jon is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Peter A. Coles, Joshua Gans, Wei-Yuan Yu suggests that, Craigslist Jon 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Craigslist Jon 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 operating costs
– Compare to the competitors, firm in the HBR case study Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market 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 Craigslist Jon 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Craigslist Jon has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market | 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 Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market are -
Leveraging digital technologies
– Craigslist Jon 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.
Using analytics as competitive advantage
– Craigslist Jon 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 Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Craigslist Jon to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Craigslist Jon can develop new processes and procedures in Innovation & Entrepreneurship 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.
Better consumer reach
– The expansion of the 5G network will help Craigslist Jon to increase its market reach. Craigslist Jon 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Craigslist Jon can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Craigslist Jon 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. Craigslist Jon 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
– Craigslist Jon can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Craigslist Jon 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, Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Craigslist Jon 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.
Learning at scale
– Online learning technologies has now opened space for Craigslist Jon 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 Craigslist Jon has opened avenues for new revenue streams for the organization in the industry. This can help Craigslist Jon to build a more holistic ecosystem as suggested in the Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market case study. Craigslist Jon can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Craigslist Jon can use these opportunities to build new business models that can help the communities that Craigslist Jon operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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 Craigslist Jon 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.
Threats Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market are -
High dependence on third party suppliers
– Craigslist Jon 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Craigslist Jon in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Stagnating economy with rate increase
– Craigslist Jon 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 Craigslist Jon
– 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 Craigslist Jon.
Technology acceleration in Forth Industrial Revolution
– Craigslist Jon has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Craigslist Jon needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
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 Craigslist Jon business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Craigslist Jon 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.
Environmental challenges
– Craigslist Jon 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. Craigslist Jon can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market, Craigslist Jon may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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. Craigslist Jon needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Regulatory challenges
– Craigslist Jon 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 Innovation & Entrepreneurship industry regulations.
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. Craigslist Jon 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.
Weighted SWOT Analysis of Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market 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 Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market 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 Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market 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 Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market 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 Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market 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 Craigslist Jon needs to make to build a sustainable competitive advantage.