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 - – increasing commodity prices, 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, there is backlash against globalization, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing transportation and logistics costs, cloud computing is disrupting traditional business models, 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 -
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.
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.
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.
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.
Ability to lead change in Innovation & Entrepreneurship field
– Craigslist Jon 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 Craigslist Jon in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Craigslist Jon digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Craigslist Jon 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.
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.
Training and development
– Craigslist Jon has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market 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.
Diverse revenue streams
– Craigslist Jon is present in almost all the verticals within the industry. This has provided firm in Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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 -
High cash cycle compare to competitors
Craigslist Jon 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.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market, it seems that the employees of Craigslist Jon 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.
Products dominated business model
– Even though Craigslist Jon has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Craigslist Jon 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market, in the dynamic environment Craigslist Jon has struggled to respond to the nimble upstart competition. Craigslist Jon has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market, is just above the industry average. Craigslist Jon 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.
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 -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Craigslist Jon in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Craigslist Jon 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 Craigslist Jon to hire the very best people irrespective of their geographical location.
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.
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.
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Craigslist Jon in the consumer business. Now Craigslist Jon can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Craigslist Jon is facing challenges because of the dominance of functional experts in the organization. Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Craigslist Jon can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Manufacturing automation
– Craigslist Jon can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
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 -
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.
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 Craigslist Jon in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Craigslist Jon 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 Killing Craigslist: Entrepreneurship in the Online Apartment Rental Market .
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.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Craigslist Jon can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
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.
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 Craigslist Jon.
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.
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.
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.