Savings and Loans and the Mortgage Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Savings and Loans and the Mortgage Market
Provides a brief overview of the history of the savings and loans, the savings and loans crisis of the 1980s and 1990s, and the creation of the mortgage markets in the United States. Also explains briefly the most common types of mortgage-backed securities available.
Swot Analysis of "Savings and Loans and the Mortgage Market" written by Alberto Moel, Robert C. Merton includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mortgage Loans facing as an external strategic factors. Some of the topics covered in Savings and Loans and the Mortgage Market case study are - Strategic Management Strategies, Financial management, Government and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Savings and Loans and the Mortgage Market casestudy better are - – increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google,
geopolitical disruptions, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Savings and Loans and the Mortgage Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Savings and Loans and the Mortgage Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mortgage Loans, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mortgage Loans 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 Savings and Loans and the Mortgage Market can be done for the following purposes –
1. Strategic planning using facts provided in Savings and Loans and the Mortgage Market case study
2. Improving business portfolio management of Mortgage Loans
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 Mortgage Loans
Strengths Savings and Loans and the Mortgage Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mortgage Loans in Savings and Loans and the Mortgage Market Harvard Business Review case study are -
Learning organization
- Mortgage Loans 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 Mortgage Loans is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Savings and Loans and the Mortgage Market Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Savings and Loans and the Mortgage 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.
Cross disciplinary teams
– Horizontal connected teams at the Mortgage Loans 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)
– Mortgage Loans 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 Savings and Loans and the Mortgage 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Savings and Loans and the Mortgage Market firm has clearly differentiated products in the market place. This has enabled Mortgage Loans to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Mortgage Loans to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Mortgage Loans 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 Savings and Loans and the Mortgage Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Mortgage Loans has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mortgage Loans 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.
Low bargaining power of suppliers
– Suppliers of Mortgage Loans in the sector have low bargaining power. Savings and Loans and the Mortgage Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mortgage Loans to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Mortgage Loans is present in almost all the verticals within the industry. This has provided firm in Savings and Loans and the Mortgage 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.
High brand equity
– Mortgage Loans has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mortgage Loans to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Mortgage Loans is one of the leading recruiters in the industry. Managers in the Savings and Loans and the Mortgage Market are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Mortgage Loans is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Savings and Loans and the Mortgage Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Savings and Loans and the Mortgage Market are -
Need for greater diversity
– Mortgage Loans 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.
No frontier risks strategy
– After analyzing the HBR case study Savings and Loans and the Mortgage Market, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Mortgage Loans is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Savings and Loans and the Mortgage 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Mortgage Loans needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High bargaining power of channel partners
– Because of the regulatory requirements, Alberto Moel, Robert C. Merton suggests that, Mortgage Loans 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.
Increasing silos among functional specialists
– The organizational structure of Mortgage Loans is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Mortgage Loans needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mortgage Loans to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Mortgage Loans 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 Savings and Loans and the Mortgage 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 Mortgage Loans 's lucrative customers.
Interest costs
– Compare to the competition, Mortgage Loans 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.
Capital Spending Reduction
– Even during the low interest decade, Mortgage Loans 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.
Low market penetration in new markets
– Outside its home market of Mortgage Loans, firm in the HBR case study Savings and Loans and the Mortgage Market needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Savings and Loans and the Mortgage 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 Savings and Loans and the Mortgage Market are -
Creating value in data economy
– The success of analytics program of Mortgage Loans has opened avenues for new revenue streams for the organization in the industry. This can help Mortgage Loans to build a more holistic ecosystem as suggested in the Savings and Loans and the Mortgage Market case study. Mortgage Loans can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mortgage Loans 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, Savings and Loans and the Mortgage 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mortgage Loans is facing challenges because of the dominance of functional experts in the organization. Savings and Loans and the Mortgage 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.
Learning at scale
– Online learning technologies has now opened space for Mortgage Loans 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.
Manufacturing automation
– Mortgage Loans 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mortgage Loans can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Mortgage Loans can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mortgage Loans 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 Mortgage Loans to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mortgage Loans 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.
Developing new processes and practices
– Mortgage Loans 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Mortgage Loans can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Mortgage Loans 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 Savings and Loans and the Mortgage Market - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mortgage Loans to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Mortgage Loans can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Savings and Loans and the Mortgage 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.
Threats Savings and Loans and the Mortgage Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Savings and Loans and the Mortgage Market are -
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. Mortgage Loans 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.
Regulatory challenges
– Mortgage Loans 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 Finance & Accounting industry regulations.
Shortening product life cycle
– it is one of the major threat that Mortgage Loans is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Mortgage Loans needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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. Mortgage Loans can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Savings and Loans and the Mortgage Market, Mortgage Loans 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 .
Increasing wage structure of Mortgage Loans
– 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 Mortgage Loans.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mortgage Loans 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 Savings and Loans and the Mortgage 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 Mortgage Loans.
Technology acceleration in Forth Industrial Revolution
– Mortgage Loans has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Mortgage Loans 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mortgage Loans 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.
Stagnating economy with rate increase
– Mortgage Loans 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.
Weighted SWOT Analysis of Savings and Loans and the Mortgage 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 Savings and Loans and the Mortgage 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 Savings and Loans and the Mortgage 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 Savings and Loans and the Mortgage 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 Savings and Loans and the Mortgage 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 Mortgage Loans needs to make to build a sustainable competitive advantage.