Lexington (LXP) SWOT Analysis / TOWS Matrix / MBA Resources
Real Estate Operations
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Lexington (United States)
Based on various researches at Oak Spring University , Lexington is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, increasing household debt because of falling income levels, geopolitical disruptions,
competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Lexington can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lexington, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lexington 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 Lexington can be done for the following purposes –
1. Strategic planning of Lexington
2. Improving business portfolio management of Lexington
3. Assessing feasibility of the new initiative in United States
4. Making a Real Estate Operations sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lexington
Strengths of Lexington | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lexington are -
Innovation driven organization
– Lexington is one of the most innovative firm in Real Estate Operations sector.
Ability to lead change in Real Estate Operations
– Lexington is one of the leading players in the Real Estate Operations industry in United States. Over the years it has not only transformed the business landscape in the Real Estate Operations industry in United States but also across the existing markets. The ability to lead change has enabled Lexington in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Lexington 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
– Lexington has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lexington 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.
Analytics focus
– Lexington 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 Real Estate Operations industry. The technology infrastructure of United States is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management in the Real Estate Operations industry
– Lexington is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Lexington has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lexington to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Real Estate Operations industry
– Lexington has clearly differentiated products in the market place. This has enabled Lexington to fetch slight price premium compare to the competitors in the Real Estate Operations industry. The sustainable margins have also helped Lexington to invest into research and development (R&D) and innovation.
Organizational Resilience of Lexington
– The covid-19 pandemic has put organizational resilience at the centre of everthing Lexington does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Lexington in Real Estate Operations industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy of Lexington comprises – understanding the underlying the factors in the Real Estate Operations 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.
Learning organization
- Lexington 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 Lexington is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Lexington emphasize – knowledge, initiative, and innovation.
Weaknesses of Lexington | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lexington are -
No frontier risks strategy
– From the 10K / annual statement of Lexington, it seems that company is thinking out the frontier risks that can impact Real Estate Operations industry. 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.
Workers concerns about automation
– As automation is fast increasing in the Real Estate Operations industry, Lexington 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 in Real Estate Operations industry
– because of the regulatory requirements in United States, Lexington 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 Real Estate Operations industry.
High operating costs
– Compare to the competitors, Lexington has high operating costs in the Real Estate Operations industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lexington lucrative customers.
Aligning sales with marketing
– From the outside it seems that Lexington needs to have more collaboration between its sales team and marketing team. Sales professionals in the Real Estate Operations industry have deep experience in developing customer relationships. Marketing department at Lexington can leverage the sales team experience to cultivate customer relationships as Lexington is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Lexington is dominated by functional specialists. It is not different from other players in the Real Estate Operations industry, but Lexington needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lexington to focus more on services in the Real Estate Operations industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lexington is slow explore the new channels of communication. These new channels of communication can help Lexington to provide better information regarding Real Estate Operations products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring in Real Estate Operations industry
– The stress on hiring functional specialists at Lexington 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.
Slow to strategic competitive environment developments
– As Lexington is one of the leading players in the Real Estate Operations industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Real Estate Operations industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Lexington has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Real Estate Operations industry over the last five years. Lexington 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.
High cash cycle compare to competitors
Lexington has a high cash cycle compare to other players in the Real Estate Operations industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Lexington Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Lexington are -
Learning at scale
– Online learning technologies has now opened space for Lexington 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 Lexington has opened avenues for new revenue streams for the organization in Real Estate Operations industry. This can help Lexington to build a more holistic ecosystem for Lexington products in the Real Estate Operations industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Lexington can use the latest technology developments to improve its manufacturing and designing process in Real Estate Operations sector. 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Lexington is facing challenges because of the dominance of functional experts in the organization. Lexington can utilize new technology in the field of Real Estate Operations industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Lexington 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 Lexington 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 Real Estate Operations industry.
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. Lexington can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Lexington 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Real Estate Operations industry, but it has also influenced the consumer preferences. Lexington 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
– Lexington can improve the customer journey of consumers in the Real Estate Operations industry by using analytics and artificial intelligence. It 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.
Using analytics as competitive advantage
– Lexington has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Real Estate Operations sector. This continuous investment in analytics has enabled Lexington to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lexington to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Lexington 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lexington can use these opportunities to build new business models that can help the communities that Lexington operates in. Secondly it can use opportunities from government spending in Real Estate Operations sector.
Threats Lexington External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Lexington 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 Lexington business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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 Lexington in the Real Estate Operations sector and impact the bottomline of the organization.
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. Lexington 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.
Easy access to finance
– Easy access to finance in Real Estate Operations industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Lexington 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 Lexington 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 Real Estate Operations industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lexington in Real Estate Operations industry. The Real Estate Operations 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
– Lexington 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 Real Estate Operations industry.
Regulatory challenges
– Lexington 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 Real Estate Operations industry regulations.
High dependence on third party suppliers
– Lexington 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Lexington may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Real Estate Operations sector.
Increasing wage structure of Lexington
– 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 Lexington.
Weighted SWOT Analysis of Lexington Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Lexington 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 Lexington 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 Lexington 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 Lexington 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 Lexington needs to make to build a sustainable competitive advantage.