Northstar Realty Europe Corp (NRE) SWOT Analysis / TOWS Matrix / MBA Resources
Real Estate Operations
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Northstar Realty Europe Corp (United States)
Based on various researches at Oak Spring University , Northstar Realty Europe Corp is operating in a macro-environment that has been destablized by – geopolitical disruptions, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, technology disruption, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings,
increasing household debt because of falling income levels, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Northstar Realty Europe Corp
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Northstar Realty Europe Corp can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Northstar Realty Europe Corp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Northstar Realty Europe Corp 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 Northstar Realty Europe Corp can be done for the following purposes –
1. Strategic planning of Northstar Realty Europe Corp
2. Improving business portfolio management of Northstar Realty Europe Corp
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 Northstar Realty Europe Corp
Strengths of Northstar Realty Europe Corp | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Northstar Realty Europe Corp are -
Innovation driven organization
– Northstar Realty Europe Corp is one of the most innovative firm in Real Estate Operations sector.
Low bargaining power of suppliers
– Suppliers of Northstar Realty Europe Corp in the Services sector have low bargaining power. Northstar Realty Europe Corp has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Northstar Realty Europe Corp to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Northstar Realty Europe Corp in Real Estate Operations industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Real Estate Operations industry
– Northstar Realty Europe Corp has clearly differentiated products in the market place. This has enabled Northstar Realty Europe Corp to fetch slight price premium compare to the competitors in the Real Estate Operations industry. The sustainable margins have also helped Northstar Realty Europe Corp to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Northstar Realty Europe Corp has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Real Estate Operations industry. Secondly the value chain collaborators of Northstar Realty Europe Corp have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Northstar Realty Europe Corp
– The covid-19 pandemic has put organizational resilience at the centre of everthing Northstar Realty Europe Corp does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Northstar Realty Europe Corp has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Northstar Realty Europe Corp staying ahead in the Real Estate Operations 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 in the Real Estate Operations industry
– Northstar Realty Europe Corp 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 of Northstar Realty Europe Corp 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
- Northstar Realty Europe Corp 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 Northstar Realty Europe Corp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Northstar Realty Europe Corp emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Northstar Realty Europe Corp is one of the leading players in the Real Estate Operations industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Northstar Realty Europe Corp has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Northstar Realty Europe Corp to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Northstar Realty Europe Corp | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Northstar Realty Europe Corp are -
High dependence on Northstar Realty Europe Corp ‘s star products
– The top 2 products and services of Northstar Realty Europe Corp still accounts for major business revenue. This dependence on star products in Real Estate Operations industry has resulted into insufficient focus on developing new products, even though Northstar Realty Europe Corp has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of United States, Northstar Realty Europe Corp needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee of Northstar Realty Europe Corp is just above the Real Estate Operations industry average. It 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Northstar Realty Europe Corp supply chain. Even after few cautionary changes, Northstar Realty Europe Corp is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Northstar Realty Europe Corp vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners in Real Estate Operations industry
– because of the regulatory requirements in United States, Northstar Realty Europe Corp 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Northstar Realty Europe Corp is slow explore the new channels of communication. These new channels of communication can help Northstar Realty Europe Corp 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.
Aligning sales with marketing
– From the outside it seems that Northstar Realty Europe Corp 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 Northstar Realty Europe Corp can leverage the sales team experience to cultivate customer relationships as Northstar Realty Europe Corp is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Northstar Realty Europe Corp 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 Real Estate Operations industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of Northstar Realty Europe Corp, 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.
Products dominated business model
– Even though Northstar Realty Europe Corp has some of the most successful models in the Real Estate Operations industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Northstar Realty Europe Corp should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Northstar Realty Europe Corp 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.
Northstar Realty Europe Corp Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Northstar Realty Europe Corp are -
Using analytics as competitive advantage
– Northstar Realty Europe Corp 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 Northstar Realty Europe Corp to build a competitive advantage using analytics. The analytics driven competitive advantage can help Northstar Realty Europe Corp to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Northstar Realty Europe Corp 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.
Building a culture of innovation
– managers at Northstar Realty Europe Corp 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.
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 Northstar Realty Europe Corp 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Northstar Realty Europe Corp in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Real Estate Operations industry, and it will provide faster access to the consumers.
Manufacturing automation
– Northstar Realty Europe Corp 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.
Better consumer reach
– The expansion of the 5G network will help Northstar Realty Europe Corp to increase its market reach. Northstar Realty Europe Corp 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.
Use of Bitcoin and other crypto currencies for transactions in Real Estate Operations industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Northstar Realty Europe Corp in the Real Estate Operations industry. Now Northstar Realty Europe Corp can target international markets with far fewer capital restrictions requirements than the existing system.
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. Northstar Realty Europe Corp can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Northstar Realty Europe Corp 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 Northstar Realty Europe Corp 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Northstar Realty Europe Corp can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Northstar Realty Europe Corp has opened avenues for new revenue streams for the organization in Real Estate Operations industry. This can help Northstar Realty Europe Corp to build a more holistic ecosystem for Northstar Realty Europe Corp products in the Real Estate Operations industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Northstar Realty Europe Corp External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Northstar Realty Europe Corp 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. Northstar Realty Europe Corp 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.
Stagnating economy with rate increase
– Northstar Realty Europe Corp 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
– Northstar Realty Europe Corp 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.
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. Northstar Realty Europe Corp can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Northstar Realty Europe Corp 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.
Shortening product life cycle
– it is one of the major threat that Northstar Realty Europe Corp is facing in Real Estate Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Northstar Realty Europe Corp 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 Northstar Realty Europe Corp prominent markets.
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 Northstar Realty Europe Corp business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Northstar Realty Europe Corp 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Northstar Realty Europe Corp 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.
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. Northstar Realty Europe Corp needs to understand the core reasons impacting the Real Estate Operations industry. This will help it in building a better workplace.
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 acceleration in Forth Industrial Revolution
– Northstar Realty Europe Corp has witnessed rapid integration of technology during Covid-19 in the Real Estate Operations industry. As one of the leading players in the industry, Northstar Realty Europe Corp needs to keep up with the evolution of technology in the Real Estate Operations 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 Northstar Realty Europe Corp Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Northstar Realty Europe Corp 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 Northstar Realty Europe Corp 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 Northstar Realty Europe Corp 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 Northstar Realty Europe Corp 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 Northstar Realty Europe Corp needs to make to build a sustainable competitive advantage.