Realogy Holdings SWOT Analysis / Matrix

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SWOT analysis is a vital strategic planning tool that can be used by Realogy Holdings managers to do a situational analysis of the firm . It is a useful technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Realogy Holdings is facing in its current business environment.

The Realogy Holdings is one of the leading firms in its industry. Realogy Holdings maintains its prominent position in market by critically analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the organization such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework helps an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Realogy Holdings to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Realogy Holdings swot analysis / matrix

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that a firm can use to exploit external opportunities, counter threats, and build on & protect Realogy Holdings strengths, and eradicate its weaknesses.

Step by Step Guide to Realogy Holdings SWOT Analysis

Strengths of Realogy Holdings – Internal Strategic Factors

As one of the leading organizations in its industry, Realogy Holdings has numerous strengths that help it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Realogy Holdings are –

  • Good Returns on Capital Expenditure – Realogy Holdings is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
  • Successful track record of developing new products – product innovation.
  • Strong distribution network – Over the years Realogy Holdings has built a reliable distribution network that can reach majority of its potential market.
  • Strong Brand Portfolio – Over the years Realogy Holdings has invested in building a strong brand portfolio. The SWOT analysis of Realogy Holdings just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
  • Strong Free Cash Flow – Realogy Holdings has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Superb Performance in New Markets – Realogy Holdings has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.

Weakness of Realogy Holdings – Internal Strategic Factors

Weakness are the areas where Realogy Holdings can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

  • High attrition rate in work force – compare to other organizations in the industry Realogy Holdings has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.
  • Limited success outside core business – Even though Realogy Holdings is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Realogy Holdings is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • The profitability ratio and Net Contribution % of Realogy Holdings are below the industry average.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
  • Investment in Research and Development is below the fastest growing players in the industry. Even though Realogy Holdings is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.

Opportunities for Realogy Holdings – External Strategic Factors

  • Government green drive also opens an opportunity for procurement of Realogy Holdings products by the state as well as federal government contractors.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Realogy Holdings.
  • The market development will lead to dilution of competitor’s advantage and enable Realogy Holdings to increase its competitiveness compare to the other competitors.
  • Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Realogy Holdings to capture new customers and increase its market share.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Realogy Holdings an opportunity to enter a new emerging market.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Realogy Holdings’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
  • The new technology provides an opportunity to Realogy Holdings to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.

Threats Realogy Holdings Facing - External Strategic Factors

  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.
  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Realogy Holdings
  • Rising raw material can pose a threat to the Realogy Holdings profitability.
  • Imitation of the counterfeit and low quality product is also a threat to Realogy Holdings’s product especially in the emerging markets and low income markets.
  • As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.
  • Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.

Limitations of SWOT Analysis for Realogy Holdings

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

  • Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
  • SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
  • The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Realogy Holdings
  • SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
  • SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

Weighted SWOT Analysis of Realogy Holdings

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Realogy Holdings managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Realogy Holdings

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

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References / Citations & Bibliography

  • M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
  • A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
  • O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
  • L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
  • R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)