SWOT analysis is a critical yet straightforward technique that Zillow can use to assess how the company is strategically positioned in the market. It examines the company’s strengths that fuel its strategic standing and its weaknesses that could sabotage the company’s prosperity; it examines the opportunities in the market that could offer the company growth avenues and looks at the threats that could lead to the downfall of the company. In this article, we take a look at these four critical factors of Zillow.
Zillow Group is a company that was Launched in 2006 and has since become the go-to platform for all real estate needs. Through acquisitions and portfolio diversification, Zillow has grown to become the market leader in the industry.
Zillow – At a Glance
| Name | Zillow Group |
| Website | https://www.zillow.com |
| Founders | Rich Barton and Lloyd Frink |
| Chief Executive Officer (C.E.O.) | Rich Barton |
| Tagline | “Where dreams come home |
| Headquarters | Seattle, Washington, United States |
| Type of Corporation | Public |
| Year Founded | 2004 |
| Revenues (2020) | $2.7 B |
| Key Products/Services | Real estate |
| Key Competitors | Realtor.com · BoldLeads CRM · G2 Storefront · Zumper · LoopNet · CoreLogic Matrix · Redfin · Apartments.com. |
Zillow’s Strengths
Being the leading organization in the industry, Zillow has critical internal strategic factors that enable the brand to thrive in the marketplace. They help the brand protect its existing market share and as well penetrate effectively into new markets. They include the following:
Brand recognition
This is the group’s primary strength. It has become synonymous with online property searches. Consumers are very familiar with Zillow. Zillow is ranked number 1 among real estate brands. Zillow ranked position 49 as the most popular website globally, position 16 in the US, and was position 1 most popular website in the business and consumer services category in 2021.
The company’s website has 221 million average monthly unique visitors, with the first quarter in 2021 registering 2.5 billion visitors. Zillow can leverage its brand recognition to expand into new categories. With consumers being familiar with Zillow’s platform and having experienced a significant level of customer satisfaction, the market is bound to be more receptive to the brand’s products
Product portfolio
Zillow has invested heavily to build a strong brand. From its inception, the Zillow brand has grown from being a simple site for real estate to have a portfolio of platforms that address the whole life cycle of real estate.
Zillow brand is built on the foundation of trust to build a seamless transaction experience for each of their customers. Its brand portfolio comprises Zillow (premier agent, research, offers, rentals, home loans, and closing services), StreetEasy, Trulia, Naked Apartments, and HotPads.
In addition, Zillow also houses Bridge, Dotloop, Interactive, Mortech, and Retxly business brands. This has been possible through strategic acquisitions and as well innovations.
High levels of customer satisfaction
Zillow is rated 3.9 stars out of 5 stars by ConsumerAffairs, G2 ranks Zillow at 3.8, while hooquest ranks the company at 8.5 stars out of 10. Some of the factors that most appeal to customers about Zillow include good quality leads that are generic, a considerable volume of properties and solutions of customers are listed on the website, and Zillow Premier Agent benefits, among others.
With its dedicated customer service department, the company can attain an exceptionally high level of customer service.
Highly skilled workforce; best workplace
Zillow invests heavily in its workforce to ensure it is highly skilled and motivated to drive the company’s agenda to achieve its goals. The company achieved the prestigious Fortune 100 best companies to work for in 2021 and 2019, where it was ranked position 47 and 69, respectively.
The company was also listed by Glassdoor as the best place to work in 2015, 2016, and 2017, where it ranked 33, 10, and 29, respectively. The company is recognized for advancing policies and benefits that ensured flexibility, equality and supporting its employees, particularly during the COVID pandemic. It was also ranked number 1 as the best place to work in Seattle 2021. Because the company supports a distributed workforce and supporting employees to work from where they were comfortable, it won the UrbanBound’s 2021 Relocation Program of the Year Award.
Other strengths include a strong dealer community, strong distribution network, great strategies and performance in new markets.
Zillow’s Weaknesses
High levels of inventory
While the company has a vast inventory, the company’s time taken for purchasing and selling products is relatively longer than the industry average. This attracts opportunity costs, among other costs.
High transaction costs
While the company has done so much in the real estate industry, it has done little with regard to the high transaction costs. With both the selling and buying receiving commissions, they drive the transaction costs higher, thus leaving the company vulnerable to competitors like Opendoor and Redfin, who offer lower transaction costs.
Gaps in customer satisfaction
While the company’s customer satisfaction rates are high compared to the industry average, the customers noticed gaps in this service. They include: limited seller leads as the new instant offer programs are designed to generate more buyer leads and little seller needs in few markets; varied pricing that could be expensive in the more costly areas.
Zillow’s Opportunities
New technologies
New technologies enable more efficiencies and effectiveness, which eventually drive down costs. These are critical in helping Zillow achieve a differentiated pricing strategy to help the company address its high transaction costs. In addition, through new technologies, Zillow can maintain their loyal customers with excellent customer service and at the same time bring in new customers through value-added propositions.
New consumer trends
New consumer trends and behaviors offer Zillow new opportunities to fulfill the new needs and preferences among consumers. For example, Zillow is appealing to a new generation of buyers keen on digitized home buying. Additionally, millennials are entering their peak home-buying years. Given they are tech-savvy, Zillow’s business model perfectly fits with this group. As a result, the company expects a residential housing boom.
Growth prospects for real estate
Industry analysts, as well as Zillow research, indicate an expected growth in the industry. Demand will be driven by an increased supply of properties that will drive prices to moderate levels, rising demand for housing by millennials, and the need to work from home.
Financial performance and assets
Zillow’s financial performance is much better than that of its competitors. This gives the company a better opportunity to secure financing and invest in innovations and expansion strategies.
Zillow’s Threats
Intense competition
The company faces intense competition from both existing competitors and new entrants into the market. In addition, the stable profitability in the industry has attracted more players in the market, a move that has pushed profits and market share downwards.
Real estate online fraud
The real estate industry is among those industries that are hot targets for fraudsters; statistics indicate that fraudsters launder approximately $1.6 trillion yearly through home purchases and rental payments. As a result, Zillow must invest more in who’s buying and selling and at the same time ensure the onboarding process remains user-friendly.
