Strategic Plan, Part II: SWOTT Analysis BUS/475 SWOTT Analysis Today’s business world is one of many challenges; challenges with our Federal Government encroaching upon the business world with regulatory changes and restrictions, challenges with an ever-changing economic climate that seems to swing in either direction and challenges with both political parties that engage in meaningless finger-pointing, rather than looking for solutions. Having a Strategic Plan in place is important to ensure that any business has a successful start to their business life.
Companies need to develop strategic plans that include performing a SWOTT analysis to establish how the business will survive in these tough economic times. A SWOTT analysis is defined as a situation analysis of an organization’s internal Strength and Weaknesses, external Opportunities, Threats and Trends faced by the company, are closely examined to chart a strategy for survival of the company, (Business Dictionary, 2011). By focusing on leadership, the legal and regulatory climate, global economic climate, technological advances, innovation, processes and systems trends, a company can determine what changes need to be made to survive.
Below is a SWOTT analysis for an all online loan origination system called The Loan Doctor, LLC. Strengths The Loan Doctor’s fully integrated online format is similar to the questionnaire system that Turbo Tax uses in their software system; each “yes” or “no” response sets up a new set of questions or responses for the next series of questions or responses; in the end, the system gets the right response it requires to make a decision to approve or deny the loan application.
The Loan Doctor, LLC recognizes the past inefficiencies, breakdowns in communication, confusion over the fees being charged and the interest rate being charged on the loan program and eliminates the confusing loan process that most people do not understand and most mortgage professionals have trouble explaining. The Loan Doctor, LLC also recognizes the general public’s frustration in dealing with personnel that are not as educated about the mortgage loan guidelines and process as they should be, rustration with rates changing at the last minute or fees that come up at the last minute. The Loan Doctor eliminates the need for undertrained personnel that can sometimes cause confusion of the information on the loan application, or failed follow-through by personnel; The Loan Doctor eliminates the human error factor altogether. This online structure allows for management to oversee each function or phase of the process.
This structure also allows for minimal accounting and supervision. The Loan Doctor’s ongoing and increasing database will position the business to operate in high volume by being able to accumulate data and service their ongoing database for future refinance or streamlined needs. Weaknesses Older people of our population prefer to work face-to-face with a “live body” in person, rather than working on an online system where they cannot ask questions during the process.
Because of the lack of a one-on-one interaction, many customers may feel like a “number” rather than a person; in today’s “entitled” society, many people like to feel important, with an online format, these same people may view this online format as “cold” and impersonal. Our location, or lack of a physical location, would be seen as a weakness. Other mortgage companies could try to capitalize on this format, claiming the exact cold and impersonal touches linked with this kind of all online origination system. Opportunities
Legal, regulatory, compliance and RESPA requirements will have to be met with an internal “check & balances” system that oversees these areas to ensure all files are met with RESPA, MDIA or HVCC requirements, and that files meet HMDA requirements for post-closing auditing. The online system would be considered innovative by most as it would eliminate the need for a Loan Officer or a Loan processor, skipping by both of these job elements going directly to Underwriting for loan approval; competition from other mortgage companies would attempt to discredit an all online origination system.
There is an opportunity to reach customers in all areas of the country, once all compliance and licensing requirements are met, to originate and sell loans in other states using this same online internet system. Threats As stated above, other “mortgage shops” would attempt to discredit an all online origination system by pointing out the lack of a “live body” person to point questions to.
To counter this, The Loan Doctor will employ knowledgeable mortgage professionals to handle questions in an online chat forum that walks the client through any questions they might have; these mortgage professionals would be paid per diem, per helped client. They would be fully trained on the software The Loan Doctor uses. These threats would be from the older portion of our population that likes face-to-face interaction vs. an online system where they cannot ask questions during the process. Competitors will have the ability to differentiate themselves in their processes vs. ur online process that won’t have sales-people to close the deal. To counter this, The Loan Doctor will need to offer the lowest fees and rates to be competitive to help offset any uneasy clients due to lack of human-to-human contact. Other threats include changes in laws or regulatory environments that could affect business in certain regions. To counter this, The Loan Doctor would need to have a strong compliance manager in place to oversee and regulate any changes, in any region, so the sake of closing the transaction for the client and for The Loan Doctor. Trends
As our population continues to grow into the internet age, more and more people are becoming computer and internet savvy; the younger population would gravitate to an all online mortgage company as most simply do not have time to take out of their day to visit a loan officer in person (if the loan officer is available), or most do not like the feeling of being “sold” into a loan or lender. Internet mortgage leads continue to increase as many people would rather be anonymous and try and get as much information as they can before “showing their cards” to the lender.
The Lending Tree is still one of the most popular online lead origination systems on the internet; The Lending Tree, in its “hay-day” proposed the lowest rate from the best four lenders that would offer their lowest fees and rates to get your business. The model at Lending Tree touted that “with Lending Tree; when banks compete, you win” and they sold the consumer on the premise that they would receive four offers within fifteen minutes (The Lending Tree 2012); the problem with Lending Tree is that they sold your information to other lead rigination systems and before the consumer knew what was going on, they were being contacted by 12-15 competitors. In closing, a full-time online loan origination system eliminating human error, tacky or opinionated sales people, unreliable or untrustworthy mortgage employees and files that seems to “sit on peoples desks” are virtually eliminated in an all online, error-free environment that will only rely an formally trained Underwriters and IT personnel to track and push the file through approval, through Underwriting, through to Clear to Close, to loan docs and finally through the funding process to close the loan.
The current economy has left the general public wary of trusting just about any bank or lender out there right now; with Wall Street bailouts, automobile manufacturer bailouts and politicians that seem to engage in finger-pointing rather than finding solutions, the general public is left to themselves to try and figure out what the best option is for them.
Most would like to remain anonymous until they feel they have uncovered the best deal, before they are willing to expose themselves of “show their cards” to a company or system the no longer trust; an full-time online origination system, allows them to do just that; remain anonymous, while gaining information, before they are willing to commit or buy. References The Lending Tree (2012). When banks compete, you win, retrieved from http://www. lendingtree. com/ WebFinance, Inc. (2012). SWOT Analysis, retrieved from Businessdictionary. com: http://www. businessdictionary. com/definition/SWOT-analysis. html#ixzz26fyPzeXb
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