Redfin Redefine Real Estate Case Solution

1. PESTLE Analysis

ii. Economic Factors

Macroeconomic factors like interest rates influence this industry, because a rise in interest rates increases the cost of obtaining a mortgage, hence negatively impacting the real estate industry (Nguyen, 2019).

iii. Social Factors

Demographic factors, lifestyles, and urbanization positively impact the real estate industry. Other social factors like family-size, population growth, education, crime ratio, and psychological factors also drive this industry ( Koske, Makokha, & Namusonge, 2016).

iv. Technological Factors

Real estate companies can now implement software tools to improve lead generation, customer experience, and convenience (Industry Today, 2020).

v. Legal Factors

As mentioned in the case, the real estate industry is regulated at the state level, meaning that laws are different for each state. 

vi. Environmental Factors

The surroundings and environment of the property are taken into consideration while pricing decisions are made. Factors such as esthetic appeal, natural components like greenery, infrastructure, nearby buildings are also important (Cellmer, Senetra, & Szczepanska, 2012).

2. SWOT Analysis

i. Strengths

The biggest strength of Redfin was its focus towards redefining the real estate industry in the customer’s favor. They introduced a user-friendly web interface for customers, and charged them lesser than a traditional agent’s fee. In order to compete with traditional industry practices, Redfin provided exceptional online and offline customer experience for buyers and sellers. They provided free home tours to buyers, and dedicated agent support to ensure customer satisfaction. 

ii. Weaknesses

The idea of a digital real estate service was not welcomed by the majority of customers, and most of them still preferred traditional agents over Redfin, even though its prices were lower. Since purchasing or selling a home was a big decision for customers, they preferred having a personalized touch in the entire process, rather than transacting on a website. Another major weakness was a lack of awareness or understanding of the services provided by Redfin. Customers were not aware that they operated as a brokerage firm and simply viewed the website to find relevant listings.