Another significant weakness the company has had to contend with is the continual churn of customers across free and fee-based services (Zillow Investor Relations, 2012). Churn continues to drop Customer Lifetime Value (CLV) and eventually reduces the company's tock price over time as well. This weakness is one that continually has challenged the company to grow in previous years (Zillow Investor Relations, 2012). The company confronted this weakness and invested heavily in analytics and advanced Customer Relationship Management (CRM) applications to better track and understand the overall value of their customers (Zillow Investor Relations, 2012).
A third weakness is the pricing model of the various business units is their reliance on access and fee-based pricing instead of value-based pricing (Zillow Investor Relations, 2012). This will eventually change as the company gains greater insight through analytics how to price to the market requirements, yet today this continued to be a weakness.
Opportunities
The potential for growth of the service on mobile platforms is exceptional, with the company recording 23.5 million average monthly unique website users who accessed at least one property online (Zillow Investor Relations, 2012). This equated into a year-over-year growth of 86% (Zillow Investor Relations, 2012). Mobile traffic continues to accelerate as does Web-based complex queries from the Premier Agent services (Zillow Investor Relations, 2012).
A second major opportunity is the potential to create advanced partnerships with realtors and create special-label versions of the website content and algorithm as well. This opportunity would broaden the Zillow brand and make it even more recognizable across the industry.
Third, the company only occasionally does surveys and research, and is continually improving the level of data analysis they can produce. Another opportunity is to take these surveys and create a specific series of research services and studies that can be used for by realtors and investment groups to better...
The data mining and analysis of the data they have is rich with insight and value, and there is ample opportunity to sell it in the form of reports and customized analysis.
Threats
The most significant threat is Amazon or Google entering their market and forcing a premature consolidation of the house listing and mortgage market. Amazon especially has the backoffice systems in place to manage this task, and could easily create a formidable competitor in this market.
Another significant threat is the consolidation of the housing market itself, which would lead to the services Zillow sells today appearing even more expensive than potential prospects perceive them to be (Zillow Investor Relations, 2012). A recession would slow down the adoption of their service and make attainment of their goals even more difficult.
A third threat is fact that larger realtors have looked into how best to create their own Zillow-like clone at much lower prices (Zillow Investor Relations, 2012). Realtors throughout the U.S. see the potential to create a public trading exchange of their information and much lower costs that Zillow charges today while also increasing the speed of transactions. To date the major realtors have not been able to make this happen technologically, yet it is an area that continues to gain interest with realty companies unwilling to pay fro premium services from Zillow.
References
Haseeb, a. (2012). Zillow to acquire mortgage tech company, offers Q4 outlook. SNL Kagan Media & Communications Report.
Lantz, E. (2012). Your next move. Mortgage Banking, 73(1), 36-38,40-41.
McDonald, J.F. (2006). Market value websites: How good are they? Journal of Real Estate Literature, 14(2), 225-230.
Schintler, L., & Istrate, E. (2011). Tracking the housing bubble across metropolitan areas -- a spatio-temporal comparison of house price indices. Cityscape, 13(1), 165-182.
Zillow Investor Relations (2012). Investor…
