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Habitat for Humanity SWOT Analysis

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College of Integrative Sciences and Arts, Arizona State University

OGL355: Leading Organizational Innovation and Change

Dr. B

November 4, 2021
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Habitat for Humanity SWOT Analysis

Successful organizations are routinely checking their positions to help problem

solve and make progressions. In this document, we have identified strengths, weaknesses,

opportunities, and threats in the organizational context of Habitat for Humanity. In the

SWOT diagram below, we identify four important bullets for each section. This allowed

us to gain a clearer image of the organization and highlighted some strategic actions the

organization could utilize to achieve their vision and goals.

SWOT Analysis

A popular method of business analysis is the SWOT analysis. This tool allows an

organization to assess their current state and helps to identify strategic ways to move

forward and improve upon. It allows an organization to gain insight and have full

awareness of their competitive advantage in their industry and aids in formulating

creative and innovative approaches to future operations and strategic goals. Strengths and

weaknesses are internal reflections on the organization. Strengths highlight what the

organization is doing well while weaknesses are what puts the organization at a

disadvantage in regard to competitors and are barriers to an organization’s potential.

While looking internally, it is exceptionally important to look externally for opportunities

and threats. Opportunities are external influences that organizations can advance on to

gain competitive advantage, and threats are barriers created by forces outside of the

organization’s control. The best way to navigate threats is to create contingency plans to

navigate and prevent damages.

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Strengths Weaknesses
● Organizational Image [recognition] ● Underutilized ReStore potential
● Simple Business Model - low-cost ● Lack of legal literacy provided to buyers
expenses, affordable buyer program ● High volunteer turnover - limited
● Global outreach - individually run knowledge of construction skills
chapters ● Reliant on fundraising/consistent
● Stable Leadership - CEO since 2005 donations

Opportunities Threats
● Advance on growing thrift store market
● Skilled labor shortage - Provide skilled ● Increasing lumber prices
training ● Zoning laws and land use regulations
● Social media presence through trending ● International cultural conflict
apps like TikTok/Instagram to inform ● COVID - 19: vaccine mandates & social
younger generations distancing
● Expand in response to environmental
disasters

Strengths

Habitat for Humanity's largest strength is a positive and recognizable image in

communities. The Charity Navigator rated Habitat for Humanity an overall score of 86.16

out of 100 points and is trustworthy for donors to give to (Charity, 2021). Expenses and

donations are transparently used towards the organization’s mission, which creates hope

and stability across communities. Donors can give to this organization without fear of

misuse of their funds or supplies. Along with their positive image, they are present in

communities across the globe with their own chapters.

In addition to their image, another recognizable strength is the organization’s

simple and sustainable business model. The reputation of Habitat for Humanity is known

through their execution of their business model. Volunteers and buyers come together to
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build homes for families in need with little discourse or financial incentives. Habitat for

Humanity created their business model with operations made easy with the clients’ needs

at the forefront. The application process is simple and clearly defined, education is

provided to aid in physical labor, and mortgages are set within the buyer’s boundaries.

The system is sustainable through donations, such as ReStores receiving items from

donors, refurbishing those items, and then selling them at a fraction of the original cost

(Habitat, 2021). In addition, physical and financial donations are used towards building

projects. Personal testimonies from buyers have also described the community building

created during these projects, and they volunteer their time to help their neighbors’ builds

as well.

Weaknesses

A weakness of Habitat for Humanity’s is their retail stores, ReStore. While

Habitat for Humanity is more widely known for its involvement in building and updating

lower-income housing, what remains to be a surprise to many is their storefront and

donation centers called Restores. These are low-cost home improvement thrift stores and

donation locations where those who wish to donate can go. Household goods are sold at

affordable prices and all proceeds go to Habitat for Humanity’s operations (Habitat,

2021). Habitat has fallen short on marketing. Habitat has the potential to utilize Restores

to reach a wider audience through advertising Restores more on their website, popular

social media such as Facebook and Instagram, and investing in expanding the number of

storefronts. With the internet and social media being the main form of advertising,

Habitat can utilize these platforms to encourage people to volunteer and donate to the
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Restore collection (Hassan et al., 2017). By focusing on pulling in more donors, this

allows for more resources for builds. Creating more locations allows for more

opportunities and presence in communities. Moreover, by promoting the Restores in a

similar fashion that Goodwill and the Salvation Army have, they will be able to reach not

just a selective audience but everyone.

A second weakness highlights a gap in Habitat for Humanity’s transparency with

their buyers. Financial education for budgeting mortgages and construction skills for

builds are taught. However, a misinterpretation of home buying for the buyer comes from

the legal literacy provided to the buyers. When most people purchase a home, they are

represented by a realtor and a mortgage broker who takes them through the buying

process and makes sure they understand the contracts and the loans. When purchasing

from Habitat, all the contract information related to the home purchase and the mortgages

are handled by Habitat. According to Bruce Trachtenberg, Habitat uses what it refers to

as hidden mortgages. They are a smaller second mortgage that decreases each year over a

twenty-year period. Habitat places this as a precaution to ensure that buyers will not flip

the homes for a profit. However, buyers don’t always understand these limitations

(Trachtenberg, 2011). This misunderstanding can lead to public relations problems for

Habitat should buyers decide to publicize the issue.

Opportunities

An opportunity for Habitat is to advance on the trends with the growing thrift

store market. In recent years the pattern of consumer culture has moved from

overconsumption to conscientious consumption. This shift in consumerism has advanced

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the growth of the thrift store market, and therefore second-hand goods shopping. Pop

culture trends as well as the rise of encouraging people to buy sustainable clothing or

home decor have also encouraged more people to lean towards vintage and retro goods

(Noon, 2011). Habitat for Humanity can tap into the thrifting trends with their Restores

establishments. Habitat for Humanity Restores are for anyone and everyone who is

looking to renovate, make home improvements, or have ideas for a crafty DIY project

(Habitat, 2021). In comparison to when consumers venture to Goodwill or the Salvation

Army for quality, period pieces, people can utilize the Restores for unique, affordable,

and long-lasting home improvement tools and pieces. Through advancing their growth in

the thrift store market they will be reaching a whole other audience of people who are

hopping on the trend of looking for affordable home pieces and enjoying the aesthetic of

vintage home materials.

According to the Association of General Contractors, construction projects are in

danger of being postponed or canceled in part due to the lack of skilled workers available

to fill open construction jobs. They report that over 70% of construction firms and unions

say that they are struggling to find workers with the required skills. Their spending

increases as they recruit and train more workers (Association of General Contractors,

2021) This career obstacle provides an opportunity for Habitat for Humanity to expand

its reach. The shortage of skilled workers allows Habitat to create a training program for

new workers. Habitat has the resources to help the volunteers learn basic construction

skills and have experienced professionals educating them on electrical, plumbing,

heating, and air conditioning processes. In turn, financial support can develop from the
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firms seeking experienced workers while having a stable source of labor for Habitat

builds. Supporting firms could have a steady influx of trained workers as well as a tax

write-off.

Threats

Rising lumber prices are a current threat to Habitat’s ability to fulfill its mission.

According to NAHB Now, in 2018, it cost $11,300 for Habitat to raise the walls on a new

home; in 2021, the cost was $17,074. That is an increase of 66%. NAHB says some

Habitat chapters have been able to secure extra funding, but this is a short-term solution.

Without the extra funding, many Habitat buyers would not be able to purchase a new

home (NAHB Now, 2021). Lumber prices have fallen since March, but the market is still

volatile. According to the Wall Street Journal, lumber futures are currently trading at

over $600 per thousand board feet, 40% higher than in August. While that price is much

lower than the peak price of over $1700 per thousand board feet, it is still considerably

higher than the average of $357 from 2019 (Dezember, 2021).

Rising building costs due to zoning laws and land use regulations also threaten

Habitat's ability to provide low-cost housing. According to HUD, zoning laws and

land-use regulations have put a constraint on the availability of affordable housing. The

cost of such laws and regulations can be nearly a third of the expense in building new

homes (PD&R Edge, 2018). The Cato Institute's Vanessa Brown Calder wrote that

Zoning laws hamper low-cost housing construction by creating artificial shortages of

buildable land, which raises prices. Zoning laws also often raise building costs by
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requiring homes to meet specific design requirements, which require more expensive

materials (Calder, 2017). The threat that zoning laws place on Habitat for Humanity is the

risk of securing funds suitable enough to meet the needs and prices of these regulations.

Conclusion

Habitat for Humanity is a leader in community building at an affordable price for

families in need. Their reputation speaks for itself across nations. While at first glance,

the organization appears to be without fault, there are some weaknesses and opportunities

to build upon. By performing a SWOT analysis, we have been able to analyze the

organization internally and externally. Some focus areas include the retail and donation

centers, ReStore, providing full transparent legalities of home buying, owning, and

maintaining to their buyers, and to discover the possibilities of creating work experience

through a new, specialized Habitat for Humanity program for the future workforce. Two

main threats we came across were the increase in lumber supplies and the regulations in

place of zoning laws. By creating an effective contingency plan, Habitat for Humanity

can carefully navigate these threats.

APPROVAL: (sign off with initials by 12pm AZ time 6/24/2020) - plan to submit by
1-2pm 6/24/2020

Ashley -AMG Dylan - DTK LillyAnn - LPB Daniel - DWT Shawn- SMM
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References

Association of General Contractors. (2021, September 2). Construction Workforce

Shortages Reach Pre-pandemic Levels Even as Coronavirus Continues to Impact

Projects & Disrupt Supply Chains. Retrieved from Association of General

Contractors:

https://www.agc.org/news/2021/09/02/construction-workforce-shortages-reach-pr

e-pandemic-levels-even-coronavirus

Calder, V. B. (2017, October 18). Zoning, Land-Use Planning, and Housing Affordability.

Retrieved from Cato Institute:

https://www.cato.org/policy-analysis/zoning-land-use-planning-housing-affordabi

lity#

Charity Navigator - rating for Habitat for humanity international. Charity Navigator .

(2021). Retrieved November 2, 2021, from

https://www.charitynavigator.org/ein/911914868.

Dezember, R. (2021, October 1). Lumber Prices Stage a Late Season Rally. Retrieved

from The Wall Street Journal:

https://www.wsj.com/articles/lumber-prices-stage-a-late-season-rally-1163308827

2?mod=Searchresults_pos6&page=1

Habitat for Humanity® International. (2021). Our work. Habitat for Humanity.

https://www.habitat.org/our-work.
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Hassan, A. A., Dao, A. H., Appikatla, P., & Gallagher, S. D. (2017). A Makeover for the

Habitat for Humanity MetroWest/Greater Worcester ReStore Website. Worcester

Polytechnic Institute. https://digitalcommons.wpi.edu/iqp-all/483

NAHB Now. (2021, March 2) How Rising Lumber Prices Impact More Than Just Home

Builders. Retrieved from NAHB Now:

https://nahbnow.com/2021/03/how-rising-lumber-prices-impact-more-than-just-ho

me-builders/

Noon, J.D. (2011). Changing patterns of consumerism: the rise of the second hand.

Massey University.1-141. http://hdl.handle.net/10179/4519

PD&R Edge. (2018, July 23). Regulatory Barriers and Affordable Housing Quarterly

Update. Retrieved from PD&R Edge:

https://www.cato.org/policy-analysis/zoning-land-use-planning-housing-affordabi

lity#

Trachtenberg, B. S. (2011, March 9). Home Buyback Also Reveals Hidden Habitat for

Humanity Lending Practices. Retrieved from Nonprofit Quarterly :

https://nonprofitquarterly.org/home-buyback-also-reveals-hidden-habitat-for-hum

anity-lending-practices/