SWOT Analysis D. R. Horton
A public limited company, D. R. Horton is headquartered in Downtown Fort Worth, Texas. It was founded in 1978. The industry in which the company operates is construction. According to the report of the previous years, D. R. Horton is the largest home builder organization in the whole United States. In 2010, the company built around 18839 houses altogether. The company has its main operations in 26 states of US. The company has a specialized workforce numbered 3000. The upcoming paragraphs will give a brief summary of the strengths and the weaknesses of the company.
The company enjoys a near-to monopolistic position in US in the category of builders because of which it has the great advantage of economy of scales. Economy of scale includes the marketing economies, technical economies, financial economies and supplier’s economies. This means that the company will incur a lower average cost based on the fact that it largely deals in the particular industry. For example, it can get the raw material at a lower price, it can obtain loans at a lower interest rate, it can advertise itself at a lower cost, and much more advantages.
Strength of the company is that it is a public limited company, because of which raising money for the company is very easy. It could simply give out shares in return for money. Also, the size is a terrific advantage to the company. It is spread out for which the process of building is carried out forward and local workers can be easily available.
The company has a wide portfolio of architecture designs and furnishing themes. People prefer D. R. Horton for its versatility. This is the reason why the company has a strong base of loyal customers.
The most likely opportunities for the company is to diversify itself and indulge into the interior designing business, which will be considered a step forward in the same line of production, or it can go a step backward and take over the raw material industry. In either way, there would be a benefit to the company.
For companies like D. R. Horton, it is mandatory to borrow money from financial institutions to fund bigger projects. With the arising credit market crises, it would mean that the availability of loans would be unavailable or at least not granted on the level on which it was previously given. As a result, the projects will have to be stopped or alternatives will have to be found. However, if retained capital is worked upon, and partnerships are found, raising capital would no more be an issue.