The New Pay Plan: Summertime and the Livin's Not Easy! SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The New Pay Plan: Summertime and the Livin's Not Easy!
Dr. Fred Carroll, a professor at Regency State, a large university in the Southeast, stopped in to talk to his department chairman, Dr. Ken Winston, about a likely change in the summer faculty pay plan. Rumors were circulating that summer teaching compensation would be cut. Winston, in an uncomfortable situation, replied that the College faced a serious budget shortfall, and the administration was looking at ways to reduce costs, in particular, the high costs of summer instruction. Carroll, who formerly had been a department chair, countered that summer compensation was just one of many possible areas for reducing costs and identified several other options. He did not accept the explanation that the budget must be balanced by reducing summer pay, and remarked that it was unfair, even discriminatory, and contrary to University policy. He vowed to investigate the situation and talk with Winston again. Along with Carroll several other faculty members had expressed their concerns about changes in summer pay to Winston. Faculty summer pay at Regency State was based on a percentage formula that was tied to the faculty member's academic year; those with higher salaries earned higher pay for a summer course. To reduce the summer compensation budget by about 25%, the dean, associate dean, and department chairs were looking at various ways of cutting costs. With the tradition of many year-round students and large summer enrollments, many faculty members were accustomed to getting significant summer pay to supplement their academic-year salaries. Winston, along with the other College administrators, were challenged in identifying alternatives and finding a satisfactory solution to the budget problem that would reduce summer compensation costs yet minimize adverse effects on faculty morale.
Swot Analysis of "The New Pay Plan: Summertime and the Livin's Not Easy!" written by Thomas R. Miller includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Summer Winston facing as an external strategic factors. Some of the topics covered in The New Pay Plan: Summertime and the Livin's Not Easy! case study are - Strategic Management Strategies, Motivating people, Organizational culture and Organizational Development.
Some of the macro environment factors that can be used to understand the The New Pay Plan: Summertime and the Livin's Not Easy! casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing commodity prices, increasing transportation and logistics costs,
competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of The New Pay Plan: Summertime and the Livin's Not Easy!
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The New Pay Plan: Summertime and the Livin's Not Easy! case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Summer Winston, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Summer Winston operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of The New Pay Plan: Summertime and the Livin's Not Easy! can be done for the following purposes –
1. Strategic planning using facts provided in The New Pay Plan: Summertime and the Livin's Not Easy! case study
2. Improving business portfolio management of Summer Winston
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Summer Winston
Strengths The New Pay Plan: Summertime and the Livin's Not Easy! | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Summer Winston in The New Pay Plan: Summertime and the Livin's Not Easy! Harvard Business Review case study are -
Ability to recruit top talent
– Summer Winston is one of the leading recruiters in the industry. Managers in the The New Pay Plan: Summertime and the Livin's Not Easy! are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Summer Winston has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Analytics focus
– Summer Winston is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Thomas R. Miller can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Learning organization
- Summer Winston is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Summer Winston is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The New Pay Plan: Summertime and the Livin's Not Easy! Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Summer Winston in the sector have low bargaining power. The New Pay Plan: Summertime and the Livin's Not Easy! has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Summer Winston to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Summer Winston is present in almost all the verticals within the industry. This has provided firm in The New Pay Plan: Summertime and the Livin's Not Easy! case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Summer Winston has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Summer Winston to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Summer Winston has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in The New Pay Plan: Summertime and the Livin's Not Easy! HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Organizational Development industry
– The New Pay Plan: Summertime and the Livin's Not Easy! firm has clearly differentiated products in the market place. This has enabled Summer Winston to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Summer Winston to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Summer Winston has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Summer Winston has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Cross disciplinary teams
– Horizontal connected teams at the Summer Winston are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to lead change in Organizational Development field
– Summer Winston is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Summer Winston in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses The New Pay Plan: Summertime and the Livin's Not Easy! | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The New Pay Plan: Summertime and the Livin's Not Easy! are -
Capital Spending Reduction
– Even during the low interest decade, Summer Winston has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the segment, Summer Winston needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The New Pay Plan: Summertime and the Livin's Not Easy!, is just above the industry average. Summer Winston needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
No frontier risks strategy
– After analyzing the HBR case study The New Pay Plan: Summertime and the Livin's Not Easy!, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The New Pay Plan: Summertime and the Livin's Not Easy! HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Summer Winston has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Thomas R. Miller suggests that, Summer Winston is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow decision making process
– As mentioned earlier in the report, Summer Winston has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Summer Winston even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Lack of clear differentiation of Summer Winston products
– To increase the profitability and margins on the products, Summer Winston needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The New Pay Plan: Summertime and the Livin's Not Easy!, it seems that the employees of Summer Winston don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Low market penetration in new markets
– Outside its home market of Summer Winston, firm in the HBR case study The New Pay Plan: Summertime and the Livin's Not Easy! needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Summer Winston has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities The New Pay Plan: Summertime and the Livin's Not Easy! | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study The New Pay Plan: Summertime and the Livin's Not Easy! are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Summer Winston can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Summer Winston can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Creating value in data economy
– The success of analytics program of Summer Winston has opened avenues for new revenue streams for the organization in the industry. This can help Summer Winston to build a more holistic ecosystem as suggested in the The New Pay Plan: Summertime and the Livin's Not Easy! case study. Summer Winston can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Summer Winston to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Summer Winston can use these opportunities to build new business models that can help the communities that Summer Winston operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Summer Winston in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Loyalty marketing
– Summer Winston has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Summer Winston in the consumer business. Now Summer Winston can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Summer Winston can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Summer Winston can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, The New Pay Plan: Summertime and the Livin's Not Easy!, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Summer Winston can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Using analytics as competitive advantage
– Summer Winston has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study The New Pay Plan: Summertime and the Livin's Not Easy! - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Summer Winston to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Summer Winston to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Summer Winston to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Summer Winston can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Threats The New Pay Plan: Summertime and the Livin's Not Easy! External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The New Pay Plan: Summertime and the Livin's Not Easy! are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Summer Winston in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Summer Winston will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Shortening product life cycle
– it is one of the major threat that Summer Winston is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Summer Winston needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Summer Winston can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Consumer confidence and its impact on Summer Winston demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Summer Winston with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Summer Winston business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Summer Winston can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study The New Pay Plan: Summertime and the Livin's Not Easy! .
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Summer Winston can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Stagnating economy with rate increase
– Summer Winston can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Summer Winston in the Organizational Development sector and impact the bottomline of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of The New Pay Plan: Summertime and the Livin's Not Easy! Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study The New Pay Plan: Summertime and the Livin's Not Easy! needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study The New Pay Plan: Summertime and the Livin's Not Easy! is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study The New Pay Plan: Summertime and the Livin's Not Easy! is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of The New Pay Plan: Summertime and the Livin's Not Easy! is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Summer Winston needs to make to build a sustainable competitive advantage.