Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt?
By 2011, many nations had experienced an escalation in deficits and debt. It appeared that some might not be able to service their debt, and might have to default. The United States a budget crisis in which "left-wing liberal" Democrats wanted to raise taxes on the wealthy while "right-winged conservative" Republicans wanted to cut expenditures. A philosophical divide existed over the role of personal responsibility versus the role of government. In the European Union, the "PIIGS" - Portugal, Italy, Ireland, Greece and Spain - seemed on the verge of default, and other members of the euro zone created new loan programs to assist them in their budget crisis. However, these loans included a requirement to move towards balanced budgets. Citizens in the borrowing nations objected to the severe tax increases and expenditure cuts, while citizens of the successful nations asked why they should have to pay. It was not clear who would bear the burden of reducing the deficits and debt.
Swot Analysis of "Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt?" written by David W. Conklin, Danielle Cadieux includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nations Debt facing as an external strategic factors. Some of the topics covered in Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? case study are - Strategic Management Strategies, International business, Policy, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? casestudy better are - – challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, wage bills are increasing, geopolitical disruptions, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing commodity prices, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nations Debt, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nations Debt 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 Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? can be done for the following purposes –
1. Strategic planning using facts provided in Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? case study
2. Improving business portfolio management of Nations Debt
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nations Debt
Strengths Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nations Debt in Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? Harvard Business Review case study are -
Diverse revenue streams
– Nations Debt is present in almost all the verticals within the industry. This has provided firm in Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? 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
– Nations Debt has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nations Debt to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Nations Debt is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Learning organization
- Nations Debt 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 Nations Debt is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Nations Debt has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nations Debt 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 Nations Debt 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.
Analytics focus
– Nations Debt 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 David W. Conklin, Danielle Cadieux 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.
Innovation driven organization
– Nations Debt is one of the most innovative firm in sector. Manager in Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Strategy & Execution industry
– Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? firm has clearly differentiated products in the market place. This has enabled Nations Debt to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Nations Debt to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Nations Debt is one of the leading recruiters in the industry. Managers in the Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Nations Debt has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? are -
Capital Spending Reduction
– Even during the low interest decade, Nations Debt 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.
No frontier risks strategy
– After analyzing the HBR case study Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt?, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Increasing silos among functional specialists
– The organizational structure of Nations Debt is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Nations Debt needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nations Debt to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Nations Debt 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. Nations Debt 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.
Products dominated business model
– Even though Nations Debt has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt?, it seems that the employees of Nations Debt 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.
High cash cycle compare to competitors
Nations Debt has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? 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 Nations Debt has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt?, in the dynamic environment Nations Debt has struggled to respond to the nimble upstart competition. Nations Debt has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Nations Debt 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nations Debt is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? | 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 Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nations Debt can use these opportunities to build new business models that can help the communities that Nations Debt operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Nations Debt to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Creating value in data economy
– The success of analytics program of Nations Debt has opened avenues for new revenue streams for the organization in the industry. This can help Nations Debt to build a more holistic ecosystem as suggested in the Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? case study. Nations Debt can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nations Debt 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, Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt?, 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
– Nations Debt can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Developing new processes and practices
– Nations Debt can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nations Debt can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nations Debt is facing challenges because of the dominance of functional experts in the organization. Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Nations Debt can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nations Debt 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nations Debt in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Nations Debt can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nations Debt 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. Nations Debt 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.
Threats Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt?, Nations Debt may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nations Debt with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Nations Debt 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.
Environmental challenges
– Nations Debt 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. Nations Debt can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Shortening product life cycle
– it is one of the major threat that Nations Debt is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Stagnating economy with rate increase
– Nations Debt 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 Nations Debt in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Nations Debt needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
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 Nations Debt business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Nations Debt.
Technology acceleration in Forth Industrial Revolution
– Nations Debt has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Nations Debt needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High dependence on third party suppliers
– Nations Debt high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? 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 Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? 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 Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? 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 Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? 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 Budget Crisis: Who Should Bear the Burden of Reducing the Deficit and Debt? 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 Nations Debt needs to make to build a sustainable competitive advantage.
