Strategies to Prevent Economic Recessions from Causing Business Failure SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Strategies to Prevent Economic Recessions from Causing Business Failure
An average of more than 500,000 businesses failed in the United States during each of the 10 recessions that have occurred since the end of World War II. Yet, scholarly and practitioner understanding of how to prepare for and respond to the challenges of an economic downturn remains extremely limited. This article analyzes and synthesizes the information from academic theory and business experience on managing through an economic recession. To assist firms in successfully navigating economic recessions, we suggest a program that involves positioning by holding positions in multiple markets and geographies, planning by developing a turnaround plan for facing sharply declining sales, promoting by maintaining marketing initiatives, and preparing by acting in anticipation of economic recovery.
Swot Analysis of "Strategies to Prevent Economic Recessions from Causing Business Failure" written by Steven C. Michael, John A. Pearce includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Recessions Economic facing as an external strategic factors. Some of the topics covered in Strategies to Prevent Economic Recessions from Causing Business Failure case study are - Strategic Management Strategies, Financial management, Recession, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Strategies to Prevent Economic Recessions from Causing Business Failure casestudy better are - – increasing transportation and logistics costs, wage bills are increasing, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, technology disruption, geopolitical disruptions, talent flight as more people leaving formal jobs,
increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Strategies to Prevent Economic Recessions from Causing Business Failure
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Strategies to Prevent Economic Recessions from Causing Business Failure case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Recessions Economic, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Recessions Economic 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 Strategies to Prevent Economic Recessions from Causing Business Failure can be done for the following purposes –
1. Strategic planning using facts provided in Strategies to Prevent Economic Recessions from Causing Business Failure case study
2. Improving business portfolio management of Recessions Economic
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 Recessions Economic
Strengths Strategies to Prevent Economic Recessions from Causing Business Failure | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Recessions Economic in Strategies to Prevent Economic Recessions from Causing Business Failure Harvard Business Review case study are -
High brand equity
– Recessions Economic has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Recessions Economic to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Recessions Economic 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.
Operational resilience
– The operational resilience strategy in the Strategies to Prevent Economic Recessions from Causing Business Failure 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Recessions Economic digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Recessions Economic has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Recessions Economic 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Strategies to Prevent Economic Recessions from Causing Business Failure firm has clearly differentiated products in the market place. This has enabled Recessions Economic to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Recessions Economic to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Recessions Economic has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Recessions Economic 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.
Effective Research and Development (R&D)
– Recessions Economic 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 Strategies to Prevent Economic Recessions from Causing Business Failure - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Recessions Economic in the sector have low bargaining power. Strategies to Prevent Economic Recessions from Causing Business Failure has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Recessions Economic to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Strategy & Execution field
– Recessions Economic 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 Recessions Economic in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Recessions Economic has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Strategies to Prevent Economic Recessions from Causing Business Failure Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Strong track record of project management
– Recessions Economic is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Strategies to Prevent Economic Recessions from Causing Business Failure | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Strategies to Prevent Economic Recessions from Causing Business Failure are -
Lack of clear differentiation of Recessions Economic products
– To increase the profitability and margins on the products, Recessions Economic needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Recessions Economic is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Recessions Economic needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Recessions Economic to focus more on services rather than just following the product oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Recessions Economic supply chain. Even after few cautionary changes mentioned in the HBR case study - Strategies to Prevent Economic Recessions from Causing Business Failure, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Recessions Economic vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Strategies to Prevent Economic Recessions from Causing Business Failure 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 Recessions Economic has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Recessions Economic, firm in the HBR case study Strategies to Prevent Economic Recessions from Causing Business Failure needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Recessions Economic 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.
Products dominated business model
– Even though Recessions Economic 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 - Strategies to Prevent Economic Recessions from Causing Business Failure should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Steven C. Michael, John A. Pearce suggests that, Recessions Economic 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Strategies to Prevent Economic Recessions from Causing Business Failure, is just above the industry average. Recessions Economic 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.
Slow decision making process
– As mentioned earlier in the report, Recessions Economic 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. Recessions Economic 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.
High cash cycle compare to competitors
Recessions Economic 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.
Opportunities Strategies to Prevent Economic Recessions from Causing Business Failure | 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 Strategies to Prevent Economic Recessions from Causing Business Failure are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Recessions Economic 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, Strategies to Prevent Economic Recessions from Causing Business Failure, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Recessions Economic 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 Strategies to Prevent Economic Recessions from Causing Business Failure - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Recessions Economic to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Recessions Economic can use these opportunities to build new business models that can help the communities that Recessions Economic 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 Recessions Economic 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Recessions Economic 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.
Learning at scale
– Online learning technologies has now opened space for Recessions Economic 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.
Manufacturing automation
– Recessions Economic 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.
Buying journey improvements
– Recessions Economic can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Strategies to Prevent Economic Recessions from Causing Business Failure suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Recessions Economic 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 Recessions Economic to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Recessions Economic 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Recessions Economic can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Recessions Economic can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Recessions Economic can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Strategies to Prevent Economic Recessions from Causing Business Failure External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Strategies to Prevent Economic Recessions from Causing Business Failure are -
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 Recessions Economic in the Strategy & Execution sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Recessions Economic has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Recessions Economic 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Recessions Economic in the Strategy & Execution industry. The Strategy & Execution 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Recessions Economic needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Consumer confidence and its impact on Recessions Economic 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.
Shortening product life cycle
– it is one of the major threat that Recessions Economic is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Recessions Economic 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 Strategies to Prevent Economic Recessions from Causing Business Failure .
High dependence on third party suppliers
– Recessions Economic 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Recessions Economic can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Recessions Economic 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.
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. Recessions Economic 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Recessions Economic with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Recessions Economic 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. Recessions Economic can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Strategies to Prevent Economic Recessions from Causing Business Failure 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 Strategies to Prevent Economic Recessions from Causing Business Failure 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 Strategies to Prevent Economic Recessions from Causing Business Failure 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 Strategies to Prevent Economic Recessions from Causing Business Failure 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 Strategies to Prevent Economic Recessions from Causing Business Failure 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 Recessions Economic needs to make to build a sustainable competitive advantage.