FRESH AIR - Confidential Instructions for City of Boston Negotiation Team SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of FRESH AIR - Confidential Instructions for City of Boston Negotiation Team
Confidential Instructions for City of Boston Negotiation Team for product #PON233.Two-party or two-team, multi-issue, integrative/distributive negotiation between representatives of a new low-cost airline and a potential headquarters city over an incentives package and airport facilities. Fresh Air, a new low-cost airline, is looking for a headquarters city. It is negotiating with the city of Boston, its top choice for a headquarters location, over an incentive package and airport facilities. Fresh Air plans to build on the brand reputation of its parent airline, which stands for innovation, fun, unparalleled customer service, and empowered employees. It believes that a unique corporate culture and happy customers will allow it to charge lower prices, to fill its planes, and to run profitable operations. Boston seeks to reinvent itself as a center of American business after years of business decline. The opening of a low-cost carrier would be an important part of this effort. However, in these tight fiscal times, Boston is limited financially. This is a role play case.
Swot Analysis of "FRESH AIR - Confidential Instructions for City of Boston Negotiation Team" written by Candace Modlin, Robert C. Bordone includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Boston City facing as an external strategic factors. Some of the topics covered in FRESH AIR - Confidential Instructions for City of Boston Negotiation Team case study are - Strategic Management Strategies, International business, Negotiations, Operations management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the FRESH AIR - Confidential Instructions for City of Boston Negotiation Team casestudy better are - – supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, geopolitical disruptions,
digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of FRESH AIR - Confidential Instructions for City of Boston Negotiation Team
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in FRESH AIR - Confidential Instructions for City of Boston Negotiation Team case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Boston City, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Boston City 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 FRESH AIR - Confidential Instructions for City of Boston Negotiation Team can be done for the following purposes –
1. Strategic planning using facts provided in FRESH AIR - Confidential Instructions for City of Boston Negotiation Team case study
2. Improving business portfolio management of Boston City
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 Boston City
Strengths FRESH AIR - Confidential Instructions for City of Boston Negotiation Team | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Boston City in FRESH AIR - Confidential Instructions for City of Boston Negotiation Team Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Boston City 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.
Low bargaining power of suppliers
– Suppliers of Boston City in the sector have low bargaining power. FRESH AIR - Confidential Instructions for City of Boston Negotiation Team has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Boston City to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Boston City is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Boston City is present in almost all the verticals within the industry. This has provided firm in FRESH AIR - Confidential Instructions for City of Boston Negotiation Team 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.
Learning organization
- Boston City 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 Boston City is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in FRESH AIR - Confidential Instructions for City of Boston Negotiation Team Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Boston City has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in FRESH AIR - Confidential Instructions for City of Boston Negotiation Team 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.
High brand equity
– Boston City has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Boston City to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Boston City 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 FRESH AIR - Confidential Instructions for City of Boston Negotiation Team HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Boston City is one of the most innovative firm in sector. Manager in FRESH AIR - Confidential Instructions for City of Boston Negotiation Team Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Strategy & Execution field
– Boston City 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 Boston City in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Boston City digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Boston City 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.
Sustainable margins compare to other players in Strategy & Execution industry
– FRESH AIR - Confidential Instructions for City of Boston Negotiation Team firm has clearly differentiated products in the market place. This has enabled Boston City to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Boston City to invest into research and development (R&D) and innovation.
Weaknesses FRESH AIR - Confidential Instructions for City of Boston Negotiation Team | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of FRESH AIR - Confidential Instructions for City of Boston Negotiation Team are -
High bargaining power of channel partners
– Because of the regulatory requirements, Candace Modlin, Robert C. Bordone suggests that, Boston City 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.
Lack of clear differentiation of Boston City products
– To increase the profitability and margins on the products, Boston City needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Boston City is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study FRESH AIR - Confidential Instructions for City of Boston Negotiation Team can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 Boston City supply chain. Even after few cautionary changes mentioned in the HBR case study - FRESH AIR - Confidential Instructions for City of Boston Negotiation Team, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Boston City vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Boston City, firm in the HBR case study FRESH AIR - Confidential Instructions for City of Boston Negotiation Team needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Boston City 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 - FRESH AIR - Confidential Instructions for City of Boston Negotiation Team should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the FRESH AIR - Confidential Instructions for City of Boston Negotiation Team 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 Boston City has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study FRESH AIR - Confidential Instructions for City of Boston Negotiation Team, it seems that the employees of Boston City 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study FRESH AIR - Confidential Instructions for City of Boston Negotiation Team, is just above the industry average. Boston City 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.
High operating costs
– Compare to the competitors, firm in the HBR case study FRESH AIR - Confidential Instructions for City of Boston Negotiation Team has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Boston City 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Boston City 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.
Opportunities FRESH AIR - Confidential Instructions for City of Boston Negotiation Team | 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 FRESH AIR - Confidential Instructions for City of Boston Negotiation Team are -
Buying journey improvements
– Boston City can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. FRESH AIR - Confidential Instructions for City of Boston Negotiation Team 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Boston City is facing challenges because of the dominance of functional experts in the organization. FRESH AIR - Confidential Instructions for City of Boston Negotiation Team 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.
Better consumer reach
– The expansion of the 5G network will help Boston City to increase its market reach. Boston City will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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 Boston City in the consumer business. Now Boston City can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Boston City 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 Boston City to hire the very best people irrespective of their geographical location.
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 Boston City 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 Boston City has opened avenues for new revenue streams for the organization in the industry. This can help Boston City to build a more holistic ecosystem as suggested in the FRESH AIR - Confidential Instructions for City of Boston Negotiation Team case study. Boston City 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 Boston City 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.
Leveraging digital technologies
– Boston City 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.
Manufacturing automation
– Boston City 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
– Boston City 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. Boston City 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 Boston City can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats FRESH AIR - Confidential Instructions for City of Boston Negotiation Team External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study FRESH AIR - Confidential Instructions for City of Boston Negotiation Team 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 Boston City in the Strategy & Execution sector and impact the bottomline of the organization.
Environmental challenges
– Boston City 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. Boston City can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Boston City.
High dependence on third party suppliers
– Boston City 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.
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. Boston City needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Boston City 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.
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.
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. Boston City 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 Boston City is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Boston City 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Boston City with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Boston City can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Boston City
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Boston City.
Weighted SWOT Analysis of FRESH AIR - Confidential Instructions for City of Boston Negotiation Team 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 FRESH AIR - Confidential Instructions for City of Boston Negotiation Team 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 FRESH AIR - Confidential Instructions for City of Boston Negotiation Team 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 FRESH AIR - Confidential Instructions for City of Boston Negotiation Team 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 FRESH AIR - Confidential Instructions for City of Boston Negotiation Team 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 Boston City needs to make to build a sustainable competitive advantage.