Case Study Description of Behavioral Time Discounting
Many decisions involve trade-offs between present and future costs and benefits. We procrastinate difficult tasks, and we forgo larger rewards for smaller ones if we can get them sooner. Why do we change our minds about the value of upcoming events? The traditional discounting model, which predicts how individuals discount future consequences and resolve trade-offs between present and future costs and benefits, does not account for this observed behavior. The behavioral discounting model presented in this technical note accounts for observed behaviors by incorporating patterns of overall high discounting, magnitude effects, and decreasing impatience.
Swot Analysis of "Behavioral Time Discounting" written by Manel Baucells includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Discounting Observed facing as an external strategic factors. Some of the topics covered in Behavioral Time Discounting case study are - Strategic Management Strategies, Decision making, Financial management and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Behavioral Time Discounting casestudy better are - – increasing commodity prices, increasing energy prices, wage bills are increasing, increasing household debt because of falling income levels, technology disruption, there is backlash against globalization, central banks are concerned over increasing inflation,
increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Behavioral Time Discounting
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Behavioral Time Discounting case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Discounting Observed, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Discounting Observed 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 Behavioral Time Discounting can be done for the following purposes –
1. Strategic planning using facts provided in Behavioral Time Discounting case study
2. Improving business portfolio management of Discounting Observed
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Discounting Observed
Strengths Behavioral Time Discounting | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Discounting Observed in Behavioral Time Discounting Harvard Business Review case study are -
Sustainable margins compare to other players in Leadership & Managing People industry
– Behavioral Time Discounting firm has clearly differentiated products in the market place. This has enabled Discounting Observed to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Discounting Observed to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Discounting Observed 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 Behavioral Time Discounting HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Discounting Observed 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 Manel Baucells 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.
Superior customer experience
– The customer experience strategy of Discounting Observed in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Discounting Observed is one of the leading recruiters in the industry. Managers in the Behavioral Time Discounting 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 brand equity
– Discounting Observed has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Discounting Observed to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Discounting Observed is one of the most innovative firm in sector. Manager in Behavioral Time Discounting Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Discounting Observed has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Behavioral Time Discounting 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.
Diverse revenue streams
– Discounting Observed is present in almost all the verticals within the industry. This has provided firm in Behavioral Time Discounting 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.
Ability to lead change in Leadership & Managing People field
– Discounting Observed 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 Discounting Observed in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Discounting Observed
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Discounting Observed does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Discounting Observed in the sector have low bargaining power. Behavioral Time Discounting has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Discounting Observed to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Behavioral Time Discounting | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Behavioral Time Discounting are -
Slow decision making process
– As mentioned earlier in the report, Discounting Observed 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. Discounting Observed 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Behavioral Time Discounting 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 Discounting Observed has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Behavioral Time Discounting HBR case study mentions - Discounting Observed takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Behavioral Time Discounting, it seems that the employees of Discounting Observed 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.
Capital Spending Reduction
– Even during the low interest decade, Discounting Observed 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Discounting Observed is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Behavioral Time Discounting 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 Discounting Observed supply chain. Even after few cautionary changes mentioned in the HBR case study - Behavioral Time Discounting, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Discounting Observed vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Behavioral Time Discounting 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 Discounting Observed 's lucrative customers.
Interest costs
– Compare to the competition, Discounting Observed 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.
Increasing silos among functional specialists
– The organizational structure of Discounting Observed is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Discounting Observed needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Discounting Observed to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Behavioral Time Discounting that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Behavioral Time Discounting can leverage the sales team experience to cultivate customer relationships as Discounting Observed is planning to shift buying processes online.
Opportunities Behavioral Time Discounting | 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 Behavioral Time Discounting are -
Developing new processes and practices
– Discounting Observed can develop new processes and procedures in Leadership & Managing People 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.
Learning at scale
– Online learning technologies has now opened space for Discounting Observed 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Discounting Observed is facing challenges because of the dominance of functional experts in the organization. Behavioral Time Discounting 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 Leadership & Managing People industry, but it has also influenced the consumer preferences. Discounting Observed 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, Discounting Observed 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.
Creating value in data economy
– The success of analytics program of Discounting Observed has opened avenues for new revenue streams for the organization in the industry. This can help Discounting Observed to build a more holistic ecosystem as suggested in the Behavioral Time Discounting case study. Discounting Observed can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Discounting Observed 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. Discounting Observed 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.
Buying journey improvements
– Discounting Observed can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Behavioral Time Discounting 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Discounting Observed 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, Behavioral Time Discounting, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Discounting Observed 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.
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 Discounting Observed in the consumer business. Now Discounting Observed can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Discounting Observed in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Discounting Observed to increase its market reach. Discounting Observed 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.
Threats Behavioral Time Discounting External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Behavioral Time Discounting are -
Environmental challenges
– Discounting Observed 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. Discounting Observed can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People 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 Discounting Observed.
Regulatory challenges
– Discounting Observed 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 Leadership & Managing People industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Discounting Observed with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Discounting Observed in the Leadership & Managing People sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Discounting Observed has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Discounting Observed needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Discounting Observed 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 Behavioral Time Discounting .
Consumer confidence and its impact on Discounting Observed 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Behavioral Time Discounting, Discounting Observed may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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. Discounting Observed 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.
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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Discounting Observed can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Discounting Observed in the Leadership & Managing People industry. The Leadership & Managing People 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.
Weighted SWOT Analysis of Behavioral Time Discounting 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 Behavioral Time Discounting 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 Behavioral Time Discounting 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 Behavioral Time Discounting 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 Behavioral Time Discounting 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 Discounting Observed needs to make to build a sustainable competitive advantage.
