Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger
When local governments face budget pressures, one approach is to regionalize services-that is, to seek out greater economies of scale by consolidating service delivery with other municipalities. This case describes the effort of two small (though well-heeled) Massachusetts towns to explore a police merger during the financial recession of 2009. The towns of Hamilton and Wenham, located north of Boston in the "North Shore" area, had, in the past, successfully consolidated school systems, libraries, recreation departments, and more. By some calculations, the towns stood to save a significant amount of money by merging police forces. Ultimately, however, they decided against it. The case includes partly conflicting data from several studies that estimate the financial impact of a police merger. Case number 1988.0
Swot Analysis of "Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger" written by David King, Pamela Varley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Towns Police facing as an external strategic factors. Some of the topics covered in Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger case study are - Strategic Management Strategies, Government, Mergers & acquisitions and Global Business.
Some of the macro environment factors that can be used to understand the Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger casestudy better are - – challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, increasing energy prices, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation,
banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Towns Police, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Towns Police 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 Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger can be done for the following purposes –
1. Strategic planning using facts provided in Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger case study
2. Improving business portfolio management of Towns Police
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Towns Police
Strengths Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Towns Police in Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Towns Police 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.
Organizational Resilience of Towns Police
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Towns Police does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Towns Police has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger 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.
Low bargaining power of suppliers
– Suppliers of Towns Police in the sector have low bargaining power. Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Towns Police to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Global Business industry
– Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger firm has clearly differentiated products in the market place. This has enabled Towns Police to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Towns Police to invest into research and development (R&D) and innovation.
Strong track record of project management
– Towns Police is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Towns Police 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Towns Police digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Towns Police 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.
Learning organization
- Towns Police 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 Towns Police is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Towns Police 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 Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Global Business field
– Towns Police 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 Towns Police in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Towns Police is present in almost all the verticals within the industry. This has provided firm in Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger 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.
Weaknesses Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger are -
Need for greater diversity
– Towns Police has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Capital Spending Reduction
– Even during the low interest decade, Towns Police 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.
Interest costs
– Compare to the competition, Towns Police 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger, in the dynamic environment Towns Police has struggled to respond to the nimble upstart competition. Towns Police has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Towns Police 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. Towns Police 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 Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger 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 Towns Police has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger 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 Towns Police 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Towns Police 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.
Low market penetration in new markets
– Outside its home market of Towns Police, firm in the HBR case study Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Towns Police 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 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 Towns Police supply chain. Even after few cautionary changes mentioned in the HBR case study - Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Towns Police vulnerable to further global disruptions in South East Asia.
Opportunities Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger | 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 Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Towns Police 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.
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 Towns Police 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Towns Police 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. Towns Police 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.
Using analytics as competitive advantage
– Towns Police 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 Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Towns Police to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Towns Police can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Towns Police is facing challenges because of the dominance of functional experts in the organization. Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Towns Police can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Towns Police has opened avenues for new revenue streams for the organization in the industry. This can help Towns Police to build a more holistic ecosystem as suggested in the Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger case study. Towns Police can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Towns Police 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 Towns Police to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Towns Police 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Towns Police can use these opportunities to build new business models that can help the communities that Towns Police operates in. Secondly it can use opportunities from government spending in Global Business sector.
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. Towns Police can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Towns Police has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Threats Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger are -
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.
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. Towns Police needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Towns Police is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger, Towns Police may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Environmental challenges
– Towns Police 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. Towns Police can take advantage of this fund but it will also bring new competitors in the Global Business 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 Towns Police.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Towns Police can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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
– Towns Police 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.
Increasing wage structure of Towns Police
– 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 Towns Police.
Technology acceleration in Forth Industrial Revolution
– Towns Police has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Towns Police needs to keep up with the evolution of technology in the Global Business 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.
Consumer confidence and its impact on Towns Police 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.
Regulatory challenges
– Towns Police 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 Global Business industry regulations.
Weighted SWOT Analysis of Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger 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 Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger 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 Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger 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 Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger 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 Cutting Costs in Financial Hard Times: Two Massachusetts Towns Consider a Police Merger 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 Towns Police needs to make to build a sustainable competitive advantage.
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