Case Study Description of Budget Woes and Worse Ahead...
In 2004, Boston's preeminent homeless shelter, Pine Street Inn, faced the prospect of steadily dwindling funds for shelter services over the next few years. This stark reality-combined with persistent frustrations at finding permanent homes for homeless clients-persuaded Pine Street's director and board to regroup, gather data, and rethink Pine Street's organizational strategy. The Harvard Kennedy School has designed two cases that look at this juncture in Pine Street's history-this one, intended for an introductory statistics class and a second case, intended for a strategic management class. Each case is designed to stand on its own. It is also possible to use the cases in sequence-the statistics case followed by the management case. There is some overlap in the content of the two written cases, as the description of Pine Street's history and organizational identity is included in both. This case, designed to introduce the concept of statistical "outliers," consists of two parts: a?? Five-page written case introduces the Pine Street Inn, provides a brief description of its origins, history, and mission, in the context of a burgeoning homelessness population between its founding in 1969 and 2004, when the case dilemma is set. The key point is to understand the strong historical commitment of Pine Street (1) to turn no one away (making it the place of last resort for many of the "hardest core" homeless in Boston) and (2) to provide a respectful, non-judgmental, and non-conditional welcome to all. a?? Data from the length of stay study, presented in spreadsheet form. Students are challenged to interpret the length of stay data, in the context of Pine Street's history and organizational identity, and to consider whether it suggests a new path forward. Case number 1988.0
Swot Analysis of "Budget Woes and Worse Ahead..." written by John Friedman, Pamela Varley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pine Street's facing as an external strategic factors. Some of the topics covered in Budget Woes and Worse Ahead... case study are - Strategic Management Strategies, Economy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Budget Woes and Worse Ahead... casestudy better are - – there is backlash against globalization, geopolitical disruptions, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs,
wage bills are increasing, technology disruption, etc
Introduction to SWOT Analysis of Budget Woes and Worse Ahead...
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Budget Woes and Worse Ahead... case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pine Street's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pine Street's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Budget Woes and Worse Ahead... can be done for the following purposes –
1. Strategic planning using facts provided in Budget Woes and Worse Ahead... case study
2. Improving business portfolio management of Pine Street's
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 Pine Street's
Strengths Budget Woes and Worse Ahead... | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pine Street's in Budget Woes and Worse Ahead... Harvard Business Review case study are -
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Pine Street's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pine Street's 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.
Low bargaining power of suppliers
– Suppliers of Pine Street's in the sector have low bargaining power. Budget Woes and Worse Ahead... has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pine Street's to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Pine Street's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pine Street's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Pine Street's is present in almost all the verticals within the industry. This has provided firm in Budget Woes and Worse Ahead... 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 recruit top talent
– Pine Street's is one of the leading recruiters in the industry. Managers in the Budget Woes and Worse Ahead... are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Leadership & Managing People field
– Pine Street's 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 Pine Street's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Leadership & Managing People industry
– Budget Woes and Worse Ahead... firm has clearly differentiated products in the market place. This has enabled Pine Street's to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Pine Street's to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Pine Street's 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 Budget Woes and Worse Ahead... HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Pine Street's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Pine Street's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pine Street's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Pine Street's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pine Street's 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)
– Pine Street's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Budget Woes and Worse Ahead... - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Budget Woes and Worse Ahead... | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Budget Woes and Worse Ahead... are -
Capital Spending Reduction
– Even during the low interest decade, Pine Street's 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.
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 Pine Street's supply chain. Even after few cautionary changes mentioned in the HBR case study - Budget Woes and Worse Ahead..., it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pine Street's vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Pine Street's 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Budget Woes and Worse Ahead..., it seems that the employees of Pine Street's 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.
Increasing silos among functional specialists
– The organizational structure of Pine Street's is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Pine Street's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pine Street's to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Budget Woes and Worse Ahead... 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 Pine Street's has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Pine Street's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to strategic competitive environment developments
– As Budget Woes and Worse Ahead... HBR case study mentions - Pine Street's 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Budget Woes and Worse Ahead..., is just above the industry average. Pine Street's 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.
Need for greater diversity
– Pine Street's 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.
High bargaining power of channel partners
– Because of the regulatory requirements, John Friedman, Pamela Varley suggests that, Pine Street's 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.
Opportunities Budget Woes and Worse Ahead... | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Budget Woes and Worse Ahead... are -
Loyalty marketing
– Pine Street's 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.
Manufacturing automation
– Pine Street's can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pine Street's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Budget Woes and Worse Ahead..., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pine Street's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pine Street's 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.
Using analytics as competitive advantage
– Pine Street's 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 Budget Woes and Worse Ahead... - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pine Street's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Pine Street's 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. Pine Street's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pine Street's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Pine Street's 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.
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 Pine Street's in the consumer business. Now Pine Street's can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pine Street's is facing challenges because of the dominance of functional experts in the organization. Budget Woes and Worse Ahead... 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pine Street's 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 Pine Street's to hire the very best people irrespective of their geographical location.
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. Pine Street's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Budget Woes and Worse Ahead... External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Budget Woes and Worse Ahead... 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.
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 Pine Street's.
Regulatory challenges
– Pine Street's 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pine Street's 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 Budget Woes and Worse Ahead... .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pine Street's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Pine Street's business can come under increasing regulations regarding data privacy, data security, etc.
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 Pine Street's in the Leadership & Managing People sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Budget Woes and Worse Ahead..., Pine Street's 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pine Street's 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.
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.
Increasing wage structure of Pine Street's
– 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 Pine Street's.
Environmental challenges
– Pine Street's 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. Pine Street's can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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. Pine Street's needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Budget Woes and Worse Ahead... Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Budget Woes and Worse Ahead... needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Budget Woes and Worse Ahead... is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Budget Woes and Worse Ahead... is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Budget Woes and Worse Ahead... 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 Pine Street's needs to make to build a sustainable competitive advantage.