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 a strategic management class, and another case, intended for an introductory statistics class. This case, designed to teach about the important role of organizational culture when changing an organization's mission, begins by introducing Pine Street's history and organizational identity as a place of last resort for many of the "hardest core" homeless in Boston. The case goes on to describe how, in 2004, faced with dwindling funding, Pine Street's director and board decided to commission a study that analyzed how long each incoming homeless client stayed at its shelters over a two-year period. The striking results: a small number of homeless people were "chronic" shelter-stayers, while the vast majority came and went in 10 days or fewer. About 20 per-cent stayed between 10 days and 20 weeks. Over the course of five years, these data, combined with Downie's frustrations at finding housing alternatives for shelter guests, lead Pine Street's director and board chair to propose a controversial new strategy: to shift from an organization that primarily provides the homeless with shelter beds and services to one that primarily provides permanent supportive housing to a subset of the homeless population-the chronically homeless-while providing a smaller pool of shelter beds to short-term stayers and a combination of shelter beds and transitional services to medium-term stayers. The case ends by posing board and staff concerns about the proposal. Case number 1989.0
Swot Analysis of "Budget Woes and Worse Ahead..." written by Thomas Glynn, Pamela Varley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Homeless Pine facing as an external strategic factors. Some of the topics covered in Budget Woes and Worse Ahead... case study are - Strategic Management Strategies, Growth strategy, Organizational culture 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 - – increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, there is backlash against globalization, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, wage bills are increasing,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, 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 Homeless Pine, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Homeless Pine 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 Homeless Pine
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 Homeless Pine
Strengths Budget Woes and Worse Ahead... | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Homeless Pine in Budget Woes and Worse Ahead... Harvard Business Review case study are -
Analytics focus
– Homeless Pine 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 Thomas Glynn, Pamela Varley 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 Homeless Pine in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Homeless Pine 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 Homeless Pine to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Homeless Pine is one of the most innovative firm in sector. Manager in Budget Woes and Worse Ahead... 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 Leadership & Managing People field
– Homeless Pine 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 Homeless Pine in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Homeless Pine has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Budget Woes and Worse Ahead... 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.
Ability to recruit top talent
– Homeless Pine 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.
High switching costs
– The high switching costs that Homeless Pine 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.
Effective Research and Development (R&D)
– Homeless Pine 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.
Operational resilience
– The operational resilience strategy in the Budget Woes and Worse Ahead... Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Highly skilled collaborators
– Homeless Pine 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.
Successful track record of launching new products
– Homeless Pine has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Homeless Pine 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.
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 -
High operating costs
– Compare to the competitors, firm in the HBR case study Budget Woes and Worse Ahead... 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 Homeless Pine 's lucrative customers.
Interest costs
– Compare to the competition, Homeless Pine 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 Homeless Pine 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.
Need for greater diversity
– Homeless Pine 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.
Slow decision making process
– As mentioned earlier in the report, Homeless Pine 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. Homeless Pine 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.
No frontier risks strategy
– After analyzing the HBR case study Budget Woes and Worse Ahead..., it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Homeless Pine 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.
Capital Spending Reduction
– Even during the low interest decade, Homeless Pine 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.
Low market penetration in new markets
– Outside its home market of Homeless Pine, firm in the HBR case study Budget Woes and Worse Ahead... needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Budget Woes and Worse Ahead... 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 Budget Woes and Worse Ahead... can leverage the sales team experience to cultivate customer relationships as Homeless Pine is planning to shift buying processes online.
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. Homeless Pine 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.
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
– Homeless Pine 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Homeless Pine 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.
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. Homeless Pine 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. Homeless Pine 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.
Better consumer reach
– The expansion of the 5G network will help Homeless Pine to increase its market reach. Homeless Pine 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Homeless Pine 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Homeless Pine 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 Homeless Pine to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Homeless Pine 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.
Manufacturing automation
– Homeless Pine 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Homeless Pine can use these opportunities to build new business models that can help the communities that Homeless Pine operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Leveraging digital technologies
– Homeless Pine 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 Homeless Pine in the consumer business. Now Homeless Pine can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Homeless Pine can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Buying journey improvements
– Homeless Pine can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Budget Woes and Worse Ahead... 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.
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 -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Homeless Pine 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 Homeless Pine in the Leadership & Managing People sector and impact the bottomline of the organization.
Consumer confidence and its impact on Homeless Pine 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.
High dependence on third party suppliers
– Homeless Pine 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Homeless Pine 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... .
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 Homeless Pine.
Environmental challenges
– Homeless Pine 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. Homeless Pine can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Homeless Pine business can come under increasing regulations regarding data privacy, data security, etc.
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.
Shortening product life cycle
– it is one of the major threat that Homeless Pine is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Homeless Pine
– 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 Homeless Pine.
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. Homeless Pine 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.
Stagnating economy with rate increase
– Homeless Pine 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.
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 Homeless Pine needs to make to build a sustainable competitive advantage.