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 - – wage bills are increasing, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing commodity prices,
increasing energy prices, there is backlash against globalization, 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 -
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.
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.
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.
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.
Learning organization
- Homeless Pine 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 Homeless Pine is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Budget Woes and Worse Ahead... Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
High brand equity
– Homeless Pine has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Homeless Pine to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Organizational Resilience of Homeless Pine
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Homeless Pine does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Homeless Pine is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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 Homeless Pine to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Homeless Pine to invest into research and development (R&D) and innovation.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Homeless Pine digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Homeless Pine 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.
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 -
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Homeless Pine is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Budget Woes and Worse Ahead... can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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 Homeless Pine 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 Homeless Pine vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Thomas Glynn, Pamela Varley suggests that, Homeless Pine 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.
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.
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.
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.
Lack of clear differentiation of Homeless Pine products
– To increase the profitability and margins on the products, Homeless Pine needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
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 -
Creating value in data economy
– The success of analytics program of Homeless Pine has opened avenues for new revenue streams for the organization in the industry. This can help Homeless Pine to build a more holistic ecosystem as suggested in the Budget Woes and Worse Ahead... case study. Homeless Pine can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Homeless Pine 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.
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.
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 Homeless Pine 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Homeless Pine can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Homeless Pine 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.
Using analytics as competitive advantage
– Homeless Pine 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 Homeless Pine to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Homeless Pine can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Learning at scale
– Online learning technologies has now opened space for Homeless Pine 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Homeless Pine 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.
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.
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. Homeless Pine can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Homeless Pine has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Homeless Pine 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.
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..., Homeless Pine 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 .
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.
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.
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 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.
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.
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.
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.
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.
