Which Way Should You Downsize in a Crisis? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Which Way Should You Downsize in a Crisis?
This is an MIT Sloan Management Review article. The recent economic downturn has left many organizations in a quandary. Just several years ago, the major issue was winning the so-called "war for talent": how to attract, motivate and retain the best and the brightest. But then the current recession turned that thinking upside down. Now, many organizations are scrambling to figure out how best to restructure and cut costs without jeopardizing the valuable human capital that they built during the prior period of growth. To help such companies, the authors have developed a framework that integrates the seemingly paradoxical practices of talent management and downsizing. The framework looks at two important dimensions. The first is the type of downsizing, either reactive or proactive. The second dimension of the framework is the approach to managing employees, either control-oriented or commitment-oriented. Those two dimensions -type of downsizing and approach to talent management -can be combined to form a two-by-two matrix consisting of four quadrants. Each quadrant represents a different strategy, with a distinct philosophy, focus and key HR and downsizing best practices. The authors contend that there is no "one size fits all" approach to downsizing and that managers need to devise the approach that makes the best sense for their particular company, depending on its position in the matrix's quadrants.
Authors :: Christopher Zatzick, Mitchell Lee Marks, Roderick Iverson
Swot Analysis of "Which Way Should You Downsize in a Crisis?" written by Christopher Zatzick, Mitchell Lee Marks, Roderick Iverson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Downsizing Quadrants facing as an external strategic factors. Some of the topics covered in Which Way Should You Downsize in a Crisis? case study are - Strategic Management Strategies, Leadership, Operations management and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Which Way Should You Downsize in a Crisis? casestudy better are - – technology disruption, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing energy prices, talent flight as more people leaving formal jobs,
banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Which Way Should You Downsize in a Crisis?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Which Way Should You Downsize in a Crisis? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Downsizing Quadrants, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Downsizing Quadrants 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 Which Way Should You Downsize in a Crisis? can be done for the following purposes –
1. Strategic planning using facts provided in Which Way Should You Downsize in a Crisis? case study
2. Improving business portfolio management of Downsizing Quadrants
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 Downsizing Quadrants
Strengths Which Way Should You Downsize in a Crisis? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Downsizing Quadrants in Which Way Should You Downsize in a Crisis? Harvard Business Review case study are -
Ability to recruit top talent
– Downsizing Quadrants is one of the leading recruiters in the industry. Managers in the Which Way Should You Downsize in a Crisis? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Downsizing Quadrants is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Downsizing Quadrants is one of the most innovative firm in sector. Manager in Which Way Should You Downsize in a Crisis? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Downsizing Quadrants 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 Christopher Zatzick, Mitchell Lee Marks, Roderick Iverson 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.
Learning organization
- Downsizing Quadrants 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 Downsizing Quadrants is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Which Way Should You Downsize in a Crisis? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Downsizing Quadrants has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Downsizing Quadrants 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.
Training and development
– Downsizing Quadrants has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Which Way Should You Downsize in a Crisis? 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 Downsizing Quadrants
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Downsizing Quadrants does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Downsizing Quadrants is present in almost all the verticals within the industry. This has provided firm in Which Way Should You Downsize in a Crisis? 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Downsizing Quadrants digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Downsizing Quadrants 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.
Effective Research and Development (R&D)
– Downsizing Quadrants 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 Which Way Should You Downsize in a Crisis? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Downsizing Quadrants in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Which Way Should You Downsize in a Crisis? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Which Way Should You Downsize in a Crisis? are -
Aligning sales with marketing
– It come across in the case study Which Way Should You Downsize in a Crisis? 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 Which Way Should You Downsize in a Crisis? can leverage the sales team experience to cultivate customer relationships as Downsizing Quadrants is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Which Way Should You Downsize in a Crisis? 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 Downsizing Quadrants has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Downsizing Quadrants, firm in the HBR case study Which Way Should You Downsize in a Crisis? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Downsizing Quadrants 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.
Interest costs
– Compare to the competition, Downsizing Quadrants 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Downsizing Quadrants is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Which Way Should You Downsize in a Crisis? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Downsizing Quadrants 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Which Way Should You Downsize in a Crisis?, is just above the industry average. Downsizing Quadrants 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
– Downsizing Quadrants 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.
Products dominated business model
– Even though Downsizing Quadrants has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Which Way Should You Downsize in a Crisis? should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Which Way Should You Downsize in a Crisis? 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 Downsizing Quadrants 's lucrative customers.
Opportunities Which Way Should You Downsize in a Crisis? | 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 Which Way Should You Downsize in a Crisis? are -
Learning at scale
– Online learning technologies has now opened space for Downsizing Quadrants 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.
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. Downsizing Quadrants 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. Downsizing Quadrants 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Downsizing Quadrants 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Downsizing Quadrants is facing challenges because of the dominance of functional experts in the organization. Which Way Should You Downsize in a Crisis? 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.
Developing new processes and practices
– Downsizing Quadrants 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.
Building a culture of innovation
– managers at Downsizing Quadrants 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.
Manufacturing automation
– Downsizing Quadrants 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.
Better consumer reach
– The expansion of the 5G network will help Downsizing Quadrants to increase its market reach. Downsizing Quadrants 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Downsizing Quadrants 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.
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 Downsizing Quadrants in the consumer business. Now Downsizing Quadrants can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Downsizing Quadrants can use these opportunities to build new business models that can help the communities that Downsizing Quadrants operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Creating value in data economy
– The success of analytics program of Downsizing Quadrants has opened avenues for new revenue streams for the organization in the industry. This can help Downsizing Quadrants to build a more holistic ecosystem as suggested in the Which Way Should You Downsize in a Crisis? case study. Downsizing Quadrants 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 Downsizing Quadrants 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 Downsizing Quadrants to hire the very best people irrespective of their geographical location.
Threats Which Way Should You Downsize in a Crisis? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Which Way Should You Downsize in a Crisis? are -
High dependence on third party suppliers
– Downsizing Quadrants 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Which Way Should You Downsize in a Crisis?, Downsizing Quadrants 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 .
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 Downsizing Quadrants business can come under increasing regulations regarding data privacy, data security, etc.
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. Downsizing Quadrants needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Downsizing Quadrants has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Downsizing Quadrants 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.
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. Downsizing Quadrants can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Downsizing Quadrants 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 Which Way Should You Downsize in a Crisis? .
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.
Environmental challenges
– Downsizing Quadrants 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. Downsizing Quadrants can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing wage structure of Downsizing Quadrants
– 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 Downsizing Quadrants.
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 Downsizing Quadrants in the Leadership & Managing People sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Downsizing Quadrants is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Which Way Should You Downsize in a Crisis? 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 Which Way Should You Downsize in a Crisis? 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 Which Way Should You Downsize in a Crisis? 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 Which Way Should You Downsize in a Crisis? 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 Which Way Should You Downsize in a Crisis? 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 Downsizing Quadrants needs to make to build a sustainable competitive advantage.