Until recently, SimpleTel had been a star performer in the telecom industry, and the CEO had been a darling of the analyst community. Several years back, SimpleTel's found itself in a situation where customers were migrating to smaller, local telecom providers to avoid the congestion on SimpleTel's network. At that point, SimpleTel's leadership had decided to invest heavily in expanding network capacity. But now the company was left with a huge amount of unutilized capacity. That, along with debt obligations related to the massive investments in capacity, and lack of demand was threatening to push SimpleTel to the verge of bankruptcy. The previously celebrated CEO had fallen out of favor and shareholders were baying for his blood. He was forced to make an unceremonious departure, and the search for a savior had begun. Today, the compensation committee was due to deliberate on the compensation package for SimpleTel's new chief executive.
Authors :: S. Venkataraman, Rajesh Narayanan, Prasad Nair
Swot Analysis of "The SimpleTel Dilemma" written by S. Venkataraman, Rajesh Narayanan, Prasad Nair includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Simpletel's Simpletel facing as an external strategic factors. Some of the topics covered in The SimpleTel Dilemma case study are - Strategic Management Strategies, and Organizational Development.
Some of the macro environment factors that can be used to understand the The SimpleTel Dilemma casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, wage bills are increasing, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of The SimpleTel Dilemma
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The SimpleTel Dilemma case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Simpletel's Simpletel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Simpletel's Simpletel 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 The SimpleTel Dilemma can be done for the following purposes –
1. Strategic planning using facts provided in The SimpleTel Dilemma case study
2. Improving business portfolio management of Simpletel's Simpletel
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Simpletel's Simpletel
Strengths The SimpleTel Dilemma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Simpletel's Simpletel in The SimpleTel Dilemma Harvard Business Review case study are -
Strong track record of project management
– Simpletel's Simpletel 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
– Simpletel's Simpletel is one of the most innovative firm in sector. Manager in The SimpleTel Dilemma Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Simpletel's Simpletel 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 The SimpleTel Dilemma - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Simpletel's Simpletel is one of the leading recruiters in the industry. Managers in the The SimpleTel Dilemma are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Simpletel's Simpletel
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Simpletel's Simpletel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Simpletel's Simpletel in the sector have low bargaining power. The SimpleTel Dilemma has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Simpletel's Simpletel to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Simpletel's Simpletel are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Highly skilled collaborators
– Simpletel's Simpletel 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 The SimpleTel Dilemma HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Organizational Development industry
– The SimpleTel Dilemma firm has clearly differentiated products in the market place. This has enabled Simpletel's Simpletel to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Simpletel's Simpletel to invest into research and development (R&D) and innovation.
Learning organization
- Simpletel's Simpletel 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 Simpletel's Simpletel is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The SimpleTel Dilemma Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Simpletel's Simpletel digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Simpletel's Simpletel 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.
High switching costs
– The high switching costs that Simpletel's Simpletel 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.
Weaknesses The SimpleTel Dilemma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The SimpleTel Dilemma are -
Workers concerns about automation
– As automation is fast increasing in the segment, Simpletel's Simpletel 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Simpletel's Simpletel is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The SimpleTel Dilemma can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The SimpleTel Dilemma 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 Simpletel's Simpletel has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study The SimpleTel Dilemma, it seems that company is thinking about the frontier risks that can impact Organizational Development 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.
Interest costs
– Compare to the competition, Simpletel's Simpletel 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 The SimpleTel Dilemma, it seems that the employees of Simpletel's Simpletel 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.
Low market penetration in new markets
– Outside its home market of Simpletel's Simpletel, firm in the HBR case study The SimpleTel Dilemma needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Simpletel's Simpletel 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 - The SimpleTel Dilemma should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The SimpleTel Dilemma, is just above the industry average. Simpletel's Simpletel 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 operating costs
– Compare to the competitors, firm in the HBR case study The SimpleTel Dilemma 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 Simpletel's Simpletel 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Simpletel's Simpletel 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.
Opportunities The SimpleTel Dilemma | 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 The SimpleTel Dilemma are -
Building a culture of innovation
– managers at Simpletel's Simpletel 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 Organizational Development segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Simpletel's Simpletel can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Simpletel's Simpletel in the consumer business. Now Simpletel's Simpletel 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, Simpletel's Simpletel can use these opportunities to build new business models that can help the communities that Simpletel's Simpletel operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Simpletel's Simpletel 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 Simpletel's Simpletel to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Simpletel's Simpletel has opened avenues for new revenue streams for the organization in the industry. This can help Simpletel's Simpletel to build a more holistic ecosystem as suggested in the The SimpleTel Dilemma case study. Simpletel's Simpletel can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Simpletel's Simpletel to increase its market reach. Simpletel's Simpletel 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Simpletel's Simpletel in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Simpletel's Simpletel can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Simpletel's Simpletel 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Simpletel's Simpletel 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, The SimpleTel Dilemma, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Simpletel's Simpletel 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.
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. Simpletel's Simpletel can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats The SimpleTel Dilemma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The SimpleTel Dilemma are -
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. Simpletel's Simpletel 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.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Simpletel's Simpletel can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Simpletel's Simpletel is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Simpletel's Simpletel.
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 Simpletel's Simpletel business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Simpletel's Simpletel 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Simpletel's Simpletel in the Organizational Development industry. The Organizational Development 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.
Increasing wage structure of Simpletel's Simpletel
– 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 Simpletel's Simpletel.
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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Simpletel's Simpletel 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 The SimpleTel Dilemma .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The SimpleTel Dilemma, Simpletel's Simpletel may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Technology acceleration in Forth Industrial Revolution
– Simpletel's Simpletel has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Simpletel's Simpletel needs to keep up with the evolution of technology in the Organizational Development 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.
Weighted SWOT Analysis of The SimpleTel Dilemma 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 The SimpleTel Dilemma 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 The SimpleTel Dilemma 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 The SimpleTel Dilemma 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 The SimpleTel Dilemma 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 Simpletel's Simpletel needs to make to build a sustainable competitive advantage.