Case Study Description of Thuraya Satellite Telecommunications
Mobile satellite services, an industry which incurred huge initial investment costs and required a critical mass of users to break even, had emerged as a niche market with little evidence for large-scale growth. In 1997, Thuraya Satellite Telecomunications was established with a unique business model - instead of launching many satellites to provide global services, Thuraya, employing a more advanced technology, launched one high-quality satellite to provide regional services as a start to ensure early break-even. In addition, as opposed to competing against fixed-line and cellular services, the company chose to complement with these services. By September 2005, with a solid financial base and an impressive business performance, the company was considering its next growth options: 1) Focus on increasing utilization; 2) Expand services in Asia and establish an international image; and 3) Develop Multimedia. This case poses a question of how to further grow the company. Are they ready for a quantum leap? Which option(s) make sense? In which order and how should these options be implemented? And how to fund the growth? Learning objective: This case is designed to provide a thorough discussion of how companies can best drive growth. It explores growth via exploiting geographic competencies, growth by building on core competencies, and growth by product/market diversification. It also provides a vehicle for discussing the challenges of managing global expansion and rapidly changing technology in a non-traditional setting.
Swot Analysis of "Thuraya Satellite Telecommunications" written by Allen Morrison, Rebecca Chung includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Thuraya Satellite facing as an external strategic factors. Some of the topics covered in Thuraya Satellite Telecommunications case study are - Strategic Management Strategies, and Organizational Development.
Some of the macro environment factors that can be used to understand the Thuraya Satellite Telecommunications casestudy better are - – challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , increasing commodity prices, there is backlash against globalization, increasing government debt because of Covid-19 spendings, technology disruption, there is increasing trade war between United States & China,
increasing transportation and logistics costs, geopolitical disruptions, etc
Introduction to SWOT Analysis of Thuraya Satellite Telecommunications
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Thuraya Satellite Telecommunications case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Thuraya Satellite, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Thuraya Satellite 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 Thuraya Satellite Telecommunications can be done for the following purposes –
1. Strategic planning using facts provided in Thuraya Satellite Telecommunications case study
2. Improving business portfolio management of Thuraya Satellite
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 Thuraya Satellite
Strengths Thuraya Satellite Telecommunications | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Thuraya Satellite in Thuraya Satellite Telecommunications Harvard Business Review case study are -
Highly skilled collaborators
– Thuraya Satellite 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 Thuraya Satellite Telecommunications HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Thuraya Satellite is present in almost all the verticals within the industry. This has provided firm in Thuraya Satellite Telecommunications 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.
Analytics focus
– Thuraya Satellite 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 Allen Morrison, Rebecca Chung 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.
Ability to recruit top talent
– Thuraya Satellite is one of the leading recruiters in the industry. Managers in the Thuraya Satellite Telecommunications 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 Thuraya Satellite 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.
Learning organization
- Thuraya Satellite 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 Thuraya Satellite is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Thuraya Satellite Telecommunications Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Thuraya Satellite has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Thuraya Satellite Telecommunications 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 lead change in Organizational Development field
– Thuraya Satellite 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 Thuraya Satellite in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Thuraya Satellite 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 Thuraya Satellite Telecommunications - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Thuraya Satellite digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Thuraya Satellite 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.
Cross disciplinary teams
– Horizontal connected teams at the Thuraya Satellite 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.
Superior customer experience
– The customer experience strategy of Thuraya Satellite in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Thuraya Satellite Telecommunications | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Thuraya Satellite Telecommunications are -
Workers concerns about automation
– As automation is fast increasing in the segment, Thuraya Satellite 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 decision making process
– As mentioned earlier in the report, Thuraya Satellite 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. Thuraya Satellite 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Thuraya Satellite is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Thuraya Satellite Telecommunications can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Thuraya Satellite Telecommunications 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 Thuraya Satellite Telecommunications can leverage the sales team experience to cultivate customer relationships as Thuraya Satellite is planning to shift buying processes online.
High cash cycle compare to competitors
Thuraya Satellite has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Thuraya Satellite is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Thuraya Satellite needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Thuraya Satellite to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Allen Morrison, Rebecca Chung suggests that, Thuraya Satellite 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Thuraya Satellite Telecommunications 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 Thuraya Satellite 's lucrative customers.
Products dominated business model
– Even though Thuraya Satellite 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 - Thuraya Satellite Telecommunications should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Thuraya Satellite 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Thuraya Satellite Telecommunications, is just above the industry average. Thuraya Satellite 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 Thuraya Satellite Telecommunications | 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 Thuraya Satellite Telecommunications are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Thuraya Satellite 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Thuraya Satellite can use these opportunities to build new business models that can help the communities that Thuraya Satellite operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Using analytics as competitive advantage
– Thuraya Satellite 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 Thuraya Satellite Telecommunications - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Thuraya Satellite to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Thuraya Satellite 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Thuraya Satellite is facing challenges because of the dominance of functional experts in the organization. Thuraya Satellite Telecommunications 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.
Building a culture of innovation
– managers at Thuraya Satellite 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.
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. Thuraya Satellite can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Thuraya Satellite to increase its market reach. Thuraya Satellite 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.
Creating value in data economy
– The success of analytics program of Thuraya Satellite has opened avenues for new revenue streams for the organization in the industry. This can help Thuraya Satellite to build a more holistic ecosystem as suggested in the Thuraya Satellite Telecommunications case study. Thuraya Satellite can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Thuraya Satellite 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
– Thuraya Satellite 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Thuraya Satellite can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Thuraya Satellite 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. Thuraya Satellite 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.
Threats Thuraya Satellite Telecommunications External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Thuraya Satellite Telecommunications are -
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 Thuraya Satellite is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Thuraya Satellite
– 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 Thuraya Satellite.
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. Thuraya Satellite can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Thuraya Satellite 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.
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. Thuraya Satellite needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Thuraya Satellite has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Thuraya Satellite 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Thuraya Satellite 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.
Regulatory challenges
– Thuraya Satellite needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Environmental challenges
– Thuraya Satellite 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. Thuraya Satellite can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Consumer confidence and its impact on Thuraya Satellite 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Thuraya Satellite 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 Thuraya Satellite Telecommunications .
Weighted SWOT Analysis of Thuraya Satellite Telecommunications 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 Thuraya Satellite Telecommunications 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 Thuraya Satellite Telecommunications 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 Thuraya Satellite Telecommunications 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 Thuraya Satellite Telecommunications 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 Thuraya Satellite needs to make to build a sustainable competitive advantage.
