Telenor (A): From Cellular Networks to Financial Services SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Telenor (A): From Cellular Networks to Financial Services
Telenor Group, based in Norway, experienced stagnating growth in average revenue per user (ARPU) at its 11 subsidiary cellular networks in Europe and Asia. Buying GSM licenses to expand to new markets was now too expensive. Having favoured Telenor Pakistan with more than $1.2 billion of capital expenditure, it was now especially in need of substantial profits from this wholly owned subsidiary. Given this context, Telenor Pakistan and several other subsidiaries were directed to explore diversification avenues. They sought a self-subsisting "growth story." In the case, we follow how the VP Strategy at Telenor Pakistan presented mobile financial services for the "unbanked" as the way forward. However, at the decision point in the case (March 2008), the central bank of Pakistan had sanctioned only a certain set of business models from which the telecommunications company (telco) had to choose one, if it was to provide mobile financial services. A basic constraint was that the venture should be "bankled." There were already various novel mobile financial service models in other emerging markets that were making headlines, such as SMART Money in the Philippines and Vodafones' M-PESA in Kenya. The VP Strategy at Telenor Pakistan had to prepare a presentation to the Board of Directors regarding how to proceed. The major issues and decisions were the following: (1) why and how Telenor Pakistan would achieve a "growth story" by diversifying into financial services; (2) given the peculiarities of the Pakistani market, what type of alliance with a bank should be pursued given the local legal restrictions and the benchmark models in other countries.
Swot Analysis of "Telenor (A): From Cellular Networks to Financial Services" written by Shazib E. Shaikh, Syed Zahoor Hassan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Telenor Pakistan facing as an external strategic factors. Some of the topics covered in Telenor (A): From Cellular Networks to Financial Services case study are - Strategic Management Strategies, Entrepreneurial finance, Joint ventures, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Telenor (A): From Cellular Networks to Financial Services casestudy better are - – technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, increasing commodity prices, increasing government debt because of Covid-19 spendings,
increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Telenor (A): From Cellular Networks to Financial Services
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Telenor (A): From Cellular Networks to Financial Services case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Telenor Pakistan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Telenor Pakistan 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 Telenor (A): From Cellular Networks to Financial Services can be done for the following purposes –
1. Strategic planning using facts provided in Telenor (A): From Cellular Networks to Financial Services case study
2. Improving business portfolio management of Telenor Pakistan
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Telenor Pakistan
Strengths Telenor (A): From Cellular Networks to Financial Services | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Telenor Pakistan in Telenor (A): From Cellular Networks to Financial Services Harvard Business Review case study are -
High brand equity
– Telenor Pakistan has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Telenor Pakistan to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Telenor Pakistan is present in almost all the verticals within the industry. This has provided firm in Telenor (A): From Cellular Networks to Financial Services 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.
Successful track record of launching new products
– Telenor Pakistan has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Telenor Pakistan 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Telenor (A): From Cellular Networks to Financial Services firm has clearly differentiated products in the market place. This has enabled Telenor Pakistan to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Telenor Pakistan to invest into research and development (R&D) and innovation.
Analytics focus
– Telenor Pakistan 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 Shazib E. Shaikh, Syed Zahoor Hassan 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.
Strong track record of project management
– Telenor Pakistan is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Telenor Pakistan has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Telenor (A): From Cellular Networks to Financial Services 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 Telenor Pakistan
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Telenor Pakistan does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Telenor Pakistan 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 Telenor (A): From Cellular Networks to Financial Services HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Telenor Pakistan 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 Telenor Pakistan is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Telenor (A): From Cellular Networks to Financial Services Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Telenor Pakistan 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 Telenor (A): From Cellular Networks to Financial Services - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Telenor Pakistan 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 Telenor (A): From Cellular Networks to Financial Services | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Telenor (A): From Cellular Networks to Financial Services are -
Aligning sales with marketing
– It come across in the case study Telenor (A): From Cellular Networks to Financial Services 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 Telenor (A): From Cellular Networks to Financial Services can leverage the sales team experience to cultivate customer relationships as Telenor Pakistan is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Telenor (A): From Cellular Networks to Financial Services HBR case study mentions - Telenor Pakistan takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Telenor (A): From Cellular Networks to Financial Services, in the dynamic environment Telenor Pakistan has struggled to respond to the nimble upstart competition. Telenor Pakistan has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Telenor Pakistan is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Telenor (A): From Cellular Networks to Financial Services 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 operating costs
– Compare to the competitors, firm in the HBR case study Telenor (A): From Cellular Networks to Financial Services 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 Telenor Pakistan 's lucrative customers.
Interest costs
– Compare to the competition, Telenor Pakistan 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.
Need for greater diversity
– Telenor Pakistan 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.
Increasing silos among functional specialists
– The organizational structure of Telenor Pakistan is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Telenor Pakistan needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Telenor Pakistan to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Telenor (A): From Cellular Networks to Financial Services, is just above the industry average. Telenor Pakistan 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 Telenor Pakistan supply chain. Even after few cautionary changes mentioned in the HBR case study - Telenor (A): From Cellular Networks to Financial Services, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Telenor Pakistan vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Telenor Pakistan, firm in the HBR case study Telenor (A): From Cellular Networks to Financial Services needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Telenor (A): From Cellular Networks to Financial Services | 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 Telenor (A): From Cellular Networks to Financial Services are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Telenor Pakistan 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. Telenor Pakistan 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 Telenor Pakistan to increase its market reach. Telenor Pakistan 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 Telenor Pakistan in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Telenor Pakistan 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 Strategy & Execution segment.
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 Telenor Pakistan in the consumer business. Now Telenor Pakistan 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, Telenor Pakistan can use these opportunities to build new business models that can help the communities that Telenor Pakistan operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Leveraging digital technologies
– Telenor Pakistan 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.
Developing new processes and practices
– Telenor Pakistan can develop new processes and procedures in Strategy & Execution 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Telenor Pakistan can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Telenor Pakistan 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.
Loyalty marketing
– Telenor Pakistan 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.
Creating value in data economy
– The success of analytics program of Telenor Pakistan has opened avenues for new revenue streams for the organization in the industry. This can help Telenor Pakistan to build a more holistic ecosystem as suggested in the Telenor (A): From Cellular Networks to Financial Services case study. Telenor Pakistan can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Telenor Pakistan can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Telenor (A): From Cellular Networks to Financial Services External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Telenor (A): From Cellular Networks to Financial Services are -
Consumer confidence and its impact on Telenor Pakistan 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.
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. Telenor Pakistan 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 Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Telenor Pakistan can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Telenor (A): From Cellular Networks to Financial Services, Telenor Pakistan may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Environmental challenges
– Telenor Pakistan 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. Telenor Pakistan can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Telenor Pakistan in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Telenor Pakistan 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 Telenor (A): From Cellular Networks to Financial Services .
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 Telenor Pakistan business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Telenor Pakistan has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Telenor Pakistan needs to keep up with the evolution of technology in the Strategy & Execution 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Telenor Pakistan with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Telenor Pakistan needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Telenor Pakistan.
Weighted SWOT Analysis of Telenor (A): From Cellular Networks to Financial Services 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 Telenor (A): From Cellular Networks to Financial Services 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 Telenor (A): From Cellular Networks to Financial Services 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 Telenor (A): From Cellular Networks to Financial Services 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 Telenor (A): From Cellular Networks to Financial Services 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 Telenor Pakistan needs to make to build a sustainable competitive advantage.
