Privatization of Telecommunications in Peru (Sequel) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of Privatization of Telecommunications in Peru (Sequel)
When the administration of Peru president Alberto Fujimori embarks on an ambitious privatization program, it turns inevitably to the nation's creaking telephone system. With but 2.5 phone lines per 100 persons, Peru, in the mid-1990s, had the lowest phone "density" in Latin America; installation of a new line took years, except via a thriving black market in existing lines. But the privatization committee which begins to plot the role of both the existing local and long distance phone monopolies, knows that it faces formidable obstacles to change: a suspicious and powerful military which nationalized the phone system in the 1970s; an influential cellular phone operator with his own agenda; existing unions, doubtful legislators who must approve a constitutional amendment to allow privatization to go forward. This case is about the political management of privatization. It describes the "interest group map" developed by the privatization committee and poses the question of what tactical approach should be taken with each. Case users must envision the potential conflicts, the objective desired, and the most useful tactics. The sequel describes the early success of the privatization process, after the phone system's sale to the Spanish phone giant, Telefonica. HKS Case Number 1404.1
Swot Analysis of "Privatization of Telecommunications in Peru (Sequel)" written by Merilee Grindle, Esther Scott includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Privatization Phone facing as an external strategic factors. Some of the topics covered in Privatization of Telecommunications in Peru (Sequel) case study are - Strategic Management Strategies, Economy, Entrepreneurship, IT, Operations management, Regulation, Strategic planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Privatization of Telecommunications in Peru (Sequel) casestudy better are - – technology disruption, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, there is backlash against globalization,
central banks are concerned over increasing inflation, wage bills are increasing, etc
Introduction to SWOT Analysis of Privatization of Telecommunications in Peru (Sequel)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Privatization of Telecommunications in Peru (Sequel) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Privatization Phone, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Privatization Phone 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 Privatization of Telecommunications in Peru (Sequel) can be done for the following purposes –
1. Strategic planning using facts provided in Privatization of Telecommunications in Peru (Sequel) case study
2. Improving business portfolio management of Privatization Phone
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 Privatization Phone
Strengths Privatization of Telecommunications in Peru (Sequel) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Privatization Phone in Privatization of Telecommunications in Peru (Sequel) Harvard Business Review case study are -
Highly skilled collaborators
– Privatization Phone 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 Privatization of Telecommunications in Peru (Sequel) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Privatization Phone 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 Merilee Grindle, Esther Scott 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.
Operational resilience
– The operational resilience strategy in the Privatization of Telecommunications in Peru (Sequel) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Innovation driven organization
– Privatization Phone is one of the most innovative firm in sector. Manager in Privatization of Telecommunications in Peru (Sequel) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Privatization Phone is one of the leading recruiters in the industry. Managers in the Privatization of Telecommunications in Peru (Sequel) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Privatization Phone 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 Privatization of Telecommunications in Peru (Sequel) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Privatization Phone in the sector have low bargaining power. Privatization of Telecommunications in Peru (Sequel) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Privatization Phone to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Privatization Phone is present in almost all the verticals within the industry. This has provided firm in Privatization of Telecommunications in Peru (Sequel) 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.
Training and development
– Privatization Phone has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Privatization of Telecommunications in Peru (Sequel) 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Privatization of Telecommunications in Peru (Sequel) firm has clearly differentiated products in the market place. This has enabled Privatization Phone to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Privatization Phone to invest into research and development (R&D) and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Privatization Phone digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Privatization Phone 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.
Successful track record of launching new products
– Privatization Phone has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Privatization Phone 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.
Weaknesses Privatization of Telecommunications in Peru (Sequel) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Privatization of Telecommunications in Peru (Sequel) are -
Lack of clear differentiation of Privatization Phone products
– To increase the profitability and margins on the products, Privatization Phone needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Privatization of Telecommunications in Peru (Sequel) 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 Privatization Phone 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Privatization of Telecommunications in Peru (Sequel), it seems that the employees of Privatization Phone 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.
Aligning sales with marketing
– It come across in the case study Privatization of Telecommunications in Peru (Sequel) 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 Privatization of Telecommunications in Peru (Sequel) can leverage the sales team experience to cultivate customer relationships as Privatization Phone is planning to shift buying processes online.
Need for greater diversity
– Privatization Phone 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 Privatization of Telecommunications in Peru (Sequel), is just above the industry average. Privatization Phone 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.
Products dominated business model
– Even though Privatization Phone 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 - Privatization of Telecommunications in Peru (Sequel) should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Privatization Phone 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.
Capital Spending Reduction
– Even during the low interest decade, Privatization Phone has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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 Privatization Phone supply chain. Even after few cautionary changes mentioned in the HBR case study - Privatization of Telecommunications in Peru (Sequel), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Privatization Phone vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Privatization of Telecommunications in Peru (Sequel), it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Opportunities Privatization of Telecommunications in Peru (Sequel) | 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 Privatization of Telecommunications in Peru (Sequel) are -
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 Privatization Phone in the consumer business. Now Privatization Phone can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Privatization Phone 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.
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. Privatization Phone 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
– Privatization Phone 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Privatization Phone 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.
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. Privatization Phone 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. Privatization Phone 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.
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. Privatization Phone can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Privatization Phone can use these opportunities to build new business models that can help the communities that Privatization Phone operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Loyalty marketing
– Privatization Phone 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.
Buying journey improvements
– Privatization Phone can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Privatization of Telecommunications in Peru (Sequel) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Privatization Phone 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, Privatization of Telecommunications in Peru (Sequel), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Privatization Phone can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Privatization Phone to increase its market reach. Privatization Phone 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.
Threats Privatization of Telecommunications in Peru (Sequel) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Privatization of Telecommunications in Peru (Sequel) are -
Shortening product life cycle
– it is one of the major threat that Privatization Phone is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Privatization Phone 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.
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 Privatization Phone in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Privatization Phone
– 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 Privatization Phone.
Regulatory challenges
– Privatization Phone 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 Strategy & Execution industry regulations.
Technology acceleration in Forth Industrial Revolution
– Privatization Phone has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Privatization Phone 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.
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 Privatization Phone 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.
Stagnating economy with rate increase
– Privatization Phone 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.
Environmental challenges
– Privatization Phone 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. Privatization Phone can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Consumer confidence and its impact on Privatization Phone 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Privatization Phone 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 Privatization of Telecommunications in Peru (Sequel) .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Privatization of Telecommunications in Peru (Sequel), Privatization Phone 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 .
Weighted SWOT Analysis of Privatization of Telecommunications in Peru (Sequel) 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 Privatization of Telecommunications in Peru (Sequel) 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 Privatization of Telecommunications in Peru (Sequel) 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 Privatization of Telecommunications in Peru (Sequel) 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 Privatization of Telecommunications in Peru (Sequel) 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 Privatization Phone needs to make to build a sustainable competitive advantage.