Case Study Description of Intrapreneurship at Alcatel-Lucent
Since 2006, Alcatel-Lucent, an international telecommunications equipment manufacturer based in Paris, France, has been conducting boot camps for its employees to provide business training and help them monetize their innovative ideas with a view to creating value for the company. The program has led to 32 projects of which two have been commercialized, three transferred to business units within Alcatel-Lucent and one spun off. In 2012, however, the boot camps were discontinued due to a cost reduction program aimed at making the company cash-flow positive. Now, in June 2014, after a change in top management and a desire to regain the innovative edge against its competition has revived the idea, the company's director of Open Innovation & Intrapreneurship is facing three dilemmas: how to reconcile the big business intolerance for failure with failure-prone intrapreneurship, how to design a forward-looking component into intrapreneurship and how to change the design and architecture of the boot camp in its new edition.
Authors :: Simon Parker, Chandra Sekhar Ramasastry
Swot Analysis of "Intrapreneurship at Alcatel-Lucent" written by Simon Parker, Chandra Sekhar Ramasastry includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Intrapreneurship Boot facing as an external strategic factors. Some of the topics covered in Intrapreneurship at Alcatel-Lucent case study are - Strategic Management Strategies, Innovation, IT and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Intrapreneurship at Alcatel-Lucent casestudy better are - – technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, increasing commodity prices, increasing energy prices,
challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Intrapreneurship at Alcatel-Lucent
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Intrapreneurship at Alcatel-Lucent case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Intrapreneurship Boot, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Intrapreneurship Boot 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 Intrapreneurship at Alcatel-Lucent can be done for the following purposes –
1. Strategic planning using facts provided in Intrapreneurship at Alcatel-Lucent case study
2. Improving business portfolio management of Intrapreneurship Boot
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 Intrapreneurship Boot
Strengths Intrapreneurship at Alcatel-Lucent | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Intrapreneurship Boot in Intrapreneurship at Alcatel-Lucent Harvard Business Review case study are -
Learning organization
- Intrapreneurship Boot 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 Intrapreneurship Boot is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Intrapreneurship at Alcatel-Lucent Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Intrapreneurship Boot 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 Intrapreneurship at Alcatel-Lucent HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Intrapreneurship Boot has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Intrapreneurship Boot 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.
Operational resilience
– The operational resilience strategy in the Intrapreneurship at Alcatel-Lucent 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.
Strong track record of project management
– Intrapreneurship Boot is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Intrapreneurship Boot
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Intrapreneurship Boot does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Strategy & Execution industry
– Intrapreneurship at Alcatel-Lucent firm has clearly differentiated products in the market place. This has enabled Intrapreneurship Boot to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Intrapreneurship Boot to invest into research and development (R&D) and innovation.
Ability to lead change in Strategy & Execution field
– Intrapreneurship Boot 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 Intrapreneurship Boot in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Intrapreneurship Boot has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Intrapreneurship at Alcatel-Lucent 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.
Effective Research and Development (R&D)
– Intrapreneurship Boot 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 Intrapreneurship at Alcatel-Lucent - 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 Intrapreneurship Boot 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.
Cross disciplinary teams
– Horizontal connected teams at the Intrapreneurship Boot 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.
Weaknesses Intrapreneurship at Alcatel-Lucent | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Intrapreneurship at Alcatel-Lucent are -
Aligning sales with marketing
– It come across in the case study Intrapreneurship at Alcatel-Lucent 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 Intrapreneurship at Alcatel-Lucent can leverage the sales team experience to cultivate customer relationships as Intrapreneurship Boot is planning to shift buying processes online.
Interest costs
– Compare to the competition, Intrapreneurship Boot 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Simon Parker, Chandra Sekhar Ramasastry suggests that, Intrapreneurship Boot 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Intrapreneurship Boot is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Intrapreneurship at Alcatel-Lucent can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Intrapreneurship Boot 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.
Low market penetration in new markets
– Outside its home market of Intrapreneurship Boot, firm in the HBR case study Intrapreneurship at Alcatel-Lucent needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Intrapreneurship Boot supply chain. Even after few cautionary changes mentioned in the HBR case study - Intrapreneurship at Alcatel-Lucent, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Intrapreneurship Boot vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Intrapreneurship at Alcatel-Lucent, it seems that the employees of Intrapreneurship Boot 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.
Increasing silos among functional specialists
– The organizational structure of Intrapreneurship Boot is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Intrapreneurship Boot needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Intrapreneurship Boot to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Intrapreneurship at Alcatel-Lucent 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 Intrapreneurship Boot 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Intrapreneurship at Alcatel-Lucent, 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 Intrapreneurship at Alcatel-Lucent | 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 Intrapreneurship at Alcatel-Lucent are -
Using analytics as competitive advantage
– Intrapreneurship Boot 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 Intrapreneurship at Alcatel-Lucent - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Intrapreneurship Boot to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Intrapreneurship Boot is facing challenges because of the dominance of functional experts in the organization. Intrapreneurship at Alcatel-Lucent 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.
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. Intrapreneurship Boot can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Intrapreneurship Boot 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, Intrapreneurship at Alcatel-Lucent, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Intrapreneurship Boot 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. Intrapreneurship Boot 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.
Loyalty marketing
– Intrapreneurship Boot 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
– Intrapreneurship Boot can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Intrapreneurship at Alcatel-Lucent 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.
Building a culture of innovation
– managers at Intrapreneurship Boot 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Intrapreneurship Boot 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Intrapreneurship Boot to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Intrapreneurship Boot 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 Intrapreneurship Boot in the consumer business. Now Intrapreneurship Boot can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Intrapreneurship Boot 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 Intrapreneurship Boot to hire the very best people irrespective of their geographical location.
Threats Intrapreneurship at Alcatel-Lucent External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Intrapreneurship at Alcatel-Lucent are -
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 Intrapreneurship Boot.
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 Intrapreneurship Boot business can come under increasing regulations regarding data privacy, data security, etc.
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. Intrapreneurship Boot needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Intrapreneurship Boot with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Intrapreneurship Boot 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 Intrapreneurship at Alcatel-Lucent .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Intrapreneurship at Alcatel-Lucent, Intrapreneurship Boot 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 .
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. Intrapreneurship Boot can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Intrapreneurship Boot 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. Intrapreneurship Boot can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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 Intrapreneurship Boot in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Intrapreneurship Boot 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.
Consumer confidence and its impact on Intrapreneurship Boot 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.
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.
Weighted SWOT Analysis of Intrapreneurship at Alcatel-Lucent 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 Intrapreneurship at Alcatel-Lucent 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 Intrapreneurship at Alcatel-Lucent 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 Intrapreneurship at Alcatel-Lucent 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 Intrapreneurship at Alcatel-Lucent 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 Intrapreneurship Boot needs to make to build a sustainable competitive advantage.
