Tata Communications' Acquisition of Tyco Global Network (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tata Communications' Acquisition of Tyco Global Network (A)
In 2004, Tata Communications (TCL) was trying to act on its strategic intent to become a globally connected network provider. It had two alternatives: build or buy. The build option would provide TCL with a chance to develop its own network under its own terms. The possible acquisition of the Tyco Global Network (TGN), however, provided a unique opportunity for TCL to establish this global position quickly. As one of the largest global networks at the time of the case, the TGN was a limited asset. The acquisition of the TGN would catapult TCL into being a top player in global Internet connectivity. Even though the acquisition price was low, the associated liabilities and risks could make this a substantially expensive acquisition for TCL. Should TCL negotiate with Tyco? If yes, what would be an acceptable position to proceed with the deal? How should TCL plan for the mitigation of risks and uncertainties? If not, what would be the consequences of losing the TGN opportunity, particularly if a competitor acquired it? Andrew Karl Delios is affiliated with National University of Singapore. Srinivasa Addepalli is affiliated with Indian Institute of Management, Ahmedabad.
Authors :: Andrew Karl Delios, Srinivasa Addepalli
Swot Analysis of "Tata Communications' Acquisition of Tyco Global Network (A)" written by Andrew Karl Delios, Srinivasa Addepalli includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tcl Tgn facing as an external strategic factors. Some of the topics covered in Tata Communications' Acquisition of Tyco Global Network (A) case study are - Strategic Management Strategies, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Tata Communications' Acquisition of Tyco Global Network (A) casestudy better are - – there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, technology disruption, increasing energy prices,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Tata Communications' Acquisition of Tyco Global Network (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tata Communications' Acquisition of Tyco Global Network (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tcl Tgn, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tcl Tgn 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 Tata Communications' Acquisition of Tyco Global Network (A) can be done for the following purposes –
1. Strategic planning using facts provided in Tata Communications' Acquisition of Tyco Global Network (A) case study
2. Improving business portfolio management of Tcl Tgn
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 Tcl Tgn
Strengths Tata Communications' Acquisition of Tyco Global Network (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tcl Tgn in Tata Communications' Acquisition of Tyco Global Network (A) Harvard Business Review case study are -
Highly skilled collaborators
– Tcl Tgn 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 Tata Communications' Acquisition of Tyco Global Network (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Tcl Tgn is present in almost all the verticals within the industry. This has provided firm in Tata Communications' Acquisition of Tyco Global Network (A) 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Tcl Tgn digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tcl Tgn 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
– Tcl Tgn has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tcl Tgn 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.
Effective Research and Development (R&D)
– Tcl Tgn 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 Tata Communications' Acquisition of Tyco Global Network (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Strategy & Execution industry
– Tata Communications' Acquisition of Tyco Global Network (A) firm has clearly differentiated products in the market place. This has enabled Tcl Tgn to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Tcl Tgn to invest into research and development (R&D) and innovation.
Analytics focus
– Tcl Tgn 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 Andrew Karl Delios, Srinivasa Addepalli 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.
Cross disciplinary teams
– Horizontal connected teams at the Tcl Tgn 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.
High brand equity
– Tcl Tgn has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tcl Tgn to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Strategy & Execution field
– Tcl Tgn 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 Tcl Tgn in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Tcl Tgn
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tcl Tgn does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Tcl Tgn 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 Tcl Tgn is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Tata Communications' Acquisition of Tyco Global Network (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Tata Communications' Acquisition of Tyco Global Network (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tata Communications' Acquisition of Tyco Global Network (A) are -
Slow to strategic competitive environment developments
– As Tata Communications' Acquisition of Tyco Global Network (A) HBR case study mentions - Tcl Tgn 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.
High cash cycle compare to competitors
Tcl Tgn 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Tata Communications' Acquisition of Tyco Global Network (A), in the dynamic environment Tcl Tgn has struggled to respond to the nimble upstart competition. Tcl Tgn has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Tcl Tgn 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
– Tcl Tgn 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Tata Communications' Acquisition of Tyco Global Network (A) 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 Tcl Tgn 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tcl Tgn is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Tata Communications' Acquisition of Tyco Global Network (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Tcl Tgn products
– To increase the profitability and margins on the products, Tcl Tgn needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Tcl Tgn, firm in the HBR case study Tata Communications' Acquisition of Tyco Global Network (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Tata Communications' Acquisition of Tyco Global Network (A), it seems that the employees of Tcl Tgn 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Tcl Tgn 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.
Opportunities Tata Communications' Acquisition of Tyco Global Network (A) | 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 Tata Communications' Acquisition of Tyco Global Network (A) are -
Leveraging digital technologies
– Tcl Tgn 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.
Loyalty marketing
– Tcl Tgn 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.
Using analytics as competitive advantage
– Tcl Tgn 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 Tata Communications' Acquisition of Tyco Global Network (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tcl Tgn to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Tcl Tgn can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Tcl Tgn 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tcl Tgn 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 Tcl Tgn to hire the very best people irrespective of their geographical location.
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. Tcl Tgn can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tcl Tgn 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, Tata Communications' Acquisition of Tyco Global Network (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Tcl Tgn 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.
Learning at scale
– Online learning technologies has now opened space for Tcl Tgn to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tcl Tgn 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.
Buying journey improvements
– Tcl Tgn can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tata Communications' Acquisition of Tyco Global Network (A) 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tcl Tgn can use these opportunities to build new business models that can help the communities that Tcl Tgn operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats Tata Communications' Acquisition of Tyco Global Network (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tata Communications' Acquisition of Tyco Global Network (A) are -
Shortening product life cycle
– it is one of the major threat that Tcl Tgn is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tcl Tgn with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Tcl Tgn 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.
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. Tcl Tgn can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Tcl Tgn needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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 Tcl Tgn business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Tcl Tgn 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. Tcl Tgn can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tcl Tgn 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 Tata Communications' Acquisition of Tyco Global Network (A) .
Technology acceleration in Forth Industrial Revolution
– Tcl Tgn has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Tcl Tgn 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.
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 Tcl Tgn in the Strategy & Execution sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Tata Communications' Acquisition of Tyco Global Network (A), Tcl Tgn 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 .
Regulatory challenges
– Tcl Tgn 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.
Weighted SWOT Analysis of Tata Communications' Acquisition of Tyco Global Network (A) 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 Tata Communications' Acquisition of Tyco Global Network (A) 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 Tata Communications' Acquisition of Tyco Global Network (A) 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 Tata Communications' Acquisition of Tyco Global Network (A) 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 Tata Communications' Acquisition of Tyco Global Network (A) 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 Tcl Tgn needs to make to build a sustainable competitive advantage.