Alcatel in China: Business as an Adventure SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Alcatel in China: Business as an Adventure
Take the world's most challenging market. Concentrate almost all your previously dispersed assets--12 joint ventures and wholly owned businesses--into one basket. Move the management of all of your regional activities to this location. Place access to your worldwide intellectual property on the table, and add $312 million for the portion of equity in a joint venture that gets you up to 50% plus one share. Then turn the venture's structure and governance on its head to build not only the most technically and sales-aggressive telecom competitor in the Chinese market, but one that also gives you access to Chinese brains and brawn in producing a global product for the global market. A recipe for revolution across the global marketplace or yet another misguided investment in China's elusive dream? Alcatel, France's venerable telecom giant, is betting the former. A 2004 EFMD award winner.
Authors :: William A. Fischer, Denis F. Simon, Katherine Xin, Janet Carmosky
Swot Analysis of "Alcatel in China: Business as an Adventure" written by William A. Fischer, Denis F. Simon, Katherine Xin, Janet Carmosky includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Alcatel Brawn facing as an external strategic factors. Some of the topics covered in Alcatel in China: Business as an Adventure case study are - Strategic Management Strategies, Intellectual property, Joint ventures, Strategic planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Alcatel in China: Business as an Adventure casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, technology disruption, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, increasing household debt because of falling income levels, there is backlash against globalization,
cloud computing is disrupting traditional business models, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Alcatel in China: Business as an Adventure
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Alcatel in China: Business as an Adventure case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Alcatel Brawn, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Alcatel Brawn 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 Alcatel in China: Business as an Adventure can be done for the following purposes –
1. Strategic planning using facts provided in Alcatel in China: Business as an Adventure case study
2. Improving business portfolio management of Alcatel Brawn
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 Alcatel Brawn
Strengths Alcatel in China: Business as an Adventure | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Alcatel Brawn in Alcatel in China: Business as an Adventure Harvard Business Review case study are -
Learning organization
- Alcatel Brawn 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 Alcatel Brawn is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Alcatel in China: Business as an Adventure Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Alcatel Brawn is one of the most innovative firm in sector. Manager in Alcatel in China: Business as an Adventure Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Alcatel Brawn has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Alcatel Brawn 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.
Ability to recruit top talent
– Alcatel Brawn is one of the leading recruiters in the industry. Managers in the Alcatel in China: Business as an Adventure are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Alcatel Brawn has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Alcatel Brawn to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Alcatel Brawn is present in almost all the verticals within the industry. This has provided firm in Alcatel in China: Business as an Adventure case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Analytics focus
– Alcatel Brawn 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 William A. Fischer, Denis F. Simon, Katherine Xin, Janet Carmosky 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Alcatel in China: Business as an Adventure firm has clearly differentiated products in the market place. This has enabled Alcatel Brawn to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Alcatel Brawn to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Alcatel Brawn 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.
Strong track record of project management
– Alcatel Brawn 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
– Alcatel Brawn has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Alcatel in China: Business as an Adventure 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.
Superior customer experience
– The customer experience strategy of Alcatel Brawn in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Alcatel in China: Business as an Adventure | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Alcatel in China: Business as an Adventure are -
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 Alcatel Brawn supply chain. Even after few cautionary changes mentioned in the HBR case study - Alcatel in China: Business as an Adventure, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Alcatel Brawn vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Alcatel in China: Business as an Adventure 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 Alcatel Brawn 's lucrative customers.
High cash cycle compare to competitors
Alcatel Brawn 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.
Products dominated business model
– Even though Alcatel Brawn 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 - Alcatel in China: Business as an Adventure should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Alcatel in China: Business as an Adventure, in the dynamic environment Alcatel Brawn has struggled to respond to the nimble upstart competition. Alcatel Brawn has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Alcatel Brawn 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.
Aligning sales with marketing
– It come across in the case study Alcatel in China: Business as an Adventure 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 Alcatel in China: Business as an Adventure can leverage the sales team experience to cultivate customer relationships as Alcatel Brawn is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, William A. Fischer, Denis F. Simon, Katherine Xin, Janet Carmosky suggests that, Alcatel Brawn 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.
Interest costs
– Compare to the competition, Alcatel Brawn 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.
Slow decision making process
– As mentioned earlier in the report, Alcatel Brawn has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Alcatel Brawn even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Capital Spending Reduction
– Even during the low interest decade, Alcatel Brawn 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.
Opportunities Alcatel in China: Business as an Adventure | 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 Alcatel in China: Business as an Adventure are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Alcatel Brawn 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.
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 Alcatel Brawn 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Alcatel Brawn 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.
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. Alcatel Brawn can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Alcatel Brawn to increase its market reach. Alcatel Brawn 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.
Buying journey improvements
– Alcatel Brawn can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Alcatel in China: Business as an Adventure 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.
Manufacturing automation
– Alcatel Brawn can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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. Alcatel Brawn 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. Alcatel Brawn 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Alcatel Brawn can use these opportunities to build new business models that can help the communities that Alcatel Brawn operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Leveraging digital technologies
– Alcatel Brawn 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.
Creating value in data economy
– The success of analytics program of Alcatel Brawn has opened avenues for new revenue streams for the organization in the industry. This can help Alcatel Brawn to build a more holistic ecosystem as suggested in the Alcatel in China: Business as an Adventure case study. Alcatel Brawn can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Alcatel Brawn 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.
Developing new processes and practices
– Alcatel Brawn 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.
Threats Alcatel in China: Business as an Adventure External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Alcatel in China: Business as an Adventure are -
Environmental challenges
– Alcatel Brawn 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. Alcatel Brawn can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing wage structure of Alcatel Brawn
– 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 Alcatel Brawn.
Shortening product life cycle
– it is one of the major threat that Alcatel Brawn is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Alcatel Brawn has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Alcatel Brawn 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.
High dependence on third party suppliers
– Alcatel Brawn 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Alcatel Brawn 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 Alcatel in China: Business as an Adventure .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Alcatel Brawn in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
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. Alcatel Brawn needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Alcatel in China: Business as an Adventure, Alcatel Brawn 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. Alcatel Brawn can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Alcatel Brawn business can come under increasing regulations regarding data privacy, data security, etc.
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 Alcatel Brawn.
Weighted SWOT Analysis of Alcatel in China: Business as an Adventure 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 Alcatel in China: Business as an Adventure 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 Alcatel in China: Business as an Adventure 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 Alcatel in China: Business as an Adventure 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 Alcatel in China: Business as an Adventure 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 Alcatel Brawn needs to make to build a sustainable competitive advantage.
