Case Study Description of RTY Telecom: Network Expansion
Requires real option analysis to analyze a capital expenditure decision by a large regional telecommunications firm. The firm needs to add network capacity for its broadband offering and is trying to decide on how to do this. One approach is simply to purchase this capacity in the spot market, whereas another approach is to buy an expensive piece of equipment from Nortel Networks. The protagonist tries to do an NPV analysis of this equipment. The specific way the equipment functions gives the firm a portfolio of real options on broadband capacity. Therefore, to do the NPV analysis correctly, the protagonist must identify the real options and determine how to value them.
Authors :: George Chacko, Vincent Dessain, Anders Sjoman, Chris Smith
Swot Analysis of "RTY Telecom: Network Expansion" written by George Chacko, Vincent Dessain, Anders Sjoman, Chris Smith includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Npv Equipment facing as an external strategic factors. Some of the topics covered in RTY Telecom: Network Expansion case study are - Strategic Management Strategies, Financial management, Financial markets and Finance & Accounting.
Some of the macro environment factors that can be used to understand the RTY Telecom: Network Expansion casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices,
wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of RTY Telecom: Network Expansion
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in RTY Telecom: Network Expansion case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Npv Equipment, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Npv Equipment 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 RTY Telecom: Network Expansion can be done for the following purposes –
1. Strategic planning using facts provided in RTY Telecom: Network Expansion case study
2. Improving business portfolio management of Npv Equipment
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Npv Equipment
Strengths RTY Telecom: Network Expansion | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Npv Equipment in RTY Telecom: Network Expansion Harvard Business Review case study are -
Effective Research and Development (R&D)
– Npv Equipment 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 RTY Telecom: Network Expansion - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Npv Equipment is present in almost all the verticals within the industry. This has provided firm in RTY Telecom: Network Expansion 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.
Organizational Resilience of Npv Equipment
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Npv Equipment does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Npv Equipment in the sector have low bargaining power. RTY Telecom: Network Expansion has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Npv Equipment to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Npv Equipment is one of the leading recruiters in the industry. Managers in the RTY Telecom: Network Expansion are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Finance & Accounting industry
– RTY Telecom: Network Expansion firm has clearly differentiated products in the market place. This has enabled Npv Equipment to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Npv Equipment to invest into research and development (R&D) and innovation.
Innovation driven organization
– Npv Equipment is one of the most innovative firm in sector. Manager in RTY Telecom: Network Expansion Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Npv Equipment 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 RTY Telecom: Network Expansion HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Npv Equipment has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Npv Equipment to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Npv Equipment has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in RTY Telecom: Network Expansion 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.
Ability to lead change in Finance & Accounting field
– Npv Equipment 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 Npv Equipment in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Npv Equipment 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 Npv Equipment is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in RTY Telecom: Network Expansion Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses RTY Telecom: Network Expansion | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of RTY Telecom: Network Expansion are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Npv Equipment is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study RTY Telecom: Network Expansion can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Npv Equipment 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.
Aligning sales with marketing
– It come across in the case study RTY Telecom: Network Expansion 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 RTY Telecom: Network Expansion can leverage the sales team experience to cultivate customer relationships as Npv Equipment is planning to shift buying processes online.
Need for greater diversity
– Npv Equipment 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.
Low market penetration in new markets
– Outside its home market of Npv Equipment, firm in the HBR case study RTY Telecom: Network Expansion needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Npv Equipment 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 - RTY Telecom: Network Expansion should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Npv Equipment is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Npv Equipment needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Npv Equipment to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Npv Equipment products
– To increase the profitability and margins on the products, Npv Equipment needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the RTY Telecom: Network Expansion HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Npv Equipment has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study RTY Telecom: Network Expansion, in the dynamic environment Npv Equipment has struggled to respond to the nimble upstart competition. Npv Equipment has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Npv Equipment 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 RTY Telecom: Network Expansion | 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 RTY Telecom: Network Expansion are -
Better consumer reach
– The expansion of the 5G network will help Npv Equipment to increase its market reach. Npv Equipment 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.
Creating value in data economy
– The success of analytics program of Npv Equipment has opened avenues for new revenue streams for the organization in the industry. This can help Npv Equipment to build a more holistic ecosystem as suggested in the RTY Telecom: Network Expansion case study. Npv Equipment can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Npv Equipment 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. Npv Equipment 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.
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 Npv Equipment 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.
Using analytics as competitive advantage
– Npv Equipment 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 RTY Telecom: Network Expansion - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Npv Equipment to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Npv Equipment 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Npv Equipment is facing challenges because of the dominance of functional experts in the organization. RTY Telecom: Network Expansion 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.
Buying journey improvements
– Npv Equipment can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. RTY Telecom: Network Expansion 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.
Leveraging digital technologies
– Npv Equipment 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Npv Equipment 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, RTY Telecom: Network Expansion, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Npv Equipment can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Npv Equipment 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 Npv Equipment to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Npv Equipment can develop new processes and procedures in Finance & Accounting 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 RTY Telecom: Network Expansion External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study RTY Telecom: Network Expansion are -
High dependence on third party suppliers
– Npv Equipment 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.
Environmental challenges
– Npv Equipment 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. Npv Equipment can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing wage structure of Npv Equipment
– 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 Npv Equipment.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Npv Equipment in the Finance & Accounting industry. The Finance & Accounting 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Npv Equipment can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study RTY Telecom: Network Expansion, Npv Equipment may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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 Npv Equipment.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Npv Equipment with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Npv Equipment needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Npv Equipment has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Npv Equipment needs to keep up with the evolution of technology in the Finance & Accounting 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.
Shortening product life cycle
– it is one of the major threat that Npv Equipment is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of RTY Telecom: Network Expansion 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 RTY Telecom: Network Expansion 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 RTY Telecom: Network Expansion 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 RTY Telecom: Network Expansion 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 RTY Telecom: Network Expansion 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 Npv Equipment needs to make to build a sustainable competitive advantage.
