TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F)
Case A of this series sets the scene for the largest merger and acquisition (M&A) deal in the telecom industry in Brazil and Latin America. Cases B to F follow on by relating the events up to the deal's conclusion. The sequencing of this story creates a sense of urgency for readers and forces them to take position on different questions at different times. Events began in 2003 when a 50:50 joint venture (JV) between Portugal Telecom (PT) and Spain's TelefA³nica acquired 60% of Vivo, the leading Brazilian mobile operator. In the subsequent years, Vivo experienced double-digit annual growth, as it reaped the benefits of its own heavy investments and booming consumer demand. In May 2010, TelefA³nica made a a‚¬5.7 billion cash bid for PT's share of the JV. According to TelefA³nica, this was a full, fair and final offer. How would PT's board regard the bid? On the one hand, it represented a 100% premium on Vivo's pre-announcement stock price. On the other hand, it was a terrible blow to the PT Group's international aspirations. Moreover, the occasionally conflicting views of the general public and the government had the potential to complicate matters further. Lastly, this deal also had important international implications. The case shows how: a) corporate governance practices vary across countries, including environments where there are dual-class shares; and b) the role of corporate governance in ensuring that managers undertake activities that maximize shareholder value as well as serving the needs and strategy of the company. The case also allows for an in-depth analysis of a variety of strategic, organizational, financial and economic issues related to growth strategies through JVs and M&As. The key focus of the case is on the links between finance and strategy.
Swot Analysis of "TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F)" written by Nuno Fernandes includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Telefa Nica facing as an external strategic factors. Some of the topics covered in TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) case study are - Strategic Management Strategies, Financial management, Joint ventures, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) casestudy better are - – increasing energy prices, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, geopolitical disruptions, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google,
challanges to central banks by blockchain based private currencies, technology disruption, etc
Introduction to SWOT Analysis of TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Telefa Nica, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Telefa Nica 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 TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) can be done for the following purposes –
1. Strategic planning using facts provided in TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) case study
2. Improving business portfolio management of Telefa Nica
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 Telefa Nica
Strengths TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Telefa Nica in TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) Harvard Business Review case study are -
High switching costs
– The high switching costs that Telefa Nica 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.
Low bargaining power of suppliers
– Suppliers of Telefa Nica in the sector have low bargaining power. TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Telefa Nica to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Telefa Nica in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Telefa Nica is present in almost all the verticals within the industry. This has provided firm in TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) 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.
Ability to recruit top talent
– Telefa Nica is one of the leading recruiters in the industry. Managers in the TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Telefa Nica digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Telefa Nica 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
– Telefa Nica has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Telefa Nica 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.
Training and development
– Telefa Nica has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) 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)
– Telefa Nica 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 TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Telefa Nica
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Telefa Nica does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Telefa Nica 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 Nuno Fernandes 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.
Learning organization
- Telefa Nica 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 Telefa Nica is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) are -
Interest costs
– Compare to the competition, Telefa Nica 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.
Increasing silos among functional specialists
– The organizational structure of Telefa Nica is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Telefa Nica needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Telefa Nica to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Telefa Nica 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.
High operating costs
– Compare to the competitors, firm in the HBR case study TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) 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 Telefa Nica 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Telefa Nica 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.
Low market penetration in new markets
– Outside its home market of Telefa Nica, firm in the HBR case study TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) 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 TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) can leverage the sales team experience to cultivate customer relationships as Telefa Nica is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Nuno Fernandes suggests that, Telefa Nica 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.
Products dominated business model
– Even though Telefa Nica 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 - TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Telefa Nica products
– To increase the profitability and margins on the products, Telefa Nica needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Telefa Nica supply chain. Even after few cautionary changes mentioned in the HBR case study - TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Telefa Nica vulnerable to further global disruptions in South East Asia.
Opportunities TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) | 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 TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Telefa Nica 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 Telefa Nica to increase its market reach. Telefa Nica 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.
Using analytics as competitive advantage
– Telefa Nica 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 TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Telefa Nica to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Telefa Nica 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.
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. Telefa Nica can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Telefa Nica can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Telefa Nica 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.
Developing new processes and practices
– Telefa Nica 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.
Building a culture of innovation
– managers at Telefa Nica 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 Finance & Accounting segment.
Manufacturing automation
– Telefa Nica can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Telefa Nica can use these opportunities to build new business models that can help the communities that Telefa Nica operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Telefa Nica 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 Telefa Nica to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Telefa Nica 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.
Threats TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) are -
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. Telefa Nica 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
– Telefa Nica 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. Telefa Nica can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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 Telefa Nica.
Regulatory challenges
– Telefa Nica 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 Finance & Accounting industry regulations.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Telefa Nica 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 TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) .
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 Telefa Nica in the Finance & Accounting sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Telefa Nica with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Telefa Nica
– 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 Telefa Nica.
Stagnating economy with rate increase
– Telefa Nica 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.
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. Telefa Nica needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Telefa Nica 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.
Technology acceleration in Forth Industrial Revolution
– Telefa Nica has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Telefa Nica 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.
Weighted SWOT Analysis of TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) 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 TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) 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 TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) 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 TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) 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 TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) 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 Telefa Nica needs to make to build a sustainable competitive advantage.
