TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (A) 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 (A)
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 aa‚¬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 (A)" 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 (A) 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 (A) casestudy better are - – there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices,
increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (A)
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 (A) 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 (A) can be done for the following purposes –
1. Strategic planning using facts provided in TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (A) 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 (A) | 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 (A) Harvard Business Review case study are -
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.
Strong track record of project management
– Telefa Nica is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Finance & Accounting field
– Telefa Nica 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 Telefa Nica in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Cross disciplinary teams
– Horizontal connected teams at the Telefa Nica 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.
Sustainable margins compare to other players in Finance & Accounting industry
– TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (A) firm has clearly differentiated products in the market place. This has enabled Telefa Nica to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Telefa Nica to invest into research and development (R&D) and innovation.
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.
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 (A) 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.
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.
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 (A) 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
– Telefa Nica has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Telefa Nica to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (A) | 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 (A) are -
Need for greater diversity
– Telefa Nica 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.
Skills based hiring
– The stress on hiring functional specialists at Telefa Nica has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to strategic competitive environment developments
– As TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (A) HBR case study mentions - Telefa Nica 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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (A), is just above the industry average. Telefa Nica needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (A) 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 Telefa Nica has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (A) 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 (A) can leverage the sales team experience to cultivate customer relationships as Telefa Nica is planning to shift buying processes online.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Telefa Nica is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (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.
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.
Opportunities TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (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 TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (A) are -
Learning at scale
– Online learning technologies has now opened space for Telefa Nica 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.
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 (A) - 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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Telefa Nica in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
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. Telefa Nica 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. Telefa Nica 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.
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.
Buying journey improvements
– Telefa Nica can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (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.
Loyalty marketing
– Telefa Nica 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.
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.
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.
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.
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.
Threats TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (A) 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 (A) 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Telefa Nica will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Telefa Nica 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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (A), Telefa Nica 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 .
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 Telefa Nica business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
Shortening product life cycle
– it is one of the major threat that Telefa Nica is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Weighted SWOT Analysis of TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (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 TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (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 TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (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 TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (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 TELEFA“NICA'S BID FOR THE MOBILE MARKET IN BRAZIL (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 Telefa Nica needs to make to build a sustainable competitive advantage.
