SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of SONAECOM TAKEOVER OF PORTUGAL TELECOM (D)
In March 2007, more than a year after Sonaecom had announced its original takeover bid for Portugal Telecom (PT), things had progressed: new investors had come along, the authorities had approved the deal, both parties were holding roadshows, and finally Sonaecom increased its offer price toa‚¬10.50. The day before the final shareholders' meeting (2 March 2007), when the votes would be counted, everyone was doing their own numbers. According to the company's bylaws, votes cast by a single shareholder whose shares exceeded 10% of the share capital would not be counted. Sonaecom's offer was conditional on the removal of this restriction. The removal of this restriction had to be approved by two-thirds of the shareholders present at the AGM. After that, for the offer to be successful, Sonaecom would have to have the support of at least 50.01% of PT's shareholders to its a‚¬10.50 per share offer. This was one of the largest deals ever in the Telecoms sector, and investors from around the world were placing their bets on who was going to win the battle.
Swot Analysis of "SONAECOM TAKEOVER OF PORTUGAL TELECOM (D)" written by Nuno Fernandes includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sonaecom 10.50 facing as an external strategic factors. Some of the topics covered in SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) case study are - Strategic Management Strategies, Financial management, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) casestudy better are - – increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , increasing transportation and logistics costs,
competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, etc
Introduction to SWOT Analysis of SONAECOM TAKEOVER OF PORTUGAL TELECOM (D)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sonaecom 10.50, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sonaecom 10.50 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 SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) can be done for the following purposes –
1. Strategic planning using facts provided in SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) case study
2. Improving business portfolio management of Sonaecom 10.50
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 Sonaecom 10.50
Strengths SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sonaecom 10.50 in SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Sonaecom 10.50 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.
Analytics focus
– Sonaecom 10.50 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.
Sustainable margins compare to other players in Finance & Accounting industry
– SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) firm has clearly differentiated products in the market place. This has enabled Sonaecom 10.50 to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Sonaecom 10.50 to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Sonaecom 10.50 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sonaecom 10.50 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.
Highly skilled collaborators
– Sonaecom 10.50 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 SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Sonaecom 10.50 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sonaecom 10.50 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
– Sonaecom 10.50 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Sonaecom 10.50 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.
Diverse revenue streams
– Sonaecom 10.50 is present in almost all the verticals within the industry. This has provided firm in SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) 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.
Innovation driven organization
– Sonaecom 10.50 is one of the most innovative firm in sector. Manager in SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Sonaecom 10.50 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 SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Sonaecom 10.50 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sonaecom 10.50 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) are -
High cash cycle compare to competitors
Sonaecom 10.50 has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (D), in the dynamic environment Sonaecom 10.50 has struggled to respond to the nimble upstart competition. Sonaecom 10.50 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Sonaecom 10.50 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.
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 Sonaecom 10.50 supply chain. Even after few cautionary changes mentioned in the HBR case study - SONAECOM TAKEOVER OF PORTUGAL TELECOM (D), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sonaecom 10.50 vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) 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 Sonaecom 10.50 's lucrative customers.
Slow to strategic competitive environment developments
– As SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) HBR case study mentions - Sonaecom 10.50 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.
Low market penetration in new markets
– Outside its home market of Sonaecom 10.50, firm in the HBR case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) 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 SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) can leverage the sales team experience to cultivate customer relationships as Sonaecom 10.50 is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Sonaecom 10.50 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Sonaecom 10.50 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Nuno Fernandes suggests that, Sonaecom 10.50 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.
Opportunities SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) | 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 SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) are -
Learning at scale
– Online learning technologies has now opened space for Sonaecom 10.50 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
– Sonaecom 10.50 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sonaecom 10.50 in the consumer business. Now Sonaecom 10.50 can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sonaecom 10.50 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sonaecom 10.50 is facing challenges because of the dominance of functional experts in the organization. SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) 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.
Loyalty marketing
– Sonaecom 10.50 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.
Creating value in data economy
– The success of analytics program of Sonaecom 10.50 has opened avenues for new revenue streams for the organization in the industry. This can help Sonaecom 10.50 to build a more holistic ecosystem as suggested in the SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) case study. Sonaecom 10.50 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Sonaecom 10.50 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. Sonaecom 10.50 can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sonaecom 10.50 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, SONAECOM TAKEOVER OF PORTUGAL TELECOM (D), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sonaecom 10.50 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 Sonaecom 10.50 to hire the very best people irrespective of their geographical location.
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. Sonaecom 10.50 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. Sonaecom 10.50 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sonaecom 10.50 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 SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) are -
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. Sonaecom 10.50 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sonaecom 10.50 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 SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) .
Regulatory challenges
– Sonaecom 10.50 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.
Increasing wage structure of Sonaecom 10.50
– 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 Sonaecom 10.50.
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. Sonaecom 10.50 needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Consumer confidence and its impact on Sonaecom 10.50 demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (D), Sonaecom 10.50 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sonaecom 10.50 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. Sonaecom 10.50 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Sonaecom 10.50 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 Sonaecom 10.50 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Weighted SWOT Analysis of SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) 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 SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) 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 SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) 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 SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) 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 SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) 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 Sonaecom 10.50 needs to make to build a sustainable competitive advantage.
