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 - – central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions,
there is backlash against globalization, challanges to central banks by blockchain based private currencies, 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 -
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.
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.
Operational resilience
– The operational resilience strategy in the SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to lead change in Finance & Accounting field
– Sonaecom 10.50 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 Sonaecom 10.50 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Sonaecom 10.50
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sonaecom 10.50 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Learning organization
- Sonaecom 10.50 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 Sonaecom 10.50 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Sonaecom 10.50 in the sector have low bargaining power. SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sonaecom 10.50 to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
Training and development
– Sonaecom 10.50 has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) 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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (D), is just above the industry average. Sonaecom 10.50 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.
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.
No frontier risks strategy
– After analyzing the HBR case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (D), it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sonaecom 10.50 is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (D) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (D), it seems that the employees of Sonaecom 10.50 don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
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.
Need for greater diversity
– Sonaecom 10.50 has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Aligning sales with marketing
– It come across in the case study 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.
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.
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 -
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.
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.
Manufacturing automation
– Sonaecom 10.50 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.
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.
Leveraging digital technologies
– Sonaecom 10.50 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
– 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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sonaecom 10.50 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.
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.
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. Sonaecom 10.50 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
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 -
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.
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.
Technology acceleration in Forth Industrial Revolution
– Sonaecom 10.50 has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Sonaecom 10.50 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.
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.
Stagnating economy with rate increase
– Sonaecom 10.50 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.
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) .
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.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Sonaecom 10.50 is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Sonaecom 10.50.
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.
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.