Case Study Description of Tele-Communications, Inc. (A): Cascading Miracles
John Malone, CEO of Tele-Communications, Inc. (TCI), the largest U.S. cable television company, is in the midst of a strategic and operational turnaround. TCI has been losing market share to direct-to-home satellite broadcasters, and Malone is considering a bold new technology strategy to stem the share loss.
Swot Analysis of "Tele-Communications, Inc. (A): Cascading Miracles" written by Thomas R. Eisenmann includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Malone Tele facing as an external strategic factors. Some of the topics covered in Tele-Communications, Inc. (A): Cascading Miracles case study are - Strategic Management Strategies, Managing people, Marketing, Reorganization, Strategy execution, Technology and Technology & Operations.
Some of the macro environment factors that can be used to understand the Tele-Communications, Inc. (A): Cascading Miracles casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, increasing energy prices, geopolitical disruptions,
digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Tele-Communications, Inc. (A): Cascading Miracles
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tele-Communications, Inc. (A): Cascading Miracles case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Malone Tele, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Malone Tele 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 Tele-Communications, Inc. (A): Cascading Miracles can be done for the following purposes –
1. Strategic planning using facts provided in Tele-Communications, Inc. (A): Cascading Miracles case study
2. Improving business portfolio management of Malone Tele
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Malone Tele
Strengths Tele-Communications, Inc. (A): Cascading Miracles | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Malone Tele in Tele-Communications, Inc. (A): Cascading Miracles Harvard Business Review case study are -
Successful track record of launching new products
– Malone Tele has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Malone Tele 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.
High switching costs
– The high switching costs that Malone Tele 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.
Superior customer experience
– The customer experience strategy of Malone Tele in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Malone Tele has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Malone Tele to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Malone Tele is one of the most innovative firm in sector. Manager in Tele-Communications, Inc. (A): Cascading Miracles Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Technology & Operations field
– Malone Tele 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 Malone Tele in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Technology & Operations industry
– Tele-Communications, Inc. (A): Cascading Miracles firm has clearly differentiated products in the market place. This has enabled Malone Tele to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Malone Tele to invest into research and development (R&D) and innovation.
Strong track record of project management
– Malone Tele is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Malone Tele in the sector have low bargaining power. Tele-Communications, Inc. (A): Cascading Miracles has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Malone Tele to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Malone Tele 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 Tele-Communications, Inc. (A): Cascading Miracles HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Malone Tele 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 Malone Tele is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Tele-Communications, Inc. (A): Cascading Miracles Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Malone Tele 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 Tele-Communications, Inc. (A): Cascading Miracles - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Tele-Communications, Inc. (A): Cascading Miracles | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tele-Communications, Inc. (A): Cascading Miracles are -
High bargaining power of channel partners
– Because of the regulatory requirements, Thomas R. Eisenmann suggests that, Malone Tele 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.
No frontier risks strategy
– After analyzing the HBR case study Tele-Communications, Inc. (A): Cascading Miracles, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Tele-Communications, Inc. (A): Cascading Miracles, is just above the industry average. Malone Tele 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.
Increasing silos among functional specialists
– The organizational structure of Malone Tele is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Malone Tele needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Malone Tele to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Tele-Communications, Inc. (A): Cascading Miracles 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 Malone Tele 's lucrative customers.
Slow to strategic competitive environment developments
– As Tele-Communications, Inc. (A): Cascading Miracles HBR case study mentions - Malone Tele 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.
Interest costs
– Compare to the competition, Malone Tele 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.
Slow decision making process
– As mentioned earlier in the report, Malone Tele has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Malone Tele even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Malone Tele is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Tele-Communications, Inc. (A): Cascading Miracles can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Tele-Communications, Inc. (A): Cascading Miracles 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 Malone Tele has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Malone Tele has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities Tele-Communications, Inc. (A): Cascading Miracles | 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 Tele-Communications, Inc. (A): Cascading Miracles are -
Building a culture of innovation
– managers at Malone Tele 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 Technology & Operations segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Malone Tele 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 Malone Tele to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Malone Tele 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.
Creating value in data economy
– The success of analytics program of Malone Tele has opened avenues for new revenue streams for the organization in the industry. This can help Malone Tele to build a more holistic ecosystem as suggested in the Tele-Communications, Inc. (A): Cascading Miracles case study. Malone Tele can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Malone Tele 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 Malone Tele 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
– Malone Tele can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
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. Malone Tele 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, Malone Tele 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, Tele-Communications, Inc. (A): Cascading Miracles, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Malone Tele in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Loyalty marketing
– Malone Tele 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
– Malone Tele 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Malone Tele 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. Malone Tele 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.
Threats Tele-Communications, Inc. (A): Cascading Miracles External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tele-Communications, Inc. (A): Cascading Miracles are -
Increasing wage structure of Malone Tele
– 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 Malone Tele.
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 Malone Tele business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Malone Tele can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Malone Tele with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Malone Tele 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.
Consumer confidence and its impact on Malone Tele 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Malone Tele 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 Tele-Communications, Inc. (A): Cascading Miracles .
Shortening product life cycle
– it is one of the major threat that Malone Tele is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Malone Tele needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Malone Tele in the Technology & Operations industry. The Technology & Operations 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.
Stagnating economy with rate increase
– Malone Tele 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.
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 Malone Tele in the Technology & Operations sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Tele-Communications, Inc. (A): Cascading Miracles 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 Tele-Communications, Inc. (A): Cascading Miracles 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 Tele-Communications, Inc. (A): Cascading Miracles 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 Tele-Communications, Inc. (A): Cascading Miracles 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 Tele-Communications, Inc. (A): Cascading Miracles 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 Malone Tele needs to make to build a sustainable competitive advantage.