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 - – central banks are concerned over increasing inflation, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, increasing commodity prices, cloud computing is disrupting traditional business models,
technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, 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.
Cross disciplinary teams
– Horizontal connected teams at the Malone Tele 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.
Organizational Resilience of Malone Tele
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Malone Tele does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Malone Tele digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Malone Tele 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.
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.
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.
Diverse revenue streams
– Malone Tele is present in almost all the verticals within the industry. This has provided firm in Tele-Communications, Inc. (A): Cascading Miracles 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.
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.
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.
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.
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 -
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.
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.
Aligning sales with marketing
– It come across in the case study Tele-Communications, Inc. (A): Cascading Miracles 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 Tele-Communications, Inc. (A): Cascading Miracles can leverage the sales team experience to cultivate customer relationships as Malone Tele is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Malone Tele, firm in the HBR case study Tele-Communications, Inc. (A): Cascading Miracles needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Tele-Communications, Inc. (A): Cascading Miracles, it seems that the employees of Malone Tele 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.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Malone Tele 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.
Lack of clear differentiation of Malone Tele products
– To increase the profitability and margins on the products, Malone Tele needs to provide more differentiated products than what it is currently offering in the marketplace.
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 -
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.
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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Malone Tele can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Malone Tele in the consumer business. Now Malone Tele can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Malone Tele can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tele-Communications, Inc. (A): Cascading Miracles 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.
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.
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.
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.
Developing new processes and practices
– Malone Tele can develop new processes and procedures in Technology & Operations 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.
Better consumer reach
– The expansion of the 5G network will help Malone Tele to increase its market reach. Malone Tele 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.
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.
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 -
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.
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.
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. Malone Tele 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.
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.
Regulatory challenges
– Malone Tele 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 Technology & Operations industry regulations.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Tele-Communications, Inc. (A): Cascading Miracles, Malone Tele may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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 Malone Tele.
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.
Technology acceleration in Forth Industrial Revolution
– Malone Tele has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Malone Tele needs to keep up with the evolution of technology in the Technology & Operations 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.
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.