Nortel: Re-Inventing Information Systems SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Nortel: Re-Inventing Information Systems
Describes the situation faced by Nortel's Information Systems (I/S) department as the company tried to respond to changes in its environment. With the evolution and convergence in the telecommunications industry and expansion onto the global stage, the company saw the need to improve integration across business units. The I/S department was charged with helping the business units reengineer their process. Brad Taylor, director of I/S, is trying to reengineer the I/S department itself so that it could fulfill the new role. Unfortunately, the existing structure--a fragmented I/S group struggling to meet existing expectations--was poorly positioned for this role. Brad's dilemma was not only to change his own department, but to change the way in which it related to the rest of the company. Can be used to discuss the role and structure of an I/S department. Can also be used as the basis for a class on business process reengineering and/or managing organizational change.
Swot Analysis of "Nortel: Re-Inventing Information Systems" written by E.F. Peter Newson, Olga Volkoff includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Department Reengineer facing as an external strategic factors. Some of the topics covered in Nortel: Re-Inventing Information Systems case study are - Strategic Management Strategies, IT, Reorganization and Technology & Operations.
Some of the macro environment factors that can be used to understand the Nortel: Re-Inventing Information Systems casestudy better are - – there is increasing trade war between United States & China, wage bills are increasing, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%,
banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Nortel: Re-Inventing Information Systems
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nortel: Re-Inventing Information Systems case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Department Reengineer, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Department Reengineer 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 Nortel: Re-Inventing Information Systems can be done for the following purposes –
1. Strategic planning using facts provided in Nortel: Re-Inventing Information Systems case study
2. Improving business portfolio management of Department Reengineer
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 Department Reengineer
Strengths Nortel: Re-Inventing Information Systems | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Department Reengineer in Nortel: Re-Inventing Information Systems Harvard Business Review case study are -
Successful track record of launching new products
– Department Reengineer has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Department Reengineer 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 brand equity
– Department Reengineer has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Department Reengineer to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Department Reengineer is one of the leading recruiters in the industry. Managers in the Nortel: Re-Inventing Information Systems are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Department Reengineer 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.
Learning organization
- Department Reengineer 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 Department Reengineer is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nortel: Re-Inventing Information Systems Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Department Reengineer has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nortel: Re-Inventing Information Systems 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.
Strong track record of project management
– Department Reengineer is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Department Reengineer 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.
Effective Research and Development (R&D)
– Department Reengineer 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 Nortel: Re-Inventing Information Systems - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Department Reengineer 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 E.F. Peter Newson, Olga Volkoff 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 Technology & Operations industry
– Nortel: Re-Inventing Information Systems firm has clearly differentiated products in the market place. This has enabled Department Reengineer to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Department Reengineer to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Department Reengineer is present in almost all the verticals within the industry. This has provided firm in Nortel: Re-Inventing Information Systems 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.
Weaknesses Nortel: Re-Inventing Information Systems | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nortel: Re-Inventing Information Systems are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Department Reengineer is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Nortel: Re-Inventing Information Systems 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 cash cycle compare to competitors
Department Reengineer 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.
Interest costs
– Compare to the competition, Department Reengineer 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nortel: Re-Inventing Information Systems, is just above the industry average. Department Reengineer 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 Department Reengineer is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Department Reengineer needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Department Reengineer 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 Nortel: Re-Inventing Information Systems 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 Department Reengineer 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Nortel: Re-Inventing Information Systems 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 Department Reengineer has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Department Reengineer 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. Department Reengineer 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 bargaining power of channel partners
– Because of the regulatory requirements, E.F. Peter Newson, Olga Volkoff suggests that, Department Reengineer 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.
Low market penetration in new markets
– Outside its home market of Department Reengineer, firm in the HBR case study Nortel: Re-Inventing Information Systems needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Nortel: Re-Inventing Information Systems, it seems that the employees of Department Reengineer 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.
Opportunities Nortel: Re-Inventing Information Systems | 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 Nortel: Re-Inventing Information Systems 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. Department Reengineer can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Department Reengineer has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Nortel: Re-Inventing Information Systems - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Department Reengineer to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Department Reengineer to increase its market reach. Department Reengineer 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Department Reengineer can use these opportunities to build new business models that can help the communities that Department Reengineer operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Buying journey improvements
– Department Reengineer can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nortel: Re-Inventing Information Systems 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Department Reengineer 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 Department Reengineer to hire the very best people irrespective of their geographical location.
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. Department Reengineer 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. Department Reengineer 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.
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 Department Reengineer in the consumer business. Now Department Reengineer can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Department Reengineer 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Department Reengineer 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.
Developing new processes and practices
– Department Reengineer 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.
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. Department Reengineer can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Department Reengineer has opened avenues for new revenue streams for the organization in the industry. This can help Department Reengineer to build a more holistic ecosystem as suggested in the Nortel: Re-Inventing Information Systems case study. Department Reengineer can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Nortel: Re-Inventing Information Systems External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nortel: Re-Inventing Information Systems are -
Environmental challenges
– Department Reengineer needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Department Reengineer can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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 Department Reengineer in the Technology & Operations sector and impact the bottomline of the organization.
Consumer confidence and its impact on Department Reengineer 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 Nortel: Re-Inventing Information Systems, Department Reengineer 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 .
Technology acceleration in Forth Industrial Revolution
– Department Reengineer has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Department Reengineer 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Department Reengineer 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 Nortel: Re-Inventing Information Systems .
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 Department Reengineer business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Department Reengineer 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Department Reengineer 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.
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.
Regulatory challenges
– Department Reengineer 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.
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 Department Reengineer.
Weighted SWOT Analysis of Nortel: Re-Inventing Information Systems 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 Nortel: Re-Inventing Information Systems 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 Nortel: Re-Inventing Information Systems 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 Nortel: Re-Inventing Information Systems 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 Nortel: Re-Inventing Information Systems 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 Department Reengineer needs to make to build a sustainable competitive advantage.