Case Study Description of Tele-Tichon Ltd.: Corporate Debt Restructuring
Tele-Tichon Limited, a private company in India's telecom equipment manufacturing sector, was in deep financial trouble, after having experienced declining financial health for nearly 10 years. The company had made an attempt at corporate debt restructuring (CDR) six years earlier but its restructuring plan had not been approved. Now, with the company in deeper financial crisis and unable to service its mounting debt and interest burden, the chief executive officer and chief financial officer must weigh the various options for bringing their company back into the black. Authors are affiliated with Institute of Management Technology.
Swot Analysis of "Tele-Tichon Ltd.: Corporate Debt Restructuring" written by Sajjan Raj Singhvi, Alok Kastia includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tichon Tele facing as an external strategic factors. Some of the topics covered in Tele-Tichon Ltd.: Corporate Debt Restructuring case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Tele-Tichon Ltd.: Corporate Debt Restructuring casestudy better are - – supply chains are disrupted by pandemic , increasing commodity prices, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, there is backlash against globalization, increasing household debt because of falling income levels,
digital marketing is dominated by two big players Facebook and Google, increasing energy prices, etc
Introduction to SWOT Analysis of Tele-Tichon Ltd.: Corporate Debt Restructuring
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tele-Tichon Ltd.: Corporate Debt Restructuring case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tichon Tele, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tichon 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-Tichon Ltd.: Corporate Debt Restructuring can be done for the following purposes –
1. Strategic planning using facts provided in Tele-Tichon Ltd.: Corporate Debt Restructuring case study
2. Improving business portfolio management of Tichon Tele
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 Tichon Tele
Strengths Tele-Tichon Ltd.: Corporate Debt Restructuring | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tichon Tele in Tele-Tichon Ltd.: Corporate Debt Restructuring Harvard Business Review case study are -
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Tichon Tele digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tichon 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.
Cross disciplinary teams
– Horizontal connected teams at the Tichon 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.
High switching costs
– The high switching costs that Tichon 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.
Strong track record of project management
– Tichon 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.
Training and development
– Tichon Tele has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Tele-Tichon Ltd.: Corporate Debt Restructuring 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.
High brand equity
– Tichon Tele has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tichon Tele to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Tichon Tele in the sector have low bargaining power. Tele-Tichon Ltd.: Corporate Debt Restructuring has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tichon Tele to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Tele-Tichon Ltd.: Corporate Debt Restructuring 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.
Innovation driven organization
– Tichon Tele is one of the most innovative firm in sector. Manager in Tele-Tichon Ltd.: Corporate Debt Restructuring Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Tichon 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 Tichon Tele is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Tele-Tichon Ltd.: Corporate Debt Restructuring Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Tichon Tele has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tichon 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.
Ability to recruit top talent
– Tichon Tele is one of the leading recruiters in the industry. Managers in the Tele-Tichon Ltd.: Corporate Debt Restructuring are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Tele-Tichon Ltd.: Corporate Debt Restructuring | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tele-Tichon Ltd.: Corporate Debt Restructuring are -
Low market penetration in new markets
– Outside its home market of Tichon Tele, firm in the HBR case study Tele-Tichon Ltd.: Corporate Debt Restructuring needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Tichon Tele has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Tele-Tichon Ltd.: Corporate Debt Restructuring should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Tele-Tichon Ltd.: Corporate Debt Restructuring, 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 decision making process
– As mentioned earlier in the report, Tichon 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. Tichon 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-Tichon Ltd.: Corporate Debt Restructuring 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 Tichon Tele has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Tele-Tichon Ltd.: Corporate Debt Restructuring HBR case study mentions - Tichon 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tichon Tele is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Tele-Tichon Ltd.: Corporate Debt Restructuring 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 bargaining power of channel partners
– Because of the regulatory requirements, Sajjan Raj Singhvi, Alok Kastia suggests that, Tichon 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Tichon Tele needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High operating costs
– Compare to the competitors, firm in the HBR case study Tele-Tichon Ltd.: Corporate Debt Restructuring 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 Tichon Tele 's lucrative customers.
Interest costs
– Compare to the competition, Tichon 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.
Opportunities Tele-Tichon Ltd.: Corporate Debt Restructuring | 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-Tichon Ltd.: Corporate Debt Restructuring 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. Tichon Tele can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Tichon Tele 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.
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 Tichon Tele 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tichon 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 Tichon Tele to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Tichon Tele has opened avenues for new revenue streams for the organization in the industry. This can help Tichon Tele to build a more holistic ecosystem as suggested in the Tele-Tichon Ltd.: Corporate Debt Restructuring case study. Tichon Tele can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Tichon 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. Tichon 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.
Loyalty marketing
– Tichon 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.
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 Tichon Tele in the consumer business. Now Tichon Tele can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Tichon Tele to increase its market reach. Tichon 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
– Tichon 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.
Using analytics as competitive advantage
– Tichon Tele 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 Tele-Tichon Ltd.: Corporate Debt Restructuring - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tichon Tele to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tichon 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 Tichon Tele can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Tele-Tichon Ltd.: Corporate Debt Restructuring External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tele-Tichon Ltd.: Corporate Debt Restructuring are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tichon Tele 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tichon 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-Tichon Ltd.: Corporate Debt Restructuring .
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 Tichon Tele in the Finance & Accounting sector and impact the bottomline of the organization.
Regulatory challenges
– Tichon 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 Finance & Accounting industry regulations.
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 Tichon Tele business can come under increasing regulations regarding data privacy, data security, etc.
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. Tichon Tele can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Tichon 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.
Technology acceleration in Forth Industrial Revolution
– Tichon Tele has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Tichon Tele 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.
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. Tichon Tele needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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-Tichon Ltd.: Corporate Debt Restructuring, Tichon 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 Finance & Accounting .
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 Tichon Tele.
High dependence on third party suppliers
– Tichon 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 Tichon 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.
Weighted SWOT Analysis of Tele-Tichon Ltd.: Corporate Debt Restructuring 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-Tichon Ltd.: Corporate Debt Restructuring 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-Tichon Ltd.: Corporate Debt Restructuring 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-Tichon Ltd.: Corporate Debt Restructuring 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-Tichon Ltd.: Corporate Debt Restructuring 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 Tichon Tele needs to make to build a sustainable competitive advantage.
