China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition
The Chinese operations of Alcatel, a global communications solution provider based in France, were faced with strong local competition and a difficult market. It remained unclear how Alcatel would be able to recover growth in the Chinese market. Initiatives were underway to increase focus on services over equipment, to increase Chinese research and development presence, and to merge with U.S. competitor Lucent.
Authors :: Laura Alfaro, Rafael Di Tella, Ingrid Vogel
Swot Analysis of "China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition" written by Laura Alfaro, Rafael Di Tella, Ingrid Vogel includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Alcatel Float facing as an external strategic factors. Some of the topics covered in China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition case study are - Strategic Management Strategies, Currency, Economics and Global Business.
Some of the macro environment factors that can be used to understand the China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, increasing household debt because of falling income levels, increasing commodity prices,
technology disruption, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Alcatel Float, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Alcatel Float 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 China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition can be done for the following purposes –
1. Strategic planning using facts provided in China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition case study
2. Improving business portfolio management of Alcatel Float
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Alcatel Float
Strengths China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Alcatel Float in China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition Harvard Business Review case study are -
Innovation driven organization
– Alcatel Float is one of the most innovative firm in sector. Manager in China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Alcatel Float has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Alcatel Float 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.
Learning organization
- Alcatel Float 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 Alcatel Float is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Global Business field
– Alcatel Float 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 Alcatel Float in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Alcatel Float is present in almost all the verticals within the industry. This has provided firm in China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition 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.
Highly skilled collaborators
– Alcatel Float 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 China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Alcatel Float 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.
Operational resilience
– The operational resilience strategy in the China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Alcatel Float digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Alcatel Float 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.
Organizational Resilience of Alcatel Float
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Alcatel Float does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Alcatel Float is one of the leading recruiters in the industry. Managers in the China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition 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 Alcatel Float 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.
Weaknesses China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition, in the dynamic environment Alcatel Float has struggled to respond to the nimble upstart competition. Alcatel Float has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Alcatel Float is dominated by functional specialists. It is not different from other players in the Global Business segment. Alcatel Float needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Alcatel Float to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition 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 Alcatel Float has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition 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 Alcatel Float 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Laura Alfaro, Rafael Di Tella, Ingrid Vogel suggests that, Alcatel Float 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.
Skills based hiring
– The stress on hiring functional specialists at Alcatel Float 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.
Products dominated business model
– Even though Alcatel Float 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 - China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Alcatel Float 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition, it seems that the employees of Alcatel Float 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition, is just above the industry average. Alcatel Float 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Alcatel Float supply chain. Even after few cautionary changes mentioned in the HBR case study - China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Alcatel Float vulnerable to further global disruptions in South East Asia.
Opportunities China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition | 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 China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition are -
Leveraging digital technologies
– Alcatel Float 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.
Building a culture of innovation
– managers at Alcatel Float 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 Global Business segment.
Creating value in data economy
– The success of analytics program of Alcatel Float has opened avenues for new revenue streams for the organization in the industry. This can help Alcatel Float to build a more holistic ecosystem as suggested in the China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition case study. Alcatel Float can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Alcatel Float 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 China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Alcatel Float to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Alcatel Float can develop new processes and procedures in Global Business 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 Global Business industry, but it has also influenced the consumer preferences. Alcatel Float 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 Alcatel Float in the consumer business. Now Alcatel Float can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Alcatel Float 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Alcatel Float is facing challenges because of the dominance of functional experts in the organization. China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Alcatel Float 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, China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Alcatel Float can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Alcatel Float to increase its market reach. Alcatel Float 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.
Buying journey improvements
– Alcatel Float can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition 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.
Threats China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition are -
Technology acceleration in Forth Industrial Revolution
– Alcatel Float has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Alcatel Float needs to keep up with the evolution of technology in the Global Business 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition, Alcatel Float may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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 Alcatel Float business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Alcatel Float
– 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 Alcatel Float.
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. Alcatel Float 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.
Regulatory challenges
– Alcatel Float 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 Global Business 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 Alcatel Float.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Alcatel Float with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Alcatel Float 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 China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition .
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.
High dependence on third party suppliers
– Alcatel Float 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 Alcatel Float in the Global Business industry. The Global Business 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.
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 Alcatel Float in the Global Business sector and impact the bottomline of the organization.
Weighted SWOT Analysis of China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition 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 China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition 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 China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition 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 China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition 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 China: To Float or Not to Float? (F): Alcatel and Strong Chinese Competition 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 Alcatel Float needs to make to build a sustainable competitive advantage.