Case Study Description of Telecommunications Act of 1996
Reed Hundt, former chairman of the Federal Communications Commission, reflects on the passage and implementation of the Telecommunications Act of 1996. The act was intended to stimulate competition and innovation in the telecommunications sector. Its provisions were of great importance to industry participants and to society at large, which led to vigorous lobbying. This note provides background on the historic conflict between monopoly local phone companies and long-distance carriers, a description of the inner workings of the FCC and the political pressures confronting the commission, a description of key provisions of the act, an assessment of how well the act has met its objectives, and Hundt's reflections on the challenges that a regulator faces in seeking a balance between private interests and public responsibility.
Swot Analysis of "Telecommunications Act of 1996" written by Thomas R. Eisenmann, Dan J. Green includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Act Telecommunications facing as an external strategic factors. Some of the topics covered in Telecommunications Act of 1996 case study are - Strategic Management Strategies, Internet, IT, Policy, Regulation and Global Business.
Some of the macro environment factors that can be used to understand the Telecommunications Act of 1996 casestudy better are - – increasing energy prices, wage bills are increasing, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, there is backlash against globalization, increasing transportation and logistics costs,
talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Telecommunications Act of 1996
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Telecommunications Act of 1996 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Act Telecommunications, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Act Telecommunications 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 Telecommunications Act of 1996 can be done for the following purposes –
1. Strategic planning using facts provided in Telecommunications Act of 1996 case study
2. Improving business portfolio management of Act Telecommunications
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 Act Telecommunications
Strengths Telecommunications Act of 1996 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Act Telecommunications in Telecommunications Act of 1996 Harvard Business Review case study are -
Successful track record of launching new products
– Act Telecommunications has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Act Telecommunications 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.
Innovation driven organization
– Act Telecommunications is one of the most innovative firm in sector. Manager in Telecommunications Act of 1996 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Global Business industry
– Telecommunications Act of 1996 firm has clearly differentiated products in the market place. This has enabled Act Telecommunications to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Act Telecommunications to invest into research and development (R&D) and innovation.
Learning organization
- Act Telecommunications 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 Act Telecommunications is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Telecommunications Act of 1996 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Act Telecommunications 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 Telecommunications Act of 1996 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Act Telecommunications digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Act Telecommunications 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.
Diverse revenue streams
– Act Telecommunications is present in almost all the verticals within the industry. This has provided firm in Telecommunications Act of 1996 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.
Effective Research and Development (R&D)
– Act Telecommunications 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 Telecommunications Act of 1996 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Act Telecommunications is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Act Telecommunications has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Act Telecommunications to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Act Telecommunications is one of the leading recruiters in the industry. Managers in the Telecommunications Act of 1996 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Act Telecommunications
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Act Telecommunications does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Telecommunications Act of 1996 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Telecommunications Act of 1996 are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Telecommunications Act of 1996, in the dynamic environment Act Telecommunications has struggled to respond to the nimble upstart competition. Act Telecommunications has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Telecommunications Act of 1996 HBR case study mentions - Act Telecommunications 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.
Products dominated business model
– Even though Act Telecommunications 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 - Telecommunications Act of 1996 should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Telecommunications Act of 1996 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 Act Telecommunications 's lucrative customers.
High cash cycle compare to competitors
Act Telecommunications 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Act Telecommunications 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.
No frontier risks strategy
– After analyzing the HBR case study Telecommunications Act of 1996, it seems that company is thinking about the frontier risks that can impact Global Business 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Act Telecommunications is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Telecommunications Act of 1996 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on 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 Act Telecommunications supply chain. Even after few cautionary changes mentioned in the HBR case study - Telecommunications Act of 1996, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Act Telecommunications vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Act Telecommunications is dominated by functional specialists. It is not different from other players in the Global Business segment. Act Telecommunications needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Act Telecommunications to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Thomas R. Eisenmann, Dan J. Green suggests that, Act Telecommunications 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.
Opportunities Telecommunications Act of 1996 | 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 Telecommunications Act of 1996 are -
Loyalty marketing
– Act Telecommunications 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.
Learning at scale
– Online learning technologies has now opened space for Act Telecommunications 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.
Using analytics as competitive advantage
– Act Telecommunications 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 Telecommunications Act of 1996 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Act Telecommunications 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 Act Telecommunications to increase its market reach. Act Telecommunications 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.
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. Act Telecommunications can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Act Telecommunications 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, Telecommunications Act of 1996, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Act Telecommunications can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Leveraging digital technologies
– Act Telecommunications can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Act Telecommunications 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. Act Telecommunications 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Act Telecommunications can use these opportunities to build new business models that can help the communities that Act Telecommunications operates in. Secondly it can use opportunities from government spending in Global Business sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Act Telecommunications 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 Act Telecommunications to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Act Telecommunications can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Telecommunications Act of 1996 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Act Telecommunications in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Threats Telecommunications Act of 1996 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Telecommunications Act of 1996 are -
Environmental challenges
– Act Telecommunications 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. Act Telecommunications can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Regulatory challenges
– Act Telecommunications 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Act Telecommunications can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Act Telecommunications 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 Act Telecommunications 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.
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 Act Telecommunications business can come under increasing regulations regarding data privacy, data security, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Act Telecommunications needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Act Telecommunications with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Act Telecommunications can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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. Act Telecommunications 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Act Telecommunications 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.
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.
Increasing wage structure of Act Telecommunications
– 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 Act Telecommunications.
Weighted SWOT Analysis of Telecommunications Act of 1996 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 Telecommunications Act of 1996 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 Telecommunications Act of 1996 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 Telecommunications Act of 1996 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 Telecommunications Act of 1996 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 Act Telecommunications needs to make to build a sustainable competitive advantage.