China's Telecommunications Industry in 2004 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of China's Telecommunications Industry in 2004
Introduces the reform and development of China's telecommunications industry in the past 10 years, which led to the current situation with six major players in the market. Discusses several factors affecting the development of the industry, such as WTO accession, legal structure, and 3G technology, further demonstrating that the industry is in transition from a planned monopoly to market-driven competition. As the Chinese government is hesitant to give up complete control, it will retain its strong role in the industry for a period of time.
Authors :: Ali Farhoomand, Zhigang Tao, Jiang Ying, Liu Tian Xiang
Swot Analysis of "China's Telecommunications Industry in 2004" written by Ali Farhoomand, Zhigang Tao, Jiang Ying, Liu Tian Xiang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Industry Telecommunications facing as an external strategic factors. Some of the topics covered in China's Telecommunications Industry in 2004 case study are - Strategic Management Strategies, Globalization, Marketing, Regulation and Global Business.
Some of the macro environment factors that can be used to understand the China's Telecommunications Industry in 2004 casestudy better are - – digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, 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, geopolitical disruptions, increasing household debt because of falling income levels,
challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of China's Telecommunications Industry in 2004
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in China's Telecommunications Industry in 2004 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Industry Telecommunications, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Industry 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 China's Telecommunications Industry in 2004 can be done for the following purposes –
1. Strategic planning using facts provided in China's Telecommunications Industry in 2004 case study
2. Improving business portfolio management of Industry 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 Industry Telecommunications
Strengths China's Telecommunications Industry in 2004 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Industry Telecommunications in China's Telecommunications Industry in 2004 Harvard Business Review case study are -
Successful track record of launching new products
– Industry Telecommunications has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Industry 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.
Effective Research and Development (R&D)
– Industry 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 China's Telecommunications Industry in 2004 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Industry Telecommunications in the sector have low bargaining power. China's Telecommunications Industry in 2004 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Industry Telecommunications to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Industry Telecommunications is one of the leading recruiters in the industry. Managers in the China's Telecommunications Industry in 2004 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Global Business industry
– China's Telecommunications Industry in 2004 firm has clearly differentiated products in the market place. This has enabled Industry Telecommunications to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Industry Telecommunications to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Industry Telecommunications in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Global Business field
– Industry Telecommunications 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 Industry Telecommunications in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Industry Telecommunications is one of the most innovative firm in sector. Manager in China's Telecommunications Industry in 2004 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Industry Telecommunications 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 Ali Farhoomand, Zhigang Tao, Jiang Ying, Liu Tian Xiang 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.
Cross disciplinary teams
– Horizontal connected teams at the Industry Telecommunications 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.
Highly skilled collaborators
– Industry 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 China's Telecommunications Industry in 2004 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Industry 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 Industry Telecommunications is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in China's Telecommunications Industry in 2004 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses China's Telecommunications Industry in 2004 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China's Telecommunications Industry in 2004 are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study China's Telecommunications Industry in 2004, in the dynamic environment Industry Telecommunications has struggled to respond to the nimble upstart competition. Industry Telecommunications has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study China's Telecommunications Industry in 2004 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 Industry Telecommunications 's lucrative 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 Industry Telecommunications supply chain. Even after few cautionary changes mentioned in the HBR case study - China's Telecommunications Industry in 2004, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Industry Telecommunications vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Industry Telecommunications has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High bargaining power of channel partners
– Because of the regulatory requirements, Ali Farhoomand, Zhigang Tao, Jiang Ying, Liu Tian Xiang suggests that, Industry 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.
High cash cycle compare to competitors
Industry 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.
Low market penetration in new markets
– Outside its home market of Industry Telecommunications, firm in the HBR case study China's Telecommunications Industry in 2004 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Industry Telecommunications products
– To increase the profitability and margins on the products, Industry Telecommunications needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study China's Telecommunications Industry in 2004 that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case China's Telecommunications Industry in 2004 can leverage the sales team experience to cultivate customer relationships as Industry Telecommunications is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study China's Telecommunications Industry in 2004, is just above the industry average. Industry Telecommunications 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Industry Telecommunications is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study China's Telecommunications Industry in 2004 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities China's Telecommunications Industry in 2004 | 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's Telecommunications Industry in 2004 are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Industry Telecommunications can use these opportunities to build new business models that can help the communities that Industry Telecommunications operates in. Secondly it can use opportunities from government spending in Global Business sector.
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. Industry Telecommunications can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Industry 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 China's Telecommunications Industry in 2004 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Industry Telecommunications to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Industry 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.
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 Industry Telecommunications in the consumer business. Now Industry Telecommunications can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Industry 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, China's Telecommunications Industry in 2004, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Industry Telecommunications 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.
Better consumer reach
– The expansion of the 5G network will help Industry Telecommunications to increase its market reach. Industry 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Industry Telecommunications is facing challenges because of the dominance of functional experts in the organization. China's Telecommunications Industry in 2004 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.
Manufacturing automation
– Industry 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.
Building a culture of innovation
– managers at Industry Telecommunications 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.
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 Industry Telecommunications 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Industry 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 China's Telecommunications Industry in 2004 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study China's Telecommunications Industry in 2004 are -
High dependence on third party suppliers
– Industry 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.
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's Telecommunications Industry in 2004, Industry Telecommunications 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 .
Stagnating economy with rate increase
– Industry 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.
Technology acceleration in Forth Industrial Revolution
– Industry Telecommunications has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Industry Telecommunications 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.
Environmental challenges
– Industry 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. Industry Telecommunications can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Increasing wage structure of Industry 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 Industry Telecommunications.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Industry Telecommunications 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's Telecommunications Industry in 2004 .
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 Industry Telecommunications in the Global Business sector and impact the bottomline of the organization.
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. Industry Telecommunications can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Consumer confidence and its impact on Industry 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Industry 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.
Weighted SWOT Analysis of China's Telecommunications Industry in 2004 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's Telecommunications Industry in 2004 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's Telecommunications Industry in 2004 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's Telecommunications Industry in 2004 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's Telecommunications Industry in 2004 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 Industry Telecommunications needs to make to build a sustainable competitive advantage.
