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 - – increasing household debt because of falling income levels, central banks are concerned over increasing inflation, there is backlash against globalization, supply chains are disrupted by pandemic , 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 energy prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, 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 -
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.
Strong track record of project management
– Industry 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Industry Telecommunications digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Industry 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.
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.
High switching costs
– The high switching costs that Industry Telecommunications 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.
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.
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.
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.
Training and development
– Industry Telecommunications has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in China's Telecommunications Industry in 2004 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.
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.
Diverse revenue streams
– Industry Telecommunications is present in almost all the verticals within the industry. This has provided firm in China's Telecommunications Industry in 2004 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)
– 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.
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 -
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.
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.
Slow decision making process
– As mentioned earlier in the report, Industry Telecommunications 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. Industry Telecommunications 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study China's Telecommunications Industry in 2004, it seems that the employees of Industry Telecommunications 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.
No frontier risks strategy
– After analyzing the HBR case study China's Telecommunications Industry in 2004, 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.
Products dominated business model
– Even though Industry 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 - China's Telecommunications Industry in 2004 should strive to include more intangible value offerings along with its core products and services.
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.
Skills based hiring
– The stress on hiring functional specialists at Industry Telecommunications 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the China's Telecommunications Industry in 2004 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 Industry Telecommunications has relatively successful track record of launching new products.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
Buying journey improvements
– Industry Telecommunications can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. China's Telecommunications Industry in 2004 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.
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.
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.
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. Industry 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. Industry 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.
Creating value in data economy
– The success of analytics program of Industry Telecommunications has opened avenues for new revenue streams for the organization in the industry. This can help Industry Telecommunications to build a more holistic ecosystem as suggested in the China's Telecommunications Industry in 2004 case study. Industry Telecommunications can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Industry Telecommunications can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 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. Industry Telecommunications needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Industry Telecommunications with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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. Industry 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.
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.
Regulatory challenges
– Industry 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.
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.
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.