Case Study Description of Northern Telecom in China--1972-94
Nortel, a large Canadian telecommunications company, has been doing business in China since 1972. By mid-1994, Nortel had successfully developed two joint ventures in China but two others were bogged down in negotiations. Art McDonald, the chairman of Nortel China, is contemplating a series of alternative ways of expediting the negotiations.
Swot Analysis of "Northern Telecom in China--1972-94" written by Neil Abramson, Janet X. Ai includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nortel 1972 facing as an external strategic factors. Some of the topics covered in Northern Telecom in China--1972-94 case study are - Strategic Management Strategies, Negotiations, Technology and Global Business.
Some of the macro environment factors that can be used to understand the Northern Telecom in China--1972-94 casestudy better are - – there is backlash against globalization, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, central banks are concerned over increasing inflation,
increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Northern Telecom in China--1972-94
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Northern Telecom in China--1972-94 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nortel 1972, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nortel 1972 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 Northern Telecom in China--1972-94 can be done for the following purposes –
1. Strategic planning using facts provided in Northern Telecom in China--1972-94 case study
2. Improving business portfolio management of Nortel 1972
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 Nortel 1972
Strengths Northern Telecom in China--1972-94 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nortel 1972 in Northern Telecom in China--1972-94 Harvard Business Review case study are -
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Nortel 1972 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nortel 1972 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.
Highly skilled collaborators
– Nortel 1972 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 Northern Telecom in China--1972-94 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Nortel 1972 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 Nortel 1972 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Northern Telecom in China--1972-94 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Global Business field
– Nortel 1972 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 Nortel 1972 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Nortel 1972 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 Northern Telecom in China--1972-94 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Nortel 1972 is one of the leading recruiters in the industry. Managers in the Northern Telecom in China--1972-94 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Nortel 1972 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 Neil Abramson, Janet X. Ai 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.
Low bargaining power of suppliers
– Suppliers of Nortel 1972 in the sector have low bargaining power. Northern Telecom in China--1972-94 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nortel 1972 to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Northern Telecom in China--1972-94 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.
Organizational Resilience of Nortel 1972
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nortel 1972 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Nortel 1972 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nortel 1972 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.
Superior customer experience
– The customer experience strategy of Nortel 1972 in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Northern Telecom in China--1972-94 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Northern Telecom in China--1972-94 are -
Skills based hiring
– The stress on hiring functional specialists at Nortel 1972 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.
No frontier risks strategy
– After analyzing the HBR case study Northern Telecom in China--1972-94, 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.
Low market penetration in new markets
– Outside its home market of Nortel 1972, firm in the HBR case study Northern Telecom in China--1972-94 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Nortel 1972 is dominated by functional specialists. It is not different from other players in the Global Business segment. Nortel 1972 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nortel 1972 to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Northern Telecom in China--1972-94 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 Northern Telecom in China--1972-94 can leverage the sales team experience to cultivate customer relationships as Nortel 1972 is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Northern Telecom in China--1972-94 HBR case study mentions - Nortel 1972 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Northern Telecom in China--1972-94 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 Nortel 1972 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Nortel 1972 has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Northern Telecom in China--1972-94 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 Nortel 1972 has relatively successful track record of launching new products.
Lack of clear differentiation of Nortel 1972 products
– To increase the profitability and margins on the products, Nortel 1972 needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Northern Telecom in China--1972-94, in the dynamic environment Nortel 1972 has struggled to respond to the nimble upstart competition. Nortel 1972 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Northern Telecom in China--1972-94 | 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 Northern Telecom in China--1972-94 are -
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. Nortel 1972 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nortel 1972 can use these opportunities to build new business models that can help the communities that Nortel 1972 operates in. Secondly it can use opportunities from government spending in Global Business sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nortel 1972 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nortel 1972 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 Nortel 1972 to hire the very best people irrespective of their geographical location.
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 Nortel 1972 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.
Learning at scale
– Online learning technologies has now opened space for Nortel 1972 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.
Building a culture of innovation
– managers at Nortel 1972 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.
Leveraging digital technologies
– Nortel 1972 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.
Loyalty marketing
– Nortel 1972 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.
Manufacturing automation
– Nortel 1972 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.
Developing new processes and practices
– Nortel 1972 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.
Creating value in data economy
– The success of analytics program of Nortel 1972 has opened avenues for new revenue streams for the organization in the industry. This can help Nortel 1972 to build a more holistic ecosystem as suggested in the Northern Telecom in China--1972-94 case study. Nortel 1972 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 Nortel 1972 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Northern Telecom in China--1972-94 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Northern Telecom in China--1972-94 are -
Shortening product life cycle
– it is one of the major threat that Nortel 1972 is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Northern Telecom in China--1972-94, Nortel 1972 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 .
Regulatory challenges
– Nortel 1972 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.
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. Nortel 1972 needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 Nortel 1972.
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 Nortel 1972 business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Nortel 1972 has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Nortel 1972 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.
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 wage structure of Nortel 1972
– 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 Nortel 1972.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nortel 1972 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 Northern Telecom in China--1972-94 .
Consumer confidence and its impact on Nortel 1972 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.
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. Nortel 1972 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Northern Telecom in China--1972-94 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 Northern Telecom in China--1972-94 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 Northern Telecom in China--1972-94 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 Northern Telecom in China--1972-94 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 Northern Telecom in China--1972-94 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 Nortel 1972 needs to make to build a sustainable competitive advantage.
