ENTel and the Privatization of Argentine Telecommunications SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of ENTel and the Privatization of Argentine Telecommunications
Growing fiscal deficits, persistent economic recession, and underinvestment in the nation's telecommunications infrastructure lead the Argentine government to privatize its state-owned monopoly provider of telecommunications services, ENTel, in late 1990. The privatization process and the resulting ownership structure is complex, and the new regulatory framework appears to offer both significant opportunities and risks for investors.
Swot Analysis of "ENTel and the Privatization of Argentine Telecommunications" written by Willis Emmons includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Entel Telecommunications facing as an external strategic factors. Some of the topics covered in ENTel and the Privatization of Argentine Telecommunications case study are - Strategic Management Strategies, International business, Policy and Global Business.
Some of the macro environment factors that can be used to understand the ENTel and the Privatization of Argentine Telecommunications casestudy better are - – increasing commodity prices, there is backlash against globalization, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic ,
customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of ENTel and the Privatization of Argentine Telecommunications
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ENTel and the Privatization of Argentine Telecommunications case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Entel Telecommunications, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Entel 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 ENTel and the Privatization of Argentine Telecommunications can be done for the following purposes –
1. Strategic planning using facts provided in ENTel and the Privatization of Argentine Telecommunications case study
2. Improving business portfolio management of Entel 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 Entel Telecommunications
Strengths ENTel and the Privatization of Argentine Telecommunications | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Entel Telecommunications in ENTel and the Privatization of Argentine Telecommunications Harvard Business Review case study are -
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Entel Telecommunications digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Entel 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.
Analytics focus
– Entel 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 Willis Emmons 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.
Sustainable margins compare to other players in Global Business industry
– ENTel and the Privatization of Argentine Telecommunications firm has clearly differentiated products in the market place. This has enabled Entel Telecommunications to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Entel Telecommunications to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Entel 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 ENTel and the Privatization of Argentine Telecommunications HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Entel Telecommunications is one of the most innovative firm in sector. Manager in ENTel and the Privatization of Argentine Telecommunications Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Entel Telecommunications is present in almost all the verticals within the industry. This has provided firm in ENTel and the Privatization of Argentine Telecommunications 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.
Ability to recruit top talent
– Entel Telecommunications is one of the leading recruiters in the industry. Managers in the ENTel and the Privatization of Argentine Telecommunications are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Entel 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.
Ability to lead change in Global Business field
– Entel 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 Entel Telecommunications 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)
– Entel 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 ENTel and the Privatization of Argentine Telecommunications - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Entel 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 Entel Telecommunications is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ENTel and the Privatization of Argentine Telecommunications Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Entel Telecommunications has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Entel Telecommunications to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses ENTel and the Privatization of Argentine Telecommunications | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ENTel and the Privatization of Argentine Telecommunications are -
Skills based hiring
– The stress on hiring functional specialists at Entel 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 ENTel and the Privatization of Argentine Telecommunications 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 Entel Telecommunications has relatively successful track record of launching new products.
High cash cycle compare to competitors
Entel 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, Entel 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.
Increasing silos among functional specialists
– The organizational structure of Entel Telecommunications is dominated by functional specialists. It is not different from other players in the Global Business segment. Entel Telecommunications needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Entel Telecommunications to focus more on services rather than just following the product oriented approach.
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 Entel Telecommunications supply chain. Even after few cautionary changes mentioned in the HBR case study - ENTel and the Privatization of Argentine Telecommunications, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Entel Telecommunications vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study ENTel and the Privatization of Argentine Telecommunications 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 Entel Telecommunications 's lucrative customers.
Slow to strategic competitive environment developments
– As ENTel and the Privatization of Argentine Telecommunications HBR case study mentions - Entel 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.
Need for greater diversity
– Entel 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.
Capital Spending Reduction
– Even during the low interest decade, Entel Telecommunications 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study ENTel and the Privatization of Argentine Telecommunications, it seems that the employees of Entel 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.
Opportunities ENTel and the Privatization of Argentine Telecommunications | 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 ENTel and the Privatization of Argentine Telecommunications are -
Building a culture of innovation
– managers at Entel 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 Entel Telecommunications to increase its market reach. Entel 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.
Developing new processes and practices
– Entel Telecommunications 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.
Leveraging digital technologies
– Entel 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Entel Telecommunications can use these opportunities to build new business models that can help the communities that Entel Telecommunications operates in. Secondly it can use opportunities from government spending in Global Business sector.
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. Entel 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. Entel 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.
Manufacturing automation
– Entel 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Entel 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 Entel Telecommunications to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Entel Telecommunications can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Entel 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.
Using analytics as competitive advantage
– Entel 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 ENTel and the Privatization of Argentine Telecommunications - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Entel Telecommunications to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Entel Telecommunications can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Entel Telecommunications is facing challenges because of the dominance of functional experts in the organization. ENTel and the Privatization of Argentine Telecommunications 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.
Threats ENTel and the Privatization of Argentine Telecommunications External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ENTel and the Privatization of Argentine Telecommunications are -
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. Entel Telecommunications can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Entel 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 ENTel and the Privatization of Argentine Telecommunications .
Increasing wage structure of Entel 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 Entel Telecommunications.
Technology acceleration in Forth Industrial Revolution
– Entel Telecommunications has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Entel 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.
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 Entel Telecommunications in the Global Business sector and impact the bottomline of the organization.
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. Entel Telecommunications needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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. Entel 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Entel Telecommunications with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ENTel and the Privatization of Argentine Telecommunications, Entel 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 .
High dependence on third party suppliers
– Entel 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.
Environmental challenges
– Entel 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. Entel 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 Entel 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 Entel Telecommunications business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of ENTel and the Privatization of Argentine Telecommunications 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 ENTel and the Privatization of Argentine Telecommunications 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 ENTel and the Privatization of Argentine Telecommunications 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 ENTel and the Privatization of Argentine Telecommunications 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 ENTel and the Privatization of Argentine Telecommunications 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 Entel Telecommunications needs to make to build a sustainable competitive advantage.
