Telkomsel: Transforming an Emerging-Market State Enterprise SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Telkomsel: Transforming an Emerging-Market State Enterprise
Addresses the challenges facing Telkomsel, an Indonesian cell phone company, as it tried to grow and become globally competitive. The protagonist is Mulia Tambunan, former CEO of Telkomsel. Tambunan's challenge was to create a nimble, modern firm out of an organization encumbered by political interventions, excessive management layers, and inadequate performance incentives--problems common to state-owned companies everywhere. In addition, Indonesia was facing an economic crisis, the telecommunications market was newly liberalized, and Indonesia was undergoing a troubled transition from the autocratic but stable regime of army-backed President Suharto to a fragile young democracy. Written with the help of Ian Buchanan and his team at Booz Allen Hamilton, who worked with Telkomsel through this transition period.
Authors :: Ian Buchanan, John McMillan, Erin Yurday
Swot Analysis of "Telkomsel: Transforming an Emerging-Market State Enterprise" written by Ian Buchanan, John McMillan, Erin Yurday includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Telkomsel Indonesia facing as an external strategic factors. Some of the topics covered in Telkomsel: Transforming an Emerging-Market State Enterprise case study are - Strategic Management Strategies, Emerging markets, Financial management, Regulation and Global Business.
Some of the macro environment factors that can be used to understand the Telkomsel: Transforming an Emerging-Market State Enterprise casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, increasing commodity prices, challanges to central banks by blockchain based private currencies, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China,
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 Telkomsel: Transforming an Emerging-Market State Enterprise
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Telkomsel: Transforming an Emerging-Market State Enterprise case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Telkomsel Indonesia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Telkomsel Indonesia 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 Telkomsel: Transforming an Emerging-Market State Enterprise can be done for the following purposes –
1. Strategic planning using facts provided in Telkomsel: Transforming an Emerging-Market State Enterprise case study
2. Improving business portfolio management of Telkomsel Indonesia
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 Telkomsel Indonesia
Strengths Telkomsel: Transforming an Emerging-Market State Enterprise | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Telkomsel Indonesia in Telkomsel: Transforming an Emerging-Market State Enterprise Harvard Business Review case study are -
Organizational Resilience of Telkomsel Indonesia
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Telkomsel Indonesia does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Telkomsel Indonesia in the sector have low bargaining power. Telkomsel: Transforming an Emerging-Market State Enterprise has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Telkomsel Indonesia to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Telkomsel Indonesia is present in almost all the verticals within the industry. This has provided firm in Telkomsel: Transforming an Emerging-Market State Enterprise 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.
Strong track record of project management
– Telkomsel Indonesia is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Telkomsel Indonesia has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Telkomsel Indonesia has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Innovation driven organization
– Telkomsel Indonesia is one of the most innovative firm in sector. Manager in Telkomsel: Transforming an Emerging-Market State Enterprise Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Telkomsel Indonesia 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
– Telkomsel Indonesia 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 Telkomsel Indonesia in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Telkomsel Indonesia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Telkomsel Indonesia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Telkomsel Indonesia 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 Ian Buchanan, John McMillan, Erin Yurday 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.
Highly skilled collaborators
– Telkomsel Indonesia 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 Telkomsel: Transforming an Emerging-Market State Enterprise HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Telkomsel Indonesia 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 Telkomsel Indonesia is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Telkomsel: Transforming an Emerging-Market State Enterprise Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Telkomsel: Transforming an Emerging-Market State Enterprise | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Telkomsel: Transforming an Emerging-Market State Enterprise are -
No frontier risks strategy
– After analyzing the HBR case study Telkomsel: Transforming an Emerging-Market State Enterprise, 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.
Need for greater diversity
– Telkomsel Indonesia 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Telkomsel: Transforming an Emerging-Market State Enterprise, in the dynamic environment Telkomsel Indonesia has struggled to respond to the nimble upstart competition. Telkomsel Indonesia has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Telkomsel Indonesia 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. Telkomsel Indonesia 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.
Products dominated business model
– Even though Telkomsel Indonesia 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 - Telkomsel: Transforming an Emerging-Market State Enterprise should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Telkomsel Indonesia has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Lack of clear differentiation of Telkomsel Indonesia products
– To increase the profitability and margins on the products, Telkomsel Indonesia needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Telkomsel: Transforming an Emerging-Market State Enterprise, is just above the industry average. Telkomsel Indonesia 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.
Low market penetration in new markets
– Outside its home market of Telkomsel Indonesia, firm in the HBR case study Telkomsel: Transforming an Emerging-Market State Enterprise needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Telkomsel Indonesia 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 cash cycle compare to competitors
Telkomsel Indonesia 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.
Opportunities Telkomsel: Transforming an Emerging-Market State Enterprise | 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 Telkomsel: Transforming an Emerging-Market State Enterprise are -
Buying journey improvements
– Telkomsel Indonesia can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Telkomsel: Transforming an Emerging-Market State Enterprise 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.
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 Telkomsel Indonesia in the consumer business. Now Telkomsel Indonesia can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Telkomsel Indonesia to increase its market reach. Telkomsel Indonesia 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Telkomsel Indonesia can use these opportunities to build new business models that can help the communities that Telkomsel Indonesia operates in. Secondly it can use opportunities from government spending in Global Business sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Telkomsel Indonesia is facing challenges because of the dominance of functional experts in the organization. Telkomsel: Transforming an Emerging-Market State Enterprise 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.
Using analytics as competitive advantage
– Telkomsel Indonesia 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 Telkomsel: Transforming an Emerging-Market State Enterprise - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Telkomsel Indonesia to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Telkomsel Indonesia can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Telkomsel Indonesia 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.
Manufacturing automation
– Telkomsel Indonesia 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Telkomsel Indonesia can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Telkomsel Indonesia 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.
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 Telkomsel Indonesia 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.
Loyalty marketing
– Telkomsel Indonesia 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.
Threats Telkomsel: Transforming an Emerging-Market State Enterprise External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Telkomsel: Transforming an Emerging-Market State Enterprise are -
Environmental challenges
– Telkomsel Indonesia 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. Telkomsel Indonesia can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Telkomsel: Transforming an Emerging-Market State Enterprise, Telkomsel Indonesia 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 .
Shortening product life cycle
– it is one of the major threat that Telkomsel Indonesia is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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, Telkomsel Indonesia 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 Telkomsel: Transforming an Emerging-Market State Enterprise .
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. Telkomsel Indonesia can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Telkomsel Indonesia 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.
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. Telkomsel Indonesia 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. Telkomsel Indonesia 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.
Stagnating economy with rate increase
– Telkomsel Indonesia 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.
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 Telkomsel Indonesia business can come under increasing regulations regarding data privacy, data security, etc.
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 Telkomsel Indonesia.
Weighted SWOT Analysis of Telkomsel: Transforming an Emerging-Market State Enterprise 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 Telkomsel: Transforming an Emerging-Market State Enterprise 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 Telkomsel: Transforming an Emerging-Market State Enterprise 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 Telkomsel: Transforming an Emerging-Market State Enterprise 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 Telkomsel: Transforming an Emerging-Market State Enterprise 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 Telkomsel Indonesia needs to make to build a sustainable competitive advantage.
