France Telecom in 2010 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of France Telecom in 2010
In 2010, France Telecom faced fierce competition from other large European telecommunication companies as well as from French telecoms. The industry was rapidly changing, and France Telecom found itself also competing with content providers, internet giants and equipment makers who were moving into telecoms' businesses, creating a "pressure cooker" for telecoms. In response, France Telecom was offering content, such as movies and games, and developing new areas such as eHealth and online advertising. France Telecom wanted to keep pace with its European rivals, which were growing both organically and through mergers, acquisitions and joint ventures. However, France Telecom had to tread carefully, as it had almost gone bankrupt seven or eight years earlier because of debt stemming from international acquisitions in Europe in 1999 and 2000. Nevertheless, it was widely felt in Europe that consolidation among telecommunication companies was necessary, and France Telecom was entering joint ventures in Britain and Switzerland to expand its footprint. France Telecom was also expanding into developing markets, especially in Africa, which brought higher gross margins but also saw occasional political instability. France Telecom had an added challenge in that a vast majority of France Telecom employees were civil servants and therefore could not be laid off or fired. In addition, the environment for employees was increasingly stressful and competitive, and people were often re-deployed multiple times in order to find suitable jobs for them within the company. In fact, France Telecom faced a crisis: between the start of 2008 and early 2010, more than 40 France Telecom employees took their own lives. The case also includes a CEO transition from Didier Lombard (2005-2010) to Stephane Richard.
Swot Analysis of "France Telecom in 2010" written by Robert A. Burgelman, Debra Schifrin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that France Telecom facing as an external strategic factors. Some of the topics covered in France Telecom in 2010 case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the France Telecom in 2010 casestudy better are - – increasing energy prices, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, technology disruption, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, etc
Introduction to SWOT Analysis of France Telecom in 2010
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in France Telecom in 2010 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the France Telecom, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which France Telecom 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 France Telecom in 2010 can be done for the following purposes –
1. Strategic planning using facts provided in France Telecom in 2010 case study
2. Improving business portfolio management of France Telecom
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 France Telecom
Strengths France Telecom in 2010 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of France Telecom in France Telecom in 2010 Harvard Business Review case study are -
Innovation driven organization
– France Telecom is one of the most innovative firm in sector. Manager in France Telecom in 2010 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For France Telecom digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. France Telecom 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.
Learning organization
- France Telecom 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 France Telecom is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in France Telecom in 2010 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of France Telecom
– The covid-19 pandemic has put organizational resilience at the centre of everthing that France Telecom does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– France Telecom 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 Robert A. Burgelman, Debra Schifrin 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 France Telecom in the sector have low bargaining power. France Telecom in 2010 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps France Telecom to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– France Telecom is one of the leading recruiters in the industry. Managers in the France Telecom in 2010 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 brand equity
– France Telecom has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled France Telecom to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– France Telecom has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in France Telecom in 2010 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.
Sustainable margins compare to other players in Global Business industry
– France Telecom in 2010 firm has clearly differentiated products in the market place. This has enabled France Telecom to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped France Telecom to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the France Telecom in 2010 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.
Cross disciplinary teams
– Horizontal connected teams at the France Telecom are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses France Telecom in 2010 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of France Telecom in 2010 are -
Slow to strategic competitive environment developments
– As France Telecom in 2010 HBR case study mentions - France Telecom 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.
Interest costs
– Compare to the competition, France Telecom 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.
No frontier risks strategy
– After analyzing the HBR case study France Telecom in 2010, 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.
Capital Spending Reduction
– Even during the low interest decade, France Telecom 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 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 France Telecom supply chain. Even after few cautionary changes mentioned in the HBR case study - France Telecom in 2010, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left France Telecom vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of France Telecom products
– To increase the profitability and margins on the products, France Telecom needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though France Telecom 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 - France Telecom in 2010 should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at France Telecom 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study France Telecom in 2010, is just above the industry average. France Telecom 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.
Aligning sales with marketing
– It come across in the case study France Telecom in 2010 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 France Telecom in 2010 can leverage the sales team experience to cultivate customer relationships as France Telecom is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, France Telecom 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. France Telecom 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.
Opportunities France Telecom in 2010 | 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 France Telecom in 2010 are -
Building a culture of innovation
– managers at France Telecom 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.
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. France Telecom can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 France Telecom in the consumer business. Now France Telecom can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– France Telecom 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.
Leveraging digital technologies
– France Telecom 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, France Telecom 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 France Telecom 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.
Learning at scale
– Online learning technologies has now opened space for France Telecom 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.
Using analytics as competitive advantage
– France Telecom 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 France Telecom in 2010 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help France Telecom to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, France Telecom can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, France Telecom in 2010, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, France Telecom is facing challenges because of the dominance of functional experts in the organization. France Telecom in 2010 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.
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 France Telecom 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.
Buying journey improvements
– France Telecom can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. France Telecom in 2010 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.
Threats France Telecom in 2010 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study France Telecom in 2010 are -
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 France Telecom.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents France Telecom with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– France Telecom 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. France Telecom can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for France Telecom 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.
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 France Telecom in the Global Business sector and impact the bottomline of the organization.
High dependence on third party suppliers
– France Telecom 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.
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 France Telecom business can come under increasing regulations regarding data privacy, data security, etc.
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. France Telecom 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
– France Telecom 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.
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. France Telecom can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study France Telecom in 2010, France Telecom 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 .
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 France Telecom in 2010 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 France Telecom in 2010 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 France Telecom in 2010 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 France Telecom in 2010 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 France Telecom in 2010 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 France Telecom needs to make to build a sustainable competitive advantage.
