Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship
After Joanne Hyland had spent three years managing the growth and development of the Business Ventures Group (BVG), Nortel Networks senior management was challenging Hyland, vice-president for new venture development at Nortel Networks, to justify the BVG's existence and show its impact on Nortel Networks' bottom line. From a strategic perspective, Nortel Networks was struggling to evolve from being a telecommunications company to becoming a major player in the Internet Age. According to Nortel Networks top executives, to achieve success, the capabilities often second nature to start-up businesses were needed and they viewed the BVG as a learning opportunity. Having a formal program for evaluating and cultivating venture opportunities allowed Nortel Networks to streamline its innovation management processes continually and potentially uncover efficiencies that could be applied to its numerous lines of business. Considers how Nortel Networks could manage spinout ventures and other unaligned business opportunities in the future.
Authors :: Gina Colarelli O'Connor, William T. Maslyn
Swot Analysis of "Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship" written by Gina Colarelli O'Connor, William T. Maslyn includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nortel Networks facing as an external strategic factors. Some of the topics covered in Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship case study are - Strategic Management Strategies, Entrepreneurship, Innovation and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship casestudy better are - – central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, there is backlash against globalization, geopolitical disruptions, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels,
technology disruption, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nortel Networks, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nortel Networks 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 Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship can be done for the following purposes –
1. Strategic planning using facts provided in Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship case study
2. Improving business portfolio management of Nortel Networks
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nortel Networks
Strengths Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nortel Networks in Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship Harvard Business Review case study are -
Diverse revenue streams
– Nortel Networks is present in almost all the verticals within the industry. This has provided firm in Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship 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 lead change in Innovation & Entrepreneurship field
– Nortel Networks 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 Networks in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Nortel Networks 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.
Ability to recruit top talent
– Nortel Networks is one of the leading recruiters in the industry. Managers in the Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Nortel Networks has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship 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.
Low bargaining power of suppliers
– Suppliers of Nortel Networks in the sector have low bargaining power. Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nortel Networks to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Nortel Networks 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 Networks is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Nortel Networks is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Nortel Networks 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 Gina Colarelli O'Connor, William T. Maslyn 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.
Successful track record of launching new products
– Nortel Networks has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nortel Networks 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.
Effective Research and Development (R&D)
– Nortel Networks 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 Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Nortel Networks
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nortel Networks does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship are -
High cash cycle compare to competitors
Nortel Networks 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship, is just above the industry average. Nortel Networks 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.
Lack of clear differentiation of Nortel Networks products
– To increase the profitability and margins on the products, Nortel Networks needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship 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 Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship can leverage the sales team experience to cultivate customer relationships as Nortel Networks is planning to shift buying processes online.
Interest costs
– Compare to the competition, Nortel Networks 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Nortel Networks 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.
No frontier risks strategy
– After analyzing the HBR case study Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Increasing silos among functional specialists
– The organizational structure of Nortel Networks is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Nortel Networks needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nortel Networks to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Nortel Networks, firm in the HBR case study Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Nortel Networks 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship 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 Networks has relatively successful track record of launching new products.
Opportunities Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship | 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 Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nortel Networks 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, Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Nortel Networks 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nortel Networks 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.
Better consumer reach
– The expansion of the 5G network will help Nortel Networks to increase its market reach. Nortel Networks 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.
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. Nortel Networks can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nortel Networks 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. Nortel Networks 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.
Using analytics as competitive advantage
– Nortel Networks 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 Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nortel Networks to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Networks can use these opportunities to build new business models that can help the communities that Nortel Networks operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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 Networks 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nortel Networks 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 Networks to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nortel Networks in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Loyalty marketing
– Nortel Networks 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.
Developing new processes and practices
– Nortel Networks can develop new processes and procedures in Innovation & Entrepreneurship 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.
Threats Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship 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 Nortel Networks.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nortel Networks can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Nortel Networks
– 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 Networks.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nortel Networks in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship, Nortel Networks may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nortel Networks with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Nortel Networks 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 Innovation & Entrepreneurship industry regulations.
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 Networks business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Nortel Networks 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. Nortel Networks can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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. Nortel Networks 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.
Technology acceleration in Forth Industrial Revolution
– Nortel Networks has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Nortel Networks needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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 Nortel Networks in the Innovation & Entrepreneurship 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. Nortel Networks needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship 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 Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship 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 Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship 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 Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship 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 Nortel Networks' Business Ventures Group: One Corporation's Take on Entrepreneurship 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 Networks needs to make to build a sustainable competitive advantage.
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