Franco Bernabe: Reflections on Telecom Italia (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Franco Bernabe: Reflections on Telecom Italia (A)
In November 1998, Franco Bernabe left ENI to become CEO of Telecom Italia, Italy's primary telecommunications provider. Three months later, Roberto Colaninno, CEO of Olivetti SpA, an Italian computer and telecom company one fifth the size of Telecom Italia, launched a hostile takeover of Telecom Italia. In this case, Bernabe reflects on his departure from ENI, his experiences at Telecom Italia during the takeover, and his plans moving forward in November 1999.
Swot Analysis of "Franco Bernabe: Reflections on Telecom Italia (A)" written by Linda A. Hill, Kristin C. Doughty includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Italia Telecom facing as an external strategic factors. Some of the topics covered in Franco Bernabe: Reflections on Telecom Italia (A) case study are - Strategic Management Strategies, Government, Leadership, Managing people, Mergers & acquisitions and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Franco Bernabe: Reflections on Telecom Italia (A) casestudy better are - – talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy,
supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Franco Bernabe: Reflections on Telecom Italia (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Franco Bernabe: Reflections on Telecom Italia (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Italia Telecom, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Italia 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 Franco Bernabe: Reflections on Telecom Italia (A) can be done for the following purposes –
1. Strategic planning using facts provided in Franco Bernabe: Reflections on Telecom Italia (A) case study
2. Improving business portfolio management of Italia Telecom
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Italia Telecom
Strengths Franco Bernabe: Reflections on Telecom Italia (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Italia Telecom in Franco Bernabe: Reflections on Telecom Italia (A) Harvard Business Review case study are -
Successful track record of launching new products
– Italia Telecom has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Italia Telecom 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
– Italia Telecom is one of the most innovative firm in sector. Manager in Franco Bernabe: Reflections on Telecom Italia (A) 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
– Italia Telecom is present in almost all the verticals within the industry. This has provided firm in Franco Bernabe: Reflections on Telecom Italia (A) 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Franco Bernabe: Reflections on Telecom Italia (A) firm has clearly differentiated products in the market place. This has enabled Italia Telecom to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Italia Telecom to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Italia Telecom 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.
Operational resilience
– The operational resilience strategy in the Franco Bernabe: Reflections on Telecom Italia (A) 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 Italia 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.
Superior customer experience
– The customer experience strategy of Italia Telecom in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Italia Telecom 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 Franco Bernabe: Reflections on Telecom Italia (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Italia Telecom in the sector have low bargaining power. Franco Bernabe: Reflections on Telecom Italia (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Italia Telecom to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Italia Telecom has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Italia Telecom to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Italia Telecom digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Italia 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.
Weaknesses Franco Bernabe: Reflections on Telecom Italia (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Franco Bernabe: Reflections on Telecom Italia (A) are -
Products dominated business model
– Even though Italia 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 - Franco Bernabe: Reflections on Telecom Italia (A) should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Italia Telecom, firm in the HBR case study Franco Bernabe: Reflections on Telecom Italia (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Franco Bernabe: Reflections on Telecom Italia (A) 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 Franco Bernabe: Reflections on Telecom Italia (A) can leverage the sales team experience to cultivate customer relationships as Italia Telecom is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Franco Bernabe: Reflections on Telecom Italia (A), is just above the industry average. Italia 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Franco Bernabe: Reflections on Telecom Italia (A), in the dynamic environment Italia Telecom has struggled to respond to the nimble upstart competition. Italia Telecom has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Franco Bernabe: Reflections on Telecom Italia (A), it seems that the employees of Italia Telecom 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.
Increasing silos among functional specialists
– The organizational structure of Italia Telecom is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Italia Telecom needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Italia Telecom to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Franco Bernabe: Reflections on Telecom Italia (A) 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 Italia Telecom 's lucrative customers.
High cash cycle compare to competitors
Italia Telecom 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.
Interest costs
– Compare to the competition, Italia 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.
Need for greater diversity
– Italia Telecom 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.
Opportunities Franco Bernabe: Reflections on Telecom Italia (A) | 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 Franco Bernabe: Reflections on Telecom Italia (A) are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Italia 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 Leadership & Managing People segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Italia Telecom can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Creating value in data economy
– The success of analytics program of Italia Telecom has opened avenues for new revenue streams for the organization in the industry. This can help Italia Telecom to build a more holistic ecosystem as suggested in the Franco Bernabe: Reflections on Telecom Italia (A) case study. Italia Telecom can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Italia 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Italia Telecom can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Italia 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 Franco Bernabe: Reflections on Telecom Italia (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Italia Telecom to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Italia Telecom can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
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 Italia Telecom in the consumer business. Now Italia Telecom can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Italia 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.
Better consumer reach
– The expansion of the 5G network will help Italia Telecom to increase its market reach. Italia Telecom 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.
Building a culture of innovation
– managers at Italia 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 Leadership & Managing People segment.
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. Italia Telecom can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Italia Telecom is facing challenges because of the dominance of functional experts in the organization. Franco Bernabe: Reflections on Telecom Italia (A) 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 Franco Bernabe: Reflections on Telecom Italia (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Franco Bernabe: Reflections on Telecom Italia (A) are -
Shortening product life cycle
– it is one of the major threat that Italia Telecom is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Italia Telecom
– 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 Italia Telecom.
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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Italia Telecom can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Italia Telecom needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Italia Telecom business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Italia Telecom 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 Franco Bernabe: Reflections on Telecom Italia (A) .
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 Italia Telecom.
Environmental challenges
– Italia 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. Italia Telecom can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People 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. Italia 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.
High dependence on third party suppliers
– Italia 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Franco Bernabe: Reflections on Telecom Italia (A), Italia 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 Leadership & Managing People .
Stagnating economy with rate increase
– Italia 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.
Weighted SWOT Analysis of Franco Bernabe: Reflections on Telecom Italia (A) 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 Franco Bernabe: Reflections on Telecom Italia (A) 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 Franco Bernabe: Reflections on Telecom Italia (A) 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 Franco Bernabe: Reflections on Telecom Italia (A) 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 Franco Bernabe: Reflections on Telecom Italia (A) 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 Italia Telecom needs to make to build a sustainable competitive advantage.