Case Study Description of China Mobile's Rural Communications Strategy
China Mobile was the world's leading mobile communications service provider with over 400 million customers. In some cities, its penetration rate was over 100%. With such huge successes, Chairman Wang Jianzhou was exploring ways to expand its customer base. Nearly saturated in the cities, China Mobile needed to broaden its base of subscribers. Wang believed that further investment in China's rural villages was a key strategy that would help the fuel growth for the future. Already deeply invested in the rural areas based on the company's participation in the government-mandated "Connect Every Village" project, China Mobile took advantage of this foundation and created new products and value-added services in order to make its mobile phone network more valuable to the lifestyles of China's rural population. However, the cost of connecting remote locations was high and was often not offset by subscriber fees or usage rates of these populations. Would this investment be relegated to a socially responsible project or would it pay-off for China Mobile in the future?
Authors :: William C. Kirby, F. Warren McFarlan, Tracy Yuen Manty, G.A. Donovan
Swot Analysis of "China Mobile's Rural Communications Strategy" written by William C. Kirby, F. Warren McFarlan, Tracy Yuen Manty, G.A. Donovan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mobile Rural facing as an external strategic factors. Some of the topics covered in China Mobile's Rural Communications Strategy case study are - Strategic Management Strategies, Government, Growth strategy, Social responsibility, Technology and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the China Mobile's Rural Communications Strategy casestudy better are - – there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, technology disruption, increasing commodity prices, wage bills are increasing, cloud computing is disrupting traditional business models,
digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of China Mobile's Rural Communications Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in China Mobile's Rural Communications Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mobile Rural, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mobile Rural 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 China Mobile's Rural Communications Strategy can be done for the following purposes –
1. Strategic planning using facts provided in China Mobile's Rural Communications Strategy case study
2. Improving business portfolio management of Mobile Rural
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 Mobile Rural
Strengths China Mobile's Rural Communications Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mobile Rural in China Mobile's Rural Communications Strategy Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Mobile Rural in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Mobile Rural has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mobile Rural 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.
Ability to recruit top talent
– Mobile Rural is one of the leading recruiters in the industry. Managers in the China Mobile's Rural Communications Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Mobile Rural 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.
Low bargaining power of suppliers
– Suppliers of Mobile Rural in the sector have low bargaining power. China Mobile's Rural Communications Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mobile Rural to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Mobile Rural
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mobile Rural does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Mobile Rural is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the China Mobile's Rural Communications Strategy 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– China Mobile's Rural Communications Strategy firm has clearly differentiated products in the market place. This has enabled Mobile Rural to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Mobile Rural to invest into research and development (R&D) and innovation.
High brand equity
– Mobile Rural has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mobile Rural to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Mobile Rural 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 China Mobile's Rural Communications Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Mobile Rural digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mobile Rural 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 China Mobile's Rural Communications Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Mobile's Rural Communications Strategy are -
Increasing silos among functional specialists
– The organizational structure of Mobile Rural is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Mobile Rural needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mobile Rural to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Mobile Rural products
– To increase the profitability and margins on the products, Mobile Rural needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Mobile Rural 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study China Mobile's Rural Communications Strategy, it seems that the employees of Mobile Rural 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.
High operating costs
– Compare to the competitors, firm in the HBR case study China Mobile's Rural Communications Strategy 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 Mobile Rural 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Mobile Rural, firm in the HBR case study China Mobile's Rural Communications Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study China Mobile's Rural Communications Strategy 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 China Mobile's Rural Communications Strategy can leverage the sales team experience to cultivate customer relationships as Mobile Rural is planning to shift buying processes online.
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 Mobile Rural supply chain. Even after few cautionary changes mentioned in the HBR case study - China Mobile's Rural Communications Strategy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mobile Rural vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Mobile Rural 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.
High cash cycle compare to competitors
Mobile Rural has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Workers concerns about automation
– As automation is fast increasing in the segment, Mobile Rural 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.
Opportunities China Mobile's Rural Communications Strategy | 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 China Mobile's Rural Communications Strategy are -
Building a culture of innovation
– managers at Mobile Rural 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mobile Rural can use these opportunities to build new business models that can help the communities that Mobile Rural operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Developing new processes and practices
– Mobile Rural 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.
Buying journey improvements
– Mobile Rural can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. China Mobile's Rural Communications Strategy 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mobile Rural 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.
Loyalty marketing
– Mobile Rural 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mobile Rural is facing challenges because of the dominance of functional experts in the organization. China Mobile's Rural Communications Strategy 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mobile Rural can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Mobile Rural can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Mobile Rural 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.
Learning at scale
– Online learning technologies has now opened space for Mobile Rural 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mobile Rural 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 Mobile Rural to hire the very best people irrespective of their geographical location.
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 Mobile Rural 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.
Threats China Mobile's Rural Communications Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study China Mobile's Rural Communications Strategy are -
High dependence on third party suppliers
– Mobile Rural 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 Mobile Rural business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Mobile Rural 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 Leadership & Managing People industry regulations.
Environmental challenges
– Mobile Rural 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. Mobile Rural 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. Mobile Rural 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.
Consumer confidence and its impact on Mobile Rural demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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. Mobile Rural needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Mobile Rural 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.
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 Mobile Rural in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Mobile Rural.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study China Mobile's Rural Communications Strategy, Mobile Rural 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 .
Shortening product life cycle
– it is one of the major threat that Mobile Rural is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Mobile Rural has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Mobile Rural needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Weighted SWOT Analysis of China Mobile's Rural Communications Strategy 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 China Mobile's Rural Communications Strategy 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 China Mobile's Rural Communications Strategy 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 China Mobile's Rural Communications Strategy 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 China Mobile's Rural Communications Strategy 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 Mobile Rural needs to make to build a sustainable competitive advantage.
