SingTel (STEL) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for SingTel (Singapore)

Based on various researches at Oak Spring University , SingTel is operating in a macro-environment that has been destablized by – geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , increasing transportation and logistics costs, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, etc

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Introduction to SWOT Analysis of SingTel

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that SingTel can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SingTel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SingTel 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of SingTel can be done for the following purposes –
1. Strategic planning of SingTel
2. Improving business portfolio management of SingTel
3. Assessing feasibility of the new initiative in Singapore
4. Making a Communications Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of SingTel

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Strengths of SingTel | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of SingTel are -

Innovation driven organization

– SingTel is one of the most innovative firm in Communications Services sector.

High brand equity

– SingTel has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled SingTel to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Strong track record of project management in the Communications Services industry

– SingTel is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Sustainable margins compare to other players in Communications Services industry

– SingTel has clearly differentiated products in the market place. This has enabled SingTel to fetch slight price premium compare to the competitors in the Communications Services industry. The sustainable margins have also helped SingTel to invest into research and development (R&D) and innovation.

Diverse revenue streams

– SingTel is present in almost all the verticals within the Communications Services industry. This has provided SingTel 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.

Successful track record of launching new products

– SingTel has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. SingTel 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.

Low bargaining power of suppliers

– Suppliers of SingTel in the Services sector have low bargaining power. SingTel has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps SingTel to manage not only supply disruptions but also source products at highly competitive prices.

High switching costs

– The high switching costs that SingTel 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.

Learning organization

- SingTel 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 SingTel is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at SingTel emphasize – knowledge, initiative, and innovation.

Ability to lead change in Communications Services

– SingTel is one of the leading players in the Communications Services industry in Singapore. Over the years it has not only transformed the business landscape in the Communications Services industry in Singapore but also across the existing markets. The ability to lead change has enabled SingTel 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 SingTel 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.

Organizational Resilience of SingTel

– The covid-19 pandemic has put organizational resilience at the centre of everthing SingTel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

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Weaknesses of SingTel | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of SingTel are -

High bargaining power of channel partners in Communications Services industry

– because of the regulatory requirements in Singapore, SingTel is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Communications Services industry.

Interest costs

– Compare to the competition, SingTel 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 operating costs

– Compare to the competitors, SingTel has high operating costs in the Communications Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract SingTel lucrative customers.

Aligning sales with marketing

– From the outside it seems that SingTel needs to have more collaboration between its sales team and marketing team. Sales professionals in the Communications Services industry have deep experience in developing customer relationships. Marketing department at SingTel can leverage the sales team experience to cultivate customer relationships as SingTel is planning to shift buying processes online.

Compensation and incentives

– The revenue per employee of SingTel is just above the Communications Services industry average. It 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, SingTel is slow explore the new channels of communication. These new channels of communication can help SingTel to provide better information regarding Communications Services products and services. It can also build an online community to further reach out to potential customers.

Increasing silos among functional specialists

– The organizational structure of SingTel is dominated by functional specialists. It is not different from other players in the Communications Services industry, but SingTel needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help SingTel to focus more on services in the Communications Services industry rather than just following the product oriented approach.

Skills based hiring in Communications Services industry

– The stress on hiring functional specialists at SingTel has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

High 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 SingTel supply chain. Even after few cautionary changes, SingTel is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left SingTel vulnerable to further global disruptions in South East Asia.

Low market penetration in new markets

– Outside its home market of Singapore, SingTel needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Slow to strategic competitive environment developments

– As SingTel is one of the leading players in the Communications Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Communications Services industry in last five years.

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SingTel Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of SingTel are -

Building a culture of innovation

– managers at SingTel 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 Communications Services industry.

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 SingTel 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 Communications Services industry, but it has also influenced the consumer preferences. SingTel can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, SingTel 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 SingTel to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Leveraging digital technologies

– SingTel 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.

Creating value in data economy

– The success of analytics program of SingTel has opened avenues for new revenue streams for the organization in Communications Services industry. This can help SingTel to build a more holistic ecosystem for SingTel products in the Communications Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Communications Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. SingTel 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. SingTel 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for SingTel in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Communications Services industry, and it will provide faster access to the consumers.

Use of Bitcoin and other crypto currencies for transactions in Communications Services industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for SingTel in the Communications Services industry. Now SingTel can target international markets with far fewer capital restrictions requirements than the existing system.

Developing new processes and practices

– SingTel can develop new processes and procedures in Communications Services 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, SingTel can use these opportunities to build new business models that can help the communities that SingTel operates in. Secondly it can use opportunities from government spending in Communications Services sector.

Using analytics as competitive advantage

– SingTel has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Communications Services sector. This continuous investment in analytics has enabled SingTel to build a competitive advantage using analytics. The analytics driven competitive advantage can help SingTel to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. SingTel can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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Threats SingTel External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of SingTel are -

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, SingTel may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communications Services sector.

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. SingTel 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 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 Communications Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. SingTel 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. SingTel needs to understand the core reasons impacting the Communications Services industry. This will help it in building a better workplace.

Technology acceleration in Forth Industrial Revolution

– SingTel has witnessed rapid integration of technology during Covid-19 in the Communications Services industry. As one of the leading players in the industry, SingTel needs to keep up with the evolution of technology in the Communications Services 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.

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 SingTel business can come under increasing regulations regarding data privacy, data security, etc.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Communications Services industry are lowering. It can presents SingTel with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Communications Services sector.

Stagnating economy with rate increase

– SingTel 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 Communications Services industry.

Environmental challenges

– SingTel 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. SingTel can take advantage of this fund but it will also bring new competitors in the Communications Services industry.

High dependence on third party suppliers

– SingTel 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.

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 SingTel.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for SingTel in Communications Services industry. The Communications Services 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.

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Weighted SWOT Analysis of SingTel Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at SingTel 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 SingTel 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 SingTel 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 SingTel 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 SingTel needs to make to build a sustainable competitive advantage.

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