"Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A)

This three-part case-study illustrates key concepts and lessons about leading adaptive change in organizations in the context of turning around Deutsche Telekom, one of the world's largest telecommunication companies. The case portrays some of the efforts undertaken by Deutsche Telekom under the leadership of RenA? Obermann after his ascent to the CEO position in that organization. The case illustrates the challenges associated with resistance to adaptive change, management of expectations of organizational members from their leaders, and the psychological challenges of leading necessary, but unpopular, change efforts under the conditions of pressure from organizational stakeholders, who consciously or unconsciously attempt to divert the change-oriented leader from pushing the organization forward. The A case briefly describes Deutsche Telekom's background of a former state-owned monopolist and its struggles in a current competitive environment, provides information about RenA? Obermann and his ascent to the CEO position, and outlines some of the change initiatives undertaken by the organization. It culminates in a letter sent to RenA? Obermann and Board members of Deutsche Telekom by a company's technician in Berlin. In the letter, which later became associated with the feelings of many of Deutsche Telekom's employees, the author accuses the Board of the company in having no interest in the development of the company, well-being of employees, and service to the customers. The B case shows the reaction to the letter (which quickly leaked to the media) within Deutsche Telekom and in German society, and provides an account of an emotional response from RenA? Obermann, who chose to respond publicly to the letter. The C case provides an overview of the change actions undertaken at Deutsche Telekom under the leadership of RenA? Obermann and describes the outcomes known at the time of preparing this case study.

Authors :: Konstantin Korotov, Urs Mueller, Ulf Schaefer

Topics :: Organizational Development

Tags :: Human resource management, Leadership, Organizational culture, Public relations, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of ""Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A)" written by Konstantin Korotov, Urs Mueller, Ulf Schaefer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Deutsche Telekom facing as an external strategic factors. Some of the topics covered in "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) case study are - Strategic Management Strategies, Human resource management, Leadership, Organizational culture, Public relations and Organizational Development.

Some of the macro environment factors that can be used to understand the "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) casestudy better are - – central banks are concerned over increasing inflation, geopolitical disruptions, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, talent flight as more people leaving formal jobs, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, etc

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Introduction to SWOT Analysis of "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A)

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Deutsche Telekom, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Deutsche Telekom 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 "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) can be done for the following purposes –
1. Strategic planning using facts provided in "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) case study
2. Improving business portfolio management of Deutsche Telekom
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Deutsche Telekom

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Strengths "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Deutsche Telekom in "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) Harvard Business Review case study are -

Sustainable margins compare to other players in Organizational Development industry

– "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) firm has clearly differentiated products in the market place. This has enabled Deutsche Telekom to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Deutsche Telekom to invest into research and development (R&D) and innovation.

High switching costs

– The high switching costs that Deutsche Telekom 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.

Diverse revenue streams

– Deutsche Telekom is present in almost all the verticals within the industry. This has provided firm in "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (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.

Strong track record of project management

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

Effective Research and Development (R&D)

– Deutsche Telekom 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 "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Successful track record of launching new products

– Deutsche Telekom has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Deutsche Telekom 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 lead change in Organizational Development field

– Deutsche Telekom 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 Deutsche Telekom in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Superior customer experience

– The customer experience strategy of Deutsche Telekom in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Ability to recruit top talent

– Deutsche Telekom is one of the leading recruiters in the industry. Managers in the "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Operational resilience

– The operational resilience strategy in the "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (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.

Analytics focus

– Deutsche Telekom 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 Konstantin Korotov, Urs Mueller, Ulf Schaefer 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.

Cross disciplinary teams

– Horizontal connected teams at the Deutsche Telekom 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.

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Weaknesses "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) are -

Workers concerns about automation

– As automation is fast increasing in the segment, Deutsche Telekom 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.

Increasing silos among functional specialists

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

Capital Spending Reduction

– Even during the low interest decade, Deutsche Telekom has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.

Slow decision making process

– As mentioned earlier in the report, Deutsche Telekom has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Deutsche Telekom even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

High cash cycle compare to competitors

Deutsche Telekom 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.

High bargaining power of channel partners

– Because of the regulatory requirements, Konstantin Korotov, Urs Mueller, Ulf Schaefer suggests that, Deutsche Telekom 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 industry.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A), in the dynamic environment Deutsche Telekom has struggled to respond to the nimble upstart competition. Deutsche Telekom has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

No frontier risks strategy

– After analyzing the HBR case study "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A), it seems that company is thinking about the frontier risks that can impact Organizational Development 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.

High operating costs

– Compare to the competitors, firm in the HBR case study "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (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 Deutsche Telekom 's lucrative customers.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A), it seems that the employees of Deutsche Telekom 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.

Aligning sales with marketing

– It come across in the case study "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (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 "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) can leverage the sales team experience to cultivate customer relationships as Deutsche Telekom is planning to shift buying processes online.

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Opportunities "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (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 "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) are -

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 Deutsche Telekom 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Deutsche Telekom can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Manufacturing automation

– Deutsche Telekom can use the latest technology developments to improve its manufacturing and designing process in Organizational Development 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Deutsche Telekom 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, "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Using analytics as competitive advantage

– Deutsche Telekom 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 "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Deutsche Telekom to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Leveraging digital technologies

– Deutsche Telekom 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Deutsche Telekom in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Deutsche Telekom can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Deutsche Telekom is facing challenges because of the dominance of functional experts in the organization. "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (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.

Increase in government spending

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

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 Deutsche Telekom in the consumer business. Now Deutsche Telekom can target international markets with far fewer capital restrictions requirements than the existing system.

Developing new processes and practices

– Deutsche Telekom can develop new processes and procedures in Organizational Development 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

– Deutsche Telekom can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) 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.

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Threats "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) are -

Consumer confidence and its impact on Deutsche Telekom 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.

Barriers of entry lowering

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

Aging population

– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.

Easy access to finance

– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Deutsche Telekom can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Environmental challenges

– Deutsche Telekom 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. Deutsche Telekom can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.

Stagnating economy with rate increase

– Deutsche Telekom 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Deutsche Telekom 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 "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A) .

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.

Technology acceleration in Forth Industrial Revolution

– Deutsche Telekom has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Deutsche Telekom needs to keep up with the evolution of technology in the Organizational Development 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 Deutsche Telekom in the Organizational Development 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. Deutsche Telekom needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.

Shortening product life cycle

– it is one of the major threat that Deutsche Telekom is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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Weighted SWOT Analysis of "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (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 "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (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 "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (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 "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (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 "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (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 Deutsche Telekom needs to make to build a sustainable competitive advantage.

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