"Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (C), Spanish Version 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 (C), Spanish Version

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 (C), Spanish Version" 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 (C), Spanish Version 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 (C), Spanish Version casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , increasing energy prices, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, 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 (C), Spanish Version

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 (C), Spanish Version 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 (C), Spanish Version 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 (C), Spanish Version 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 (C), Spanish Version | 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 (C), Spanish Version Harvard Business Review case study are -

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.

Learning organization

- Deutsche Telekom 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 Deutsche Telekom is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (C), Spanish Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

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 (C), Spanish Version 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.

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 (C), Spanish Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

High brand equity

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

Low bargaining power of suppliers

– Suppliers of Deutsche Telekom in the sector have low bargaining power. "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (C), Spanish Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Deutsche Telekom to manage not only supply disruptions but also source products at highly competitive prices.

Organizational Resilience of Deutsche Telekom

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

Innovation driven organization

– Deutsche Telekom is one of the most innovative firm in sector. Manager in "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (C), Spanish Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Operational resilience

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

Training and development

– Deutsche Telekom has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (C), Spanish Version Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

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 (C), Spanish Version 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 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.

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Weaknesses "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (C), Spanish Version | 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 (C), Spanish Version are -

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 (C), Spanish Version, 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 (C), Spanish Version 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 (C), Spanish Version can leverage the sales team experience to cultivate customer relationships as Deutsche Telekom is planning to shift buying processes online.

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.

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.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (C), Spanish Version HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Deutsche Telekom has relatively successful track record of launching new products.

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.

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.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (C), Spanish Version, is just above the industry average. Deutsche Telekom 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.

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.

Interest costs

– Compare to the competition, Deutsche Telekom 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.

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

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.

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.

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.

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.

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 (C), Spanish Version 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.

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 (C), Spanish Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Better consumer reach

– The expansion of the 5G network will help Deutsche Telekom to increase its market reach. Deutsche Telekom 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.

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.

Learning at scale

– Online learning technologies has now opened space for Deutsche Telekom 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.

Loyalty marketing

– Deutsche Telekom 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.

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.

Building a culture of innovation

– managers at Deutsche Telekom 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 Organizational Development segment.

Low interest rates

– Even though inflation is raising its head in most developed economies, Deutsche Telekom can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.

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Threats "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (C), Spanish Version 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 (C), Spanish Version are -

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.

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.

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.

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.

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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (C), Spanish Version, Deutsche Telekom may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .

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.

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 wage structure of Deutsche Telekom

– 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 Deutsche Telekom.

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.

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.

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.

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Weighted SWOT Analysis of "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (C), Spanish Version 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 (C), Spanish Version 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 (C), Spanish Version 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 (C), Spanish Version 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 (C), Spanish Version 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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