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

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 (B)" 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 (B) 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 (B) casestudy better are - – increasing transportation and logistics costs, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , wage bills are increasing, increasing commodity prices, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, etc

---

---

---

---

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

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 (B) 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.

---

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 (B) 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 (B) 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

---

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

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 (B) 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.

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 (B) - 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.

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.

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.

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 (B) 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.

Operational resilience

– The operational resilience strategy in the "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (B) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

Cross disciplinary teams

– Horizontal connected teams at the 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.

Digital Transformation in Organizational Development segment

- digital transformation varies from industry to industry. For Deutsche Telekom digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Deutsche Telekom 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.

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 (B) 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 (B) 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.

---

---

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

Low market penetration in new markets

– Outside its home market of Deutsche Telekom, firm in the HBR case study "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Skills based hiring

– The stress on hiring functional specialists at Deutsche Telekom 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.

Need for greater diversity

– Deutsche Telekom 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.

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 (B) 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.

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 (B), 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.

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 Deutsche Telekom supply chain. Even after few cautionary changes mentioned in the HBR case study - "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Deutsche Telekom vulnerable to further global disruptions in South East Asia.

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.

Slow to strategic competitive environment developments

– As "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (B) HBR case study mentions - Deutsche Telekom takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.

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.

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 (B), 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.

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.

---

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

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 (B) - 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.

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.

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.

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.

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. Deutsche Telekom can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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.

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.

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.

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 (B) 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.

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.

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.

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.

---

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

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 Deutsche Telekom.

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 (B), 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 .

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.

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.

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.

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.

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 (B) .

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Deutsche Telekom in the Organizational Development industry. The Organizational Development 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.

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.

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.

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.

High dependence on third party suppliers

– Deutsche Telekom 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.

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.

---

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

--- ---