"Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A), 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 (A), 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 (A), 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 (A), 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 (A), Spanish Version casestudy better are - – talent flight as more people leaving formal jobs, increasing energy prices, increasing government debt because of Covid-19 spendings, increasing commodity prices, there is increasing trade war between United States & China, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, 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), 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 (A), 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 (A), 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 (A), 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 (A), 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 (A), Spanish Version Harvard Business Review case study are -

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 (A), Spanish Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

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.

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 (A), 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.

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), Spanish Version 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.

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), 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.

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 (A), Spanish Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

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.

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.

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.

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), 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.

Highly skilled collaborators

– Deutsche Telekom has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A), Spanish Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

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

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.

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.

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), 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.

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), Spanish Version 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.

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.

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.

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 (A), Spanish Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Slow to strategic competitive environment developments

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

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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Deutsche Telekom is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study "Do you really think we are so stupid?" A letter to the CEO of Deutsche Telekom (A), Spanish Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

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

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.

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.

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.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Deutsche Telekom 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. Deutsche Telekom 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.

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.

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.

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.

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.

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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Deutsche Telekom to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Deutsche Telekom to hire the very best people irrespective of their geographical location.

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), Spanish Version - 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.

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.

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.

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

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), Spanish Version .

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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 Deutsche Telekom business can come under increasing regulations regarding data privacy, data security, 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), 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 (A), 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 (A), 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 (A), 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 (A), 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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