Case Study Description of Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition
This article presents a clinical study, based on a decade of ongoing research at Samsung Group, that describes how the Samsung Group and its mobile phone division competed successfully in smartphones. The ability to manage co-opetition-simultaneous forces of competition and cooperation within the business group-is a particular dimension of dynamic capability that has stood Samsung in excellent stead. Relying on internal exhortations to cooperate often leads to a lack of dynamism, whereas untrammeled competition leaves proverbial synergies entirely untapped and spawns duplicative investments. Samsung, however, has succeeded by its ability to strike a balance between the two.
Swot Analysis of "Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition" written by Jaeyong Song, Kyungmook Lee, Tarun Khanna includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Samsung Opetition facing as an external strategic factors. Some of the topics covered in Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition case study are - Strategic Management Strategies, Competition, Competitive strategy, Innovation and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition casestudy better are - – there is backlash against globalization, increasing commodity prices, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, increasing transportation and logistics costs, increasing energy prices, digital marketing is dominated by two big players Facebook and Google,
competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Samsung Opetition, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Samsung Opetition 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 Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition can be done for the following purposes –
1. Strategic planning using facts provided in Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition case study
2. Improving business portfolio management of Samsung Opetition
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Samsung Opetition
Strengths Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Samsung Opetition in Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition Harvard Business Review case study are -
Organizational Resilience of Samsung Opetition
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Samsung Opetition does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Samsung Opetition is one of the most innovative firm in sector. Manager in Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Samsung Opetition has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition 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
– Samsung Opetition is present in almost all the verticals within the industry. This has provided firm in Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition 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.
High brand equity
– Samsung Opetition has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Samsung Opetition to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Samsung Opetition is one of the leading recruiters in the industry. Managers in the Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Samsung Opetition has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Samsung Opetition 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.
Strong track record of project management
– Samsung Opetition is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Samsung Opetition in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Samsung Opetition digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Samsung Opetition 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition firm has clearly differentiated products in the market place. This has enabled Samsung Opetition to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Samsung Opetition to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Samsung Opetition 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 Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition are -
Lack of clear differentiation of Samsung Opetition products
– To increase the profitability and margins on the products, Samsung Opetition needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition, it seems that the employees of Samsung Opetition 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.
Capital Spending Reduction
– Even during the low interest decade, Samsung Opetition 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.
Increasing silos among functional specialists
– The organizational structure of Samsung Opetition is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Samsung Opetition needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Samsung Opetition to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition 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 Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition can leverage the sales team experience to cultivate customer relationships as Samsung Opetition is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition, in the dynamic environment Samsung Opetition has struggled to respond to the nimble upstart competition. Samsung Opetition has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Samsung Opetition, firm in the HBR case study Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Samsung Opetition 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.
No frontier risks strategy
– After analyzing the HBR case study Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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 bargaining power of channel partners
– Because of the regulatory requirements, Jaeyong Song, Kyungmook Lee, Tarun Khanna suggests that, Samsung Opetition 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.
Skills based hiring
– The stress on hiring functional specialists at Samsung Opetition 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.
Opportunities Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition | 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 Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition are -
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 Samsung Opetition in the consumer business. Now Samsung Opetition can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Samsung Opetition can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Samsung Opetition 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Samsung Opetition in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Samsung Opetition has opened avenues for new revenue streams for the organization in the industry. This can help Samsung Opetition to build a more holistic ecosystem as suggested in the Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition case study. Samsung Opetition can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Samsung Opetition 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Samsung Opetition can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Samsung Opetition 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.
Developing new processes and practices
– Samsung Opetition can develop new processes and procedures in Strategy & Execution 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Samsung Opetition 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. Samsung Opetition 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Samsung Opetition 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 Samsung Opetition to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Samsung Opetition can use these opportunities to build new business models that can help the communities that Samsung Opetition operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Leveraging digital technologies
– Samsung Opetition 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.
Threats Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Samsung Opetition in the Strategy & Execution industry. The Strategy & Execution 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.
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 Samsung Opetition business can come under increasing regulations regarding data privacy, data security, 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. Samsung Opetition will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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 Samsung Opetition.
Stagnating economy with rate increase
– Samsung Opetition 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Samsung Opetition with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Samsung Opetition is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Samsung Opetition needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Consumer confidence and its impact on Samsung Opetition 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.
High dependence on third party suppliers
– Samsung Opetition 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Samsung Opetition 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 Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition .
Weighted SWOT Analysis of Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition 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 Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition 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 Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition 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 Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition 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 Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition 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 Samsung Opetition needs to make to build a sustainable competitive advantage.
