Samsung and Daewoo: Two Tales of One City SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Samsung and Daewoo: Two Tales of One City
By fiscal year 2000, Samsung had pulled far ahead of other "chaebols," Korean conglomerates. For example, the market value of Samsung affiliates listed on the Korea Stock Exchange exceeded the sum of the market value of listed affiliates of second, third, and fourth largest groups: Hyundai, LG, and SK. Samsung's accomplishments during the late 1990s were particularly noteworthy when compared to its long-time rival Daewoo, whose businesses were forced into financial workout disposition of assets overseen by creditors in 1999. Discusses what made the destinies of the two groups totally different.
Authors :: Donald N. Sull, Seonghoon Kim, Choelsoon Park
Swot Analysis of "Samsung and Daewoo: Two Tales of One City" written by Donald N. Sull, Seonghoon Kim, Choelsoon Park includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Samsung Daewoo facing as an external strategic factors. Some of the topics covered in Samsung and Daewoo: Two Tales of One City case study are - Strategic Management Strategies, Crisis management, Emerging markets, Government, Leadership, Organizational culture and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Samsung and Daewoo: Two Tales of One City casestudy better are - – technology disruption, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, wage bills are increasing, there is backlash against globalization, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion,
banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Samsung and Daewoo: Two Tales of One City
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Samsung and Daewoo: Two Tales of One City case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Samsung Daewoo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Samsung Daewoo 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 Samsung and Daewoo: Two Tales of One City can be done for the following purposes –
1. Strategic planning using facts provided in Samsung and Daewoo: Two Tales of One City case study
2. Improving business portfolio management of Samsung Daewoo
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 Daewoo
Strengths Samsung and Daewoo: Two Tales of One City | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Samsung Daewoo in Samsung and Daewoo: Two Tales of One City Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Samsung and Daewoo: Two Tales of One City firm has clearly differentiated products in the market place. This has enabled Samsung Daewoo to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Samsung Daewoo to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Samsung Daewoo in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Samsung Daewoo is present in almost all the verticals within the industry. This has provided firm in Samsung and Daewoo: Two Tales of One City 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.
Learning organization
- Samsung Daewoo 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 Samsung Daewoo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Samsung and Daewoo: Two Tales of One City Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Samsung Daewoo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Samsung Daewoo 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.
Operational resilience
– The operational resilience strategy in the Samsung and Daewoo: Two Tales of One City 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.
Organizational Resilience of Samsung Daewoo
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Samsung Daewoo does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– Samsung Daewoo 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 Samsung Daewoo in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Samsung Daewoo 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.
Analytics focus
– Samsung Daewoo 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 Donald N. Sull, Seonghoon Kim, Choelsoon Park 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 recruit top talent
– Samsung Daewoo is one of the leading recruiters in the industry. Managers in the Samsung and Daewoo: Two Tales of One City are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Samsung Daewoo is one of the most innovative firm in sector. Manager in Samsung and Daewoo: Two Tales of One City Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Samsung and Daewoo: Two Tales of One City | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Samsung and Daewoo: Two Tales of One City are -
No frontier risks strategy
– After analyzing the HBR case study Samsung and Daewoo: Two Tales of One City, 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.
Products dominated business model
– Even though Samsung Daewoo has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Samsung and Daewoo: Two Tales of One City should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Samsung and Daewoo: Two Tales of One City 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 Samsung Daewoo 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Samsung Daewoo 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Samsung Daewoo is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Samsung and Daewoo: Two Tales of One City can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Samsung and Daewoo: Two Tales of One City, in the dynamic environment Samsung Daewoo has struggled to respond to the nimble upstart competition. Samsung Daewoo has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Samsung and Daewoo: Two Tales of One City, is just above the industry average. Samsung Daewoo 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.
Interest costs
– Compare to the competition, Samsung Daewoo 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.
Increasing silos among functional specialists
– The organizational structure of Samsung Daewoo is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Samsung Daewoo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Samsung Daewoo to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Samsung Daewoo 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. Samsung Daewoo 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.
Capital Spending Reduction
– Even during the low interest decade, Samsung Daewoo 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.
Opportunities Samsung and Daewoo: Two Tales of One City | 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 Samsung and Daewoo: Two Tales of One City are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Samsung Daewoo is facing challenges because of the dominance of functional experts in the organization. Samsung and Daewoo: Two Tales of One City 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.
Manufacturing automation
– Samsung Daewoo can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
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. Samsung Daewoo can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Daewoo can use these opportunities to build new business models that can help the communities that Samsung Daewoo operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Creating value in data economy
– The success of analytics program of Samsung Daewoo has opened avenues for new revenue streams for the organization in the industry. This can help Samsung Daewoo to build a more holistic ecosystem as suggested in the Samsung and Daewoo: Two Tales of One City case study. Samsung Daewoo can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Samsung Daewoo can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Samsung and Daewoo: Two Tales of One City 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.
Using analytics as competitive advantage
– Samsung Daewoo 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 Samsung and Daewoo: Two Tales of One City - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Samsung Daewoo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Daewoo 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 Daewoo 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.
Building a culture of innovation
– managers at Samsung Daewoo 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 Strategy & Execution segment.
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 Daewoo in the consumer business. Now Samsung Daewoo can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Samsung Daewoo 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.
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 Daewoo can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Samsung Daewoo 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.
Threats Samsung and Daewoo: Two Tales of One City External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Samsung and Daewoo: Two Tales of One City are -
Stagnating economy with rate increase
– Samsung Daewoo 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.
High dependence on third party suppliers
– Samsung Daewoo 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.
Increasing wage structure of Samsung Daewoo
– 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 Samsung Daewoo.
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 Daewoo.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Samsung Daewoo with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Samsung Daewoo 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. Samsung Daewoo can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Samsung and Daewoo: Two Tales of One City, Samsung Daewoo may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Samsung Daewoo 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 Samsung and Daewoo: Two Tales of One City .
Technology acceleration in Forth Industrial Revolution
– Samsung Daewoo has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Samsung Daewoo needs to keep up with the evolution of technology in the Strategy & Execution 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.
Shortening product life cycle
– it is one of the major threat that Samsung Daewoo is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Samsung Daewoo in the Strategy & Execution sector and impact the bottomline of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Samsung Daewoo needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Daewoo 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.
Weighted SWOT Analysis of Samsung and Daewoo: Two Tales of One City 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 Samsung and Daewoo: Two Tales of One City 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 Samsung and Daewoo: Two Tales of One City 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 Samsung and Daewoo: Two Tales of One City 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 Samsung and Daewoo: Two Tales of One City 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 Daewoo needs to make to build a sustainable competitive advantage.
