Case Study Description of Samsung Galaxy Note 7 Debacle
In early September 2016, Samsung Electronics Co. Ltd. (Samsung), a leading manufacturer of smartphones headquartered in South Korea, released the new generation of its flagship smartphone, the Galaxy Note 7. Despite initial positive reviews and a strong market reception, just eight days later, Samsung voluntarily recalled 2.5 million of the smartphones, after receiving reports of the devices overheating and catching on fire. The problems persisted even with the replacement device, and the company decided to cease all production and sales of the Galaxy Note 7 in October 2016. Samsung faced a highly commoditized market, decreasing global demand, and increasing competition, but the company now also needed to deal with one of the biggest recalls in the history of the industry. What had gone wrong, and how could the company move forward?
Authors :: John Lee, Chloe Zheng, Dominic S.K. Lim
Swot Analysis of "Samsung Galaxy Note 7 Debacle" written by John Lee, Chloe Zheng, Dominic S.K. Lim includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Samsung Galaxy facing as an external strategic factors. Some of the topics covered in Samsung Galaxy Note 7 Debacle case study are - Strategic Management Strategies, Corporate governance, Crisis management, Manufacturing and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Samsung Galaxy Note 7 Debacle casestudy better are - – wage bills are increasing, there is backlash against globalization, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models,
geopolitical disruptions, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Samsung Galaxy Note 7 Debacle
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Samsung Galaxy Note 7 Debacle case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Samsung Galaxy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Samsung Galaxy 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 Galaxy Note 7 Debacle can be done for the following purposes –
1. Strategic planning using facts provided in Samsung Galaxy Note 7 Debacle case study
2. Improving business portfolio management of Samsung Galaxy
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Samsung Galaxy
Strengths Samsung Galaxy Note 7 Debacle | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Samsung Galaxy in Samsung Galaxy Note 7 Debacle Harvard Business Review case study are -
Analytics focus
– Samsung Galaxy 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 John Lee, Chloe Zheng, Dominic S.K. Lim 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Samsung Galaxy digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Samsung Galaxy 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.
Training and development
– Samsung Galaxy has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Samsung Galaxy Note 7 Debacle 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.
Low bargaining power of suppliers
– Suppliers of Samsung Galaxy in the sector have low bargaining power. Samsung Galaxy Note 7 Debacle has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Samsung Galaxy to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Samsung Galaxy is one of the leading recruiters in the industry. Managers in the Samsung Galaxy Note 7 Debacle are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Samsung Galaxy has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Samsung Galaxy to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Samsung Galaxy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Samsung Galaxy 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.
Cross disciplinary teams
– Horizontal connected teams at the Samsung Galaxy 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.
Strong track record of project management
– Samsung Galaxy is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Samsung Galaxy 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.
Operational resilience
– The operational resilience strategy in the Samsung Galaxy Note 7 Debacle 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Samsung Galaxy Note 7 Debacle firm has clearly differentiated products in the market place. This has enabled Samsung Galaxy to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Samsung Galaxy to invest into research and development (R&D) and innovation.
Weaknesses Samsung Galaxy Note 7 Debacle | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Samsung Galaxy Note 7 Debacle are -
Increasing silos among functional specialists
– The organizational structure of Samsung Galaxy is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Samsung Galaxy needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Samsung Galaxy to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Samsung Galaxy products
– To increase the profitability and margins on the products, Samsung Galaxy needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Samsung Galaxy, firm in the HBR case study Samsung Galaxy Note 7 Debacle needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Samsung Galaxy Note 7 Debacle, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Samsung Galaxy Note 7 Debacle, in the dynamic environment Samsung Galaxy has struggled to respond to the nimble upstart competition. Samsung Galaxy has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Samsung Galaxy 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Samsung Galaxy Note 7 Debacle, is just above the industry average. Samsung Galaxy 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.
Need for greater diversity
– Samsung Galaxy 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.
Slow to strategic competitive environment developments
– As Samsung Galaxy Note 7 Debacle HBR case study mentions - Samsung Galaxy 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, Samsung Galaxy 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Samsung Galaxy Note 7 Debacle 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 Galaxy 's lucrative customers.
Opportunities Samsung Galaxy Note 7 Debacle | 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 Galaxy Note 7 Debacle are -
Leveraging digital technologies
– Samsung Galaxy 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.
Manufacturing automation
– Samsung Galaxy can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Samsung Galaxy 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 Galaxy to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Samsung Galaxy can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Samsung Galaxy Note 7 Debacle 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 Samsung Galaxy 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Samsung Galaxy 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 Galaxy 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.
Creating value in data economy
– The success of analytics program of Samsung Galaxy has opened avenues for new revenue streams for the organization in the industry. This can help Samsung Galaxy to build a more holistic ecosystem as suggested in the Samsung Galaxy Note 7 Debacle case study. Samsung Galaxy can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Galaxy can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Samsung Galaxy in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Samsung Galaxy to increase its market reach. Samsung Galaxy will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Low interest rates
– Even though inflation is raising its head in most developed economies, Samsung Galaxy 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
– Samsung Galaxy can develop new processes and procedures in Leadership & Managing People 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Samsung Galaxy can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Samsung Galaxy Note 7 Debacle External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Samsung Galaxy Note 7 Debacle are -
Shortening product life cycle
– it is one of the major threat that Samsung Galaxy is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Samsung Galaxy 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 Samsung Galaxy business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Samsung Galaxy
– 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 Galaxy.
Technology acceleration in Forth Industrial Revolution
– Samsung Galaxy has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Samsung Galaxy needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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 Galaxy 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.
Environmental challenges
– Samsung Galaxy 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 Galaxy can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People 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 Galaxy Note 7 Debacle, Samsung Galaxy may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Samsung Galaxy can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Samsung Galaxy 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 Leadership & Managing People industry regulations.
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 Galaxy needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
Consumer confidence and its impact on Samsung Galaxy 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.
Weighted SWOT Analysis of Samsung Galaxy Note 7 Debacle 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 Galaxy Note 7 Debacle 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 Galaxy Note 7 Debacle 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 Galaxy Note 7 Debacle 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 Galaxy Note 7 Debacle 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 Galaxy needs to make to build a sustainable competitive advantage.