Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
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Case Study SWOT Analysis Solution
Case Study Description of Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk
This three-part case covers the history of Samsung from its origins as a small trucking company to one of Korea's largest conglomerates. Part A, "Drivers of Success, Family Assets and Business Strategy", charts the growth of Korea's the export-led economy after the end of Japanese occupation in 1945, driven by a handful of family-owned 'chaebols'. Founder Lee Byung-chull's trucking business, set up in 1938, diversified in the aftermath of the Korean War, as he forged a strong political network that enabled him to embed his family's influence and assets in the business strategy. Part B, "Heart Attack Puts Succession Planning at Risk", describes how the ill health of the second-generation leader Lee Kun-hee deprived the firm of a clear succession plan. As the de facto leader of Samsung, his son had to build up his power base to assume the role in the context of a complex ownership structure. Part C, "Court calls time out on Lee Jae-yong", examines how the de facto heir was convicted of bribery and given a five-year prison sentence, prompting speculation that he would run the Samsung empire from his cell.
Authors :: Morten Bennedsen, Brian Henry, Yupana Wiwattanakantang
Swot Analysis of "Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk" written by Morten Bennedsen, Brian Henry, Yupana Wiwattanakantang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Samsung Lee facing as an external strategic factors. Some of the topics covered in Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk casestudy better are - – technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization,
geopolitical disruptions, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Samsung Lee, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Samsung Lee 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: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk can be done for the following purposes –
1. Strategic planning using facts provided in Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk case study
2. Improving business portfolio management of Samsung Lee
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 Lee
Strengths Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Samsung Lee in Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk Harvard Business Review case study are -
Diverse revenue streams
– Samsung Lee is present in almost all the verticals within the industry. This has provided firm in Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk 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.
Low bargaining power of suppliers
– Suppliers of Samsung Lee in the sector have low bargaining power. Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Samsung Lee to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Samsung Lee
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Samsung Lee does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Samsung Lee has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Samsung Lee 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.
Superior customer experience
– The customer experience strategy of Samsung Lee in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Leadership & Managing People industry
– Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk firm has clearly differentiated products in the market place. This has enabled Samsung Lee to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Samsung Lee to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Samsung Lee is one of the leading recruiters in the industry. Managers in the Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk 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 switching costs
– The high switching costs that Samsung Lee 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.
Innovation driven organization
– Samsung Lee is one of the most innovative firm in sector. Manager in Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Samsung Lee 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 Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Samsung Lee 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 Morten Bennedsen, Brian Henry, Yupana Wiwattanakantang 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.
Effective Research and Development (R&D)
– Samsung Lee 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 Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk are -
Increasing silos among functional specialists
– The organizational structure of Samsung Lee is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Samsung Lee needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Samsung Lee to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk HBR case study mentions - Samsung Lee 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk, is just above the industry average. Samsung Lee 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.
Products dominated business model
– Even though Samsung Lee 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: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Samsung Lee 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 decision making process
– As mentioned earlier in the report, Samsung Lee 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 Lee 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.
Need for greater diversity
– Samsung Lee has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High cash cycle compare to competitors
Samsung Lee has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, Samsung Lee 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, Samsung Lee 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, Morten Bennedsen, Brian Henry, Yupana Wiwattanakantang suggests that, Samsung Lee 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.
Opportunities Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk | 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: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk are -
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 Lee can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Samsung Lee 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: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Samsung Lee to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Samsung Lee 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.
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 Lee 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Samsung Lee can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Lee can use these opportunities to build new business models that can help the communities that Samsung Lee operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Creating value in data economy
– The success of analytics program of Samsung Lee has opened avenues for new revenue streams for the organization in the industry. This can help Samsung Lee to build a more holistic ecosystem as suggested in the Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk case study. Samsung Lee can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Lee 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 Lee 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.
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 Lee can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Samsung Lee 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Samsung Lee can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Samsung Lee is facing challenges because of the dominance of functional experts in the organization. Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk 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.
Building a culture of innovation
– managers at Samsung Lee 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 Leadership & Managing People segment.
Threats Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Samsung Lee 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: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Samsung Lee in the Leadership & Managing People industry. The Leadership & Managing People 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.
High dependence on third party suppliers
– Samsung Lee 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.
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: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk, Samsung Lee 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 .
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 Lee business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Samsung Lee 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.
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 Lee can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Samsung Lee in the Leadership & Managing People sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Samsung Lee 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 Lee 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.
Stagnating economy with rate increase
– Samsung Lee 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.
Regulatory challenges
– Samsung Lee 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.
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 Lee.
Weighted SWOT Analysis of Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk 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: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk 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: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk 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: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk 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: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk 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 Lee needs to make to build a sustainable competitive advantage.
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