Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
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 - – digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies,
central banks are concerned over increasing inflation, increasing transportation and logistics costs, 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 -
Training and development
– Samsung Lee has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk 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.
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.
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.
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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Samsung Lee digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Samsung Lee 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.
Strong track record of project management
– Samsung Lee is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Ability to lead change in Leadership & Managing People field
– Samsung Lee 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 Lee in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
Learning organization
- Samsung Lee 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 Lee is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Samsung Lee 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.
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 -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Samsung Lee has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk, in the dynamic environment Samsung Lee has struggled to respond to the nimble upstart competition. Samsung Lee has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Samsung Lee 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.
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.
No frontier risks strategy
– After analyzing the HBR case study Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk, 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.
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.
Aligning sales with marketing
– It come across in the case study Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk 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 Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk can leverage the sales team experience to cultivate customer relationships as Samsung Lee is planning to shift buying processes online.
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.
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.
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.
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 -
Low interest rates
– Even though inflation is raising its head in most developed economies, Samsung Lee 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.
Buying journey improvements
– Samsung Lee can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Samsung: Family Assets and Roadblocks (B) - Heart Attack Puts Succession Planning at Risk 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.
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.
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.
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.
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 Lee in the consumer business. Now Samsung Lee can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Samsung Lee 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 Lee can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Samsung Lee 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 Lee to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Samsung Lee to increase its market reach. Samsung Lee 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.
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.
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.
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 -
Shortening product life cycle
– it is one of the major threat that Samsung Lee is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
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 Lee 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.
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.
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.
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.
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 Lee needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
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.
Increasing wage structure of Samsung Lee
– 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 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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