Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong
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 (C) - Court Calls 'Time Out' on Lee Jae-yong" 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 (C) - Court Calls 'Time Out' on Lee Jae-yong 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 (C) - Court Calls 'Time Out' on Lee Jae-yong casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels,
increasing commodity prices, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong
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 (C) - Court Calls 'Time Out' on Lee Jae-yong 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 (C) - Court Calls 'Time Out' on Lee Jae-yong can be done for the following purposes –
1. Strategic planning using facts provided in Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong 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 (C) - Court Calls 'Time Out' on Lee Jae-yong | 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 (C) - Court Calls 'Time Out' on Lee Jae-yong Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Samsung Lee in the sector have low bargaining power. Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong 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.
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 (C) - Court Calls 'Time Out' on Lee Jae-yong 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong 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.
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 (C) - Court Calls 'Time Out' on Lee Jae-yong HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Samsung Lee is one of the leading recruiters in the industry. Managers in the Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong 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.
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.
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.
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.
High brand equity
– Samsung Lee has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Samsung Lee to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Weaknesses Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong are -
High operating costs
– Compare to the competitors, firm in the HBR case study Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong 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 Lee 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Samsung Lee is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Samsung Lee products
– To increase the profitability and margins on the products, Samsung Lee needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong 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.
No frontier risks strategy
– After analyzing the HBR case study Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong, 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.
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 dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Samsung Lee supply chain. Even after few cautionary changes mentioned in the HBR case study - Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Samsung Lee vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Samsung Lee, firm in the HBR case study Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong 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 (C) - Court Calls 'Time Out' on Lee Jae-yong can leverage the sales team experience to cultivate customer relationships as Samsung Lee is planning to shift buying processes online.
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.
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 (C) - Court Calls 'Time Out' on Lee Jae-yong | 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 (C) - Court Calls 'Time Out' on Lee Jae-yong are -
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.
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.
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.
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.
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.
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.
Manufacturing automation
– Samsung Lee 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.
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.
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 (C) - Court Calls 'Time Out' on Lee Jae-yong case study. Samsung Lee can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 (C) - Court Calls 'Time Out' on Lee Jae-yong - 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.
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.
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.
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.
Threats Samsung: Family Assets and Roadblocks (C) - Court Calls 'Time Out' on Lee Jae-yong 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 (C) - Court Calls 'Time Out' on Lee Jae-yong are -
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.
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.
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.
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.
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.
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.
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.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Environmental challenges
– Samsung Lee 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 Lee can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
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.
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 (C) - Court Calls 'Time Out' on Lee Jae-yong 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 (C) - Court Calls 'Time Out' on Lee Jae-yong 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 (C) - Court Calls 'Time Out' on Lee Jae-yong 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 (C) - Court Calls 'Time Out' on Lee Jae-yong 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 (C) - Court Calls 'Time Out' on Lee Jae-yong 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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