Samsung: Family Assets and Roadblocks (A) - Drivers of Success, Family Assets and Business Strategy 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 (A) - Drivers of Success, Family Assets and Business Strategy
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 (A) - Drivers of Success, Family Assets and Business Strategy" 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 (A) - Drivers of Success, Family Assets and Business Strategy 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 (A) - Drivers of Success, Family Assets and Business Strategy casestudy better are - – geopolitical disruptions, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, technology disruption, there is backlash against globalization, increasing energy prices,
increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Samsung: Family Assets and Roadblocks (A) - Drivers of Success, Family Assets and Business Strategy
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 (A) - Drivers of Success, Family Assets and Business Strategy 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 (A) - Drivers of Success, Family Assets and Business Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Samsung: Family Assets and Roadblocks (A) - Drivers of Success, Family Assets and Business Strategy 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 (A) - Drivers of Success, Family Assets and Business Strategy | 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 (A) - Drivers of Success, Family Assets and Business Strategy Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Samsung: Family Assets and Roadblocks (A) - Drivers of Success, Family Assets and Business Strategy 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.
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.
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.
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.
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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Samsung: Family Assets and Roadblocks (A) - Drivers of Success, Family Assets and Business Strategy 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.
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 (A) - Drivers of Success, Family Assets and Business Strategy 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.
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.
Innovation driven organization
– Samsung Lee is one of the most innovative firm in sector. Manager in Samsung: Family Assets and Roadblocks (A) - Drivers of Success, Family Assets and Business Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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 (A) - Drivers of Success, Family Assets and Business Strategy - 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 (A) - Drivers of Success, Family Assets and Business Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Samsung: Family Assets and Roadblocks (A) - Drivers of Success, Family Assets and Business Strategy are -
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 (A) - Drivers of Success, Family Assets and Business Strategy should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Samsung: Family Assets and Roadblocks (A) - Drivers of Success, Family Assets and Business Strategy, 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Samsung: Family Assets and Roadblocks (A) - Drivers of Success, Family Assets and Business Strategy, 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.
Aligning sales with marketing
– It come across in the case study Samsung: Family Assets and Roadblocks (A) - Drivers of Success, Family Assets and Business Strategy 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 (A) - Drivers of Success, Family Assets and Business Strategy can leverage the sales team experience to cultivate customer relationships as Samsung Lee is planning to shift buying processes online.
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.
Slow to strategic competitive environment developments
– As Samsung: Family Assets and Roadblocks (A) - Drivers of Success, Family Assets and Business Strategy 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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Samsung: Family Assets and Roadblocks (A) - Drivers of Success, Family Assets and Business Strategy 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.
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.
No frontier risks strategy
– After analyzing the HBR case study Samsung: Family Assets and Roadblocks (A) - Drivers of Success, Family Assets and Business Strategy, 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.
Opportunities Samsung: Family Assets and Roadblocks (A) - Drivers of Success, Family Assets and Business Strategy | 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 (A) - Drivers of Success, Family Assets and Business Strategy are -
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.
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.
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.
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 (A) - Drivers of Success, Family Assets and Business Strategy 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.
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 (A) - Drivers of Success, Family Assets and Business Strategy case study. Samsung Lee can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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.
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.
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.
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.
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.
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 (A) - Drivers of Success, Family Assets and Business Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 (A) - Drivers of Success, Family Assets and Business Strategy 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 (A) - Drivers of Success, Family Assets and Business Strategy are -
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.
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 (A) - Drivers of Success, Family Assets and Business Strategy, 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 .
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.
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.
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.
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.
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.
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.
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.
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 (A) - Drivers of Success, Family Assets and Business Strategy .
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Samsung Lee with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Samsung: Family Assets and Roadblocks (A) - Drivers of Success, Family Assets and Business Strategy 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 (A) - Drivers of Success, Family Assets and Business Strategy 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 (A) - Drivers of Success, Family Assets and Business Strategy 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 (A) - Drivers of Success, Family Assets and Business Strategy 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 (A) - Drivers of Success, Family Assets and Business Strategy 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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