SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market
The case details the strategic decisions that SK Planet, a leader in web and mobile services in its home country of Korea, needed to make regarding the best way to carry out an aggressive global expansion-most importantly into the United States. The $1 billion company had a war chest of $600 million in cash, which allowed company leadership to consider three strategic options for evaluation: 1) Port or rebrand SK Planet's top-ranked Korean services to the U.S. A challenge with this option was that these platforms were developed largely for the Korean market and might not translate to U.S. audiences. Also, many of these services would face entrenched, direct competition within the U.S.; 2) Develop or expand organically, by way of chartering new SK Planet divisions under experienced Korean or American executives. The downside was that this would involve delays in getting new divisions off the ground, and the company needed to invest significant time and energy in researching the U.S. market; 3) Follow a Merger & Acquisitions strategy using its $600 million in cash. However, this would involve a high degree of risk, and if not managed carefully, mergers could lead to culture clashes between U.S. and Korean executives. Whichever option it chose, SK Planet set a three-year goal for its expansion efforts. While nominally short, the company saw this as the critical time frame before the smartphone ecosystem in the U.S. reached maturation and the incumbents fortified their market positions.
Authors :: Robert A. Burgelman, Steve Chung, Jon Nathanson, Won-yo Lee
Swot Analysis of "SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market" written by Robert A. Burgelman, Steve Chung, Jon Nathanson, Won-yo Lee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sk Korean facing as an external strategic factors. Some of the topics covered in SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market case study are - Strategic Management Strategies, International business, Internet, Leadership, Mergers & acquisitions, Mobile and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , there is backlash against globalization,
increasing commodity prices, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sk Korean, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sk Korean 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 SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market can be done for the following purposes –
1. Strategic planning using facts provided in SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market case study
2. Improving business portfolio management of Sk Korean
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 Sk Korean
Strengths SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sk Korean in SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Sk Korean in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Sk Korean has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market 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.
Highly skilled collaborators
– Sk Korean 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 SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Sk Korean is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Sk Korean has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sk Korean to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Sk Korean 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.
Diverse revenue streams
– Sk Korean is present in almost all the verticals within the industry. This has provided firm in SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market 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.
Effective Research and Development (R&D)
– Sk Korean 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 SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Sk Korean 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 Sk Korean is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market 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.
Organizational Resilience of Sk Korean
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sk Korean does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Leadership & Managing People industry
– SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market firm has clearly differentiated products in the market place. This has enabled Sk Korean to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Sk Korean to invest into research and development (R&D) and innovation.
Weaknesses SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market, in the dynamic environment Sk Korean has struggled to respond to the nimble upstart competition. Sk Korean has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Sk Korean supply chain. Even after few cautionary changes mentioned in the HBR case study - SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sk Korean vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market 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 Sk Korean has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sk Korean is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Sk Korean 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. Sk Korean 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.
Capital Spending Reduction
– Even during the low interest decade, Sk Korean has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert A. Burgelman, Steve Chung, Jon Nathanson, Won-yo Lee suggests that, Sk Korean 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market, is just above the industry average. Sk Korean 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 Sk Korean 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 - SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market, it seems that the employees of Sk Korean don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Skills based hiring
– The stress on hiring functional specialists at Sk Korean 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.
Opportunities SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market | 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 SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market are -
Loyalty marketing
– Sk Korean 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.
Learning at scale
– Online learning technologies has now opened space for Sk Korean to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sk Korean 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. Sk Korean 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sk Korean 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. Sk Korean can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Sk Korean can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sk Korean 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.
Creating value in data economy
– The success of analytics program of Sk Korean has opened avenues for new revenue streams for the organization in the industry. This can help Sk Korean to build a more holistic ecosystem as suggested in the SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market case study. Sk Korean can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Sk Korean 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.
Manufacturing automation
– Sk Korean 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sk Korean is facing challenges because of the dominance of functional experts in the organization. SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market 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.
Using analytics as competitive advantage
– Sk Korean 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 SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sk Korean to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Sk Korean in the consumer business. Now Sk Korean can target international markets with far fewer capital restrictions requirements than the existing system.
Threats SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market are -
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. Sk Korean can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Sk Korean is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sk Korean with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Sk Korean has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Sk Korean 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.
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 Sk Korean business can come under increasing regulations regarding data privacy, data security, etc.
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. Sk Korean 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
– Sk Korean 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sk Korean 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 SK Planet in 2013: A Korean Giant's Big Bet on the U.S. 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 Sk Korean in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Sk Korean.
Increasing wage structure of Sk Korean
– 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 Sk Korean.
Weighted SWOT Analysis of SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market 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 SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market 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 SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market 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 SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market 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 SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market 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 Sk Korean needs to make to build a sustainable competitive advantage.