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 - – technology disruption, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic ,
there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
Analytics focus
– Sk Korean 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 Robert A. Burgelman, Steve Chung, Jon Nathanson, Won-yo Lee 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.
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.
Ability to lead change in Leadership & Managing People field
– Sk Korean 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 Sk Korean in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Sk Korean digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sk Korean 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.
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.
Innovation driven organization
– Sk Korean is one of the most innovative firm in sector. Manager in SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
Successful track record of launching new products
– Sk Korean has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sk Korean 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
- 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.
Low bargaining power of suppliers
– Suppliers of Sk Korean in the sector have low bargaining power. SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sk Korean to manage not only supply disruptions but also source products at highly competitive prices.
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 -
High operating costs
– Compare to the competitors, firm in the HBR case study SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market 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 Sk Korean 's lucrative customers.
Lack of clear differentiation of Sk Korean products
– To increase the profitability and margins on the products, Sk Korean needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market, 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.
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.
Interest costs
– Compare to the competition, Sk Korean 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.
Need for greater diversity
– Sk Korean 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Sk Korean 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.
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.
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 -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sk Korean 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 Sk Korean to hire the very best people irrespective of their geographical location.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sk Korean in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Sk Korean 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sk Korean can use these opportunities to build new business models that can help the communities that Sk Korean operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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. Sk Korean can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Sk Korean to increase its market reach. Sk Korean 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.
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.
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.
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.
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.
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.
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 -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study SK Planet in 2013: A Korean Giant's Big Bet on the U.S. Market, Sk Korean 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 .
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 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.
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.
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. Sk Korean needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
Stagnating economy with rate increase
– Sk Korean 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.
Consumer confidence and its impact on Sk Korean 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sk Korean 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.
Environmental challenges
– Sk Korean 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. Sk Korean can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
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.
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 .
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.