Business Strategy Management.

1 Introduction

Samsung is a multinational organization that operates in the worldwide market with

consumer appliances and gadgets. The organization originates from South-Korea

having strong desires of spreading its self all over the globe, with the recent research of

its new expanding market places, Samsung is not only for a particular market so it’s

spreading itself all over the globe, targeting as many countries as possible. Thus, our

center of focus would be on external environmental drivers of Samsung strategy.

Samsung is listed in the multi-billion dollar revenue-generating organizations of the

world, in 2007 for the very first time Samsung reached its sales to more 100 Billion

Dollars. Which makes Samsung among world’s top 3 organizations of the electronic

industry where only Siemens and Hewlett Packard had claimed to generate such

enormous revenue? The meaning of the Korean word Samsung is Tri-Star or three-

stars because of the vision of the founder for it to become everlasting like stars.

Samsung groups dominate two other sectors, in the run of revolution; it stands among

as the leader in consumer electronics, with equipping its products according to

customer’s desire. That’s what made Samsung to be modified to Asia’s best technology

organization from a copy-cat.

Samsung is bargaining with unique and innovative products that had enhanced user

experience, this factor strengthen company because while any new trends are with the

design or technology, Samsung adopts them for providing enhanced user experience

towards their products. The expenditure of research annually costs more than six billion

dollars, with the acknowledgment that many of its products are now daily life appliance,

and it desires to create thin and unique designed devices for the next generation. As the

Sony Walkman in 80's and iPod nowadays. Samsung emphasizes the structure and

most precisely the structure of their digital Televisions; in 2005 they launched R7 LCD

TV which leads them on for creating "Bordeaux" the flat-screen TV, which generated the

sales of more than one million units.

1.1 Research and Development

Research and Development is core by which Samsung leads on making any decision,

Research and development is key factor by which Samsung makes any decision.

Samsung global research network plays a vital role for creating products for tomorrow.

Research and Development Expenditure of Samsung last 4 years

(Samsung2014,pg20)

1.2 Vision 2020

Inspire the world, create the future

Criteria Vision statement investigation of Samsung.

Criterion

Bargaining in new trending Innovative technology, electronics products and

design. The main area that is indicated in their vision is using proficiency to

create unique products and designs with innovative technology to generate

the desired digital future.

Foresight

Imagination for the future where the company direct all of its effort to prosper

the community and responsibly create and shape the future. This imagination

is set for 2020 where the company has taken into account all of its

stakeholders.

Breadth

The main focus of the vision 2020 is Innovation through which inspire the

world communities and create a digital future. The broad changes are that

Samsung is a leading company in IT and electronics and hope to enrich

people life with digital future they are shaping.

Uniqueness

The vision statement walks along with the word "create" because the

company plans to secure and benefit the shareholders and present them their

desired future.

Consensus

Samsung is widening both, with internal and external shareholders and also

believes that they are nothing without their employee's And doing more

external collaborations to make the dream of vision 2020 to turn in reality to be

technology leader of the globe.

Action-

ability

To achieve the vision 2020 the Samsung has identified three strategic

approaches “Creativity, Collaboration, Great People” to be adopted to realize

vision. Six core competencies have been identified “CapEx, R&D, Patent,

Marketing, HR, M&A”

*Important: Investigation has been made by our own assumption for class room study

and learning only

1.3 Mission:

For a socially responsible and sustainable future Samsung encourages the globe with

revolutionized technologies, products, and design ideas that make the users more

comfortable.

Criteria

Samsung Electronic mission statement investigation

Be specific

enough

The mission statement of the Samsung electronics is specific enough

because the company has its main focus is on continuous innovation

through which inspire the world communities. So to achieve that

mission the company has strategic approaches “creativity and great

people” to shape the digital future. Has impact on the individual to

bring that innovation.

Reflect the

distinctive

advantage

based on

objectives.

The distinctive advantage is contribution to the society by acting as a

responsible citizen. This is because most profit-oriented

organizations are not taking into account socially responsible

behavior and ultimate benefits to the society. The concept of

sustainability for the people further reflects the distinctive advantage.

Be realistic

and attainable

The mission statement of the company is realistic and attainable

because the mission is set for 2020 and company has set

quantitative and qualitative goals that is company want to earn $400

billion and become the world’s leader and admired company by new

products and designs

Be flexible to

take into

The word innovative in mission statement depicts the intention of the

company that company is concerned about the uncertain

account

environmental

shift

environmental changes and industry trends so that is why there is

flexibility in the mission statement in which modification occurs when

environmental factors change.

*Important: Investigation has been made by our own assumption for purpose of study

only

After its 40th anniversary, Samsung revolutionized its vision for becoming innovative

leader of the new markets and stabilization of rapidly changing environments of global

business, this is to express organizations vision for building a new future that generates

positive influences for global community through revolution in technology, products and

user reviews and solutions which generates the bonding of the globe to be Samsung

community.

Three strategic approaches have been adopted for Samsung 2020 vision which is

talent, partnerships and namely creativity. Concerning talent management system: hope

to bring up creative and first-rate professionals and inspire and motivate them for new

challenges solutions.Relating to partnerships: Do efforts for Building a network for the

organization that builds up collaboration and environmental management.Concerning

namely creativity: Samsung will explore new technology and new markets and will

propose trends for a new lifestyle. To achieve the vision 2020 many proposed action

plans will be implemented.

When we analyze the vision of Samsung Electronics more let us tell about that more

broadly. Samsung Electronics has set vision for 2020 and hope to inspire the

communities by enriching their lives with innovative products, designs and solution.

What Action Plans Samsung has proposed to achieve their mission and vision? The

following diagram shows

(Sustainability, pg. 12)

Samsung believes that the backbone of its success is its ability to generate new

opportunities for business, technology, and products. Conclusion, the organization gives

vital importance to future purchases and patents. Samsung realizes that challenges are

to serve as an instigator for strategic problem solving and revolution for the global

market. By consistent problem solving and creative technological modifications,

Samsung is devoted to making a more sustainable tomorrow for the entire global

community.

Samsung is inspiring communities by its new vision of taking benefits from its key

strengths, innovative products, and up to date technologies, as they raise the values for

hub of Samsung network, it includes shareholders, representatives and allies. Samsung

want to enhance the world toward better user experiences by using all these efforts,

which even gets included in Samsung vision.

Samsung's mission desires are to secure a creative leading position for itself in new

markets. Samsung is to generate reputation so it does do obtain fast followers,

Samsung had always been succeeding through watching others discovering new

technologies and markets and then hasten after. It was even disclosed when Samsung

was accused by the I-phone. In which Samsung had violated patent rules.

Work-hard being shifted to work smart:

The work smart strategy had been adopted by Samsung to obtain the set of principles

to provide quality and performance managed way of performing business, the reason to

follow work smart criteria is to identify the process of work which leads to efficiency

which further leads to boosting productivity. And Samsung is even enhancing creativity

to give and achieve better performance

To help out employees, Samsung had introduced a course, which is known as the work

smart academy, to provide detailed action plans for the business, which includes

meeting formats, preparation of documentation, reporting and important instructions and

tips. Idea open space| tapping employee's creativity for enhancement in product

development.

In 2013 (14000) ideas had been submitted to idea open space, this is the system which

encourages to present creative ideas and concepts that can be implemented. Samsung

designers and engineers had many contributions for making the product perform better.

3. Swot analysis of Samsung

Strengths

The foundation of Samsung has

always been on Innovative research

and development. Expenditure in

these departments resulted in the

company having a wide range of

product portfolio among its

competitors.

Award Winning Brand –

Samsung’s position as a

pioneer for innovation is

backed with credibility.

Samsung has won many

awards for its offerings

Ecologically Friendly

Innovations – Samsung has

enhanced its brand reputation

through its environmentally

friendly innovations.

Weaknesses

Heavily dependent on the

American Markets – It is

estimated that both Apple and

Samsung sold at least 70.8% of

smartphones in the USA. While

Samsung has diversified its

resources and expanded its

operations in Asia, it is still heavily

dependent on the American

markets.

The decline in Smartphone

Sales – Samsung has been

experiencing a decline in

smartphone sales since 2017.

A similar trend was seen in

China due to the price

senstivity of the Chinese

market. They dump a lot of

those products in the Indian

market at a lower cost which

harms the Samsung sales

Opportunities

HR Management – Samsung

can make impressive

transformational

Threats

Controversies – Samsung

has been involved in

controversies that have

accomplishments if it invests in

its HR management. Not only

would it be good for its sales

but it will also give a

competitive advantage over its

competitors.

Diversification and

Acquisitions – It is critical that

Samsung avoids the mistake

of being limited to just one

marketplace. It not only invites

risks from an economic

perspective, but it also attracts

unwanted political polarization

and negative media publicity.

threatened its business. Its

rival Apple filed a lawsuit

against Samsung for patent

infringement which underwent

a heated court battle for seven

long years until finally reaching

a settlement.

Legal and

Regulatory Threats – With

the world becoming more

globalized and digitally

oriented, governmental

authorities have begun issuing

their guidelines which are

increasing legal and regulatory

threats to companies around

the globe.

2. Environmental Analysis of Samsung

2.1 Political

Most of the markets where Samsung is operating, have conducive political environment

and even there are minor nuisances for foreign region like India, while overall political

factors for Samsung are gracious, but in the recent course of time Samsung had faced

vital headwinds because of the dispute of South Korea and North Korea, where it had

not only faced political uncertainty but also had the threat of war being break out to

Korean Peninsula. Even though Samsung faces political stresses in many Latin

American and African countries because of instability in political environments and

inclines various changes in governing structure. This is not the point where the

organizations should worry because of companies own strategic calculations.

2.2 Economic

Economic dimensions are the critical one for Samsung, as Samsung is expanding to

new market places and the company can even enhance its performance to more

extents, but due to the ongoing global economic crisis, it had seriously scratched the

purchasing powers of consumers in already developed markets, and are enforcing

Samsung to provide and seek beneficial ventures in visible market's.

The most important point here for the discussion is the macroeconomic environment in

which Samsung is operating in the world is besieged with the stages that are

undetermined or not known, but Samsung is still trying to make its policies accordingly

with the era global economic crisis. The success of the company is this that in

developed countries it had adjusted disposable incomes by expanding into emerging

and developing markets. In the expectations for making up lost business in the

developed world

2.3 Socio-Cultural

Samsung is basically a South Korean family-owned multinational organization, while

having it footprints globally it still operates from core of being organization of South

Korea, while it global activities depend upon many features, which is getting along with

the regional circumstances on the other hand it means Samsung being a global

organization had to target as many countries as it could and for achieving this purpose

its using Google strategies in new market places, even Samsung had to develop the

products according to the needs of the global users for that Samsung is using Global

strategy, Samsung does reorient itself in different market places on the basis of lifestyle

preferences of consumer according to sociocultural factors of each country and regions.

2.4 Technological

Samsung is considered one of the leading brands in the globe; the company is using

the power of technology to the enormous extents, for achieving innovation for

sustainable business opportunities is concerned. The objectives of Samsung is to

dominate its competitors and rivals by providing the latest and unique technology

products for enhanced user experience so it merges up the devices with all of the new

trends, shapes, features and designs. This thing also led Samsung in cutting corners

with the imitation of Apple's product design and that's what causes the company to face

legal and regulatory scrutiny and mess, this is what generates message for other rising

brands and it's that no matter how fast will you reach the consumer in this age of big-

bang disruption, performing the basic in right manner is path of success.

2.5 Legal

As we had already discussed that Samsung had to pay huge amount of penalties for

being penalized by the Apple' iPad & iPhone, even by this case the organization

negative reviews and questions by consumers, the answer is still be found that how

Samsung seeks to however the corporate would wriggle out of the legal maze that it

finds itself within the developed markets due to the assorted lawsuits.

2.6 Environmental

Increasing Consumers of global market demands there products brand to be

unassailable, which means that Samsung had be aware of the products and the

audience's the build the product for, which in further could be described as that the

organization doesn't compromise in quality of product and in payment of wages of the

labor who are serving in constructing the products.

Samsung McKinsey 7s model

3. Porter’s Five Forces Analysis of Electronics Brand Samsung

The fame of Samsung is considered around the globe, there are different products

which led it to achieve it, the vast range of its items, e: g Mobiles phones, TV, wearing

gadgets, cameras, etc. made it one of the top sellers in the world. The revolution in

technology sector by Samsung could not be even denied, and with consistently growing

sales there was remarkable financial growth which had been recorded in 2016, and the

edge technology Samsung edge6 and Samsung edge7 mobile phones had even

produced awesome financial results and are well known in all the mobile markets of the

globe, Samsung succeeded in generating huge balance to their accounts with above-

discussed products, even the Samsung's global demand emphasizes to bring more new

to the world, the comparison sector of brand mobiles are high. It could be known as the

porter five forces analysis of the organization, and as we already know that these are

the forces which influence every market of the globe, which allows us to generate what

factors are getting more attractive, and we could even dig further with porter analysis

which would present the competent analysis of the Organization and what are the things

causing more engagements for it.

3.1 Bargaining power of suppliers:

The main source of companies to get raw material and items is suppliers and they are

the most important part of any organization and their bargaining power is significant part

of any company. if suppliers have high rates the competitive rivalry increases and

company’s strength will be low and decreases. According to Samsung their bargaining

power of suppliers is relatively low and they are distributed all over the world and

according to them thy can switch to any other supplier at any time. but Samsung is the

major source of income of these suppliers and they depend highly on company.

Company always makes rules and regulations so that they can easily follow and not

able to switch any other brand or company. Samsung also conducts surveys to get to

know about their performance and either they are per routine or not. Suppliers have to

follow all rules at lower to upper state. if the suppliers wants to exit or switch that’s only

because of their bargaining power, sustainability, size and their financial crisis.

3.2 Bargaining power of customers:

The main concern for every consumer is quality product which has a continuous rise in

bargaining power of them. The budget of every Samsung user is moderately high for

latest products. It is because switching cost to another brand is very low and they can

easily compare features, attributes to other brand products. Customers or users can

easily compare brands and its products and can get feedback from other users. Now

brands are highly investing in marketing and advertisement to attract new customers.

every rival company is aggressively trying to hack others marketing strategies to lower

the rate. All these are the basic factors to increase the bargaining power of the buyer.

The factors which have significant impact on brands are its quality, cost, size,

innovation, features.

3.3 Threat from substitutes:

Rival brands and their products are the basic threat to SamsungCompany and it has

different competitors like, Apple McIntosh, Qmobile, Huawei, Motorola, LG. apart from

them local and international small brands are also threat for the Samsung, but

customers have several attributes and loyalty toward each brand and its products. As

rival small brands have low cost consumer can easily switch and they can switch on

brand image, its innovation and similar features at low and moderate cost.

3.4 Threat of new entrants:

The threat of new entrance is low for Samsung, it’s not easy to build such a large brand

and it requires huge investment, marketing strategies and highly skilled human

resources to compete Samsung. Any local brand can enter at small scale and can try to

enter and compete other small ventures and barriers to compete Samsung are very

high.

3.5 Level of Rivalry in the Industry:

The electronic industry analyzed huge completion between large companies in their

products, size and financial strength. All these companies are competing for market

share and they are LG to Apple, Apple, SONY, Toshiba. It is also very difficult entrance

for any new brand. They have huge brand image and position in market. Technological

innovation is the basic and primary feature of all these companies to remain stable in

the market.

4. Conclusion

The Samsung Company is growing fast day by day and it is assembling new products

with vast range of innovation. Samsung is bargaining with unique and innovative

products that had enhanced user experience, this factor strengthen company because

while any new trends are with the design or technology, Samsung adopts them for

providing enhanced user experience towards their products. Samsung Company is

preparing to expand its global for in whole world and stakes of its are not too high to

take a big risk and enter in new market.

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