Samsung strategic management

Samsung strategic management

Question 1

Samsung is a multinational company that offers a wide range of electronics and IT solutions. The company was founded in 1969 in Suwon, South Korea, where they are headquartered to date. Samsung Electronics operates in more than sixty countries across the world. They have more than 300,000 employees. Initially, Samsung mainly produced electronics and electrical appliances like TVs, refrigerators, and washing machines. However, currently, they have diversified to include semiconductors, telecommunication solutions, random access memories, computers, and mobile phones. Over the years, Samsung has acquired several business entities such as the Rollei Watchmaker, Fokker aircraft, and FUBU cloth line. As it is, this company has overcome several challenges to achieve its current status, the world’s leading electronic and IT solutions provider. In 2009, Unit Sales, named Samsung, the leading mobile phone manufacturer after it thrashed its long time competitor, Nokia. Although Samsung has strategically positioned itself as the best electronic and IT solutions provider, it still faces competition from established firms such as Sony and Apple. The company has managed to remain profitable by regularly adjusting to the ever-changing internal and external environment. Samsung has also maintained its people-centered corporate culture that respects employees, customers, and the environment. Samsung’s primary goal is to contribute to South Korea’s economy by prioritizing its human resources and the following rationalism. The company devotes its employees and technology to creating superior products and services for a better global society.

Question 2

Strengths

1. Samsung Electronics Company has a variety of products, mobile phones, cameras, tablets, computers, and home appliances, to satisfy the different customer needs.
2. The company has made significant investments in Research and Development. Such investments have made Samsung a global brand with its products being sold in more than 200 countries.
3. Its product customization and diversification have made the company a favorite brand to consumers. This has strengthened Samsung’s position as the leading IT solutions provider.
4. Samsung products innovative sleek designs have made the company’s products attractive to customers, keeping them happy and loyal.
5. Samsung Electronics is economically stable, thanks to the steady revenue from global operations. As a result, the company has a reliable financial base available to make investments for product innovation.

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Weaknesses

1. The company is heavily dependent on USA markets. For instance, Samsung and Apple sold approximately 70.8% of its smartphones in America. USA’s economy is unpredictable, and in case of any recession, Samsung’s revenues could be put in jeopardy. Samsung should focus on the Asian and European markets to guarantee sustainability and evade potential failures.
2. Samsung has been facing a decline in Smartphone sales since 2017 due to cheap smartphones from China.

Opportunities

1. Samsung can make extraordinary transformational accomplishments if it invests in HR management. This would give the company competitive leverage against its rivals. Through the use of its brand image, the company can hire the best qualified and skilled workers to enhance performance and productivity.
2. Samsung also can increase their customer base through diversification and acquisition of other businesses.

Threats

1. Samsung faces some controversies that threaten its business. Apple filed a lawsuit against Samsung for patent infringement. This underwent a heated court battle for seven years before settling. The suit damaged Samsung’s sales and reputation.
2. Samsung Electronics faces stiff rivalry and particularly in the mobile phone subdivision. Apple, Xiaomi, and Huawei are some of the companies trying their level best to outperform this technology giant.
3. Samsung faces increasing legal and regulatory threats from governmental authorities around the world. Such strict regulations that differ from one market to the other cause hindrance in the company’s operations. Failure to comply might lead to a complete shutdown in the respective market.

Question 3

Samsung’s vision for its corporate social responsibility is to build a society where people, communities, and the environment coexist in peace. The company is committed to transparency and the delivering of essential information to its shareholders to build confidence and trust in them regularly. This ensures enhanced performance and increased sales.

The Samsung Company has given itself the image of a responsible corporation by devising methods of giving back to the community. Some of these ways include financing community development projects like building and facilitating hospitals and schools. For instance, Samsung has concentrated its efforts on improving the lives of children as the umbrella for all its global philanthropic initiatives. The program helped support the STEM programs in education. These programs are strategically essential to the company’s workforce needs. The company also used its portfolio products in crucial ways that met the needs of educators.

Samsung also participates in environmental cleaning as well as sponsoring the needy students. By doing so, Samsung has entered directly into the community at large. People can see the company as being a partner rather than a private entity. That positive image has an impact on Samsung’s ratings and overall performance. In other words, a positive public image implies a more extensive customer base, which translates to more sales and increased revenue collection. This offers the Samsung Company a sustainable competitive advantage over other players in the same industry.

Samsung’s contests, like solve for tomorrow initiative, are not only grants of products or funds. They are also orchestrated for participatory activities, which include essay writing, video producing, online voting, and sharing of social posts. These activities help broaden an understanding of the company’s support. Again, Samsung is assured that the prize winners would be willing and eager to put the prizes into immediate use. This markets Samsung’s brand, as well as leads to increased sales.

Samsung Company also understands that it’s their corporate responsibility to look after its employees. The company is committed to ensuring the health and safety of their workers. The company understands well that employees are critical to driving innovation across the world. This is achieved by enhancing the workplace environments and safety practices. All workers are rewarded equally and fairly, and their rights are respected. This provides a conducive environment for employees to give their best and perform beyond expectations. As a result, Samsung receives the competitive advantage of employees’ commitment and enhanced performance.

Question 4

Power of Buyers

Samsung Electronics makes a variety of products ranging from mobile products, TV, computers, and home appliances. Customers have a variety to choose from and have to stick to the items due to their high value. Consumers have a high bargaining power due to the availability of quality information. However, the switching cost to consumers is low. This means that consumers can easily switch to other products that have acquired enough information about the product. High competition due to advanced technologies leads to competitive prices, which affect customer preferences. As a result, Samsung should invest more in marketing to attract and maintain customers since other rival brands are aggressively advertising their products.

Power of Suppliers

Samsung Company has about 580 suppliers. Its supply chain has more than 2600 suppliers globally. Businesses supplying general components to Samsung do not need a bargaining power due to the company’s volume and negotiation power. Nevertheless, if alternative suppliers are not available for a specific component, then the supplier has the bargaining power to more prices from Samsung. The company has always worked hard to maintain good relations with suppliers to avoid inconveniences and hence can take advantage of the relationship strategies.

Threat of Substitutes

Ordinary machines can substitute the electronics products made by Samsung without time wastage or cost limitation to customers. There are several other electronic items which can be used as substitutes for the Samsung products. Consumer preferences are also changing. The availability of easy alternatives, such as cloud storage, has changed the preference of printers. This poses a threat due to the reduced sales of Samsung’s products.

Rivalry

The electronics market is saturated. This increases competition among the existing companies. Little differentiation is also left to the products provided. The diversity of rivals in the market, such as Huawei, Sony, and Apple, fuels the intensity of competition. To maintain its leading position, Samsung has to bring more innovative products and designs that meet the changing consumer needs.

The threat of new entrants

The electronics industry has high barriers of entry and low barriers of exit and especially where big organizations such as Samsung and Apple are involved. As a result, Samsung faces a low threat of entrants, thanks to the vast distribution networks, efficient supply chains, and expensive setup costs. However, exiting from the industry is easy since the companies only need to sell the venture to any foreign player. As a result, Samsung has been able to enter various markets stepwise and has quickly exited from some markets, which turned out to be unprofitable.

Question 5

Samsung business practices are unique and suitable for their operations. For instance, market segmentation has offered Samsung a comparative advantage over its rivals. Through this strategy, Samsung studies several markets for its different products and classify each of them regarding output and performance. For example, a market zone such as the European Union is classified as a significant market segment because of its tendency to demand a variety of products from home appliances to computers. As a result, such a market needs no specialization, not like the East Asian Market, where demand is almost limited to mobile phones due to the reigning restrictive government policy on social media. Markets such as East Asia call for a selective market segmentation, which makes Samsung supply mobile phones alone. Samsung’s adaptation to markets reduces operation costs, maximizing the chances of making profits. This offers the company a competitive advantage over its competitors, who tend to employ blanket marketing strategies.