Strategic Management of Samsung: A Case Study

The assignment discusses the strategic management of Samsung, a technology giant that has become the global leader in the smartphone industry. It highlights Samsung's value chain model, which consists of primary and secondary activities. The company encourages innovation and performance-based promotions to its employees, who are equipped with cutting-edge technologies. Samsung invests heavily in research and development, marketing, and design to stay ahead of its competitors. The company's business model is based on integration of technological and marketing ideas, enabling it to customize innovations for the market. Furthermore, Samsung prioritizes sustainability and ethical standards by releasing annual environmental reports and ensuring fair labor practices. The strengths of the company include its vast resources, human and technological assets, while weaknesses include being perceived as a follower rather than an innovator. Opportunities abound in developing countries, but threats come from low-cost smartphone companies.

Running Header: Samsung Strategic Management 1
Samsung Strategic Management
Name
School

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Contents
Introduction.................................................................................................................................................2
Samsung Electronics...................................................................................................................................3
Customer Target..........................................................................................................................................3
Current and Desired Position.......................................................................................................................4
Management................................................................................................................................................4
Technology..................................................................................................................................................7
Marketing and Design.................................................................................................................................7
Environment and Ethical Standard..............................................................................................................9
SWOT analysis............................................................................................................................................9
Conclusion.................................................................................................................................................10
References.................................................................................................................................................11

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Introduction
Strategic Management involves identifying the scopes and analyzing the important aspects of
business and work towards the goals and objectives of the organization by mapping out a clear
strategy. Strategy involves leaders and managers to identify strength, weakness, opportunities
and threat of a business and take steps to capitalize on strength and opportunities to take
organization forward for successful accomplishment of goals and objectives. Mission and vision
of an organization are long term aspects of an organization which is realized with proper
implementation of strategies at various levels. Strategies are different from goals and objectives
and should not be confused with them. In simple terms, an organization takes strategy to
accomplish goals and objectives during its course of business and management operations and
building strategy is a never ending process. A proper strategic management reflects leaders’ and
managers’ awareness of all the important aspects of business and effective integration of
resources to work towards goals and objectives. Strategy may change from time to time as per
the requirements depending on the current and future market; managers need to keep themselves
apprised of every business aspects and pro activity is the essence of strategy. The key factors lie
in determining the essentiality of sustaining existing customers and forecasting changes in future
to be ready to take steps when the changes arrive.
The story of Samsung success is a perfect example of how an organization should keep itself
updated with the changing market dynamics and build its strategy at every step to counter ever
growing competition and stay competitive in today’s business world (Co., 2014).

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Samsung Electronics
Samsung Electronics based in South Korea is a manufacturer of electronic devices; it mainly
manufactures television and mobile phones for consumers all over the world and its products are
full of varieties meant to serve consumers at different economic levels. In 2011 Samsung
Electronics occupied the numero uno position to be regarded as the largest technology company
by displacing Apple Inc. and it has been maintained that position since then. In recent years its
main revenues come from manufacturing of variety of smart phones catering to consumers
around the globe at every economic level. Its flagship products are series of Galaxy smart phones
and Tablets. Besides all these it also manufactures semiconductors, chips, lithium ion batteries,
flash memory and hard drive for its own product and also for Apple Inc and other mobile phone
companies (Shaughnessy, 2013). Below is the organizational structure of Samsung.

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Customer Target
Samsung Electronics targets individual consumers as well as business consumers all over the
world. Recently Samsung Electronics have been targeting various government agencies
throughout the world including white house members as they are contemplating to switch to
other mobile phone company. Samsung Electronics also serves television consumers with wide
range of products all over the world. In 2011 when it overtook Apple Inc to become the largest
technology company it spent over $400 million in advertising which was $75 million more than
Apple’s advertising expenditure. In the year 2013 it sold around 70 million units which is
reflected from its first quarter sale alone. Recently it has launched its high cost galaxy note book
devices which are touted as the next big thing in the technology market. It aims to grow further
and sustain its numero uno position. Along with that it continues to be main supplier of Apple
Inc’s subsidiary products which generates further revenue and profit for the company
(Shaughnessy, 2013).

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Current and Desired Position
As per 2015 first quarter report Samsung Electronics’ shipped 83.2 million smart phones
whereas Apple Inc’s Shipment was 61.2 million. The 2015 report announced that Samsung
regained its position as the number 1 supplier of smart phones after losing its major chunk to
Apple Inc’s i-phone 6 innovation. The smart phone market all over the world is getting intensely
competitive and many players such as Lenovo, Motorola, and MI are making a huge dent in its
market share and giving it a tough fight. Samsung has plans to penetrate business organization
market along with replacing Blackberry as the supplier of smart phones to White House officials.
It strives to sustain its position as the largest supplier of Smart phones and increase its market
share and revenue which have been on the lower side (GSM Arena, 2015).
Management
The management of Samsung is based on Value Chain Model which was popularized in the year
1985 by Michael Porter after he proposed value chain model as the set of primary activities and
secondary activities. The primary activities have a direct relation with products or services that
the company intends to sell to its customers. Under secondary activities are those which are
performed within the infrastructure of the firm to carry out primary activities. Following pictorial
representation would give a clear idea of what actually are primary activities and what are
secondary activities (Jung, 2014).

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Both primary activities and secondary activities are interrelated and performing the secondary
activities is a must in order to perform the primary activities. Samsung encourages its employees
by introducing Open HR system where there is no discrimination and everyone is encouraged to
perform and innovate. It provides pay package and promotes its employees on the basis of
performance giving up earlier ideas of seniority. Its technical team consists of well equipped
engineers and researchers who are dispatched to several parts of the world to learn and
accumulate knowledge on technical aspects essential for technological innovation. Below is the
pictorial representation of Samsung’s HR model adopted specifically for 21st century global
market.

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Technology
Samsung invests heavily on research and development and in the year 2015 alone it spent nearly
$14 billion dollar and was second only to German Auto maker Volkswagen. This aggressive
spending is aimed at future market innovation in technological aspects are supposed to play a
crucial role in sustaining its position as the global market leader in technology. Samsung’s
immediate rival Apple Inc often comes with upgrade version of its smart phones and Samsung is
a master in customizing innovations of other companies and make it suitable for its own avoiding
infringement adhering to patented rights. Although recently Samsung is under severe criticism
for copying Apple’s model of i-phone 6 innovation in which it largely came out unscathed.
Marketing and Design
Samsung’s marketing strategy is based on extensive market survey where it gives innate
preference to what customers want and understands the needs of consumers all over the world. It
emphasizes to build reputation and cater to customers designing products of both high cost and
low cost. It is evident that in the era of smart phones and tablets Samsung haven’t stopped
producing elegant traditional mobile phone products. Its smart phones are of various ranges and
providing satisfaction and efficiency to smart phone consumers of both high cost and low cost.
Samsung’s designs are elegant and its display is the most elegant which appeals to its consumers.
Consumers of Samsung connect to its product emotionally and customer loyalty is more evident
among them. Moreover Samsung phones are cost effective as compared to Apple’s phone which
provides it with a massive advantage.
Samsung’s management system is hybrid management where it gives due importance to both
American style of management and Japanese style of management maintaining a proper tradeoffs
between both of them. It specifically gives importance to both internal and external markets and

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focuses to improve its products and services through R&D along with innovation, marketing as
well as design. It maintains long term relationships with its competitors by supplying them with
crucial chips and other products thereby promoting critical competition. It still is the major and
valued supplier of Apple Inc’s despite the entire law suit episode regarding patented rights for
the last two year.
The business model innovation of Samsung is based on integration of ideas and it pursues
integration of technological ideas along with marketing ideas. This innovation enables Samsung
to adopt and customize ideas in line with the market requirements which helps it to stay ahead of
others. It is evident how Nokia which was the most prominent mobile phone providers across the
world suddenly disappeared from the market as due to lack of efficient model. Samsung along
with serving current customers also gives importance to future opportunities keeping track of all
the developments in the consumer smart phone industry (Jung, 2014).
The following diagram would give us the overview of Samsung Strategic Management

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Environment and Ethical Standard
Samsung release Environmental and Ethical report every year mentioning the activities taken to
ensure sustainability and maintain a eco friendly image. The reports are issued under the
headings of people, society, environment and guidelines of business conducts to apprise of its
environmental and ethical standard (Samsung, 2016). However in the year 2013 it admitted that
fallacy in its supply chain where it used tin components danger for sustenance of tropical forests
in Indonesia. Company also vowed to take measures in order to control it and maintain clean
environmental image. Its human resource reports are also excellent where every employees and
labor are paid aligning with the rules and regulations of its state of operation (Foeeurope, 2013).
SWOT analysis
Strength
The strength of the Samsung lies in its vast resources; human and technological assets which
helps it to engage in capital generation for its future endeavors to remain ahead of others. Its
chips, semi conductors are considered its valued assets the supply of which enables it to extract
revenues from reputed firms like Apple, Lenovo, and Sony.
Weakness
However the company is labeled more as followers rather than innovators, Apple could not win
the law suit filed after alleging infringement of patented rights but has managed to dent
Samsung’s image severely in the eyes of consumers which have branded it as followers of
Apple’s technological innovation. The company needs to come with clear image and some
radical technological innovation can play a crucial role in that.

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Opportunities
There are large opportunities opening up for smart phone markets in developing countries and
Samsung’s over reaching R&D can make bigger impacts.
Threat
The ever growing low cost smart phone companies are threat to its existence as the global leader.
Conclusion
Samsung case is a perfect example of why having a clear cut strategy for each and every
organizational aspect is important for successful accomplishment of goals and objectives. Proper
strategy management reflects transparency in each and every affairs of day to day business. For
an organization like Samsung which faces intense competition from every small and big firm, it
is essential to avoid every possibility of manipulation by other firms as scope of error is very
minute to say the least. Samsung needs to come up with some radical innovation to dent its
image after the law suit episode. Though it holds advantage in overall resources and comes with
customized innovation at proper time, it needs to do something and must do it quick to deliver at
least one radical eye catching innovation to shed the tag. Overall, the Samsung story is an
example of how an organization should build its strategy and maintain healthy competition to at
the topmost level.

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References
Co., G. R. (2014). Strategic Management Theory: An integrated approach. Cengage Learning.
Foeeurope. (2013, 04 25). Friends of the Earth Europe. Retrieved 08 25, 2016, from
http://www.foeeurope.org: http://www.foeeurope.org/Samsung-admits-forest-trashing-tin-220413
GSM Arena. (2015). GSM Arena. Retrieved 08 25, 2016, from http://www.gsmarena.com:
http://www.gsmarena.com/gartner_samsung_retains_smartphone_leadership_in_2015_with_over_20_
market_share-news-16723.php
Jung, S. C. (2014). The Analysis of Strategic Management of Samsung Electronics. International Journal of
Software Engineering and Its Applications , 133-142.
Samsung. (2016). Samsung. Retrieved 08 25, 2016, from http://www.samsung.com:
http://www.samsung.com/us/aboutsamsung/sustainability/sustainabilityreports/
Shaughnessy, H. (2013). Forbes. Retrieved 08 25, 2016, from http://www.forbes.com:
http://www.forbes.com/forbes/welcome/?toURL=http://www.forbes.com/sites/haydnshaughnessy/
2013/04/26/samsung-rises-to-nearly-double-apples-smartphone-sales/&refURL=http://
www.forbes.com/forbes/welcome/?toURL=http://www.forbes.com/sites/haydnshaughnessy/201