International Business Across Border

This report examines the different business techniques and the working position of Samsung in Russia. It covers entry strategies, supply chain management, human resource management, and organizational design structure.

Running head: INTERNATIONAL BUSINESS ACROSS BORDER
International business across border
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1INTERNATIONAL BUSINESS ACROSS BORDER
Executive summary:
This report is meant to examine the different business technique and the working position
of the Samsung to follow how the firm has advanced to wind up where it is currently. Through
this examination, this report will give brief outline with respect to the vital approaches to enter
new market, store network administration and human asset administration strategies of the firm
at better places to grandstand the knowledge points of interest of the chose association. To finish
up it will give abridged diagram of the report and proposals to improve the execution of the
administration. From the analysis, it has been found that, the brand has lack in management and
deteriorating market share is one of them major concerns of the brand, however, considering the
potential and the recommendations, it can be said that it has power to become the market leader
in the Russia once again.

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Table of Contents
Introduction:....................................................................................................................................3
Overview of the Samsung Russia and its present operating position:.............................................3
Review of company’s international competitive strategy:..............................................................7
Human resource management, information and control system:....................................................8
Existing organizational design structure and control issues:...........................................................8
Entry strategies used to enter other regions:..................................................................................10
Supply chain management of the selected brand:..........................................................................11
Management of Human Resources across borders:.......................................................................11
Crucial issues and opportunities for management:........................................................................12
Recommendations to management for improvement:...................................................................12
Conclusion:....................................................................................................................................12
Reference:......................................................................................................................................14

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Introduction:
Russia is one of the developing countries that has been developing at considerable rate it
has high growth prospect for future. Since 1990, it can be seen that the remote multinationals are
opening up their business in this nation and they are adequately boosting the way of life of the
nation (Lantsov et al. 2018). Among numerous outside multinationals that has been supporting in
forming of the Russian economy is the Samsung Russia. Since its introduction in the nation in
1969, Samsung has been improving the way of life, work and the Gross Domestic Product
(GDP) of South Korea and through its steady undertaking to develop over the residential outskirt
has been supporting the brand to end up one of the biggest association around the globe. Under
this unique circumstance, this report is meant to examine the different business technique and the
working position of the Samsung to follow how the firm has advanced to wind up where it is
currently (Choo et al. 2017). Through this examination, this report will give brief outline with
respect to the vital approaches to enter new market, store network administration and human
asset administration strategies of the firm at better places to grandstand the knowledge points of
interest of the chose association. To finish up it will give abridged diagram of the report and
proposals to improve the execution of the administration.
Overview of the Samsung Russia and its present operating position:
Among many multinationals firms that are operating in Russia, Samsung is the second
largest organization among all. Though apple has the largest operating share in the Russian
market in case of mobile devise, yet Samsung has good financial performance over the last few
years at the chosen state. Samsung with its historical dominance in the Asian market has gained
much amount of prominence and economies of scale that has aided the firm to become one of the
largest organization in the Russia as well as all other countries where it operates (Yuldoshev,

4INTERNATIONAL BUSINESS ACROSS BORDER
Yun and Geum 2017). It is one of the largest South Korean firm that is being accounted for the
7% of the total revenue of the Samsung group. Though the firm was initially introduced its
business in the Russian market with the DRAM back in 2000s’, over the preceding years, it has
captured a large chunk of the Russian mobile device market (Martysheko et. al. 2016).
Additionally it has also been seen that the firm sells TV, refrigerators and other electronic goods
and services as well making a diverse organization. Post DRAM, Samsung introduced semi-
conductors and li—on batteries and other electronic devices that has revamped the market for the
Samsung in Russia. As per the CEO of the Samsung Russia, they have considered the limping
chain of growth and transformed it into such a thing that the Samsung Russia can use as the
powerhouse in order to bring in changer in the Canadian electronic industry. Considering the
history of Samsung, it can be seen that the firm was inaugurated with the 16 employees and now
it has more than 4, 89,000 out of which 13% of the workers are employed in the Samsung Russia
division showcasing the rapid growth of the firm during the last few decades (Gribov et al.
2015). Apart from the mobile devices, there are varieties of goods and services that Samsung
Russia merchandise. For instance, there is TV, volatile and non-volatile memories (Ram and
Hard disk), LED display for multipurpose and other electronic devices (Jordan 2015). In case of
Russia, Samsung has introduced customized bundle of goods ranging from small earphones to
large displays that has enabled the firm to become one of the largest electronic goods producing
firm in the state.
Figure 1: Samsung sales by product type

5INTERNATIONAL BUSINESS ACROSS BORDER
Source: (Images.Samsung.com 2016)
Considering the figure 1, it can be seen that the Samsung sales by the different product
type has performed differently over the years. During the 2014 to 2016, TV sales has been
decreased by a large extent and mobile sales has also reduced marginally in the wake of brands
like apple with their iPhone X and Chinese brands like Mi in the Russia (Kaufmann and Raulin
2014). Contrary to this, memory sell of the Samsung has been enhanced by a large extent since
2014 to 2016 and in the case of the display panel, it has also increased by a good amount during
the last three years (Yuzhakova et al. 2015). Thus, from the above figure it can be seen that the
sales of different products of Samsung has performed differently over the last three years.
Figure 2: Samsung product type sales
Source: (Images.Samsung.com 2016)
Considering the figure 2 it can be seen that products sales of the Samsung has decreased
during 2016 compared to the 2014 due to the recessionary period in the year 2015. On the other
hand sales and service has also reduced for the firm over the years 2014 to 2016 and the total
number of product sales of the firm during 2014 to 2016 has been reduced by a large amount
depicting deteriorating sales proposition by the firm (Kopytova et al. 2016).

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Figure 3: Samsung sales region wise
Source: (Images.Samsung.com 2016)
Considering the figure 3, it can be seen that sales of the Samsung in the different regions
has performed differently. In the Asian market sales has been moderate and in case of the china
sales figure has been enhanced largely for the Samsung depicting good sales proposition by the
firm. As it can be seen in the European region sales figure has been deteriorated marginally and
when it comes to the sales figures of the Asia and African market combined, then it can be seen
that the sales value has also dropped marginally depicting poor sales proposition by the figure in
all the continents (Fish 2018). According to the same trend it can be entailed that, sales figure in
the Russia has been decreased as well. However, contrary to this, it can be seen as per the latest
report, Samsung with the 30% market share is the second largest band electronic brand operating
in Russia (Park et al. 2017).
Figure 4: Samsung financial performance
Source: (Images.Samsung.com 2016)

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Figure 4 is the explanation of the financial performance of the Samsung, where it can be
seen that, during the 2015 to 2016, overall sales of the Samsung has been enhanced by 0.6%
leading to rise in income by 19.2%. In addition to this, gross profit of the firm has been enhanced
by 5.7% leading to depicting better financial performance of the firm (Andrianov et al. 2017).
From the point of view of accounting, it can be seen that there has been 98.2% loss during the
2016 faced by Samsung due to valuation gain from the equity that showcase Samsung has been
facing reduced dominance in the equity market and the price of the Samsung’s share has been
deteriorating (Chae 2015). Operating profit of the firm has been increased by 10.70%
highlighting the strong financial performance of the Samsung organization around the world. In
the same fashion Samsung has performed in Russia too making it one of the largest electronic
merchandise in the state (Wisner et al. 2014).
Review of company’s international competitive strategy:
As per the mechanism of the winning the battle both in the domestic and the foreign market,
Samsung use the following competitive strategies:
Local adaptation:
In order to adapt the business environment and market of the foreign nationals, Samsung
utilize the local adaptation policy. By the means of experimental approach to enhance the market
demand for the firm, Samsung introduce different type of stores at various strategic locations. In
addition to this, the brand maintain a strong relation with the local leaders that aid the business to
grow in different part of the country (Lee and Vachon 2016).
Fore frontal attack on the present market actors:
Samsung operates aggressively and with its dominant nature wherever it operates. Same
thing can be seen in the case of the Russia too. Initially it launched its RAM and other electronic

8INTERNATIONAL BUSINESS ACROSS BORDER
goods and services in the state and then Samsung came with their dedicated stores capturing the
business of the local service providers (Bratton and Gold 2017).
In bound logistics:
Distribution system of the Samsung is accounted for the shipping of the 85% of the store
stocks and utilizing the strategic location of the stores they makes their logistics simple in nature.
With the help of the strategic distribution system and 150 to 200 suppliers the brand enables a
strong logistics system of the brand (Brewster et al. 2016).
Human resource management, information and control system:
With devoted wing of human resource and higher representative efficiency, the firm has
overseen well their human capitals. Developing offer and rewards time to time encourages the
firm to keep their specialist stimulated and accomplish the firm hierarchical objective with
satisfying the individual objective. Every one of the stores are associated with the diverse
division of the Samsung and the constant data sharing has supported the firm to enhance their
development contrasted with other association that lacks in case of the data stream.
Existing organizational design structure and control issues:
From the analysis of the business structure of Samsung, it can be seen that there is
hierarchical structure in the organization. As the distinctive feature of the firm’s organizational
structure, it has been argued by the (Kavanagh and Johnson 2017) that it is hierarchical structure
created based upon the function and definition of the job. The primary one influence the vertical
line of the command of the executives all over the directorial framework. For instance, except
CEO of an organization, all the employees of the organization have their supervisors and the
orders comes directly from the management of top level of the firm. Lower section is fed with
the information and they need to operate as per the directives come from the hierarchical

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operation. When it comes to the function based definition of the firm, it can be seen that the
group of the employees performing specific sets of job. For instance, there is human resource
management team, department of IT and other operation bodies to look into the business of the
firm to keep it running smoothly.
Figure 5: Organizational structure of Samsung
Source: (Lombardo 2017)
As per the organizational structure mentioned in the figure 5, theoretical aspect of the
firm’s operation can be seen. It has now been clear that the firm has a hierarchical structure that

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enables it to pass the orders directly from the top level to the bottom level via the respective
supervisors of the different teams. Though it is an effective model to enhance the performance of
the firm as well at let it roll smoothly, however, I provides less amount of flexibility to the lower
section of the workers making it had for them to work. In addition to this, it leads to polarity
among the workers as well as the supervisors that sometimes makes huge problem for the firm.
Entry strategies used to enter other regions:
Speed of expansion:
Expansion speed in new location is crucial for any brand and Samsung understands the
same. Compared to the other brands like Apple, Nokia and Mi, it has expanded at a rapid rate
during the initial days. As it can be seen that, during 2000s, Apple was considered for the 8% of
market share in Russia and when it comes to Samsung, then the brand was accounted for 15%
market sharing making it one of the largest electronic service provider in the region (Kavanagh
and Joshnson 2017). With the rapid speed of growth the brand has enabled it to become where it
is now.
Strategic location of the stores:
Samsung positions its stores in such a place, where it can gain logistics easily and attract
prospect buyers without much headache. During the initial days, Samsung used to place their
stores in the rural areas and moving forward, with the maturity of the business and reluctant
nature of the present market players, it started to grow its business in such areas where the
market much competitive in nature.
Marketing:

11INTERNATIONAL BUSINESS ACROSS BORDER
With the strong marketing campaign and strong PR team Samsung has enabled itself to
reach new buyers in the Russia. In addition to this, with the offers and discount, the brand
enhanced its acceptance to the prospect buyers (Fish 2018).
Supply chain management of the selected brand:
Key reason for this amazing upsurge in the performance of the Samsung lies within the
supply chain management. As the principal of this fruitful supply chain management of the
Samsung it uses the following simple rules:
Strategic vendor partnership:
The Samsung buy only from those dealers who has potential to come across the demand
of the brand without any fault. The brand has streamlined supply chain for the firm in order to
smoothen the supply chain management and additionally it has enabled the firm to bring in
transparency in the system.
Technological growth:
Samsung utilize a much amount of its revenue in the research and development. With the
new product line and efficient researchers the brand always come up with the outstanding
products that help it to attract new customers. In addition to this, state of the art inventions like
Track and Predict Inventory aids the Samsung to keep their stock up to the mark so as to deal
with the demand crunches. Along with this, there is Universal Product Code Bar Codes that
allow the firm to allocate the information in real time for the smooth performance of the firm
(Wilton 2016).
Management of Human Resources across borders:
The firm has rooted human resource management structure and it cares for the labor of
the firm. The firm works intimately with their representatives to improve the capacity of the

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laborers and also it consolidates more current workers with shifted measure of abilities.
Contingent on the ability level human asset branch of the firm prepares the HR in order to make
them helpful for the firm (Kew and Stredwick 2016)
Crucial issues and opportunities for management:
Crucial issues faced by the Samsung are as follows:
 Lack of efficiency in the logistics germinates through the performance gap between the
suppliers
 Price of the products are not competitive in nature
 Production differentiation is one of the major issue for the firm
 Deteriorating market share is one of the main concerns of the firm
Recommendations to management for improvement:
Recommendations for the Samsung is as follows:
 Samsung need to bring in price discrimination depending upon its different locations,
however need to keep it fixed for the same region.
 Management system need to be flexible in lower sections of the firm.
 Firm need to provide detailed focus on its mobile and computer hardware sector because
it has faced large number of drop in sales during the recent years.
Conclusion:
Considering the above analysis it can be found that the brand has been growing at a
steady speed with its suitable business strategy. As the firm has been performing at a rapid speed,
it can be seen that it has enhanced its business in various nations too. One of the main market of
Samsung is Russia and with the special focus of the brand on the Russian market it has enabled it

13INTERNATIONAL BUSINESS ACROSS BORDER
to become the second largest electronic goods provider. The brand has lack in management and
deteriorating market share is one of them major concerns of the brand, however, considering the
potential and the recommendations, it can be said that it has power to become the market leader
in the Russia once again.

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