Business Report: Business Model Deconstruction

This report analyzes the business model of Samsung using the nine building blocks and critical success factors that have contributed to its success in the market. The report discusses key partners, key activities, key resources, value proposition, customer relationship, distribution channel, target customers, cost structure, and revenue stream. The critical success factors include revenue and human resource. The report concludes that Samsung's success is attributed to its unique operating system, application software, and hardware, as well as its high-quality products and skilled employees.

Running head: Business Report: Business Model Deconstruction 1
Business report
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Table of Contents
Introduction......................................................................................................................................3
Business Model: Nine building blocks............................................................................................3
Key partners.................................................................................................................................4
Key activities................................................................................................................................4
Key resources...............................................................................................................................5
Value proposition.........................................................................................................................5
Customer relationship..................................................................................................................5
Distribution channel.....................................................................................................................6
Target customers..........................................................................................................................6
Cost structure...............................................................................................................................7
Revenue stream............................................................................................................................7
Critical success factors....................................................................................................................7
Revenue........................................................................................................................................7
Human resource...........................................................................................................................8
Conclusion.......................................................................................................................................8
Bibliography....................................................................................................................................9

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Business report
Introduction
This research will discuss the business model of a company and analyze the factors which
have contributed to its success in the market. The report discusses the nine blocks of the business
model which are important in achieving its success and growth. The selected company is
Samsung. The company is also the biggest manufacturer of smartphones and mobile phones. The
company is fueled by the popularity of its Samsung Galaxy devices (Knöpfle, 2016, p. 34). Since
2006 the company has been the most significant television manufacturer and suppliers, and since
2011 the company also becomes the biggest producer of mobile phones. In the long run, SEC has
been the world leading manufacturers of components such chips, hard drive, flash memory,
lithium-ion batteries and semiconductors devices for clients who include Nokia, HTC, Apple,
and Sony (Knöpfle, 2016, p. 67).
Business Model: Nine building blocks
For us to analyze the Samsung company success strategy it is vital to know the business
model of the company. Basically, the business model comprises of nine building blocks which
are helpful in attaining its goals and objectives (Commonwealth Secretariat, 2008, p. 119). The
business model of Samsung is the representation of all the services and operations carried by the
firm in order to increase the profit. The business model of the Samsung Company is as discussed
below

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Key resources
Key resources for Samsung Company are the human resources and technology. The two
are able to come up with the unique operating system, application software, and hardware which
are different from other companies in the market. These enable the company to compete
competitively in the market. Apart from the two patents and licensing also act as key resources to
the company contributing to the company success in the long run (Chang, 2011).
Value creation
In a most important aspect of every company are to create values to its customers.
Samsung Company is able to come up with a different brand from the rests of the companies in
the market. The brand differentiates the company from the rest. Some of the most prominent

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brands are Samsung galaxy which was introduced in the market early 2010’s (Garcia, 2015). In
value creation, the company promoted and encouraged innovation among the employees to
increase competition in the business. The improved technology and recent innovation has helped
the company to come up with high quality products. SCM and SIX SIGMA is another sector
associated with Samsung Company value creation. Basically, the above sector improves the
revenue generated by the company as well as profit in the long run (Garcia, 2015).
Key activities
The companies’ key activities include research and development which is aimed at
producing the best products in the market which are quality and durable compared to others.
Some of the products supplied by Samsung include mobile phones, television, radio, ironing
machine and other home appliances. The improved product quality is attributed to the research
and development the company carries. Another important activity is making sure the customers
are satisfied with all the time. The most important aspect amongst all is coming up with the
highest level of technology in the market which enables high-quality product production (Jörg
Mahlich, 2012).
Value proposition
The aim of the company is to devote its talent and technology so that it can create more
superior products and services in the market which will contribute to a better global community.
The home appliances used in our home, the mobile user for communication, the television used
to deliver news and radio used for entertainment are all Samsung’s products which are used to
keep our life better. Samsung is used to deliver satisfactory products in our life as well as
keeping our life cool and simple (Suklev, Fidanoski, Simeonovski, Mateska, & Zlatanoska,
2013).

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Distribution channel/Customer channel
Chances are vital for every company as it enables the customers to reach the company
and the company to reach the customers. The company uses various channels to advertise its
products. Some of the channels used include YouTube, television, radio, Google, and all other
social media sites. For the products to reach the market also the company uses different channels
such retails, wholesales among other (Giachetti, 2014).
Customer relationship
The main aim of the business operation is to make a profit; in order to achieve the
required target the company must maintain its good relationship with customers. Samsung
understands this and has laid down various ways to maintain the good relationship with its
customers (Clow & Baack, 2012, p. 35). Some of those ways include
After sale services-the company offers after sale services such installing electronic
devices to the customer’s house. By doing this the accident rate caused by wrong electrical
devices have reduced thus increasing the relationship between customers and the company
(Brock, 2011, p. 39).
Affirm or guarantee- Samsung Company offers warrants to its customers where a
customer is supposed to take back to the company if any product has a malfunction problem. The
warrant is mostly offered if the malfunctioning happens in the span of five years after purchases
and the customer is supposed to take back the product to the company for an exchange or
compensation.
Personal assistance- sometimes the customers are taught how to use the Samsung
products if the need arises. The education is carried in shows and exhibition to the general

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public. This enhances the relationship between the customers and the company which results in
increased product purchases in the long run.
Target customers/Customer Segment
In Samsung Company customers is dived into classes. Lower class, this is kind of people
who earn less and are associated with buying low products as they have minimal disposals. The
middles class, this is kind of whose earning is in average they are associated with buying average
quality products. Upper class, these are people with high disposals and them quality matters a lot.
High-class people can buy the product at any price so long they are of high quality and also it
satisfies their need. Although, most of the Samsung products are purchased by young compared
to old people due entertainment reasons.
Cost structure
The Samsung Company incur a lot of cost in securing skilled human resources in the
market, carrying out research and development, financial cost, information, and technology
department, selling of products and the general administration costs. At the end of every
financial year, all the costs incurred by the company are evaluated.
Revenue stream
The primary company revenues are generated through the sales of the products to the
customers. However, the company also generates revenues through renting its premises to third
parties at a small rate.
Critical success factors
Based on the above model of canvas there are some critical success factors which help
the Samsung Company to compete in the market. These factors help the company to outperform
other companies in the market and achieve its success and growth

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Revenue
As we said earlier, profit is the primary reason for business existences. Samsung
Company has been able to produce profits for the past years. The profit keeps on increasing from
year to year apart from 1980 and 2011 when the company made a loss due to the financial crisis
which affected the dollars. For instance, in October 2017 the company made US$372.0 billion.
Currently, Samsung is the largest company in the world in terms of revenue generation. In spite
of the company employing more than 308, 745 workers in 2012it still generated the highest
revenue and also making it one of the biggest employers in the whole world.
Human resource
Human resources are the greatest resources the company has. The company is able to pay
the most skilled workers in the market competitively. Acquiring the most skilled workers in the
market has enabled the company use the most advanced technology in coming up with their own
unique operating system, application software, and hardware. Due to their creativity, the
company is able to maintain the competitive composition in the market in terms of design,
technology, and creativity. Some of the reasons why the company is able to attract and maintain
high skilled labor are the healthy working environment, job security and competitive salary. As a
result, the company enjoys increased revenues generated from sales.
Conclusion
Based on the canvas business model Samsung Company has achieved its success and
growth. Among other factors, the above once have helped the company to reach that growth. For
example, nine building blocks are the essential factors which have helped that growth. High
products produced and high skilled employees also contribute a lot to the company success. The

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future of the company is controlled by the actions and decision made by the company
management.
Bibliography
Brock, D. (2011). Aftersales management: creating a successful aftersales
strategy to reduce costs, improve customer service and increase sales. London;
Philadelphia: Kogan.
Chang, S.-J. (2011). Sony vs Samsung: The Inside Story of the Electronics Giants'
Battle For Global Supremacy. Hoboken: John Wiley & Sons.
Clow, K. E., & Baack, D. (2012). Cases in marketing management. Thousand
Oaks, Calif.: SAGE.
Commonwealth Secretariat. (2008). Commonwealth finance ministers reference
report 2008. London: Henley.
Garcia, R. (2015). Startup soar coaching: successful outcomes by adapting to
resiliency. New York: Buoyant Capital.
Giachetti, C. (2014). Competitive dynamics in the mobile phone industry. [Place
of publication not identified]: Palgrave Pivot.
Jörg Mahlich, . P. (2012). Innovation and technology in Korea: challenges of a
newly advanced economy. Heidelberg: Physica-Verlag, A Springer Company.
Knöpfle, G. (2016). Samsung Electronics and the Global Market. The History and
the Competitive Advantage. Munich: GRIN Verlag.

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Suklev, B. G., Fidanoski, F. G., Simeonovski, K. G., Mateska, V. G., &
Zlatanoska, A. G. (2013). Strategic Planning in Entrepreneurial Companies. Seoul:
Seoul Selection.