Samsung Corporation: Business Strategy, Performance and Future Outlook

This article discusses Samsung Corporation's business strategy, performance, and future outlook. It covers their competitive business strategy, performance, stakeholders' perspective, and anticipated changes in the electronics industry. Samsung Electronics is a leading manufacturer of electronics and electronic components, and has benefited from integration of its business strategy with market gaps which takes advantage of opportunities that can be gained. The company has performed remarkably well over the course of years and is currently performing better than its competitors having surpassed top competitor in Apple.

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Samsung Corporation
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Samsung Corporation
Introduction
Samsung is a South Korean organization with its headquarters in Samsung Town, Seoul.
Samsung is a multinational conglomerate comprised of numerous businesses. Samsung
Electronics Company Limited is part of the Samsung Group. This company has its headquarters
in Suwon, South Korea. Samsung Electronics majors in electronics and information technology.
The company has establishments for assembly in 80 countries around the globe. The company
employs more than 300,000 workers and has amassed market cap top of $350 billion (Stickler,
2013).
Samsung Electronics is a leading manufacturer of electronics and electronic components.
Some of the items are mobile phones, smartphones, laptops, tablets, and household components
such as television sets, home theaters, video players, refrigerators and kitchen appliances. Some
of the components are hard drives, flash drives, lithium ion batteries and memory chips
(Samsung Company, 2018).
The electronics industry has major traits that define it. There is high degree of innovation
across the industry with major players reinventing their products. There is much effort and
investment put into product design. Technology has led to increased demand for smart products.
Smartphones and smartwatches have widely reached across diverse markets. Smart TVs are now
on the rise. There is high demand for electronics in general around globe. One drawback is that
electronic products tend to have short life cycle before technology evolves (Lasinskas, 2016).

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Competitive Business Strategy
The business strategy of Samsung is orchestrates to aid the strengthening of the
company’s competitiveness and profit structures. Focus is based on production of premium
products. The business strategy that Samsung Electronics employs involves high degree of
flexibility. This is mainly due to the changes that occur in the external business climate. The
company therefore is able to make dramatic changes according to the world trends. Samsung has
prospered on the back of efficient and effective reading of the market. The company observes the
market progress and is able to learn from other competitors (Dudovskiy, 2017). The corporation
comes up with products that are replicated or innovated based on the products of other brands in
the market. The products are manufactured with similar important features but with some basic
alterations such as screen size.
Samsung has a catalog that features extensive product range. The company is invested in
new product development which results in numerous product types available for customers.
Samsung Electronics provide their products in particular divisions: Consumer Electronics (ME),
Device Solutions (DS) and IT and Mobile Communications (CE). This development is enhanced
by R & D centers of the company located in more than 35 areas across the world (Samsung
Electronics, 2016).
Samsung has benefited from integration of its business strategy with market gaps which
takes advantage of opportunities that can be gained. In this way, the company engages the
market through addressing a particular need in a specific place. The choice of new marketplaces
is based on achieving economies of scale. The regions are mostly characterized by inexpensive
production factors and the company is able to sell standardized items. In general, Samsung

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Electronics displays preference of cost leadership over strategic differentiation (Samsung
Electronics, 2017).
Samsung Electronics Performance
Samsung has faced a number of issues that have affected the company. There have been
some periods of turmoil but for the most part the organization has seen positive business
outcomes. In the recent years, the company has seen its earnings increase steadily. In 2017,
Samsung was able to achieve its best ever performance, posting quarterly operating profits
$13.02 billion. It was listed the top company in the year. Samsung Electronics’ market value
surpassed $360 billion. Close to end of the year, its stock price and preferred stock rose by
3.89% and 4.24% respectively to record numbers (Samsung Newsroom, 2018).
This performance has been driven by innovation and development of wide range of
products. Samsung have manufactured a myriad of quality products which customers have
embraced. The products are able to reach many people due to the company’s market presence.
Samsung Electronics The company has been aggressive in pursuing market trends based on how
their observation of the market. This has helped the company stay abreast in technology and
developments which has greatly promoted their sales. Samsung Electronics use a large share of
its revenue in research. 5.7% of the revenue it amasses in research activities. Combination of the
company’s market research and innovations have made the Samsung Electronics a leading
organization in the industry (Samsung Newsroom, 2018).
Samsung Electronics is part of the conglomerate that is Samsung Group. This gives the
entity a great supply chain and distribution system. There is cost advantage in the company

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producing the components that they required in making the electronics (Kline & Rosenberg,
2010).
The performance is in line with the business strategy that they have employed. The
positive results are the direct outcome of the strategies that have been implemented by the
organization. Their extensive market research and growth of innovation have led to production of
items that have received global appeal firm customers. New product development has enabled
the company to capture wider market.
The company has performed remarkably well over the course of years. It is currently
performing better than its competitors having surpassed top competitor in Apple (Sherisse,
2017).
Stakeholders’ Perspective
The performance of Samsung Electronics has received wide acclaim from major
stakeholders. The significantly high revenue is impressive for the company and offers some
satisfaction to those invested in the company. The design and quality of the products of the
company have received mostly positive reviews and reactions with a number of awards going the
company’s way (SCMP, 2017).
The company has however had issues that have negatively impacted the perception of
stakeholders. Some products of the company have been faulty. The company admitted that
Samsung Galaxy Note 7 had issues with manufacturing and battery design (SCMP, 2017).
Customers had reported cases of their devices exploding. Stakeholders have also been concerned
with legal matters that the organization has faced such as arrest of company official (Mozur &
Sang-Hun, 2017).

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External Environment Assessment
Much of the world’s population has taken to technology. The growth of electronics
industry has led to spread of technology across the globe. The demand that is created is working
towards the benefit of the industry. The continuing development ensures that the companies keep
on raking in increasing revenues while customers become more inclined to smart products.
Technology is a major driving force in this sector.
Among demographics, the youth have played a central role in the progress of electronics
industry. The adoption of technological products is quite high among the younger persons which
has driven the growing demand (Marketresearch, 2018).
Industry production needs to be efficient in order to realize the type of profits envisioned
before. One of the demands that companies need to achieve to be competitive is improvement of
productivity and efficiency in their organizational systems. It will be impossible to compete with
major companies without having sound processes that maximize the gains for the company. The
growing trend has seen companies become keener on coherent production processes to increase
their profits (Marketresearch, 2018).
An important factor impacting the industry concerns environmental aspect. There is
growing pressure exerted on organizations to produce more eco-friendly products. This is a
worthy cause that people are pushing for. The electronics industry has massive impact in the
lives of individuals. It makes sense that they should be part of the social responsibility given
their capabilities. Technology is essential in production of green electronics.

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Key Success Factors
Electronics industry has some key aspects that have promoted the success. The public in
general has constantly demanded technological product over the past decade thus providing the
necessary market that the industry needed to prosper. Outsourcing of production units has led to
improved earnings for electronics industry. There are benefits that companies reap in cheaper
production resources and labour costs overseas.
The competitive environment in electronics industry has driven the success of companies.
Competitiveness has led to more innovativeness and development. Most of all, the pursuit of
technology by companies provides the means for success for the organizations (Lee & Sturgeon,
2015).
Anticipated Changes
The use of technology and technological products has mainly involved persons of the
younger generation. This part of the population has provide the most avid customer base for
electronic companies worldwide. Young people are more in touch with these developments. In
future, the customer base will include higher figure of persons of advanced ages. The customer
base will grow larger with full inclusivity is achieved.
There is growing digital and mobility services in the electronics industry. The future of
electronics is uncertain for products such as tablets and personal computers. Instead, companies
may need to pursue other avenues which are influenced by customer needs. The products that are
expected to have higher demand in future are Internet of Things (IoT), cloud computing,
automation devices, M2M communications products and data storage devices (NCSU, 2018).

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Stakeholders’ Direction
Stakeholders are involved majorly in the progression of the company. One aspect that
stakeholders are driving forward is the production of environmentally-friendly products. Future
strategy of the company and other industries involved electronics will feature more eco-friendly
efforts. The stakeholders of the company are likely to implore more diversification for the
company. Technological developments make the business environment volatile. Divulging into
other business such as biotechnology and clean energy will ensure further growth and
development. Smart healthcare is a promising business strategy for future expansion (Lee &
Sturgeon, 2015).
Stakeholders need Samsung Electronics to continue reinventing itself in a bid to continue
the dominance that has been exhibited. Involved parties seek more technological innovation to
make the products of the company more outstanding and game changing. The company is
expected to continue being a global leader in the industry. The efforts put in business strategies
are expected to maximize the shareholder value. Additionally, the company need to increase its
corporate citizenship and interaction with customers and the community (Khan et al, 2015).
More developments that are future oriented include integration of personal security
technologies with other innovative technologies. This is expected to enhance realization of next-
level information technology (Khan et al, 2015).
Samsung Electronics will be aided by more investment in software development. The Big
Data center is used in tracking market and consumer trends. Big Data entails data collection of
large sets which include imaging and text data generation in the digital environment. This is
expected to bring more productivity and generation of business innovation.

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Conclusions
The business strategy that Samsung Electronics has utilized has worked impressively
leading to global market leadership. These strategies have resulted in improved financial
performances for the company. In future, the strategies will be effective, but the efficacy will not
be as rewarding as has been the case in the recent past.
The strategy of observing market products and production of more or less similar features
on items will not be viable going forward if the organization keeps utilizing it. The company has
faced issues of concern with the replication of the developments of other entities. This strategy
will not be conducive for their market in future. Substantial market reading will, however, be
vital in establishing market gaps that the company can exploit for future success.
Other strategies will be more effective. The extensive research and development will be
vital for the progression of the company. This goes hand in hand with innovativeness which
drives the success of the electronics industry. Well-developed R & D is crucial in invention of
other technology that will promote the future performance of the company (NPD Group, 2018).
The diversity that Samsung Electronics has demonstrated will be helpful in ensuring
more success in future. The strategy will be useful in increasing market reach and value. As
aforementioned, though, the strategies will not be as impactful as has been the case. There is
need for new business strategies to be integrated with current viable strategies for the company
to achieve the continued growth that has been characteristic of the company.

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