Samsung Electronics Report

This report provides a comprehensive analysis of Samsung Electronics, including its company overview, competitive advantage, five forces analysis, and supply chain management. It also offers recommendations for improving the business conduction and financial stability of the organization.

Running head: SAMSUNG ELECTRONICS REPORT
Samsung Electronics Report
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction:...............................................................................................................................2
Company Overview:..................................................................................................................2
Competitive Advantage:.............................................................................................................3
Five Forces Analysis:.............................................................................................................3
Competitive Rivalry: High.................................................................................................3
Bargaining Power of the Buyers: High..............................................................................5
Bargaining Power of the Suppliers: Moderate...................................................................5
Threat of new entrants: Low..............................................................................................6
Threat of Substitutes: Moderate.........................................................................................6
Supply Chain Management:.......................................................................................................7
Recommendations:.....................................................................................................................9
Conclusion:................................................................................................................................9
References:...............................................................................................................................11

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Introduction:
The modern business world is observed to face significant impact of the globalization
and that is petty evident with the increasing number of new business organizations entering
the various industries for the effective and sustainable business conduction. With the increase
in the number of new entries, the business industries are observed to face the impact of the
minimization of the market monopoly (Bhaumik, Driffield and Zhou 2016). The electronics
industry is considered to be one of booming industry in the business world and that is
significantly visible with the increasing number of the organizations entering the market
(Bhaumik, Driffield and Zhou 2016). The paper is focused in the elaboration of one of the
market leader of the mentioned industry, Samsung Electronics. The paper includes a brief
description regarding the company and the operations of the company. Along with that, the
paper provides the definition of the term “competitive advantage” with the effective
identification of the factors that are playing a crucial role for the organization in gaining the
competitive advantage. The paper includes the Porter’s five forces analysis for the efficient
evaluation of the competitive advantage and adding to that, analyses the supply chain of the
mentioned organization for providing important information regarding the business
conduction of the organization. With a precise focus on the findings, the paper also
summarizes some of the crucial recommendations for the chosen organization for improving
the business conduction and for improving the financial stability of the mentioned
organization.
Company Overview:
The chosen organization Samsung Electronics operates in the consumer electronics
and appliances industry. The organization is one of the market giant of the mentioned
industry and along with that, is considered to be one of the few organizations belonging to

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South Korea that have the emerged as the global leader in their relevant industry. The
mentioned organization was established in the year 1969 and is currently headquartered
Suwon, South Korea (Samsung.com 2019). The organization is currently managed by Lee
Kun-hee, the chairman of the organization, Lee Jae-yong, the vice chairman of the
organization, Kwon Oh-hyun, the vice chairman and Chief Executive Officer of the
organization and Young Sohn, the president of the organization (Samsung.com 2019). The
excellence in the leadership of the above mentioned members of the senior level management
of the organization along with the operational brilliance of 320671 number of employees of
the organization played a crucial role in the generation of an increased revenue of 221.6
billion US dollars in the year 2018 (Samsung.com 2019). Along with that, the organization is
able to generate an operating income of 53.5 billion US dollars in the year 2018. Hence the
increment in the operating income of the organization clearly states the growth that the
company is associated with (Samsung.com 2019).
As mentioned earlier, the organization serves the customers with the optimum quality
consumer electronics products and the home appliances which are considered to be one of the
major needs of the people of the modern generation. Adding to this, the incorporation of the
modern technology and the innovative solutions in the products and the services that the
company offer to the customers is seen to be significant from the part of the organization in
creating shared values amongst the customers of the organization.
Competitive Advantage:
Five Forces Analysis:
Competitive Rivalry: High
The consumer electronics market is seen to experience significant amount of
competition owing to the representation of the considerable number of market leading

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organizations. With a precise focus on the growth of the industry, the existing organizations
are seen to focus on the generation of the revenue using various strategies that have the
potential to increase the generation of the revenue. The chosen organization is seen to face
tough competition from the part of the market leading organizations such as Apple, Huawei,
Xiaomi, Oppo and Lenovo (Lenovo.com 2019).
One of the main competitor of the selected organization is observed to be Apple. With
the application of the premium pricing policy for the products and the services, Apple is able
to generate a revenue of 265.595 billion US dollars in the year 2018 and along with that, the
company is able to increase the operating income to 70.898 billion US dollars in the same
year (Apple.com 2019).
Huawei second largest competitor of the chosen organization. With a significantly
diversified product chain and notable amount of investment in the research and development
from the part of the senior level management of the organization, the company is able to
conduct a substantially profitable business and that is pretty evident with the increment of the
revenue to US$105.191 billion in the year 2018. Along with that, the above mentioned
factors played a crucial role increment of the operating income of the organization to
US$10.689 billion in the same year (Apple.com 2019).
The third largest competitor organization of the chosen organization is Xiaomi. The
Chinese company is able to conduct a significant business with the diversified product range
of the organization. The operational excellence of the employees of the organization has
enabled it to achieve an increased revenue of CN¥ 174.915 billion along with an increased
net income of CN¥13.478 billion in the year 2018 (Mi.com 2019).
With a precise focus on the competition, the chosen organization has gained
significant competitive advantage in the aspect of the product portfolio. The company

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currently experiences the widest range of product portfolios which includes Mobile phone,
Home appliance, TV/Audio/Video, Camera and Tablet. Apart from this, the chosen
organization is able to achieve a significant market share in most of the product categories
and is considered to be one of the top three companies in the world in terms of incorporating
innovative solutions (Lee and Sturgeon 2015).
Bargaining Power of the Buyers: High
The current industry is observed to have considerable number of organizations with
different pricing strategies which enables the customers of different income groups to achieve
the products and the services. Adding to this, majority of the above mentioned organizations
are observed to employ different strategies for improving the quality of the products and that
positions them perfectly to provide high quality products to the customers of the
organizations (Jaafreh, and Al-abedallat 2013). With a precise focus on the pricing strategies
and the quality of the products, the customers are observed to have considerable number of
organizations for their products to choose from.
The aspects that provide significant competitive advantage to the chosen organization
is the incorporation of the modern technology and the presence of innovation in the products.
Along with that, the chosen organization is considered to be best in terms of improving
design features and incorporating the advanced features in the products.
Bargaining Power of the Suppliers: Moderate
The chosen organization is observed to have considerable number of suppliers with
the quality of quick achievement of the modern trends and technologies in their support and
that provides significant competitive advantage to the mentioned organization in terms
introducing innovative products. Though the impact of the suppliers on the business
conduction of the mentioned organization is comparatively less impactful, one of the

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suppliers of the chosen organization, Google is seen to have significant bargaining power in
the form of Android platform supplier as the chosen organization is seen to have limited
alternative for the same (Google.com. 2019).
Threat of new entrants: Low
The market leaders of the mentioned industry including Apple or Samsung are seen to
largely gain the benefit of economies of scale. This enables the organizations to achieve the
cost advantage and it is pretty evident that, such an advantage will not be present for the new
entrants. Adding to this, the massive capital investment that is required for a sustainable
business conduction in the mentioned industry is seen to be a major concern for many of new
entrants of the market.
Threat of Substitutes: Moderate
As mentioned earlier, the consumer electronics industry is observed to experience
considerable number of organizations providing the same sort of quality at competitive
prices. On the other hand, with the improved quality and the capability in introducing modern
and advanced technologies, the chosen organization is able to create values for them amongst
the customers which provides them significant amount of competitive advantage to the
selected organization. With a precise focus on the significant market share of various
companies operating in the mentioned industry, the threat of getting substituted in the
industry is seen to be moderate for the chosen organization (Moon et al. 2013).

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Supply Chain Management:
The supply chain of the mentioned organization is divided into three crucial aspects
which are social, economic and environmental.
In the economic aspect, the mentioned organization is seen to make sure that they
manage the cost, delivery, quality, technology and the human resources in an efficient
manner to maximize synergy, speed and efficiency with the operations of the suppliers
(Samsung.com 2019). This helps the organization to create a corporate ecosystem that
triggers the organization towards the sustainable growth (Sezen and Cankaya 2013). The
suppliers of the chosen organization is observed to have the qualities such as the on time
delivery, appropriate delivery along with proper pricing of the supply.

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The chosen organization has the quality of making sure that they source the raw
materials in an ethical manner and in doing so, they pay strong focus on the effective
management of the human resources with a precise focus on the human rights and
regulations. The organization is able to put strong emphasis in making sure that they have the
capability of improving the working environment with a precise focus on the ethical practices
and along with that, the effective management of the conflict mineral issues from the part of
the organization, plays a crucial role in the improvement of the sustainability of the supply
chain of the mentioned organization (Samsung.com 2019). In addition to this, the company’s
aim of building an open and transparent management accounting system, is of great
significance for the organization in engaging the shareholders, stakeholders and the relevant
authorities responsible for the effective management of the supply chain of the organization.
Apart from this, the organization is observed to focus on the strict implementation of
their policy of sourcing materials from the Eco-partner certified suppliers as that enables the
chosen organization to manage the environmental impacts that have the potential to occur in
the raw materials, components and the manufacturing process of the chosen organization
(Samsung.com 2019).
In addition to this, the selected organization has a significantly well-developed new
supplier registration program which is based on the aspects such as the environment and
safety, labour rights and eco-partner. The organization requests the new suppliers to satisfy a
criteria set in 22 articles which covers the aspects such as fire prevention equipment,
spanning occupational safety, environmental facility, hazardous substances and occupational
health (Samsung.com 2019). Apart from that, for the labour rights, the mentioned
organization perform mandatory on site audit on 20 articles which covers compliance with
work hour regulations, ban on discrimination and voluntary work (Samsung.com 2019).

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Recommendations:
The effective follow up on the set criteria, designed for the efficient evaluation of the
suppliers capability has the potential to help the chosen organization reach newer heights in
terms of producing better quality and innovative products.
A precise follow up on the market demands and the modern trends along with the
creation of a sense of urgency for incorporating the preferences of the customers or the
modern trends in the products of the chosen organization will have the chance to provide
notable benefits to the organization in the long term. The increment of the product chain of
the organization for the effective achievement of the market demands will enable the chosen
organization to serve a larger customer base.
The increased occurrence of the training and the developmental activities for the
employees of the organization to improve the skills and the competencies will be significant
for the organization in delivering quality products to the customers and that will certainly
trigger the intention of repetitive purchases of the customers which has the potential to
improve the financial stability of the organization.
Conclusion:
On a concluding note, the chosen organization has the potential to become of a bigger
brand in the modern business world of consumer electronics. However, the main constraint
for the company is seen to be the intense market competition. The companies such as
Huawei, Apple or Xiaomi are seen to provide tough competition to the chosen organization in
terms of market share and generation of revenue. However, with a precise focus on the rapid
growth of the consumer electronics industry, the company has all the possibilities of
improving their business conduction for improved generation of revenue. In order to achieve

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a sustainable growth, the mentioned organization is in need to focus on the supply chain, the
expansion of the product chain along with the aspect of improvement of quality.

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References:
Apple.com 2019. Apple. Retrieved from https://www.apple.com/
Bhaumik, S.K., Driffield, N. and Zhou, Y., 2016. Country specific advantage, firm specific
advantage and multinationality–Sources of competitive advantage in emerging markets:
Evidence from the electronics industry in China. International Business Review, 25(1),
pp.165-176.
Google.com. 2019. Google. [online] Available at: https://www.google.com/
Huawei.com 2019. Huawei - Building a Fully Connected, Intelligent World. Retrieved from
https://www.huawei.com/en/
Jaafreh, A.B. and Al-abedallat, A.Z., 2013. The effect of quality management practices on
organizational performance in Jordan: An empirical study. International Journal of Financial
Research, 4(1), pp.93-109.
Lee, J.R. and Sturgeon, T.J., 2015. Industry co-evolution: a comparison of Taiwan and North
American electronics contract manufacturers. In Global Taiwan: Building competitive
strengths in a new international economy (pp. 55-97). Routledge.
Lenovo.com 2019. Lenovo Official UK Site| Laptops, PCs, Smartphones, Data Center.
Retrieved from https://www.lenovo.com/
Mi.com 2019. Xiaomi United States - Xiaomi United States. Retrieved from
https://www.mi.com/us/
Moon, H.C., Parc, J., Yim, S.H. and Yin, W., 2013. Enhancing Performability through
Domestic and International Clustering: A Case Study of Samsung Electronics Corporation
(SEC). International Journal of Performability Engineering, 9(1).

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Samsung.com 2019. Home Retrieved from https://www.samsung.com/
Samsung.com 2019. Samsung Electronics America. Supply Chain | Sustainability | Samsung
US. [online] Available at: https://www.samsung.com/us/aboutsamsung/sustainability/supply-
chain/
Sezen, B. and Cankaya, S.Y., 2013. Effects of green manufacturing and eco-innovation on
sustainability performance. Procedia-Social and Behavioral Sciences, 99, pp.154-163.
Tse, Y.K., Zhang, M., Akhtar, P. and MacBryde, J., 2016. Embracing supply chain agility: an
investigation in the electronics industry. Supply Chain Management: An International
Journal, 21(1), pp.140-156.