Managing Innovation in Business: A Case Study of Samsung

This report discusses Samsung's innovation history and current innovative practices in the electronic industry. It also analyzes the macro and micro competitive environment in the industry, including drivers of innovation. The report concludes that innovation is crucial for a business to survive in a market.

Managing Innovation in
Business

Executive summary
This report is based on Samsung and in the report we will discuss about how innovation
helped the organisation to grow in past. The report include a detailed introduction of Samsung
and their innovation performance and capabilities. By introducing advance technology the
company always come up with products which satisfy consumers demand. To survive in a
market where there are rivals like Apple and Lenovo the company used there strategy of product
differentiation very well, and to implement this strategy in market innovation and technology
helped Samsung throughout their business journey. Further the report analyse innovation
activities and innovation drivers of the electronic industry.

Contents
INTRODUCTION...........................................................................................................................4
Report's purpose and structure.....................................................................................................4
Organisation and Industry Overview ..............................................................................................4
Samsung and its innovation history.............................................................................................4
Existing innovation performance and capabilities.......................................................................5
Electronic industry in 2022..........................................................................................................6
Drivers of Innovation...................................................................................................................7
Wider Macro Competitive Environment.........................................................................................7
SWOT Analysis of Samsung.......................................................................................................7
PESTLE analysis of Samsung.....................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................9

INTRODUCTION
Report's purpose and structure
In modern era every company is looking for implementing the innovation in their
organisational culture (Wojan, Crown and Rupasingha, 2018). This report will be a innovation
audit for the Samsung organisation, first it will discuss the innovation history and their past
innovation initiatives. Further the report will highlight the current innovative practice that
company is following in the current market to maintain their place in the industry. Also, in this
report we will analyse the macro and micro competitive environment in the industry.
Organisation and Industry Overview
Samsung and its innovation history
Samsung is one of the largest producers of electronics devices in the world, the company
produce a wide rage or products for consumers and industries. Samsung specializes in the
producing electronic appliances, semi conductors, digital media devices and integrated systems.
Being one of a leader in industry and managing a multi billion dollar company require constant
innovation is the business (Iwai, 2020). They follow a approach of constant increment in
innovation and their effective and efficient research and development department allowed them
to introduce new and innovative products time to time.
Samsung was founded by Lee Byung Chull in 1938 as a grocery trading store and with
time they have diversified their business and established themselves in different industries. The
company get success in different industries but in 1969 they entered the electronic industry and
established their electronic focused divisions which later proved to be the biggest success of the
company. In early 70's the company start exporting their products and in few year they expanded
their technology business. As diversification have been their strategy form the beginning, so with
related diversification strategy they established many divisions like aerospace and Samsung Data
Systems. This strategy helped them to capture the global market quickly. By introducing new
technology and innovation company became one of the global market leader in electronic
industry. Samsung started producing semi conductors and components for other companies
which make other big companies to rely on them. Samsung bring many innovations in the

industry. Entering the phone market was also a huge success for the company. They bring many
innovation in the industry by launching their touch screen phones and they also introduced the
first speech recognition phone in 2005. They also made Gear VR which was a virtual reality
device developed for their smartphones. The company kept innovating new technologies and
devices they also got the permission for testing self driving cars in 2017.
Existing innovation performance and capabilities
In current competitive environment every industry need to gain a competitive advantage
over their competitors to survive in the market. Samsung operate in a market where competition
is very high. The companies major competitors are Apple, LG Electronics and Qualcomm. All of
these companies are established companies and Samsung is competing with them with their
approach of constant innovation. Innovation and technology is crucial for every company to
operate in the industry but in electronic industry the significance of innovation is even higher.
Samsung focus on technology and innovation because it help them to make quality products to
cater consumers demand. The company is using technology and innovation in present time by
following ways -
Folding Phones – The company revealed their first prototype flexible display in 2011 and after a
decade now the company has launched their Foldable phones. Flexible displays is a
revolutionary technology which can make the phones smaller without compromising the screen
size. The market of foldable phones is growing and the company has captured the market already
by launching their Galaxy Fold and Flip series (Fowler, 2019). This innovation that Samsung
bring can be proved very important for them because no one from their competitors are focusing
on this technology as much as Samsung.
Integrating 5G Technology – For grater speed transmission the company is moving towards 5G
technology and integrating this into their devices. 5G can increase the speed of data transmission
up to 20 Gbps. The company is innovating its new products considering this technology because
it can enhance user experience. This technology can also enhance users AR and VR experience
because it provide a steady connection and there will be no lag in steaming and broadcasting
with 5G.
Samsung Pay – Another innovation that Samsung introduced is their Samsung Pay Feature.
With digitalisation the number of online transaction increased and number of digital wallets and

digital payment apps came in the market. Samsung also launched a new feature in their devices.
This feature simplifies users transactions and it is accepted where a consumer swipe their cards
(Wang, and Lai, 2020). Samsung pay also has many security features which safeguard users
privacy. The feature allow users to make payment from their mobile home screen by just
verifying their fingerprints.
Electronic industry in 2022
The revenue from the consumer electronic industry in increasing constantly from past
few years and the industry is showing potential as consumer electronics is one of the fastest
growing consumer product. Like computers mobiles are also getting thinner, small and
lightweight. User expectations and needs constantly keep changing and to fulfil their demand it
is important that companies in this industry keep innovating. Also the use of artificial
intelligence is increasing in electronic devices and almost every other electronic device has
integrated AI technology for making user experience more personal and intimate (Gavlovskaya
and Khakimov, 2022). Companies in the industry are bringing AI and robots in their daily life
and Samsung is also making their efforts by doing so. The company has launched their new
vacuum cleaner which uses advance technology to recognise objects and identify the objects to
decide best way of cleaning. This device easy consumers to clean hard to reach corners. The
company has used LiDAR and 3D sensors which allow JetBot 90 AI to avoid cables and small
objects while cleaning. From electronic industry, users want products that can give them more
personalised experience. After the pandemic work from home culture increased in many
countries and consumers are now spending more time at their homes. To enhance their
experience at home Samsung has launched many products like Bespoke 4 Door Flex, Lifestyle
TV and SmartThings Cooking. Many electronic companies in the worlds rely on semi conductors
and Samsung is one of few companies who produce semi conductors for the world. Samsung
should invest more on this aspect of their business because so many companies rely on that and
Samsung can take competitive advantage in the industry. The recent shortage of semiconductors
from the market showed that the demand to these chips are increasing and world do not have
enough suppliers who make this essential component. Mobile phone market is growing with a
very fast speed and one of the many reason of that is constant innovation (Agarkov, Guskova and

Korzhin, 2021). Companies like Samsung, Sony and Oppo are constantly introducing new
products which is helping the industry to grow.
Drivers of Innovation
Samsung's management has integrated innovation in their organisational culture the
company embed innovation in a strategic context. There can be three drivers of innovations
which are mentioned below -
Problem Driven Innovation – Innovations which solve a problem is classified as problem
driven innovation. Samsung has solved many problems with their innovation and technology.
The company make semiconductors which is an essential component for electronic appliances
which solve the problems of many electronic companies another example of problem driven
innovation can be their JetBot 90 AI+ which is a vacuum cleaner which solve consumers
problems.
Constraint Driven Innovation – Organisations with restrictions are more likely to come up
with innovation as solution. Smartphone users wanted a bigger screen size but a light weight and
thinner phone. Then Samsung solved their problem where they come up with foldable displays.
This can be an example of constraint driven innovation.
Opportunity Driven Innovation – When company innovate new products to grab the possible
opportunities then such innovation can be classifies as opportunity driven innovation. There are
many products which Samsung innovate for taking the advantage of the opportunities available
in the market (Fisher and Fang, 2018). The company is producing products with artificial
intelligence, Samsung Bot Care and Samsung Bot Handy are some of the examples of
opportunity driven innovation of Samsung.
Wider Macro Competitive Environment
SWOT Analysis of Samsung
 The organisation have a vary
diversified business which is their
greatest strength. The company do not
heavily rely on any particular business.
 The marketing of the company has
been their weakness the company fail
to match the marketing abilities of their
rival Apple Inc.

 The company have ample of experience
and funds because they are operating a
profitable business from a long time.
 Samsung uses android which is an open
source operating system. Many users
think that Android is a inferior product
(Kaur, Agrawal and Chaudhari, 2022).
 The market of smartphones is
constantly growing and introducing
new products in the market can help
Samsung to capture the market.
 New technology and innovation bring
opportunities in electronic market.
Demand of foldable screen phones and
wearable tech devices can increase in
future.
 Apple has emerged as a smartphone
leader in the market. Samsung has
failed to create a reputation for their
products.
 Chinese manufacturers like Xiaomi and
Oppo are emerging in developing and
under developed countries which can
be a threat for the company.
PESTLE analysis of Samsung
Political – The company is a multinational company and they trade in many countries which
expose them to various political environments. Samsung face pressure from African and Latin
American countries because of unstable political environment of these countries. The company
also face political problems in their home country because of their problems with North Korea.
Economical – Global economical factors can impact companies operations and profitability.
Exchange rates, interest rates are some factors which constantly remain a danger for the
organisation.
Social – Samsung has a very big product portfolio, they make products for everyone in the
society and that increases the impact that society can make on their business. Shifting of
consumer's taste and preference can impact on Samsung's business significantly.
Technological – The company need to constantly bring new products to survive in the industry.
They should always need to focus on new technologies which help them to gain competitive
advantage in the industry.

Legal – The organisation must follow the rules and regulation of the country they are working
in. They are exposed to different legislatures in different countries they can lose permit for
operating in a country if they fail to follow their law.
Environmental – The company should operate in a way that their operations make minimum
effect on the environment. The company should integrate sustainability in their organisational
culture.
CONCLUSION
In this report it is concluded that innovation is crucial for a business to survive in a market. It is
important for business management to include innovation in their strategies because it can help
organisations to thrive in the market. Samsung is a example of how a company can grow very
fast if they keep innovating new products and technologies. Innovation and new technologies
create differentiation in Samsung's products. Every company need to remain up to date in order
to maintain their position in the market.

REFERENCES
Books and Journals:
Agarkov, M.A., Guskova, M.F. and Korzhin, S.N., 2021, January. An innovative method of
procurement management in the electronics industry. In 2021 IEEE Conference of
Russian Young Researchers in Electrical and Electronic Engineering (ElConRus) (pp.
1870-1873). IEEE.
Fisher, G.J. and Fang, E.E., 2018. Customer-driven innovation: A conceptual typology, review
of theoretical perspectives, and future research directions. In Handbook of research on
new product development. Edward Elgar Publishing.
Fowler, G.A., 2019. Hands on with Samsung's Galaxy Fold: Make peace with a
crease. Washingtonpost. Com.
Gavlovskaya, G.V. and Khakimov, A.N., 2022. Impact of the Covid-19 pandemic on the
electronic industry in Russia. In Current Problems of the World Economy and
International Trade. Emerald Publishing Limited.
Iwai, H., 2020. Practicing the Company Philosophy to Survive: The Competitive World of
Samsung Group. In Cultural Translation of Management Philosophy in Asian
Companies (pp. 121-135). Springer, Singapore.
Kaur, J., Agrawal, S. and Chaudhari, N., 2022. Impact of Effective and Non-Effective Change
Management on Organizational Performance: A Comparative Study Between Nokia and
Samsung. ECS Transactions, 107(1), p.12915.
Wang, J. and Lai, J.Y., 2020. Exploring innovation diffusion of two-sided mobile payment
platforms: A system dynamics approach. Technological Forecasting and Social
Change, 157, p.120088.
Wojan, T.R., Crown, D. and Rupasingha, A., 2018. Varieties of innovation and business
survival: Does pursuit of incremental or far-ranging innovation make manufacturing
establishments more resilient?. Research Policy, 47(9), pp.1801-1810.