Operations Management at Samsung

This article discusses the operations management of Samsung Electronics, the leading manufacturer and marketer of television sets globally. It covers their competitive strategies, product focus, and internal and external failures. The article also explores the manufacturing processes used by Samsung to produce their products.

Running head: OPERATIONS MANAGEMENT OF SAMSUNG ELECTRONICS
Operations Management at Samsung
Name of the Student:
Name of the University:
Author Note:

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Answer 1:
Samsung Electronics and the product chosen-television sets:
Samsung Electronics Company Limited is the electronic goods manufacturing arms of
the South Korean business conglomerate Samsung and dominates the global electronics market.
It is listed on several stock exchanges around the world like Korea Exchange and London Stock
Exchange. The company is the leading manufacturer and marketer of television sets globally
(samsung.com, 2018).
Figure 1. Top manufacturers of TV sets 2008-2017
(Source: statista.com, 2018)
The statistics shown above shows that Samsung holds approximate a fifth of the global
television market. Samsung Electronics manufactures television sets of different types like flat
television, curved TV, UHD television and LED television sets. The company specializes in
marketing television sets of both high end and medium prices. The company charges high prices

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and low prices respectively for these two ranges of TV sets. As far as television as a product is
concerned, the product is in demand from all round the world in both business sectors and
household sector. This means that Samsung Electronics engages in both B2B and B2C business
as terms of television sets. The domestic customers of Samsung Electronics include middle and
upper class customers who purchase the lower and higher versions of television sets
manufactured by the electronics giant. The business customers of Samsung Electronics consist of
business organizations which purchase the Samsung television sets to install in their premises.
These organizations consist of hotels which install television sets in their lobbies and rooms to
maximize the satisfaction of the guests. The customers of the electronics giant includes
wholesalers and retailers which sell television sets. The business customers of Samsung
Electronics as far as television also include international and national retail chains which sell
electronic goods. Samsung electronics is the largest manufacturer of electronic parts used in
television sets. Thus, the customers of Samsung Electronics Company Limited also consist of
other television set manufacturers like LG and Sony which are also its international competitors.
Competitive strategies of Samsung Electronics Company Limited:
The competitive strategies which Samsung Electronics Company Limited uses in terms
of television sets are as follows:

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Differentiation:
The main competitive advantage which Samsung possesses is product differentiation
using its superior technology and marketing strategy. The electronic giant achieves this in two
ways, first by using technological features which it creates in its own laboratories. The second
differentiation factor is that Samsung manufactures components which other companies use.
Thus, in a way Samsung can control their production and maintain individuality in its own
products. This enables Samsung to manufacture electronic products with unmatched technology
excellence. Samsung uses superior technology in its television sets which has earned it a high
degree of product differentiation. For example, 108cm (43) N5380 Smart FHD TV comes with
highly advanced technology like Ultra Pix Colour Technology, Surround sound and Bluetooth
two way audio. The product also allows synchronization with other electronic devices like smart
phones which enables the TV sets exchange information with the smart phones. This superior
technology has become an indispensable part of every Samsung Electronics product, including
television sets. The company offers attractive discount offers on its television sets which
maximizes the value of their purchase. Samsung television sets also comes with financing offers
which enables more customers buy them. Thus, a combination of technological and marketing
prowess attributes the company with its competitive advantage.

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Figure 2.108cm (43) N5380 Smart FHD TV
(Source: samsung.com, 2018)
Low cost:
Samsung Electronics Company is able to maintain low cost of production in spite of high
technology which owes it its second competitive advantage. The multinational has strong
presence in the main markets of Asia, Europe, North America and Oceania. The company
besides being listed on the Korea Exchange, in its home country is listed on international stock
exchanges like London Stock Exchange. This means it can generate capital from several markets
like Asia, Europe and North America which it can channelize towards manufacturing Smart FHD
TV. This means capital generation strategy of Samsung Electronics is one of the most important
competitive strategies. The company as a result is able to maintain low cost of production
compared to its immense capital generation. Samsung can thus generate immense revenue which
again it reinvest its manufacturing activities.
Response to customer requirement through marketing:
The deadly marketing strategy of Samsung Electronics in response to customer
requirements comes to use in the marketing of television in the global market. The tag line of
Samsung television sets ‘Feel the picture Feel the love’ reflects the technological prowess of
Samsung Electronics which finds use in the television sets as well. The phrase ‘Feel the love’ to
certain points out to the satisfaction which the customers can feel on purchasing Samsung TV
sets. The TV sets from the electronic giant are available in the brick-and-mortar stores owned the
Samsung and of its partner retailers. The customers, both business and individual customers can
also view and purchase Samsung TV sets online. The company and its partner retailers give

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attractive discounts. This deadly marketing strategy enables Samsung Electronics market its TV
sets all over the world and generate high revenue.
Answer 2:
The term modular design is the product manufacturing strategy in which a number of
parts can be assimilated to form different models of product. The technology is used in a number
of diverse industries ranging from fast food to automobile and electronics. For example, a tear
down of a Samsung Smart FHD TV shows that the product consist of 2500 high-tech
components which house the cutting edge technology the television sets have. The components
like Bezel, Crystal black panel, frame middle mold, optical sheet, LED, bottom chassis, middle
cover, rear cover and several other parts which are outcome of the precision and cutting edge
technology which Samsung possesses.

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Figure 3. Teardown of Samsung Smart TV
(Source: news.samsung.com, 2018)
Answer 3:
The following are the two internal failures which Samsung Electronics is facing:
Cost of quality:
The term cost of quality refers to the financial costs which multinational companies incur
to get access to resources it requires to prevent defects and mistakes. As far as Samsung
Electronics is concerned, the company faces competition from multinational companies like
Sony and LG. The electronic giant in under continuous pressure to conduct research in
technology to ensure zero-defect products. This places immense cost pressure on the company.
The cost of quality keeps on increasing because often old technology and methods are rendered
redundant which leads to total wastage of the financial resources that had gone into making the
product. Moreover, Samsung requires to continue this investment because its competitors like
LG to keep on carrying out similar R&D.
Total quality management (TQM):
The term total quality management or TQM refers to management of quality which
business organizations engage into by collaborating with the stakeholders like suppliers and
customers. As far Samsung Electronics is concerned, the company has to spend immense amount
of money to collaborate with suppliers of components to ensure that they maintain zero-defect
parameters as well. Similarly, the company has to collaborate with customers on the social media
websites to gain feedback about its products. The company has to spend immense amount of

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money in maintaining and updating its pages on the social media platform. This shows that total
quality management places immense stress on the financial resources of Samsung Electronics.
The following are the two external failures which Samsung Electronics Company
Limited faces while operating in the television market:
Competition:
. Competition refers to the challenge which one company faces from companies making
and marketing similar products. As far as Samsung is concerned, it faces competition from
international electronic manufacturers like Sansui and Sony. This is a failure because it has
prevented Samsung from dominating the market. The multinational giant has to continuously
invest in promotion of its products and marketing new TV sets like Smart FHD TV to sustain in
the competition. This is a failure because it puts immense on the financial, material and human
resources of the company.
Sustainability:
The term sustainability refers to the operations of business organizations to reduce their
environmental footprint and minimize pollution. As far as Samsung Electronics is concerned, the
company manufactures products all over the world. This means that the company results in
immense pollution while manufacturing products. The company is under continuous pressure to
comply with the environmental and sustainability laws in power in different countries. This is a
failure because it leads to plummeting the operating costs of the electronic giant.
Answer 4:
The company uses the following processes to manufacture its products:

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The Four process strategies:
Samsung uses four process strategies to manufacture its products like Smart FHD TV.
This manufacturing process is used to manufacture low volume and high variety outputs. The
process is supervised by various departments like marketing, finance and production. The
outcome of the process is high degree of flexibility but leads to low equipment equalization.
Figure 4.Four step process diagram
(Source: Game & Gregoriou, 2016)
Product focus:
The product focus revolves around high volume and low variety products. The emphasis
remains on manufacturing standard products.

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Figure 5. Product focus
(Source: Game & Gregoriou, 2016)
The comparison and analysis of the two production methods woulfd show that Smasung
Electronics stresses on manufacturing both standard products like television sets. The company
produces a small number of variants of TV sets like Smart FHD TV which uses its technological
prowess. This standard follows the product strategies of Samsung which is continued to other
products as well. Thus, it can be pointed out that Samsung uses product focus method to
manufacture TV sets. It is this process which ensures that the company dominates approximately
a fifth of the global television market and generate immense revenue.

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