Business Innovation: A Case Study of Samsung TV's QLED TV

This report analyzes the innovation process of Samsung TV's QLED TV, including macro and micro environmental analysis, Mckinsey 7s model analysis, and factors influencing the innovation process. The report highlights the challenges faced by Samsung TV, such as rising labor cost and lack of self-operating system, and provides recommendations to overcome these challenges. The subject of the report is business innovation and the course code and college/university are not mentioned.

Running head: INNOVATION
Business innovation
Name of the Student:
Name of the University:
Author’s Note:

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Executive Summary
This current report deals with the Samsung TV and its new innovation. Samsung is going to
introduce QLED TV in 2018. The main aim of this innovation is to gain competitive advantages
and to improve the viewing experience of the customers. From the external environmental
analysis, it is received that rising labor cost and shortage of skilled labor are the major issues of
Samsung Company. On the other hand, the internal environmental analysis shows that lack of
self-operating system, huge competition, and the low-profit margin are the major weaknesses of
Samsung Company. However, strong brand image and innovative ideas lead Samsung to gain
success in their business. However, by using disruptive innovation and self-created operating
system Samsung will be able to overcome its challenges.

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Table of Contents
Introduction......................................................................................................................................4
Company Background.....................................................................................................................4
Macro Environmental Analysis.......................................................................................................5
Micro Environmental Analysis........................................................................................................7
Analysis of Mckinsey 7s model in the context of Samsung TV......................................................9
Process through which Samsung TV is spurring the innovation and the factors influencing the
innovation process.........................................................................................................................11
Recommendations..........................................................................................................................13
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

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Introduction
Business innovation refers to the new idea of an organization to gain competitive
advantages in the global market. In order to develop the product or service the business
organization generates new ideas or modifies their old ideas. In the recent years, innovation is
brought by the incorporation of technology in product or service development (Ehrenhard et al.
2017). Use of technology is a new way to establish an agile and efficient organization.
Generation of the new idea is the main factor of innovation. During the innovation, the ideas are
narrowed down through the brainstorming process. This study deals with the new innovation of
Samsung TV. Therefore, the innovation process of this organization will be analyzed in this
section with the support of various theories and models.
Company Background
Samsung Company is a Korean Based Electronic organization. However, this
organization expands its business all over the world. It has branches in US, Singapore,
Australian, India and many other countries. This organization has a conglomerate structure
(Samsung.com 2018). This company is considered as the most successful electronic organization
in the global market. Samsung offers various types of electronic products. In the recent years,
Samsung becomes popular for its television and smart phones. However, Samsung TV is popular
since many years among the various countries. They focus on the development of new
technologies for their television industry. The main vision of Samsung TV is to improve the
viewing experience of the customers throughout the world. At the end of 2008 Samsung is
declared as the World’s number one TV producer company. In the year 2018, Samsung is going
to innovate a new idea in their Television industry. They want to introduce QLED TV in 2018.

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Their mission behind this innovation is to improve the viewing experience of the customers and
to add value to the daily routine of the people through life-changing advances in connectivity.
Introduction of QLED TV is a global innovation of Samsung TV in the current years
(Samsung.com 2018). This product will enable Samsung to strengthen their position in the global
electronics industry.
Macro Environmental Analysis
Macro environmental analysis is crucial for any business while going to introduce a new
service or product (Van Wormer and Besthorn 2017). In order to carry out the environmental
analysis application of PESTLE model will be helpful. QLED TV is a new innovation of
Samsung TV in the global market. Among the various target countries, Singapore is one of the
vital target markets of Samsung. At present Singapore, market has shown the high economic
growth and today it is considered a high-income country. Hence, the current PESTLE analysis is
done based on the Singapore market. Political factor focuses on the political condition of a
country. In Singapore, the political risk is low, which is a big opportunity for the foreign
investors to expand their business in this country. However, the living standard is better in
Singapore and the political condition is stable. Such political stability will lead Samsung TV to
introduce their new product in this country without facing any legal obligation. The next element
of PESTLE is the economic factor.
The economic environment of Singapore highlights on the vibrant free-market economy.
The economic environment is developing in Singapore and the per capita income of this country
is highest in ASEAN. Therefore, the corruption-free environment of Singapore supports
Samsung TV to introduce their new product in this country. In the recent years, the Government

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has invested to diversify the economy of Singapore (Javeed and Mukhopadhyay 2017). This
economic stability will facilitate the innovation of Samsung TV in this country. Despite such
facilities rising labor cost and labor shortage is the major challenges that may hamper the
innovation of Samsung TV I this country.
Social factor plays an important role in influencing a product or service in a country
(Glowik 2017). In Singapore, people follow high lifestyle especially the young generation like
the western culture. However, the literacy rate is high in Singapore and the purchasing power of
the customers is also high. This will lead Samsung TV to get a good response from the Singapore
market for their new product QLED TV. On the other hand, this TV also adds values to the
lifestyle of people. Technological factor focuses on the use of emerging technology in the daily
life of people. Technological advancement is a big factor of the changing lifestyle of individuals.
The IT infrastructure of Singapore is well developed. Hence, Samsung TV always gives their
focus on technological innovation to improve their product feature. QLED TV is an example of
new QLED technology, which includes a macro LED display. Hence, the emerging technology
of Singapore will boost this innovation of Samsung TV in this country.
Legal factors of Singapore highlights that the growth of electronic commerce depends on
favorable legislation. In order to expand their business and to introduce their new product in
Singapore market, Samsung TV needs to follow Electronic Transaction Act, Intellectual Property
Right, Tax issues, Content Regulation and import-export procedures. Apart from this
Environmental norms should be followed by the business organization to reduce their impact on
the environment (Kuznetsova and Markova 2017). For Samsung TV it is crucial to adopt
sustainability approach as well as CSR activities to develop an environmentally friendly business
in Singapore.

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Summary of the analysis: From the above macro-environmental analysis it has been received
that the political and economic environments of Singapore are favorable for Samsung TV to
introduce their new products in this market. However, rising cost of the labor and labor shortage
are the two major issues that may hamper their business. On the other hand, the emerging
technology and well developed IT infrastructure in Singapore will boost the innovation process
of Samsung TV in this market. Moreover, it is crucial for Samsung TV to maintain the legal and
environmental laws to carry out their business without any legal obstruction in this country.
Micro Environmental Analysis
Micro environmental analysis includes the internal features of an organization. In order to
give shape the innovation process, it is crucial for an organization to evaluate their strength,
weakness, threat, and opportunities (Glowik 2017). In the context of Samsung TV, SWOT
analysis has been taken to understand the internal environment of this organization.
S-Strength
 Operating in the market for a long time
and having a great brand recognition
 Popular for launching a new innovative
product
 Provides a lot of TV models for every
price range
 One of largest TV manufacturer in the
world
W-Weakness
 Lack of self-created operating system
 Low profitability
 Highly dependent on the third parties
for software
O-Opportunity T-Threat

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 To gain strong financial position in
near future
 Incorporation of new technology
 The growth of television market
 Strong competition from Apple and
HTC
 Threat of alternative product from
Chinese and Taiwanese in the local
market
Table 1: SWOT Analysis
(Source: Samsung.com 2018)
Summary of the Analysis: From the above table it has been found that Samsung TV has been
operating in the global market for a long time. This creates a strong brand image of this
organization. In order to get a response from the market, a strong brand image is required
(Gnanakumar 2017). However, Samsung is one of the largest TV makers in the world. Therefore,
they are popular for their innovative product feature. They provide the variety of TV products at
different prices. This allows all classes of customers to purchase Samsung's product. One of the
major weaknesses of Samsung TV is the lack of self-created operating system. They do not have
their own operating system, which hampers their business. In the recent years, Samsung has been
facing low-profit margin in their television industry. This creates difficulties for this organization
to innovate new product in the global market. On the other hand, Samsung is highly dependent
on the third party to support the customers as they have no customer support software.
Strong brand image of an organization leads the organization to gain significant growth
in the market (Keller 2017). Samsung is popular for its innovation and it has a strong brand
image. Such innovative feature and strong brand image lead Samsung to gain a good financial

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position in the near future. Samsung TV has the opportunity to expand their market in foreign
countries through their innovation. Therefore, emerging technology brings opportunity for this
organization to improve their television feature as well as the customer experience. Huge
completion in the global market is the major threat for Samsung TV. However, Apple and HTC
are the major competitors of this organization as these companies are famous for their
innovation. HTC also offers various types of televisions to the market, which is an emerging
threat for Samsung TV. Apart from these China and Taiwanese offers alternative products in the
local markets, this creates a threat for Samsung while going to introduce an innovative product.
Analysis of Mckinsey 7s model in the context of Samsung TV
In order to understand the internal organization Mckinsey 7s model is applied by the
various business organizations. To bring innovation in an organization it is crucial to organize
the internal resources in an organization (Shaqrah 2018). There are seven elements in Mckinsey
model. The first element is the strategy. In order to generate a new idea or to improve the
business adoption of the new strategy is crucial. The second element is the structure of the
business or organization. For an organization, it is crucial to develop a proper structure to share
the information properly. Next is the system of an organization, which reveals the daily business
activities of an organization. Skill focuses on the ability of the employees in a firm to cope with
the new changes in an organization. Therefore, staff refers to the number of employees in an
organization. Style focuses on the management structure of an organization. Finally shared
value is the last element of this model, which highlights the employee behavior and action of the
organization to meet their business goal.

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In the context of Samsung TV, the major three elements of Mckinsey model are
considered to understand their role in increasing the effectiveness of the organization. Strategy,
Structure, and System are the major three components that leave a great impact on the new
innovation of Samsung TV. In order to bring innovation, Samsung replicates the innovation
process of their market leader. Samsung TV has taken scanning and utilizing strategy to
improve their product feature. As commented by Faturrohman et al. (2018), scanning refers to
the market analysis, which is important to understand the competitor’s position and the current
market demand. Such strategy will help Samsung to understand the market demand for their new
QLED TV. The organizational structure of Samsung is divisional. This organization is
categorized into three divisions based on their product category. The divisions include Device
Solution, Consumer Electronics and IT and Mobile Communication. Samsung TV is categorized
under the Consumer Electronic. Each division is managed and organized properly based on the
product feature. Such well-organized structure of this organization is beneficial to introduce a
new product in the market. For example, QLED TV of Samsung will be managed properly based
on its characteristics as it will be taken under a specific division of Samsung. Samsung has
developed its operating system based on the long-term growth prospect. They have recruitment
system, customer relationship management system, business intelligence system, knowledge
management system and orientation system (Samsung.com 2018). They follow regular
evaluation to find out the opportunities to bring improvement in their system. Hence, the
knowledge management system of Samsung will be helpful to develop their new product QLED
TV as innovation needs more knowledge and more idea.

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Figure 1: Mckinsey 7s Model
(Source: Shaqrah 2018)
Process through which Samsung TV is spurring the innovation and the factors influencing
the innovation process
According to Werner et al. (2018), establishment of an innovative culture is required to
give shape an innovation. Samsung has developed an innovative culture in their organization to
develop the features of television. First, they have carried out a vast market analysis to
understand the current demand of the market. At present people prefer LED monitor instead of
LCD. Based on this concept Samsung has decided to launch QLED TV. The modern customers
and especially the young generation prefer good viewing experience while watching TV. By
analyzing this demand Samsung wants to improve the viewing experience of the customers by
introducing QLED TV.

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Various factors are associated with the innovation in Samsung Company. As asserted by
Kim et al. (2018), market competition and customer demand are one of the major factors of
innovation. As criticized by Amis (2018), if the organization fails to identify the current market
demand then it is difficult for them to gain competitive advantages through innovation. In the
context of Samsung, they are going to innovate their new product QLED TV in the global
market. They aim to meet the current demand of the customers and to gain competitive
advantages through this innovation. However, QLED TV is made with a micro-LED display and
the wall of the TV has a super slim bezel. Such latest TV will meet the market demand and help
Samsung to get a good position in the global electronics industry.
Availability of the resources also influences the innovation process. As criticized by
García-Sánchez et al. (2018), lack proper resources hamper the innovation process. Samsung has
many skilled labors that lead this organization to bring innovation in their television department.
Technology is another factor of innovation. As mentioned by Brunswicker and Chesbrough
(2018), without incorporating the technology innovation is not possible. As argued by
Gnanakuma (2017), if the employees of an organization do not access the technology properly
then it will hamper the innovation process. Samsung has utilized the technology in their product
development. Introduction of QLED TV is an example of new technology in Samsung Company.
Next proper management and leadership play an important role in creating innovation in an
organization. Samsung has an effective strategic management and they follow transformational
leadership style, which facilitates their innovation process.

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Recommendations
From the external environmental analysis, it has been found that high labor cost and lack
of skilled labors are the major challenges of Samsung. In order to deal with these issues,
Samsung needs to provide training to their employees to improve their skill. It is a short-term
initiative for this organization, which facilitates their innovation process. On the other hand,
Samsung has no own operating system. Thus, implementation of their own operating system will
be helpful to enhance the customer experience. Apart from this, they need to offer a unique
product in order to deal with the threat of alternative product, which is driven by the competitors.
Therefore, integration of the innovation strategy into the leadership strategy will be an effective
approach for Samsung to improve their Television feature and gain competitive advantages in
the global market. Application of disruptive innovation strategy is a long-term goal, which will
boost the innovation and growth of Samsung.
Conclusion
The above piece of work highlights the new innovation of Samsung TV in the global
market. Introduction of QLED TV is a new innovation of Samsung, which will lead the
organization to achieve high-profit margin. It has been received that lack of self-created
operating system, low-profit-margin and high competition are the major challenges that hamper
the business of Samsung Company. Hence, the new innovation of Samsung TV will open a new
opportunity for this organization to gain a good position in the global market. Therefore, it can
be concluded that integration of innovation strategy into the leadership strategy will be an
effective approach for this organization to gain success in the competitive market.

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