ABD703 - Samsung's Innovation, New Venture Creation: Feasibility Study

This report provides a comprehensive feasibility study for Samsung's new venture creation, focusing on innovation within the smartphone and home appliance markets. It identifies market needs and opportunities, evaluates creative ideas for new product experiences, and assesses the market, organizational, and financial feasibility of these ventures. The analysis includes considerations of consumer preferences, competitive landscape, market growth potential, and potential profitability. The report also explores different types of innovation, such as breakthrough innovation, and evaluates the potential for market value creation, including point-of-difference, consumer value addition, and market penetration timelines. Furthermore, the report delves into organizational structure, financial projections, funding needs, and strategies for growth and sustainability, ultimately providing conclusions and implications for Samsung's strategic direction.

Assessment Cover Page
Course qualification DIPLOMA IN BUSINESS AND ENTERPRISE
MANAGEMENT
US/Prescription title: CREATIVITY, INNOVATION AND NEW VENTURE
CREATION
Course/Paper number: ABD703
Student name: JINHO SONG
Student ID: 174482A
Teacher: ZIA, AMRINDER AND TIM
Assessment type: 2nd ASSESSMENT
Due date: 21/MAR/2018
Student(s) to complete: Assignment/Report Plagiarism Declaration
For Individual Assignment / Report ONLY
I / we certify that this is my / our own work and I / we have read
and understood the Plagiarism and Dishonest Policy (7.7) of
Abacus Institute of Studies.
I/we understand that the submission of this form electronically is
the equivalent of me / us signing my / our name, in pen, on a paper
assignment cover sheet.
For Group assignments/reports ONLY:
Student name(s) & IDs:
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Table of Contents
1.0 Business introduction/background.......................................................................................2
2.0 Market need/opportunity......................................................................................................2
3.0 Generation of Idea................................................................................................................4
4.0 Evaluation and selection of idea..........................................................................................5
5.0 Feasibility of the market.......................................................................................................7
6.0 Feasibility of the organization............................................................................................12
7.0 Monetary feasibility...........................................................................................................14
8.0 Growth and sustainability potential...................................................................................19
9.0 Conclusions/Implications...................................................................................................21
References:...............................................................................................................................22
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1.0 Business introduction/background
Write a brief introduction for the existing business/or the business idea/ or concept you
have chosen to investigate in your report.
Samsung is the world well-known company for its products which are
technologically based such as laptops, computers, mobile phones and home electronic
appliances. The organization mission is to have a full dedication of its technology and talent
to develop products and services that are based on innovation (Samsung 2017). The firm
faces stiff competition from its rivals in business such as apple. Apple Company is in battle
with Samsung firm due to the patent infringement. Samsung has a marketing strategy that
focuses on the promotion of the brand image and sales increment with the aim of achieving
its strategic and financial goals. The customer rang can be expanded and the sales revenue
increased if the company adopt and effective marketing strategies. This report focuses on
providing the financial feasibility and the organizational and market of the suggested
investment (Samsung, 2017).
2.0 Market need/opportunity
Identify a market need or opportunity by analysing the current market situation based
on the following dimensions:
 Consumer taste along with preference
 The potential for profitability and growth in the market
 Competition from competitors
 Other needs
Dimension Analysis/Discussion
customer wants, needs and preferences The recent growth in the technological
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development has brought a significant shift
in the smartphone industry. The industry is
the most significant industry in business and
has produced a dynamic environment.
The consumer has over the years preferred a
phone that has improved life battery would
prefer a battery life that can go past a day
without being charged. The smartphone
comes with various features such as WI-FI,
Bluetooth, EDGE, GSM and a different
color display all depending on the battery
life of the phone. With all these features,
consumers are more addicted to their phones
and would prefer a phone that has longer
battery life.
Competition The Chinese brand market has continually
increased while Apple and Samsung market
share decline over the years based on the
most recent Gartner data below.
There was a marginal yearly growth n the
iPhone sales. However, there was a 9%
market growth during the same period
which resulted in market share decrease.
The global share of apple decreased from
14.8% to 13.7%. However, the Samsung
having the more significant market share
saw a decline from 23.3% to 20.7% (Kim,
Park,&Kim,2015).
On the contrary, oppo saw the most
significant growth in the market share of
4.6% to 8.1%.Huawei and vivo saw an
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increase in the market share too.
market growth and profitability potential The smartphone market is expanding at a
rapid speed globally, justifying for the 14%
of the cell phones in the world. The rapid
growth in the technological development
has backed up the high increase. Some of
the technological development comprises of
the professional data management, fast
internet browsing, advanced personal data
management and the 4g and 3 G network
evolution technologies. Smartphone hotspot
has been linked to the Asian region mainly
in China and India. The region has seen a
continuous development in the cellular
market and an increment in the 3G
expenditure and penetration on customer
electronics across the region. In the markets
that there is saturation, the growth of
smartphone in the region has been fueled by
the subsidies of the operator and the carrier
wars. In the year 2014 the smartphone
market is been estimated to reach $150.3
billion compared to the year 2009 where it
attained $55.4 billion (Lee, Kim,&Park
2015)
other relevant (if any)
3.0 Generation of Idea
 Provide more than two creative ideas that the capable of handling the need
identified based on the analysis above.the creative ideas can take any of the
form below.
 Service
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 Product
 Process
 Concept
 All of the above combined
 Any other appropriate.
Creative idea#1: Allowing consumers to have an experience of the release of new
smartphones in the showroom. It would be an effective way of getting more sales of the
smartphones.
Creative idea#2: Allowing consumers to have an experience of the release of new electronic
appliances, in real time fun setting. This would allow the customers to have a close look of
those appliances and would also develop an urge within them to know more about the
product and make a purchase
4.0 Evaluation and selection of idea
4.1 Evaluate and analyze the creative ideas above for their potential to be developed as
value creation opportunity.
Inventive
knowledge
Advantages Disadvantage
s
Expenditur
e
Vs. Profit
(Range
1- 10)
Executio
n ease
(Range 1-
10)
Reversibilit
y
(Range 1-
10)
Creative
Idea 1:
Enabling
customers
to
experience
the release
of new
smartphone
s located in
Superior value
addition in terms
of the experience
of the customer
unmatched by
competitors
(Yuksel, 2012)
- Foremost mover
advantage
- So as to set
up an area
where many
people could
literally have
an experience
of the new
products,
extensive
resource input
2 1 1
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the
showroom
is required.
-Possible
environmental
damage due
to waste as a
result of the
people’s
engagement
in the process
-Involvement
of children in
the process
may cause
certain health
and safety
issues.
-Breakage of
the mobile
phones.
Creative
Idea 2:
Allowing
consumers
to have an
experience
of the
release of
the new
electronic
appliances,
in real time
fun setting.
-Allows the
addition of
superior customer
value and
experience that is
unmatched by
those of
competitors.
- Potential that
scalable/replicabl
e
-The
electronic
appliance can
be broken
4 4 6
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4.2 Based on the evaluation and analysis conducted in Q 4.1, justify and select the idea
that you can recommend for adoption in the potential venture scenario.
From the above evaluation and analysis of potential ideas, it is clear that Samsung is
hunting the effective cost-benefit. The first idea involves a great potential in the economic
aspect, however, there are high risks involved when dealing with resource inputs. Also, the
second idea contains a risk of investment and reversibility while they fill new electronic
appliances in the booth.
5.0 Feasibility of the market.
5.1 under each section, analyze the selected ideas mentioned above for its innovative
type:
 Innovation incremental.
 Innovation disruptive,
 Innovation breakthrough
 Innovation sustaining
 Other
Innovation type Fits with the innovation type
Incremental innovation No.
(it is not oriented towards improving the
products that are existing)
Disruptive innovation No
(it is not oriented towards improving the
products that are existing)
Breakthrough innovation Yes
Sustaining innovation No
(it is not oriented towards improving the
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products that are existing)
The selected idea, according to the innovation type’s exploration, evidently suits the
breakthrough innovation as this is a way of including new products and serving the customer
needs to experience new products. Breakthrough Innovations can turnaround the market trend
with unique product, which would assist achieve a competitive edge in the market, and create
maximum possible value.
5.2 Discuss the scope and degree of innovation term in the life cycle and innovation
based on the above.
Life cycle stage Scope of Innovation
Introduction stage
For the company that is introducing a new
product in the market, this is considered as
the most expensive stage for the company.
The product has a smaller market size, and
the product sale will increase.
However, the cost of expenses such as
development and research, consumer testing
and marketing, required for product
introduction can be competitive
(yuksel,2012)
Scope- High
Costs- High
Profits- Low
Customers- Low
(Innovators about 2.6%)
Growth Customers: (Early
adopters 14.5%, Early Majority
34%)
Maturity Customers: (Late Majority about 35%)
Decline Customers:
(Laggards about 17%)
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5.3 under each section, explore and evaluate the selected idea for its potential in the
market value creation viability and scope.
 Potential in profits and attractiveness of the target market.
Impending threat Analysis Degree Favorable?
Bargaining power of
customers
Buyer’s cost diverts
to the products of the
competitor
High NO
Bargaining power of
dealers
It is dissimilar
dependent on
dealers.
There is a few
alterative to Android
platform provided to
Samsung as the
bargaining power is
represented by
Google. (Lee, Kim,
& Park, 2015)
High NO
New entrants threats Limited number of
organization to
High No
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Apple,Huawei,LG
and Oppo.(Kim,
Park, & Kim, 2015).
substitute products
or services threats
Compared to
Samsung the Huawei
smartphone, a brand
of the Chinese
market, is cheaper,
thus it can substitute
Samsung.
High No
conflict among
existing companies
conflict among
companies that are
existing is extremely
competitive
High NO
The presence of substitute products in the market has threatened the existence of
Samsung. For instance, the Huawei smartphone which is a cheaper Chinese smartphone can
substitute Samsung for consumers who cannot afford to purchase Samsung.
The home appliance industry is facing a stiff rivalry since the products are saturating
the market, and the products feature don not different from one manufacturer to the other.
There a significant disparity in the aspect of bargaining power of the suppliers.
Suppliers who provide components are not considered of the bargaining power since they are
only affected by the quantity of the order of the Samsung and price negotiation. Due to the
few alternatives to the Android platform, Google has represented a bargaining power that is
marked.
In the home electronic appliances, for the new entrants, the big brands have been
limited, for instance, there is Samsung, Panasonic, and LG. However, in the smartphone
market, there is the limitation in the number of firms such as LG, Apple, Huawei, Oppo and
Lenovo (Lee..Kim& Park, 2015).Samsung has seized this chance and remained at it’s the
leader in the market worldwide.
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