Managing Innovation: Samsung's Application of Innovation Theory

This report provides a comprehensive analysis of Samsung's innovation strategies, focusing on the application of innovation theory to its product development, particularly in the mobile phone sector. The report begins with an introduction to innovation, emphasizing its importance in maintaining market share and sustainability. It then delves into various innovation theories, with a specific focus on the Sustaining & Disruptive Technology Innovation Theory developed by Clayton M. Christensen. The report examines how Samsung has utilized this theory, especially in the evolution of its mobile phones, from early models to the Galaxy series, to gain a competitive advantage. The report highlights technological advancements, market developments, and the impact of innovation on Samsung's revenue and brand value. The report also discusses the challenges and criticisms associated with disruptive innovation theory. The report concludes with a reflective summary of the key findings and implications of innovation strategies in the context of Samsung's business operations. The report also highlights Samsung's adoption of GSM technology and its impact on the company's market position. The report also explores the role of technology and innovation in the mobile industry and the strategies Samsung has adopted to stay ahead of its competitors.

MANAGING INNOVATION

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
1) Innovation theory...............................................................................................................1
2) Application of theory on a product....................................................................................3
A) Technological development..............................................................................................4
B) Predicting alternative and possible market developments.................................................6
3) Reflective Summary...........................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
In present business world, innovation plays a crucial role when it comes to develop
market share or to maintain strong sustainability at marketplace. Innovation can be known as
making modifications in existing products and services in order to deliver high and qualitative
experience to customers. This process is mostly being adopted by companies when they find that
returns becomes moderate and would not take a rise in near future (Bieraugel, 2015). With the
help making modifications is products, it has been found that customers interests can be
developed. Through this, enhancement of sales and profit ratios can be done. Firm which has
been taken under in this report i.e. Samsung which was found in the year of 1938 by Lee Byung-
chul. They are dealing in many sectors like electronics, apparel, chemicals, medical equipments
and many more. Main focus under this assignment will be on electronic gadgets and application
of innovation on them which changed the whole scenario for them. Assessment will show
Sustaining & Disruptive Technology Innovation and implication of it in specific products of
Samsung in order to gain competitive advantages.
TASK
1) Innovation theory
In modern world, innovation is occurring at every single place in order to bettering the
existing situations and results. It has been analysed that there are ample number of innovational
theories that can be adopted by organisations for some specific goals and objectives
(Brunswicker and Vanhaverbeke, 2015). Some of these theories are Routines, Bottom of the
Pyramid, Incremental & Radical Innovation, Architectural Innovation, Dominant Design,
Sustaining & Disruptive Technology Innovation and many more.
Sustaining & Disruptive Technology Innovation Theory, is going to be considered as
the main approach which will be applied in present matter. This theory was developed and
analysed in 1995 by Clayton, M. Christensen who is an American Scholar and a business
consultant at current moment. He took some support as well of some collaborators (Michael
Raynor and Rory McDonald) in order to formulate disruptive innovational approach.
According to the view point of Christensen, Disruptive innovation is a sort of
modification which creates a whole new market along with value network. This process directly
interrupts old or existing markets. This approach is being used by many firms in order to
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establish themselves so that they can displace existing firms, products or services and sustain a
better position as compared to rivals. This thought which was developed by Clayton, M.
Christensen and his collaborators is being considered as one of best idea i.e. helping business
firms in current century (Dawson and Andriopoulos, 2014). On the other hand, this theory has
given a specific approach which is being adopted by products and services and then when they
adopted it they brought in innovative products with a whole new market and replace the old
ones. It has been analysed that, there are many leaders of small and medium sized business
organisation and entrepreneurial companies which took under in use and praises it because it has
became as guidance for them and can be taken as a key element in order to make sustainability of
firm stronger.
Some of example of different organisations like Intel, Southern New Hampshire
University, and salesforce.com, that started at a small level but enforced themselves with
innovation and made their existence high in nature. Apart from this, it has also been analysed
that this theory is in massive danger just because of success rate of this approach is really very
high. Regardless of wide spread, the hypothesis' centre ideas have been broadly misjudged and
its fundamental principles as often as possible twisted. Besides, fundamental refinements in the
hypothesis in the course of recent years seem to have been eclipsed by the fame of the
underlying plan. Accordingly, the hypothesis is in some cases reprimanded for deficiencies that
have just been tended to.
On the other hand, another concern of the American scholar is that, most of people in
business world talks about disruption without even knowing or going into depth of it. Rapid
increase in number of these individuals in the marketplace will make this approach less effective
in nature. Apart from this, it has also been examined that implication of this sort of approach
may or may not require high funding, this totally depends on the competitive level where
organisation is looking forward to expand its business or to develop a whole new market. At
current time, companies that are offering new, updated and innovative products have taken under
in use of this theory which can be stated as a breakthrough that changed the whole scenario of
doing business. Because of this, competition at marketplace gets altered which can put both
negative or positive impact on a business firm (Dickins and Germaine, 2014). On the other hand,
the exercises which has been found out about prevailing as a troublesome trend-setter (or
protecting against a problematic challenger) won't have any significant bearing to each
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organization in a moving business sector. On the off chance that company may get messy with
our names or neglect to incorporate bits of knowledge from resulting exploration and experience
into the first hypothesis, at that point chiefs may wind up utilizing the wrong devices for their
unique circumstance, lessening their odds of accomplishment. After some time, the hypothesis'
helpfulness will be undermined.
It has also been critically analysed that, disruptive innovations was primarily developed
for and by outsiders along with entrepreneurs, in order to vanish previous or existing market and
trends so that to gain competitive advantages (Drucker, 2014). At initial level, this sort of
innovative strategy was not accepted by firms at its initial level because they did not meet with
goals and objectives at starting point. This reduced its affectivity, but then when a organisations
started gaining knowledge and implemented this approach through going into depth this
developed their interest, brand image, productivity, profitability and many other things. In
present context, Samsung have applied and experienced boom in their profitability and
reputation at the same time. Specific products of this company are getting modified with
considering all needs and requirements of customers and through implementing new technology
and this raised its brand value in all over world. Product's (mobile) performance became high
when Samsung implied this theory in its manufacturing process.
2) Application of theory on a product
Lets consider Samsung which is one of high brand valued firm in all over world whose
giving good rivalry to its competitors. To of its rivals are Apple, VIVO, OPPO, Huawei, Xiaomi
and many more. Samsung majorly relied on both technology and innovation in order to gain
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Illustration 1: DISRUPTIVE INNOVATION

competitive advantages. They have used Disruptive innovational theory in use and applied it in
their products. This can be understood with the history of Samsung.
A) Technological development
According to Du, Leten and Vanhaverbeke, (2014), technology factor plays an essential
role when it comes to develop a whole new market or to give competitors that are already having
good reputation in existing market. Samsung which is one of powerful and well-known brands in
all around the globe was found in the year of 1938 where founder was Lee Byung-chul. Revenue
which was generated by this organisation in the year of US$305 billion where net profit is
US$22.1 billion in the year of 2014 and they just saw an incline line in their graphs of financial
reports which never got declined then. In initial years of Samsung, they launched simple mobile
phone with speakers and microphones and then when they found that selling of mobiles becomes
moderate they decided to adopt innovation process at workplace (Tidd and Bessant, 2014). This
has helped them in improvising performance level and experience of customers through
delivering them mobile phones. First phone which was manufactured by this company was
named as SH-100 which they made with taking under help of R&D department of Samsung in
the year of 1988. After that, in 1994 Samsung made a remarkable phone whose name was SH-
700 which was light in weight and consists with fast processor than its rivals who were dealing
in same sector. Then in middle of 1996, they manufactured first digital CDMA mobile phone
which was named as SCH-100. Innovation at this phase brought this company up from its rivals
because modifications which was made has helped them in reducing the weight of mobile, made
it slim and enabled a feature which is clear communication. Wide use of this mobile helped
organisation to become a leader of Personal Communications Services (PCS). Features of SCH-
100 caught eyes of youngsters which embraced their customer range (Seidel and O’Mahony,
2014).
Then in the year of 1997 it raised market share of this Samsung up to 57%. This was the
phase where technology has finally come up as a revolution. In mobile industry, researchers and
software engineers made another change in the technology i.e. from CDMA to GSM. Disruptive
innovational theory was again adopted by this organisation as for growth they had to change
technology and develop or manufacture mobile phone with taking under in use of GSM
technology where they developed a model named as SGH-200. This model was for citizens of
Europe only but it did not impacted positively on their market value. This is the initial phase
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where company saw that adopting this hypothesis will not help them out in gaining good value at
both domestic and international level. But then, they believed in it and developed SGH-600 in
middle of 1998. Continuous implementation of this theory has helped Samsung in generating
high revenue. Some of major selling phones of Samsung was 2008 which carried many
innovative features like Sliding and Flip Flop and QWERTY key padded phones has helped this
organisation in making 6.65 trillion KRW which was around 46.3 million mobile were sold out
in different countries. At current time, there are many mobile phones that has been manufactured
by this organisation in different series with many many features like face detection unlock,
thumb print unlock, retina scan and many others (Frow and et. al., 2015). Some of Samsung's
products that are being sold to customers on a regular basis are Galaxy Note, S, J, Xcover and so
on which carrying distinctive and unique features. On the other hand, it has been found that
technology is carrying a rapid changing nature. Therefore, it is pretty much required for Samsung
to adopt updated technology and imply them in new products. With the help of this, they can
whole and solely develop a new market with new and updated products. Because of this, it is
may be possible that Samsung may give good competition to its rivals. If consumers starts liking
products and starts purchasing mobiles of Samsung from a whole new market like through online
(E-commerce) then it is may be possible that existing markets and products may leave behind.
Latest innovation which has been done by Samsung is on mobile phone named as Galaxy S8
Edge where curve of this mobile carrying curved screen where notifications can be seen by the
owner even if mobile is placed at the desk. This innovation raised sales, revenues, profit margins
of Samsung and reduced sales of existing products of rivals and many more. Apart from this, it
also impacted positively on its brand where customers started remembering about the company
through looking at the its slogan or sign (Lager, 2016).
Along with this, Young Sohn who is President and chief strategy officer (CSO) of
Samsung Strategy Innovation Centre (SSIC ) mentioned that "Leadership in core businesses is
not enough for our success", which means they have to make transformation in existing products
and services. As per survey, which was done by this centre have stated that around $100trillion is
the value which is being carried by digital transformational organisations and institutes. It is
required for keep up presence of Samsung at marketplace in all over world so that benefits can
be gained right on time (Santen and Anadon, 2016).
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From above mentioned graph, it can be analysed that graph of Samsung of shipping new
and updated mobile phones and other electric gadgets carried less shipments in first quarter. But
then, hike can be seen in the third quarter where rivals shipment got low. Samsung carrying a
steady increasing line. On the other hand, its competitors shipments went in fluctuations.
B) Predicting alternative and possible market developments
At current situation, it has been critically analysed that prediction of anything can go
wrong or right at the same time (Malhotra and Majchrzak, 2014). Because, technology is
carrying a rapid changing nature and common person do not carry information that what changes
are going to take place. Lets get into the scenario of Samsung. In 2018, as organisation is rapidly
making alterations in its mobile phones, they will continue to make changes in cutting-edge
technology. It was one of those innovation which was majorly liked by its customers and pulled
eyes of people and changed them into consumers. On the other hand, foldable OLED displays
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Illustration 2: Global Smartphone Vendor Shipments: Samsung, Apple, Nokia

which is a unique feature that has been added in Samsung S8 Edge by software and hardware
engineers of this company. On the other hand, Samsung that experienced a decline in the mobile
business earnings in the end of 2017. Because of this, organisation have developed a strategy
which may aid in attaining specific goals and objectives like development of existing products
and many more can be done in a succeeding manner. On the other hand, demand for smartphones
is expected to rise outstanding to the growing substitution needs for superior smartphones. Apart
from this, it has also been found that, decline was also experienced in shipment of mobile
phones. This took place because of rise in merchandising costs. On the other hand, it has also
been found that predicting process becomes unrelenting just because of seasons as well which
directly impacted on lining up the optimisation of low-end models.
This above mentioned less prognostic discussion it has been analysed that because of less
relevant information it cannot be predicted that what exactly technology is going to come across
in near future. On the other hand, some of features that majorly are going to take place in near
future are virtual reality calls where individual can actually see the other person who is on call.
In order to implement these, Samsung organised a budget of $23 billion which can be utilised by
research and development department (Samsung Aims Big For 2018 With These Strategies.
2018). In this way, different thing is there which should get cellphones i.e. different highlights
which isn't being designed by some other brands. As condition changes the necessities and wants
of individuals additionally changes there thought with the presentation of new mobile phone in
awesome way. Advancement and innovativeness in the organization is helping them to have an
expansion in their stock and piece of the pie too and with such thing they have earned colossal
incomes and Samsung will get numerous more development and inventiveness their merchandise
and enterprises (Seidel and O’Mahony, 2014).
Essentially, development should be possible in future also in there wireless in different
ways like acquiring slimness, having a retina acknowledgment for opening the portable, having a
3D highlights which make it diverse among the other and so forth can be considered as the piece
of future advancement in Samsung. This could acquire enthusiasm for different individuals and
firm can have an expansion in deals and winning of more benefit can be there in successful way.
Typically having such could make Samsung S8 Edge to get steady in showcase for the more
extended period notwithstanding for all the more then around 10 years as well, Disruptive
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Innovational hypothesis however it needs to look inside in awesome way and subsequently this
kind of hypothesis is being used by too for there working situation.
TRIZ Theory: This is one kind of theory which can be used by Samsung when they get
into some sort of issue. It is being found that TRIZ theory can be utilised when it is mandatory to
analyse the various pattern of study and invention having a global patent literature as well. TRIZ
is a Russian word which means “theory of innovation and problem solving technique”. It is a
kind of framework which is needed to have a collection of strategies and tools for having a
solution and for the different problems.
Utilisation of it within Samsung: Long and short term problems are in front of
supervisors of this company then they can take in use of list of principles of TRIZ. Which may
aid in gaining many solutions right on time.
3) Reflective Summary
As per above mentioned report, it can be summarised by me that both technology and
innovation plays an essential role when organisations mostly deals with many situations like
developing new products and market. I found that existing markets can get interrupted because
of entrance of new market. Samsung have adopted and used disruptive innovational theory in an
appropriate manner which impacted positively on its presence and reputation at international
marketplace. I have also examined that, managing innovation at both larger or smaller level
consists with high risks because adoption of a new technology requires guts, funds and resources.
If leaders and managers of organisations do not develop appropriate policies and strategies that
are related to pricing of product and promotion of new electronic items then, I examined that
organisation may not reach to desired position. But, if implementation of everything gets done in
a successful manner then company like Samsung can go on its peak where no other company can
reach to its height. On the other hand, I also analysed that, developing new product has helped
Samsung in many ways like it raised its sales, image, brand value, reputation, goodwill and may
other things in marketplace of UK and in other countries.
Apart from this, before launching a whole new product, it is very much required for
marketing and research and developing department of Samsung to analyse the market, look at
trends, see competitors strategies and then execute the plan in order to gain competitive
advantages at marketplace (Peschl and Fundneider, 2014). I saw that, prediction becomes easy
which is related to sustainability of a company if proper and befitting product, promotion, pricing
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and place is being chosen by the business firm before launching a new product. With the help of
this, it has been located by me that firm can easily remove existing products and market through
implementing a befitting plan in order to pull eyes of of consumers in brand new electronic
gadgets at whole new market.
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REFERENCES
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teaching: Building bridges. Routledge.
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and concept coherence in product innovation. Organization Science. 25(3). pp.691-712.
Tidd, J. and Bessant, J., 2014. Strategic innovation managementD1. John Wiley & Sons.
Wang, C. J. and Tsai, C. Y., 2014. Managing innovation and creativity in organizations: an
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Online
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