Samsung's Business Development: A Comprehensive Strategic Analysis

This report provides a strategic analysis of Samsung, a South Korean multinational conglomerate, focusing on its business development strategies. It identifies strategic challenges such as continuous technological advancements and escalating competition from both established players and emerging market entrants. The analysis employs SWOT and PEST models to evaluate Samsung's internal strengths and weaknesses, as well as external political, economic, social, and technological factors influencing its operations. Key strategies related to product innovation, pricing, distribution, and promotion are discussed, highlighting Samsung's approach to maintaining a competitive edge. The report also reflects on the implications of these strategies, emphasizing the importance of precise market assessment and adaptation to maintain market share and revenue in a highly competitive environment. The analysis concludes by underscoring the need for continuous innovation and customer-centric approaches to achieve sustainable growth and profitability.

STRATEGY

TABLE OF CONTENTS
Executive summary..........................................................................................................................1
INTRODUCTION...........................................................................................................................3
High-level strategic analysis and appropriate supporting- level strategic analyses.........................7
Integrated Summary of Strategic Analysis....................................................................................10
Selection Of One Strategic Option................................................................................................12
Critical Reflection of Implications Of Recommended Strategies.................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16
ILLUSTRATION INDEX
Illustration 1: SAMSUNG Korea Headquarter View......................................................................4

Executive summary
The success of organization depends upon the efficiency of management of operations
and quality of services and products offered. In the existing volatile and competitive market
condition, to establish the prominent position in the market place, the organizations' comes up
with the effective and distinguished strategy. Strategic management is among the three
fundamental pillars of the organization along with the other two operational management and
human resource management. Strategic management plays the deciding factor for the company's
establishment and its profitability. The report elucidates strategic analysis of the South Korean
multinational conglomerate company. Comprising numerous subsidiaries and affiliated
businesses in consumer electronics, Samsung has been successful in consolidating the large
stream of customers around the Globe. Samsung had established its business with the limited
range of products in color TV's, microwave ovens, washing machines and AC's but gradually it
has widens its horizons to the large range of consumer electronics, information technology
products, mobile phones and home appliances. It can be stated that Samsung is a multinational
electronics conglomerate which is facing a number of strategic challenges that involves
ineffective infrastructure operations, poor reception and lack of competency that possess an
adverse effect on sales. However, business is also facing an intensive competition from new
market players and also responding to the enhancement of technological innovation at a global
level.
A.)Strategic challenges
 With the effective research and development team, management prepares the targeting
strategy inculcating three core components; innovation, design and technology. The
strategic management has been evolved with the different stages. At the time of
inception, the company faced certain issues with respect to its prominent establishment
in the market. Lack of research and market trends analysis results in the low demand
and low sales. Further, Ineffective infrastructure operation, poor reception and lack of
competency were the major obstacles.
 Continuous technological advancements: In the digital era, the dynamic and fast pace
growing nature of technology demands the better research work and development
process. To achieve the further growth and profitability it seeks the intimate knowledge
of technological innovation around the globe.
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 Escalating competition: Entry of big players in the market is the major strategic
challenge for the establishment of Samsung. To strengthen the competitive edge and
widening the gap with the major competitors demands the formulation of strategy to
bring innovative ideas and pioneering of attention capturing product.
B.) Approach taken in the analysis
To carry out successful business in the future, the management of Samsung takes certain
cross-functional decisions and incorporates business and personal goals. To detect the potential
and growth possibilities, the internal and external analysis is performed. It helps in bringing the
optimum transition in raw materials to the finished goods. For the purpose SWOT and PEST
models are used. By using SWOT analysis, the company analysis is done by identifying the
strong areas of company and the weak areas in its operations. Further, it helps to realise the
arenas of possible growth opportunities and major threat areas company will be facing such as
strategic challenges and competition. For the external analysis PEST model is used. It analalyze
the effectiveness of competency of its operation in the political, economical, social and
technological areas of the country.
C.) Key analysis findings
With the above analysis, certain inferences are made and consequently strategy options
are derived. The company Samsung has prepared strategy with respect to the three core areas and
components pricing, promotion, products innovation and distribution.
 Product innovation: The organization with the effective research and development,
pioneer the innovative products with the distinguished designs and features. It formulate
the strategies to inculcate the latest technology in the products to provide their customers
products with advanced features.
 Pricing: To reach in the lives of large number of customers Samsung introduces products
with wide range of prices targeting economical to elite users.
 Distribution: It has built the effective supply chain with the smooth inbound and
outbound logistics.
 Promotional strategy: Samsung adopts the effective marketing strategy by using suitable
marketing mixes in different segments.
D.) Critical reflection on the implications
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Samsung has to consider each and everything very precisely in order to establish a new
product in the competitive market as in each and every country there will be competitors who
will generally affect the market share as well as revenue of the firm. With the implementation of
SWOT, PESTLE, Ansoff Matrix, cited firm will be able to achieve its competitive position and
will be able to achieve the goals and objectives in desired manner.
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INTRODUCTION
Strategy for any business organization is considered as a high level plan which lead
ventures to achieve their goals and objectives under different conditions of the uncertainties.
Strategy is also necessary for the business organizations because the resources which are
available to these goals and objectives are limited (Mohr, Sengupta and Slater, 2009). In order to
have effective functioning, leaders and managers have to implement some specific strategies so
that there employees gets motivated and organization able to achieve their goals and objectives
in a significant manner. In order to meet this strategy, top managers and executives makes
strategic planning as well and deliberately divide all the important resources in order meet the
objectives of enterprise. Further, strategic management is also the part of the same topic and top
owners consider both internal and external resources for making an effective decision by
considering the different resources available to the venture (Ogrodnik, 2012).
In this context, this present report has been prepared on Samsung which is a multinational
electronic brand and having its effective operations throughout the globe including UK. Further,
the mentioned firm has number of subsidiaries and different affiliated business and many of them
are running under the major brand called Samsung. As stated, currently Samsung is dealing only
in electronics but in coming one or two decades, cited firm will expand their business in the field
of food processing, textile sector, insurance, securities and most important in retail as well.
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Further, the company is treated as a world's largest manufacturer of mobile as well as
smartphones in the line of electronic devices. Samsung is also a major seller of tablet computers
and particularly the Android phones just because customers like the product and it is available to
them at an affordable price. By considering the above scenario, this present report will
emphasize on the introduction of the business along with the strategic challenges which are faced
by the venture. This report will also derive towards the high level strategic analysis along with
the supporting level strategic analysis which will certainly help the venture to achieve the goals
and objectives.
Further, Samsung can see their effective functioning with the help conducting a micro
and macro environmental analysis. For this, company can conduct the SWOT and PEST
analysis. This will help them to know their strategic position that where they are standing in the
global market.
SWOT Analysis: Strengths: Organization strength is that it is considered as the most successful electronic
vendor in the world and the company's core strength is in producing television sets, LCD,
mobile phones and smartphones. Company also having strong manufacturing as well as
marketing capabilities (Foxall, 2014). Weakness: Weakness for cited firm is that it is still unable to match the Apple's marketing
capabilities in the smartphones. Further, some of the Chinese manufacturers like Xiaomi
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Illustration 1: SAMSUNG Korea Headquarter View
(Source: Global Offices. 2015)

and Huawei are giving organization a stiff competition. Further, Samsung's marketing
effort is not as sophisticated as compared with Apple. Opportunities: Samsung have opportunities in finding smartphones based solution as
Samsung play. Further, company can increase more of their sale with the help of online
marketing like Amazon, Flipkart, etc.
 Threats: With such a brand image of Apple, in coming time company might not be able
to compete in the quality and reliability (Mootee, 2013). Further, decreasing middle-class
income in North America and UK could reduce consumer behaviour in order to buy the
product.
PEST
 Political:
◦ South Korean government is limiting up the growth of large coroporates
◦ China and India offering positive business environment in order to start the operations
 Economic:
◦ Samsung core strength is their economic market
◦ Can implement crucial operations in BRICS countries.
 Social:
◦ Organization understands the needs and wants of customers and produce products
according to that only
◦ However, aging will lead towards increase in cost for the venture
 Technological:
◦ Samsung is core dependent on new innovations
◦ It relies on new and superior technologies to produce gadgets
Strategic business challenges are faced by each and every business ventures and Samsung
is not apart from the same (MARKETING THEORIES – PESTEL ANALYSIS. 2015). With so
much stiff competition in the electronics world, business organization have to change their
policies and procedures by considering the product and price of their competitors (Mozota,
2005). Mentioned company is considered as a largest vendor of the smartphones but their global
market has slipped down by 1% as compared with the sale of the year 2014 and this is the
ventures first decline in almost half a decade. This generally happened because apart from the
global company like Apple and Windows Lumia, company is also getting a tough competition
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from manufactures of China like Huawei and Lenovo along with Xiaomi. These phones having
high end specifications and are available at low costs.
Further, as stated above Apple is the primary competitor of cited firm and produce
phones with better specifications and company is planning to make entry in new market. The
price of the Apple's product are relatively high but people consider this brand as a status and
reputation in the society and make purchase even they are beyond the limit of the budgets (Füller
and et.al., 2006). However, with all these consequences, Samsung having a base of their loyal
customers throughout the globe and mentioned and mentioned company is able to increase their
sale of their electronics along with mobile product's year by year.
In order to solve this problem, top executives of the cited firm have to take some relative
steps so that they will be able to attract more of the customers towards their products. Mentioned
company can focus on following strategies: Product innovation: Samsung having vast product range which constitutes CCTV audio
and video products, mobile phones, television and home appliances. Further, innovation
is taking place daily in today'c competitive world and technicians and engineers of the
cited firm are also focusing on giving best of the products specifications to the
individuals at an affordable price. Pricing: Pricing generally plays a significant role in success of Samsung as company take
cares of all the demographic segmentation (Michalek, Feinberg and Papalambros, 2005).
Company having products which has relative high range which satisfies the needs of
customers and also have products for middle class and lower class people. Distribution: Distribution for company plays a crucial role and cited firm having an
effective distribution system along with an attracting dealer interface. This dealer
interface helps the firm to get the effective feedback from the dealers and makes
company liable to launch the products according to the need and demands of the
customers.
 Effective promotional strategies: In order to attract customers and also to attract large
customers base, mentioned company having an effective promotional strategy which
diverts the mind of target audience towards the company's product, further, celebrity
endorsement also help the company to sell more of the product in particular country. For
instance, in India actor Shahid Kapoor is promoting the Samsung J series phones and
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with the help of it mentioned company is able to increase the sale of the particular
product.
However, if we talk about Samsung's vision statement than there is no such official
mission of the venture but it is generally expressed with the help of organization philosophy
only. It states “At Samsung, we follow a simple business philosophy: to devote our talent and
technology to creating superior products and services that contribute to a better global society.”
Further, for 2020 vision, company having their vision statement which states that company is
committing to inspire its communities with the help of key strengths i.e. New Technology,
Innovative Products and Creative Solutions (Chapman, 2005).
On the other hand, organization mission is to become the best digital company of the
world and for this company is producing more of the innovative products which will help them
to face the challenges which they are getting from their major competitors.
High-level strategic analysis and appropriate supporting- level strategic
analyses
With more than 70, Samsung is the diverse business with chips, display and other
technology. It adopts the systematic and holistic approach with the integration of innovative
productive design and business strategy to establish the dominant market position and bring
sustainability in the long run (Crumpacker and Crumpacker, 2007). The company has been
successful in capturing the attention of the customers. In the areas of its operation, consumer
electronics and home appliances, policies are framed by the management by bringing into it the
innovation strategies, product design philosophies, localization of products and the product
design outsourcing. Samsung has a competitive edge in the market due to its distinguished
interplay of innovation and strategic management. To consolidate the large stream of customers
with the company, Samsung adopts Porter's generic strategies.
The competitive edge pursued by Samsung, in the market of consumer electronics and
home appliances and its high level strategy framed in the context is analyzed in different aspects:
 Strong customer-focus is developed by Samsung for the better understanding of the needs
and wants of customers. Keeping in consideration the global perspective, the designed
products are made.
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 Samsung understands the importance of brand and branding, maximizes long term
growth by launching innovative products in different market segments.
 The company builds the long term relational constructs with the suppliers and partners to
provide the best products (Porter, 2008). Samsung's focus is on continuous improvement through the research and development by
inculcating three fundamental components into the strategy: innovation, marketing and
design.
Samsung's strategies are categorized in two areas:
Fundamental activities: The basic areas of strategies framed by organization in the primary
activities are Network promotion and contact development, service provisioning and
infrastructure operation. Network Promotion: Offering the range of products in the number of countries brings in
the demand of better connectivity and networking with the suppliers and customers. The
customer service providers functions to enhance the networking (Rossi, 2010). This
enables Samsung to consolidation the large number of customers. Samsung's network
identity is identified and it is inferred that it has the prominent position in the structure of
actors, resources and activities. It also holds the strong relationship with the other
networking firms. This unique feature is one of the core area in strategy build by
Samsung. Service provisioning: With the efficient supply structure and sound coordination firm
focus o the product and service positioning. It widens the vertical and horizontal scope of
business in all the other of its such as in consumer electronics and home appliances.
 Infrastructure operation: It refers to the analytically framework of the resources,
strategy and implementation in the company. It is the USP of Samsung (Salem Khalifa,
2012). For the efficient infrastructure operation, It can be assessed that USP of Samsung
is that it provides high quality technology products at reasonable price. Thus, business is
trying to become a global brand in order to develop trust and recognition among people
and fulfill the expectation of people. However, the importance of USP is such that it
helps business to increase the company's brand value and increase demand among people.
Samsung adopts ARA model which states initiating actor bonds, encouraging resource
ties that is the better coordination and inter dependencies and the activity links. Further, it
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can be stated that business needs to undertake such model as it is very significant for
them in order to enhance sales and profits. Moreover, Samsung corporation is required to
undertake effective application of Unique Competing Space (UCS) and the Value
Proposition frameworks so that high level strategic planning can be done. Further, it can
be assessed that through implementing such type of practice business can attain high
level of strategic analysis so that unique competing space framework can be developed.
However, implementing such high level strategic analysis within business helps firm to
provide big picture so that strategic challenge can be developed. Further, in order to attain
competitive advantage Porter's Five Forces so that best external factors and competition
can be analyzed in order to gain best results.
 Threat of market entry- It is low as there are major firms operating within the industry
such as Samsung, Apple and HTC which benefits the economies of scales in order to gain
cost advantage. However, such benefit is not provided to new market entrants.
 Threat of substitutes- It is low as there are no or little substitutes available of product in
market. For instance, it is essential for business to develop unique software so that
substitute products can be build.
 Intensity of rivalry- It is high as there are varied number of competitors available for
Samsung in order to provide unique and attractive products or services. Thus, it affects
businesses as suppliers and buyers will go elsewhere in order to obtain a good deal.
 Power of customers- It is high as consumers possess a wide variety of choices to select
from therefore it affects Samsung in the form of driving prices down. Also, it is crucial
for individual to switch from one product to another and attain results. Power of suppliers- It is high as suppliers possess the power to drive up the prices. For
instance, there are varied suppliers who drive the prices of products high due to
uniqueness of their products, its features and cost of switching from one product to
another.
Value chain analysis
Primary activities:
 Inbound and outbound logistics: The sound supply chain management and fined
coordination and linkages smoothen the functioning. Further, it can be evaluated that the
majority of the Samsung suppliers are based within Asia and thus 79.4% of its supply
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