Samsung's Business Model: Software Shift and Culture Impact Analysis

This report examines Samsung's strategic shift from a hardware-focused business model to one emphasizing software and its subsequent impact on the company's organizational culture. The analysis explores the context of this transformation, driven by market competition and leadership changes, particularly the influence of Koh Dong Jin. The study reviews relevant literature on enterprise, business models, and organizational change. A case study of Samsung highlights its evolution, including the adoption of a new business model that prioritizes software products and services, alongside initiatives to foster a creative corporate culture. The report applies Lewin's change management model to analyze the cultural changes within Samsung, examining the unfreeze, change, and refreeze phases. Findings reveal Samsung's commitment to innovation, employee development, and a flexible work environment. The report concludes that the shift towards software has been instrumental in Samsung's growth, and the company's ability to adapt its culture has been crucial for success in a dynamic market.

A Study of Samsung’s business model -A switch from Hardware to Software
and its impact on the change in the culture of the organisation
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Executive Summary
The enterprise refers to a business where the enterprise prefers for innovations and remains
ready to take a risk in order to make his or her business successful. The business organisation
formulates business models for the growth of the business and these models are planned as
per the business needs of the company. Samsung is one of the important companies that is
famous for its electronic products. The company incorporated a new business model after the
joining of Koh Dong Jin as the new leader. The company focused on the more innovations
and produced more software related products instead of only home appliances. The change in
the business models brought a change in the culture of the organisation. In this study, the
business model of the company has been studied and the change in the culture of the
organisation has also been studied with the help of Lewin’s change management model. The
study finds that Samsung believes in innovations and works on developing the capacities of
the employees by offering them good working environment.
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Contents
A Study of Samsung’s business model -A switch from Hardware to Software and its impact on the
change in the culture of the organisation...........................................................................................1
Executive Summary...........................................................................................................................2
Introduction.......................................................................................................................................4
Literature Review..............................................................................................................................4
Case Study: Samsung.........................................................................................................................5
Change in Samsung : Analysis............................................................................................................6
Analysis of the impact of change in the culture with the help of Lewin’s change management
model................................................................................................................................................6
Samsung’s initiatives to build a creative corporate culture...............................................................7
Findings.............................................................................................................................................7
Conclusion.........................................................................................................................................8
Bibliography...........................................................................................................................................8
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Introduction
In the ordinary sense enterprise is the other name of a business. The enterprise defines the
actions of the individual who takes initiative to run a business by investing for it even at the
risk. For an enterprise initiative & risk are two key words. The enterprise takes initiative for
the business opportunity. Risk taking is also a part of the enterprise as the probability of loss
is there for the investment. The growth of an organisation depends on the strategic business
plan of the company (Hilton, 2007). The company prepares strategies to accomplish the
objectives and goals of it. The business organisation takes initiative to launch innovations in
the target market so that it will gain maximum market share.
Samsung Electronics is one of the most important companies that is famous for its electronics
products. The South Korean company was established in the year 1950 and it was supported
by the government of South Korea. The company has become the global leader in the field of
the Information Technology. The company is famous for its both hardware and software
products (Ungureanu, 2015).
The company found a high growth of the electronic gadgets especially LCD and LED
products and it became the world’s number one sellers for 8 years continuously. The
company developed its business model that focused on software products instead of
hardware. The change in the business model brought a change in the culture of the
organisation. The year 2016 saw a change in the culture of the organisation. The company
provides a very flexible culture that promotes healthy work-balance so that the employees
can work in a dynamic, creative & work environment that is challenging (samsung.com,
2016). The development of the change in the culture of the company is studied with the
theory of Lewin’s change management.
Literature Review
Enterprise is a business run by an entrepreneur who with his or her initiatives focuses on
bringing development in the desired business process. The entrepreneur takes initiatives and
invests on the business without expecting the huge return. The entrepreneur knows that the
possibility of the risk in the enterprise is very high. Thus initiatives and risk taking are the
foremost features of the entrepreneur (Frynas & Stephenes, 2014).
The entrepreneur of the organisation established a culture of the organisation that becomes
the guiding principles of all the stakeholders to follow. The set of principles guide the
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employees to work in the correct direction so that the organisation will be able to achieve its
goals and objectives. The culture of the organisation is changed with the business process of
the organisation (George-Godfrey, 2012). A multinational company formulates different
business models to achieve its business objectives. The company changes its culture as per
the need and the employees of the organisation are directed to follow this.
Change is inevitable for every organisation. The change of the organisation is accepted by
the employees of the organisation when they feel that the change has a positive impact on the
growth of the individuals and as well as the company. If the employees do not accept this the
management of the organisation faces difficulties to manage the people and lead them to
achieve the goals of the organisation (Hancock, 2015).
The employees contribute to the growth of the company. Every employee expects to work in
a participatory environment where he or she can feel a sense of dignity and own the vision of
the organisation. The Samsung Electronics has a creative culture that invests strength in the
employees to work in a very competitive environment. The company provides a very flexible
culture that promotes healthy work-balance so that the employees can work in a dynamic,
creative & work environment that is challenging (Hwajung, 2013). The company produced
successful electronic gadget in the year 2009 and expanded its divisions in 2010. The
company is a Korean based company that has employed more than 100,000 Korean
employees.
Case Study: Samsung
Samsung is a very popular brand that is very popular worldwide. The company has been
ranked as the eight important brand by the Inter brand Best Global list in the year 2013.
Samsung Electronics has been ranked as the most admired company by the Fortune magazine
in the year 2013. The South Korean company was established in the year 1950 and it was
supported by the government of South Korea. The company has become the global leader in
the field of the Information Technology. The company is famous for its both hardware and
software products. The company offers home appliances like Televisions, refrigerators etc.
and the products related to mobile telecommunication (Ungureanu, 2015). The company
offers smartphones & tablets. The focus of the company is to produce quality products &
services that will be accepted by the global customers and enhance convenience by fostering
smarter lifestyles. The company establishes a corporate culture that works to improve the
global community through the pursuit of innovation & value creation. The company has sale
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networks in sixty-one countries all over the globe. The company has more than 160,000
workers.
In the year 2009, Samsung surpassed Hewlett-Packard as the biggest Information
Technology maker. The company was very popular in the areas of LCD, LED & memory
chips. The company could find a huge growth in the segment of Television and from 2006 to
2010. The company continued to be the market leader for 8 years (Ungureanu, 2015).
The vision 2020 of the company focuses on inspiring the world and creating the world. The
focus is on the commitment to lead the technological innovations. The company focuses on
products & solutions that will inspire the entire communities all across the world. The new
business model of the company has the vision to improve the annual sales to USD four
hundred billion. The company plans to make it among the top five brands in the world.
Change in Samsung : Analysis
The change in the process of the business of Samsung was observed after the change in the
leader of Samsung Electronics. Koh Dong Jin replaced Shin Jong-Kyun as the new leader of
the company. The change in the business model of the company was witnessed when the
company could find huge competition from Apple, Xiaomi & Huawei in the market. The
company focused its attention on producing more software products instead of hardware
(Wiedenbeck, 2010).
The change in the business process and the introduction of the new business model also
brought challenges to the company as the market was growing. The well-positioned company
launched Galaxy S6 that brought huge business success. In the 3rd quarter of 2015, the
company found its growth in its sales & the profit went up to $ 6.4 billion. The new business
model of Koh Dong focused more on software instead of hardware. Koh Dong focused more
on strengthening the Research and Development department of Samsung Mobile. He worked
for the development of Samsung Pay & Knox (Ungureanu, 2015). The potential of the
company has been found in software & the unique innovations in the recent time. The new
business model of the company helped it to get more revenue by using subscription. The
model of Samsung is also equal to that of Apple’s business model.
Analysis of the impact of change in the culture with the help of
Lewin’s change management model
Here I have analysed the impact of the change in the culture of Samsung after the
introduction of the new business model after 2016. The Lewin’s Change management model
has been discussed here. The company focused on improving the work culture so that it can
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promote a creative culture of the organisation. The Lewin’s model focuses on three features
of the change management. They are:
1. Unfreeze
2. Change
3. Refreeze
Unfreeze
The unfreeze refers to the situation when the management of the organisation makes the
employees understand the needs of the change in the culture of the organisation. The
management of the organisation cannot change its culture when the employees resist the
change (Greyvenstein & Cilliers, 2012). Here the management creates the situations so that
the employees feel that change is required to sustain in this business world.
Change
The company implements change when the employees feel that it is necessary. The change
becomes the culture of the organisation when the employees accept it and work as per the
change strategies.
Refreeze
The change becomes the culture of the organisation when it is accepted by all. The company
refreezes the change as the culture.
Samsung’s initiatives to build a creative corporate culture
In order to promote the employees a creative culture of the organisation, Samsung works for
the improvement in the work process. In order to improve the working environments, the
company adopts flexible time programme. The company also focuses on building a Great
Work Place. The company utilises this to strengthen corporate culture (Hilton, 2007).
The company focuses on the development of the human resources. The company offers
educational programmes to nurture the employees to become the global leaders and to
enhance their ability in the workplace. The company focuses on enhancing capabilities of the
employees by offering training so that the employees will be successful in every division of
the business.
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Findings
Samsung has achieved its credibility as one of the leading business organisation that
promotes growth in the electronics industry. The creative corporate culture of the company
has been grown by the company with the help of technological developments and innovative
applications used in the process of the development of the technology. As the successful
enterprise, the company focuses on the innovative ideas & the technology. The Research &
Development department of the company engages itself in trial and error methods to put the
innovative ideas into practice. The numerous verifications assure the appropriate use of
innovations (George-Godfrey, 2012).
The company has known its global presence that brings people of different culture to work
for the company. The departments of the company prepare improvement plans and
implement them for the growth of the company. The implementation of the plan is made with
joint efforts of the employees with trust and respect (Kannair, 2007).
The company believes that employees are the most valuable assets. The company executes
its business activities on the basis of the principles of the human respect. In order to ensure a
sustainable growth in the ever changing environment of the current business the company
recruits and retains skilled people so that they will work in an enterprising corporate culture
(Matthews & Thakkar, 2012).
The objective of the company is to set a culture that will focus on three principles. They are
creative, Partnership & Great People. As one of the great enterprises the company will
achieve new capacity & expertise in the future.
Conclusion
The growth of the organisation depends on the successful business model. The company
prepares business model on the need basis so that the company can successfully launch its
products in the target market. Samsung’s approach to change its business policy shifting from
hardware products to software products brought huge success for the company. The
company faces challenges in the process of the change in the culture of the organisation. The
company with its successful policies has managed to utilise the employees in the correct
direction and the vision 2020 of the company will be effective for the company to achieve its
targets.
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