International Business Strategy: Samsung's Successful Entry into India

This essay examines Samsung's strategic approach to entering the Indian market, focusing on internationalization and globalization strategies. It discusses factors such as market analysis, competitive advantage, and strategic partnerships, including a joint venture with Reasonable Computer Solutions Pvt Ltd (RCSPL). The analysis incorporates Dunning's eclectic paradigm to explain Samsung's ownership, location, and internationalization advantages. The essay also addresses challenges faced by Samsung, such as competition from Chinese companies and the need for a skilled workforce. Through a hybrid strategy of low-cost leadership and differentiation, Samsung has managed to establish a strong presence in India by adapting to the local market and focusing on product innovation and marketing. This document is available on Desklib, a platform offering various study tools for students.

Running head: ORGANIZATIONAL MANAGEMENT
ORGANIZATIONAL MANAGEMENT
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The essay is prepared to focus on the various approaches undertaken for achieving
internationalization or globalization, i.e., making an entry into the Indian market by Samsung.
There are various factors responsible for managing globalization and this ensured a proper entry
for Samsung in the Indian market to enhance its customer base, generate higher revenue and
attain competitive advantage in business as well. There are various ways by which the
development of global and international strategies will be possible such as the development of
shared vision and mission along with goals and objectives to be achieved (Samsung.com 2018).
The environmental assessment and scanning are done along with the analysis of internal and
external environment for ensuring that the right global integrative and market entry strategies are
implemented. The alterative foreign market entry strategies were also assessed to ensure
targeting the right market segments comprising of customers and enhancing the organizational
capabilities to maintain a proper balance or fit between the internal entities of the organization.
The PESTEL analysis will be done here for demonstrating the political, economic, social,
technological, legal and environmental factors contributing to the business management
(Deresky 2017).
Samsung India Electronics Limited also stated as SIEL has been a subsidiary of the
Samsung Electronics Company Limited and is one of the major manufacturer and producer of
high tech instruments. The company is also one of the major leading producers of consumer
electronics that has focused on attracting the right market segments in India and become the
major player in the home appliances and information technology market. SIEL also imported
high quality televisions and audio systems at first alongside other major players within the
consumer electronics industry (Ruigrok and Van Tulder 2013). The company has found it
convenient to enter the Indian market because of its focus on innovation of the products, great

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marketing strategies, advertising and promotional activities, quality management and managing
the after sales services and widespread dealer network.
Samsung has entered the Indian market in 1992 while SIEL was incorporated in the year
1995 with more than 50 percent at stake by launching consumer services and consumer
electronic products and services. This has been an influential factor that has contributed to the
major success within the Indian market. The growth and success in the turnover of SIEL while
making an entry into India is mainly dependent on the impact of Korean ways or approaches of
managing business in India. The analysts of the market have focused on product innovation,
aggressive marketing approaches and great network management for establishing itself as a
successful business in the Indian marketplace (Cavusgil et al. 2014). The first segment in the
market included CTVs, Video players, audio instruments and thus the market share was 4.2
percent in the two million CTV market in India. It was a dominant approach, which brought
favorable results for Samsung and gradually the company started to grow with the introduction
of wide range of other products and services in the Indian market segments.
Samsung Group was founded as a trading company in Japanese Korea by Lee Byung-
chul in the year 1938 an with passing time, the company slowly managed to diversify into areas
such as processing of food, securities, retail and insurance services too. The company entered the
electronics industry in the year 1960 and slowly the areas of electronics were focused on to drive
higher growth, success and profitability along with competitive advantage as well (Verbeke
2013). The company has its headquarters in Samsung Electronics building in Seoul, South Korea
and the areas served by the company are all over the world. Since the year 1990, the company
has largely increased the scopes for globalization and focused on internationalization activities,
furthermore transformed the entire electronics industry by bringing mobile phones and semi-

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conductors too. These have been major sources of income for the organization and thus Samsung
has one of the largest global brand value with nearly 500000 employees and a revenue of more
than US$305 billion (Patra and Krishna 2015).
The analysis of Samsung in the Indian market is all about the major reasons for making
an entry into the Indian market and the strategic partnerships formed. Tone of the major reasons
for which, Samsung decided to make an entry into the market is to increase the customer base
and start global business through the implementation of effective internationalization strategies.
The focus was on creating a positive brand presence worldwide and increased the customer base,
which could generate higher revenue and allow the company to attain competitive advantage in
business as well. The Dunning’s model, also known as the eclectic paradigm was introduced by
John Dunning that prioritized on the advantages that could be obtained through
internationalization strategies by exploiting the major resources and using the skills and core
competencies effectively to ensure successful global business management (Kim and Tung
2013). Samsung’s main motive was to bolster play in India’s consumer electronics market and
thus with the introduction of televisions, audio and video systems, mobile phones and other
electronic gadgets were followed by, which assisted in gaining a good position within the Indian
marketplace.
The Dunning’s model proposed internationalization theories to facilitate ownership
advantages, location advantages and internationalization advantages too. The ownership
advantages included gaining competitive advantage, which has been possible for Samsung with
the introduction of wide range of electronic items targeted at the price conscious and quality
conscious clients. The products were a success and a sustainable position as gained by Samsung
within quick time. Through globalization, the company established itself in multiple countries

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and the resources used further helped in creating a good brand presence in the foreign nations too
(Luo and Zhang 2016). The internationalization advantages were obtained by exploiting the core
competencies and skills, thereby allowing for internalizing the product markets and getting
involved in import and export activities with the foreign countries. Samsung, at first, formed a
joint venture with Reasonable Computer Solutions Pvt Ltd (RCSPL) that was owned by the
Videocon Group while entering the Indian market in the year 1995 (Samsung.com 2018).
1995: Samsung entered India as a joint venture with another organization named Reasonable
Computer Solutions Pvt Ltd or RCSPL.
1998: Samsung bought the total stake of RCSPL in 1998
2002: The manufacturing and production departments are developed by Samsung to introduce
color TVs, washing machines and other consumer electronics in Uttar Pradesh. The sales
plummeted to 170 million rupees and achieved 26 percent growth.
2005: Official sponsor of football clubs and this attracted many consumers in India with a large
number of football fans. New products such as NAND flash memory was introduced in the
Indian market
2006: Became the number one company with a global TV market share
2009: The brand value of Samsung increased it was ranked 19th in the entire world by
Interbrand’s 2010 Best Global Brands
2010: Became the leader in global electronics sales and merged with Samsung Digital Imaging
2012: The LCD and LED business started, which was a major attraction among the Indian clients

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2013: Introduced Galaxy S series smart phones
2014: Introduced Galaxy Note Edge, Gear S in the Indian market and was ranked as the 7th most
valuable brand in the entire world
2016: Plan to acquire HARMAN and introducing new age smart phones including Galaxy S7
and S7 edge in India
2018: Galaxy S8, S8+, Note 8 and world’s first cinema LED screen was introduced too, thus
gaining a huge market share in the Indian marketplace, which further has allowed the company
to gain a competitive edge over its competitors in business.
Figure 1: Porter’s generic model
(Source: Fernandes 2013)
The concerned organization, Samsung, undertakes a hybrid strategy of low- cost
leadership and differentiation strategy which has helped the business in undertaking efficient
production processes in order to meet the competitive objective of the same (Ponde and Muley

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2015). The key elements of change in the organizational operations are based on the
identification of the needs of the customers and thereby develop diversified range of products.
Diversification strategy of the organization has helped the same in sustaining in the Indian
markets and thereby competing with the Chinese competitors developing lower cost products.
The diversity in the range of products that are offered by Samsung has helped the same in
attracting the attention of the target customers and thereby enhances the operations of the same
while operating in diverse markets.
The challenges that are faced by the organization, Samsung, while operating and entering
is due to the expansion of different Chinese companies in India. The China based companies and
other new entrants offered products at lower cost than that of the concerned business. The
challenges relating to lack of skilled workforce in India has affected the proper functioning of the
business. Hur, Kang and Kim (2015) stated that the key challenges that are faced by Samsung
while operating in India is based on the threat of new entrants and the substitute products, which
affected the performance of the concerned business in the Indian markets. The different
challenges that are faced by the organization while operating in the Indian markets has restricted
the smooth functioning of the same as per the objectives of the same.
Factors Opportunity/ threat Explanation
Political Opportunity  The free trade policies
in India have helped
the organization in
undertaking its

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Opportunity
Opportunity
expansion in India.
 Stable political
situation of the nation
has also helped in the
growth of the business.
 Highly receptive
nature of the nation has
helped in the growth of
the Samsung in India
Economic Opportunity  According to the
Ministry of Statistics
and Program
Implementation, the
Indian economy faced
a hike by 7.1% in
2017, which was the
cause of different
industrial activities and
foreign investments
(Dellink et al. 2017).
The stability in the
economic condition in
India has helped in the

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Opportunity
growth of Samsung in
the nation. The
enhanced income rates
of the people has also
helped in enhancing
their lifestyle and
boosted their
affordability to buy
leisure commodities. It
has helped the
concerned organization
in undertaking its
expansion in the
diverse regions of the
nation (Ponde and
Muley 2015).
 The corporate tax rate
in India is 30% as on
2018, which is a
negligible amount to
be paid by the
organizations while
undertaking their

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operations (Glowik
2016). It has also
helped Samsung in
undertaking its smooth
operations as per the
objectives of the same.
Social Threat and Opportunity
Opportunity
 The lower education
level in different
regions of the nation
has affected the
organizational
operations due to lack
of proper labor
supplies. The lack of
skilled labor has
distinctly affected the
operations as per the
objectives of Samsung.
However, affordable
labor force in the
nation has helped the
same in minimizing
the operational costs

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 Improving standard of
living of the Indian
citizens has helped the
organization in
positioning their
products to potential
target markets. It has
helped in the wide
expansion of Samsung
in Indian markets
Technological Threat and Opportunity
Threat
 Wide technological
innovations in the
nation has resulted to
enhanced market
competition in the
Indian markets (Chari
and David 2012)
 The market entry and
expansion of Chinese
companies like MI
offering products in
half the price that is
quoted by Samsung

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might affect the
competitive advantage
of the same while
expanding in the
Indian markets
Environmental Threat  India faces different
issues relating to
environmental
depletion through
industrial activities and
consumer wastes.
Therefore, the
government and other
environment protection
agencies imposed
different regulations in
order to maintain the
environmental
sustainability of the
nation. It might restrict
the operations of the
concerned business
while operating in the