BM627: Managing Innovation in Business - Samsung Report

This report provides a comprehensive analysis of Samsung's innovation strategies and their impact on the company's market performance. The executive summary highlights the importance of innovation for business success, particularly in improving products and services to meet customer needs and maintain a competitive edge. The report delves into Samsung's history of innovation, emphasizing how it became a leader in the electronics industry. It examines the company's existing innovation capabilities, including its R&D efforts and customer-centric approach. The report also includes an industry analysis using Porter's five forces to assess the competitive landscape in 2016 and how Samsung navigates these forces. It identifies Samsung's strengths, such as high R&D expenditure and strong manufacturing capabilities, as well as opportunities like the growing demand for smart devices in emerging markets. The report concludes by emphasizing the critical role of innovation in Samsung's continued growth and success.

Managing Innovation in
Business

Executive Summary
Innovation is important for the success of a business so that they can improve their products
and services which can help them in meeting the new customer needs and wants so that they can
survive in the market and gain a competitive edge. It also help the businesses in adding unique
and innovative features in their products so that they can gain high customer satisfaction and
increase the value for their customers. The customers get attracted to products and services that
help in increasing their convenience and innovation play an important role in bringing
improvements in the products so that high consumer experience can be achieved. In this report
Samsung Electronics is taken so that the importance of innovation in its rapid growth and
expansion can be determined. In this report the complete history of how Samsung became an
innovative brand in market is discussed which help in throwing light on the core importance of
innovating its products so that it can become a world leader in the electronics industry. The
company is well known for its rapid and fast innovation in its electronic items which helps the
company in strategically expanding its market. It also help it in becoming more competitive so
that the customers base of company can be expanded.
In this report further discussion is done on its capability of innovating its products so that its
performance in market can be improved and it can continue to earn large profit so that the
growth and development of company can take place. In this section the strengths and the possible
opportunities that are present in market are identified so that it can use its innovative skills in
improving its products and capturing the opportunities that re present in market which can help it
in remaining a top class electronic business leader. In the later part of the report the industry
analysis of the year 2016 is done so that the attractiveness of the industry in the success of
company can be determined. For this analysis Porter’s five forces are used so that an overview of
the industry and the competitive factors present in the industry can be analysed which has helped
it in becoming highly competitive in market. this analysis will help in determining the impact of
the five forces which are present in market on Samsung and the way in which t has been
efficiently able to deal with so that it became successful in market will be discussed. Thus the
overall emphasis of the report is on the innovative capacity of Samsung which has helped it in
becoming highly competitive market so that the importance of innovation can be established.

Table of Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
The organisation and industry overview..........................................................................................4
Organisation and its innovation history..................................................................................4
Existing innovation performance and capabilities.................................................................5
Industry in 2016......................................................................................................................7
Conclusion.......................................................................................................................................9
REFERENCES..............................................................................................................................11

Introduction
Innovation helps the businesses in acquiring opportunities which are present in market by
developing new ideas that can help in dealing with the changing needs of the customers so that
these needs can be efficiently met and huge profits can be earned. Innovation management also
help businesses to grow and develop in the competitive marketplace so that they can continue to
survive sustainably in market and offer better products and services to customers (Frow, and et.
al., 2015). In this report the importance of innovation in Samsung will be discussed along with
its innovative history, its existing innovation performance and capabilities etc. to develop an
overall knowledge about innovation in Samsung.
The organisation and industry overview
Organisation and its innovation history
Samsung is a South Korean multinational conglomerate which is headquartered in
Samsung Town, Seoul. The company was founded by Lee Byung-chul in 1938 as a trading
company and over the years it became diversified in various sectors and has become 6th highest
global brand value. The company is well known for its innovations in its products and services
so that it can provide high quality to its customers at competitive prices. In the past the company
has been involved in many innovations in its various business branches so that the user
experience can be improved (Rothaermel, 2015). There were various factors that helped the
company in having an innovative history so that continuous innovations in its products were
possible. After the Korean War, Lee expanded the business in textiles and the protectionist
policy of the Korean government helped in further expanding of the Samsung business in various
other sectors like heavy industries, shipbuilding and petrochemical industries. In 1969 the
company entered in electronics division with their first products as black and white TVs. In
1970s there was a rapid expansion in the Samsung’s technology business and the company also
created two R&D institutes which helped it in broadening its line of business in
telecommunications, aerospace, semiconductors, nanotechnology etc. The company then
continued to advance its technology use so that better quality products can be produced. In 2000s
Samsung’s Galaxy Smartphone series were launched which topped the market. Also the
company manufactures high definition TVs through its rapid innovation technologies which help
it in competing the market in an efficient manner (Saebi and Foss, 2015).

The company applies planting and harvesting innovation scheme in its Samsung
Electronics so that innovation that can help it in achieving competitive advantage are applied by
company. The company has been able to gradually innovate its products in such a manner that
high quality of products can be developed by using the advanced techniques so that high value
can be created for customers. The company has been successfully able to innovate its
Smartphone and televisions so that highly smeary and developed technologies can be made
available to its customers (What are the Benefits of Saving Electricity?. 2018). Through its R&D
the company became the first company to launch a phone having an in-built camera which was
launched in the South Korean market in June 2000. The company is thus well known for its
innovations in its electronics division which helped it in launching innovative TVs that can help
in enhancing the experience of its users so that the sales of company can increase and it can
capture the markets in various countries.
Existing innovation performance and capabilities
Samsung is a highly innovative company which helps it in developing its products in such
a manner that they become more efficient and effective in meeting the wants and needs of
customer and also in increasing their experience. The R&D department of company help in
analysing the market needs and also in estimating competitor’s moves so that effective measures
can be taken and improvement in the existing products can be done. Samsung is renowned for its
devotion towards customer centric approaches so that highly innovative products can be
developed and superior products that can help in contributing towards making the society a better
place can be developed. The existing innovation capabilities and performance of Samsung in
market is high as it regularly develops its products which has helped in making the company a
leader in electronics sector in the world (How to become a virtual reality or hologram developer..
2018).
The company has an organisational culture which helps it in embracing cultural differences
so that all the workers of the company can work together in an efficient manner which lead to
innovative thinking and also help in enhancing their work performance. The company also is
able to adapt approaches which can help it in entering into the local markets of different
countries. It forms strategies that can help it in penetrating the markets depending on the
financial and social makeup of the society which help the people to easily adopt the technologies
offered by company. The company also has an expertise in building high quality of products at

low cost which means that it is able to sell its products at lower prices than its competitors so that
a large number of customers can be attracted and sales of company can increase. Thus these
three features help the company in improving its competitiveness in market and also in market
development so that new customers can be added and sales of company can increase (Tether,
2014).
Samsung accelerate its entry in new business areas trough R&D so that new opportunities
in market can be created through mergers and acquisitions which can help in acquiring easily the
markets of already existing companies. The company also use limited growth strategies in which
the organisation focuses on its current products which are manufactured by it and the potential
market. This helps the company in innovating its products and adding additional features which
can help in increasing the convenience of customers and also in enhancing their satisfaction.
Through this the company reduces the overall cost of innovation by penetrating the potential
market and creating new market opportunities for itself so that high sales can be achieved. This
helps the company in improving its market position and developing its products as per the needs
and wants of the local customer so that they can be made available in the market as per the
demand and economic conditions of market so that sales of company can increase and a
competitive edge can be gained in that market (Wang and Tsai, 2014).
The company replicates the already existing products in market by adding special and
unique features to them so that they can be improved and made available at economical costs.
Samsung also develop its products that can help in improving the quality and in achieving high
customer experience. The electronics section of the company is well known for its innovation in
mobile phones and televisions so that high definition quality can be provided to customers by
giving them additional features. Following are the strengths and opportunities for Samsung
which can help it in utilising its growth potential in market and increasing its market
performance by utilising its capabilities (Winterhalter, Zeschky and Gassmann, 2016).
Strengths:
 The company has a very high R&D expenditure which help it in making one of the
strongest patent portfolios among technology companies.
 The company is well known for product innovation and its highly effective design
capabilities by using advanced technology and creating environment friendly products.

 The company has strong manufacturing and marketing capabilities which help it
manufacturing highly efficient electronic product so that high market demand in market
can be created.
Opportunities:
 The market demand for smart phones, tablets, TVs etc. is increasing in the markets of
India and Africa where the consumer market is increasing due to their economic
developments and increasing purchasing power of people.
 Growing use of technologies so that development can take place which require the use of
smart phones and other electronic products (BBC builds a 'holographic' TV to see how
we may watch shows in the future. 2018).
Samsung can thus make use of its current potential and capabilities in innovating its products
so that they can be made available to customer and high customer experience can be achieved
along with high growth potential for company. It will also help it in acquiring new opportunities
present in market so that its performance can be improved and new demands can be created.
Innovation can also help it in lowering its costs so that products can be made available at lower
process so that a competitive advantage can be gained and superior position can be gained in
market.
Industry in 2016
The modernisation of an economy depend on the revolution in electronic industry and the
use of electronic items like computers, mobile phones, TVs and other electric components. It is
important that the electronic manufacturing companies innovate their products so that electric
items can be made available to customers at reasonable prices which can also help in making
their lives more convenient. The electronic industry in UK and globally in the year 2016 has
witnesses various innovations in the electronic items like televisions, mobile phones, internet
speed etc. This means that the innovation in electronic industry in 2016 was high which helped
in developing the markets and also increasing the market demand for consumption of electronic
items. Porter’s five forces analysis can be used to determine the industry of electronics in 2016: Bargaining power of customers: As the consumers are have high quality of information
available through various sources and also the availability of various electronic items

manufacturing companies the bargaining power of customers is high. The switching cost
of customers is also low as they can easily choose other company over Samsung which is
providing same item at lower price. This means that Samsung need to invest more in
marketing strategies so that more customers can be attracted and the sales of company
can increase (Biemans, 2018). Bargaining power of suppliers: Samsung has over 579 suppliers globally and also the
supply chain management of company is high which means that the company has high
negotiation power as it manufactures its products in large volumes. Thus the bargaining
power of suppliers is low which help the company in acquiring high quality of
components at reasonable rates. However it is important that the company maintains
goods relations with its supplier so that they can continue to give high quality products to
Samsung. Threat of new entrants: As the electronic industry is very huge and requires high
investment the barrier for new entrants is high which mean that the number of
competitors cannot increase in the market due to new entrants. Also the companies need a
high distribution networks, effective supply chain and highly efficient manufacturing
units so that high quality electronic products acne b developed. Samsung thus takes
advantage of this and enter in new market so that new demand can be created and its
products can be sold in the market (Talukder, 2016). Existing competitors: There are various highly established rivalries present in market for
Samsung like LG, Panasonic etc. which give the company tough competition. The
intensity of competition is high as all the companies are offering almost similar products
which decreases the differentiation among their products and it becomes difficult for
Samsung to compete in the market strategically.
 Threat of substitutes: The presence of various companies who offer similar products at
similar quality means that the threat of substitution of Samsung products is more. This
can be dealt by the company in an efficient manner through innovating its products so
that high quality can help in attracting the attention of customers and increasing sales of
company. It can also help in increasing their experience so that their satisfaction can be
increased (Winterhalter, Zeschky and Gassmann, 2016).

Conclusion
From this report it can be concluded that Samsung is a highly innovative company which
thrives in the market due to constant introduction of innovative products in market which help it
in seeking the attraction of its customers. The company also has many competitors in market
which it can effectively deal with by the help of innovating its products so that high value can be
created for customers. Also through constant innovation it is able to lower its cots and provide
products at low prices so that high sales can be achieved.

REFERENCES
Books and Journals
Frow, P., and et. al., 2015. Managing co‐creation design: A strategic approach to innovation.
British Journal of Management. 26(3). pp.463-483
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education,.
Saebi, T. and Foss, N.J., 2015. Business models for open innovation: Matching heterogeneous
open innovation strategies with business model dimensions. European Management
Journal. 33(3). pp.201-213.
Tether, B.S., 2014. Services, innovation, and managing service innovation. In The Oxford
Handbook of Innovation Management.
Wang, C.J. and Tsai, C.Y., 2014. Managing innovation and creativity in organizations: an
empirical study of service industries in Taiwan. Service Business. 8(2). pp.313-335.
Winterhalter, S., Zeschky, M.B. and Gassmann, O., 2016. Managing dual business models in
emerging markets: an ambidexterity perspective. R&D Management. 46(3). pp.464-479
Biemans, W., 2018. Managing innovation within networks. Routledge.
Talukder, M., 2016. Managing innovation adoption: from innovation to implementation.
Routledge.
Winterhalter, S., Zeschky, M.B. and Gassmann, O., 2016. Managing dual business models in
emerging markets: An ambidexterity perspective. R&D Management. 46(3). pp.464-
479.
Online
BBC builds a 'holographic' TV to see how we may watch shows in the future. 2018. [Online]
Available through <https://www.wired.co.uk/article/bbc-holographic-tv/>.
How to become a virtual reality or hologram developer.. 2018. [Online] Available through
<https://teamtreehouse.com/community/how-to-become-a-virtual-reality-or-hologram-
developer/>.
What are the Benefits of Saving Electricity?. 2018. [Online] Available through
<https://solaric.com.ph/blog/benefits-saving-electricity/>.