Innovation and Risk Management: A Case Study of Samsung's Business

This report examines innovation and risk management within Samsung, a multinational electronics company. It begins with a company background, emphasizing Samsung's innovative approach to product development and market competitiveness, highlighting the importance of innovation in the current digital era. The report then delves into the '7 Dimensions of Innovation,' a strategic framework used to drive business growth. These dimensions include a managed process of innovation, strategic alignment, industry foresight, customer insight, core technologies and competencies, organizational readiness, and disciplined implementation. Each dimension is analyzed in the context of Samsung's business practices. The report discusses how Samsung integrates these dimensions into its operations, from combining traditional and non-traditional approaches to understanding market trends and customer needs, leveraging core technologies, and ensuring organizational readiness for innovation. The analysis provides insights into Samsung's strategies for maintaining a competitive edge and achieving business success through innovation and risk management.

INNOVATION AND RISK
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Company background.............................................................................................................1
7 Dimensions of Innovation...................................................................................................2
CONCLUSION................................................................................................................................7
RECOMMENDATION...................................................................................................................7
REFERENCES................................................................................................................................8
ILLUSTRATION INDEX
Illustration 1: Seven dimensions of innovation...............................................................................2

INTRODUCTION
The innovation management states a set of tools that allows the individuals like managers
and researchers to cooperate with a common understanding of processing and achieving goals. It
brings together all the factors that are responsible for creating ideas with the collaboration and
using social software. In addition to this, it specifically focuses on increasing innovation with
encouraging level of sharing the knowledge (Shankar and et.al., 2011). Along with this, risk
management is ascertained as a method of managing and controlling the pressure of all the risk
faced by the organization in their business operations. It also controls the risk creation process
and converting such risks into opportunities.
Company background
Samsung is a well established multi national company that mostly deals with the
electronic gadgets and appliances. It is one of the best company that produces and sells advanced
gadgets. It stands in the top ten multi branded companies in worldwide. It is evident that
Samsung is highly known for their innovating ideas in their products and services. Innovation
plays a crucial role in Samsung's business. As in current trend of the market, new technologies
are being constantly launched to the market, however, this speed is essential for remaining and
maintaining a competitiveness in present digital era. In addition to this, company needs to
develop new markets that are to be innovated continuously. By using the interplay of creative
and imaginative meet of people in a global market of R&D network (Schubert, 2010). It is an
organisation that promotes collaboration and competition among business partners with the
supply chain and a strong commitment to ongoing investment. Samsung has put an effective
R&D department in all the functions performed by them while processing a product.
Along with this, innovation and effective manpower is termed as a global endeavour at
Samsung. Their research and development team network spans and monitor six Samsung centres
all over the world including centres in Korea, US, UK, Russia, India, Japan and China. These
centres are projected and assigned with tasks like hiring top local talent, identifying the latest
trends of high technology and delivering those technologies that offer a high level of benefits
(Brettel and et.al.,2011).
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7 Dimensions of Innovation
The strategic innovation framework design and holds together all the seven dimensions
that produces a portfolio of outcomes which drives and directs the factors to business growth.
These seven dimensions of innovation are:
 A managed process of innovation – The combination of traditional and non-traditional
approaches that aids the business with a perfect innovative strategy.
 Strategic alliance/alignment – It helps in building base and balancing support to the
innovative scope of the strategy.
 Industry foresight – It assists in understanding the emerging trends of the market.
 Customer insight – It focuses the management efforts on understanding the level of
articulated and unarticulated needs of the customers.
 Core technologies and competencies – It leads to increasing leveraging and extending the
corporate assets of the business (Mothe and Uyen Nguyen Thi, 2010).
 Organizational readiness – It creates and encourages the ability of the management of a
company to take action.
 Disciplined implementation – It controls, manages and monitors the path of company
from inspiration to business.
Considering the seven dimensions of innovation in the context of Samsung's business
which states their importance in the functioning of its business operations. The strategic
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Illustration 1: Seven dimensions of innovation

innovation framework design and holds together all the seven dimensions that produces a
portfolio of outcomes which drives and directs the factors to business growth (Allen, M and
et.al., 2015). It is ascertained that all the seven dimensions of innovation which are specified in
the innovating processes. Concerning the current trend of the market and the business condition
of Samsung, the following information about the dimensions of innovation is been determined
which states that: A managed process of innovation – This dimension reflects the vital combination of
traditional and non-traditional approaches that aids the business with a perfect innovative
strategy. It broadly focuses on combining major traditional approach of management with
the modern techniques in order to deliver quality and innovative products to its core
consumers (Evangelista and Vezzani, 2010). In order to provide its customers with
creativity and wide range of new and innovative products, Samsung lays its significant
concern over managing and controlling its traditional organisational structure with the
modern system to bring quality in results and closely accomplish the core demands of its
customers. The said company is generating measures to implement a well designed
management system which will assist the organisation towards the direction of achieving
the heights of success by gaining the highest level of customer satisfaction. Moreover,
with the implementation of such an innovative process in the company, Samsung will be
able to maintain its competitive image in the international market. This will help the
company to reach high economies of scale by generating more profits through increased
sales (Škerlavaj, Song and Lee, 2010). Apart from this, the mention entity will be able to
gain a worldwide exposure in this ever changing environment which will create a well
established brand image of the company in the hyper competitive market economy. Strategic alliance/alignment – This dimension focuses on building strong base and
balancing support to the innovative scope of the strategy. It broadly encompasses such
strategic alliance which lays their prior concern over establishing powerful base which
supports the innovative and creative products. For this, Samsung implements such
strategy which leads the company towards the well framed direction of developing a
strong foundation by critically examining and evaluating the needs of its internal control
system which broadly includes its major stakeholders and employees (Khavul and et.al.,
2010). It also deals in analysing its external support system which includes its core
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consumers and competitors. After closely evaluating its internal and external support
system, Samsung lays its significant attention over developing strategic alliance which
provides it the strong base to share the company's vision, strategies, goals and actions.
Moreover, it provides a wider range of scope to its valuable customers to choose different
versions of innovative smartphones. This helps the cited company to attract new
customers and retain its existing customers (Mohnen and Hall, 2013). The company also
focuses on rendering high quality services to its audience by providing them with
maximum ease and comfort. To do so, Samsung implements measures to digitalize its
organisational structure which will serve a strong base to support the innovations in the
entity. Industry foresight – It assists the said organisation in understanding the emerging trends
of the market. It provides the management of the company to implement and undertake
the top-down approach in order to meet and understand the upcoming trends in the hyper-
competitive market. By executing such an approach, the company focuses on making
appropriate strategies by the top level management, which matches the rising trends in
the market economy (Rogers, 2010). Such strategies are then passed on to the middle
level managers who further communicates and understands the market's strategy to their
co-worker. To do so, the managers of the company make appropriate use of training and
development sessions to enhance their knowledge and skills and guide them towards the
strategic direction of achieving market competencies. Moreover, this dimension lays its
significant concern over critically analysing and evaluating the company's core
competitor in the corporate world (Chitakornkijsil, P., 2010). It has been seen that
Samsung faces a tough competition with Apple. In this context, Samsung implements
measures to beat its competitors and gain monopoly in its innovative products in the line
of smartphones. Apart from this, the said organisation uses top down approach to gain an
in-depth understanding of complex factors which drives the change in the overall
company's structure. Customer insight – It focuses the management efforts on understanding the level of
articulated and unarticulated needs of the potential and existing customers. This
dimension lays its major concern over using a bottom up approach to attain effectiveness
and efficiency in the business operations (Arts, Frambach and Bijmolt, 2011). According
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to such an approach, the mention organisation focuses on considering the decisions, ideas
and thoughts of its operational managers and their co-workers in implementing a strategic
decision. The reason behind using such an approach is that, the operational and the co-
workers are in direct touch with the customers. They usually deals in face to face
interaction with their core customers. This helps the workers to gather information
regarding the vital needs, requirements and demands of its audience. They pass such
information to their supervisors which in turn communicates it to the top level
management. As a result, the higher level managers then implements such strategy which
helps Samsung to closely accomplish the emerging demands of its valuable audience in
an impressive and flawless manner (Ahmed and Shepherd, 2010). Apart from this,
adopting such a strategy helps the concerned company to gain an insight understanding
about its customers and their upcoming demands. Consequent to this, they execute a well
designed framework which focuses on implementing such cost effective machinery
which meets the demands of its consumers in an exotic and beautiful way. All such
strategies benefits the company to gain global exposure and maintain its brand image in
the corporate environment. Core technologies and competencies – It is stated as a solid understanding about the
company's centric competencies and technologies that provides a pragmatic filter through
which imaginative ideas can be assessed and shaped into practical investment-worthy
opportunities. Despite of all the negative conditions, an organization possesses deep
insight information about the customer needs and future trends of the market, in order to
transform the new ideas into set of actions (Gassmann, Enkel and Chesbrough, 2010).
This step works as an uphill battle unless and until, the organisation has a keen presence
of knowledge of its inherent ability and strengths in a manner to attain a leverage for its
core assets. Considering this dimension in the business of Samsung, it is observed that it
is very essential function which considers all the aspects of related to their technologies
and other capabilities leading to success. Such competencies level of Samsung includes
the factors like intellectual property or patents of the company and its products,
uniqueness of business relationships with their suppliers and partners, brand equity and
loyalty, individuality in business practices or operational eligibility (Ergonomics in the
Workplace, 2011). However, Samsung is multi-national company dealing in various
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sectors and thus, every business unit of Samsung has developed a group which is
focusing its own operational processes (Huizingh, 2011). Such groups members keeps on
valuing its level of competencies and attaining best practices in order to share this ability
with other departments of the company. Organisational readiness – It refers as an ability of an organization to take actions and
implement a new set of innovative ideas and strategies in their management. This helps in
attaining higher success that comes to grip with the political, cultural, operational and
financial demands which are to be followed and overcome in all the business operations.
An organization needs to have higher scope of inspiring vision and innovative products
for implementing an effective action plan (Igartua, Garrigós and Hervas-Oliver, 2010).
Therefore, a method of assessment is required by an organization, like Samsung, for
considering all the three readiness of present in its business environment, which are:
◦ Cultural readiness – It is termed as the norms and the mindset of an individual and
the teams present in the all the departments of Samsung. Their ability to think
imaginatively, to face discreet risks and to carry out new thoughts of ideas which
classifies their capabilities of creating and generating innovative solutions.
◦ Process readiness – It is considered as the Samsung's general business functions and
practices that allows all the functional groups to operate their assigned task
effectively in order to collaborate towards a common goal (Maital and Seshadri,
2012).
◦ Structural readiness – It is concerned as the organisational structure and level of
technologies present in Samsung. It supports their ability of creativeness and
innovation as well as their flexibility to assign high-priority projects to the available
qualified staff.
 Disciplined implementation – It is ascertained that organization, like Samsung, faces
high difficulties in producing creative, strategical, innovative and unique products after
fixed duration of time. It has been examined that as soon as the organisation launches
new product to the market which is innovative and unique as per current situation, after
certain duration, the product becomes unattractive to the customers (Talke, Salomo and
Kock, 2011). This might be because launching of similar range of products with same
innovation and creativity. It includes a wide set of planned activities that is used for
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supporting and determining all the functions across the organization. It can be in the form
of transition to some specific projects or programs, brand development, building a morale
support for the business, specialized product development and designing and many other
activities. However, for Samsung, the work of strategic innovation often acts as a deep
implication in the terms of structural, functional, operational and business activity change
(Van De Vrande, Vanhaverbeke and Gassmann, 2010). Thus, Samsung has put brand-
new finishing touches to all its innovative ideas for creating new products by identifying
effective growth strategy and new market for launching business processes in order to
find critical transition point of idea generation and strategy development.
CONCLUSION
It has been articulated from the report that innovation management plays a vital effect on
the business environment of an organisation. There are numerous effective ways to measure,
control and implement the methods of innovative ideas. This is necessary for an organisation for
its survival and attracting customers towards their products available in the market. It also states
that there are seven dimensions which specifies about the innovation of an organisation. These
dimensions help an organisation to identify and develop proper strategy which can effectively be
implemented in its business operations for achieving the defined set of objectives. The report is
based on the study and understanding of innovative techniques used by the Samsung in their
products.
RECOMMENDATION
By this report, it has been recommended that strategic innovation initiative has some set
of techniques which is impacting the results of business operations and the functioning of an
organisation. It also examined that innovating ideas is one of an essential activity which highly
focuses on identifying new thoughts and implementing them in the norms and procedures of
business for producing and developing a new product.
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REFERENCES
Books and Journals
Ahmed, P. and Shepherd, C. D., 2010. Innovation management: Context, strategies, systems and
processes. Pearson Education Limited.
Allen, M and et.al., 2015. Impact of Risk Management on Project Cost: An Industry
Comparison. Journal of Information Technology & Economic Development. 6(2).
Arts, J.W., Frambach, R.T. and Bijmolt, T.H., 2011. Generalizations on consumer innovation
adoption: A meta-analysis on drivers of intention and behavior. International Journal of
Research in Marketing, 28(2). pp.134-144.
Brettel, M., and et.al.,2011. Cross‐functional integration of R&D, marketing, and manufacturing
in radical and incremental product innovations and its effects on project effectiveness and
efficiency. Journal of Product Innovation Management, 28(2). pp.251-269.
Chitakornkijsil, P., 2010. Enterprise risk management. International Journal of Organizational
Innovation. 3(2) pp.309.
Evangelista, R. and Vezzani, A., 2010. The economic impact of technological and organizational
innovations. A firm-level analysis. Research Policy,39(10). pp.1253-1263.
Gassmann, O., Enkel, E. and Chesbrough, H., 2010. The future of open innovation. R&d
Management. 40(3). 213-221.
Huizingh, E. K., 2011. Open innovation: State of the art and future perspectives. Technovation.
31(1). 2-9.
Igartua, J. I., Garrigós, J. A. and Hervas-Oliver, J. L., 2010. How innovation management
techniques support an open innovation strategy. Research-Technology Management.
53(3). 41-52.
Khavul, S., and et.al., 2010. Going global with innovations from emerging economies:
investment in customer support capabilities pays off. Journal of International Marketing,
18(4). pp.22-42.
Maital, S. and Seshadri, D. V. R., 2012. Innovation management. Sage.
Mohnen, P. and Hall, B.H., 2013. Innovation and productivity: an update.Eurasian Business
Review, 3(1). pp.47-65.
Mothe, C. and Uyen Nguyen Thi, T., 2010. The link between non-technological innovations and
technological innovation. European Journal of Innovation Management, 13(3). pp.313-
332.
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Rogers, E.M., 2010. Diffusion of innovations. Simon and Schuster.
Schiederig, T., Tietze, F. and Herstatt, C., 2012. Green innovation in technology and innovation
management–an exploratory literature review. R&D Management. 42(2).180-192.
Schubert, T., 2010. Marketing and organisational innovations in entrepreneurial innovation
processes and their relation to market structure and firm characteristics. Review of
Industrial Organization, 36(2). pp.189-212.
Shankar, V., and et.al., 2011. Innovations in shopper marketing: current insights and future
research issues. Journal of Retailing, 87, pp.S29-S42.
Škerlavaj, M., Song, J.H. and Lee, Y., 2010. Organizational learning culture, innovative culture
and innovations in South Korean firms. Expert systems with applications, 37(9). pp.6390-
6403.
Talke, K., Salomo, S. and Kock, A., 2011. Top management team diversity and strategic
innovation orientation: The relationship and consequences for innovativeness and
performance. Journal of Product Innovation Management. 28(6). 819-832.
Van De Vrande, V., Vanhaverbeke, W and Gassmann, O., 2010. Broadening the scope of open
innovation: past research, current state and future directions. International Journal of
Technology Management. 52(3). 221-235.
Online
Ergonomics in the Workplace, 2011. [Online]. Available through: <http://www.impact.ie/wp-
content/uploads/2015/07/HSA-Ergonomics-2006.pdf>. [Accessed on 13th April 2016].
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