Samsung's Innovation Strategy: Threats, Opportunities, and Evaluation

This report provides a comprehensive analysis of Samsung's strategic innovation, exploring both threats and opportunities within its operational environment. It examines the company's need for innovation, leveraging frameworks such as PESTEL to identify industry threats and opportunit...Read More

Running head: STRATEGIC MANAGEMENT
Strategic Management
Name of the Student
Name of the University
Author note

1STRATEGIC MANAGEMENT
Table of Contents
Introduction................................................................................................................................2
Analysis of Innovation Strategy.................................................................................................2
Need for Innovation at Samsung................................................................................................3
BCG Matrix analysis of Samsung..............................................................................................5
McKinsey GE Framework analysis of Samsung.......................................................................7
Innovation opportunity pursued by Samsung............................................................................8
References................................................................................................................................10

2STRATEGIC MANAGEMENT
Introduction
The report helps in analysis of the strategic innovation threats and opportunities for
the Samsung Company. The different kinds of appropriate analysis are required to be done as
to gain more analysis on the strategic objectives along with the strategic capabilities.
Samsung is one of the South Korean Company and this is one of the conglomerate that is
based in Samsung Town, Seoul. The headquarter of Samsung Company was Seocho District
and the areas served by them is worldwide. The revenue earned by the company is US$305
billion and the employees who are working in Samsung are more than 489,000 and the main
competitor of Samsung is iPhone in the present scenario.
Analysis of Innovation Strategy
The most significant part of the technology strategy of Samsung is the usage of the
innovation along with the terms and processes through which the entire process of innovation
is being managed (Hill, Jones and Schilling 2014). The most important cultural kind of
philosophy that has been able to influence the different organizations is the philosophy of
moving from one imitation to the innovation. The respective perspective is evident in
different kind of circumstances wherein it has been seen that there are different kind of
similarities that can be noticed between the products produced by Samsung and iPhone.
Furthermore, the main significant part of Samsung Electronics Company is the
innovative strategy that has been adopted by them. The recent and emerging kind of recession
has forced the different companies to undergo major kind of changes. As of the different
consequences, Samsung tried to strengthen their position by merging with the most powerful
businesses and this is positive move by Samsung. With such positive movement that has been
done by Samsung has tried to establish the excellence in the entire hardware manufacturing
organization (Ginter, Duncan and Swayne 2018).

3STRATEGIC MANAGEMENT
Additionally, the strategic management of Samsung revolves around the partnership,
talent along with creativity as well. The same kind of strategy is applied throughout the entire
divisions of the company including the different kind of smart phone devices. Furthermore,
Samsung has opted to diversify the entire portfolio as to keep innovating along with creating
the products that will reflect the different needs of the customers in an effective manner.
Samsung is referred to as the market leader and they have tried to establish themselves as fast
follower to Apple when the different mobile devices are concerned in an effective manner.
Need for Innovation at Samsung
Innovation is essential and important in the long-term success of the Samsung
Company by improving the business models and adopting to the different changes in an
effective manner as well. With the implementation of PESTEL analysis, the proper analysis
of the threats from the industry will be observed and this will assist the company in analysing
their position in the competitive market as well.
Political Aspect is one of the major aspects that has to be ascertained effectively
wherein Samsung operates in an effective manner. The entire political environment is
conducive in nature towards the different operations in different markets wherein the political
factors benign. However, in the present scenario, it has been noticed and seen that there are
different kinds of political headwinds in the home country South Korea and this has given
rise to tensions in home country and other countries as well (Lasserre 2017). Furthermore,
Samsung faces political pressures from different African and Latin American countries and
this has affected the different instability in the growth of the company as well.
Economic Aspect is the other aspect that is critical in nature for Samsung Company as
the company is trying to open new branches in different all around the world and this is
reaching towards the global expansion as well. However, these aspects has a negative aspect

4STRATEGIC MANAGEMENT
on the company as the ongoing economic crisis has severely dented on the entire purchasing
power of the consumers in the developed countries that has forced Samsung to seek the
different profitable ventures in the entire markets that is emerging in nature (Rothaermel
2017). There is huge volatility and uncertainty in the market and this has led the company to
change their strategies and make them more innovative in nature as well. Furthermore,
Samsung has begun with the entire aggressive push into the entire emerging kind of market
and this can help them in making up for the lost kind of business as well (Wheelen, et al.
2017).
Social Aspect is the other factor wherein Samsung has tried to create their presence in
different parts of the world and make their business globally emerging in the market.
Furthermore, Samsung required to tailor the products as per the fast-changing requirements
of the customers in the market and this has helped the company in analysing the lifestyle of
the individuals in an effective manner as well (Barney 2014).
Technological Aspect is the other factor that is required to be considered in an
effective manner. Furthermore, Samsung is one of the leading innovative electronic company
and this has tried in harnessing the power of the entire technology and this drives the
innovation for gaining sustainable kind of business advantage as well. The technological
advancements are essential in nature as this will help Samsung in gaining competitive
advantage (Moutinho and Vargas-Sanchez 2018).
Legal Aspect is the other factor that has to be considered in an effective manner
wherein Samsung have faced different legal issues and heavy penalties for the alleged
imitation of the Apple’s iPhone and iPad. This has led the respective company taking beating
as far the perceptions of the public along with approval of the consumers of the different
strategies are concerned as well.

5STRATEGIC MANAGEMENT
Environmental Aspect is the other aspect wherein this will rise the ethical consumers
who wants the brands to source along with make the different products in socially along with
environmentally responsible manner. Samsung is required to be more aware of the different
needs as to make the products to satiate with the ethical kind of consumers.
Therefore, it can be analysed that from PESTEL analysis, that the companies are
required to take different steps as to gain more competitive advantage in comparison to the
other competitors in the entire market. Furthermore. Samsung has to take different kind of
initiatives in order to gain more success in comparison to the other competitors.
Furthermore, Samsung is the global conglomerate and Samsung is not being
competent in nature to cope up with different kind of happenings. It has been noticed that the
company has to undertake different innovative kind of strategies as to gain more competitive
advantage and this will help in operating more in the respective environment in different
countries effectively.
In the next sections, proper analysis of the innovation threats and opportunities have
been analysed that will help the company Samsung in managing the different kinds of
opportunities in the environment wherein it is operating along with analysis of the threats that
can affect the brand image of the company as well. It has been noticed that the PESTEL
analysis has helped in analysing the different kinds of drivers of innovation that will help in
understanding the strategy that can help the company in analysing the strategy that will help
the company in being more innovative in nature.
BCG Matrix analysis of Samsung
Samsung is a renowned organization in the technology industry that has its operations
in the electronics sector. The organization operates various other business units which is

6STRATEGIC MANAGEMENT
analysed with the help of BCG matrix. The analysis can be performed in the following
manner,
 Cash cows – The organization has a business unit which is considered to be a part of
the mature industry and can be further identified as the cash cow. The main feature of
the business or the products of the company is to qualify as the cash cow which helps
in increasing the profits of Samsung. The products need to be highly resource
intensive in nature for the purpose of qualifying in the cash cow based segment of the
entire matrix. The share that has been gained by Samsung in the market is high and
the major role is played by the cash cows in this case so that the company is able to
maintain the position in the industry (Deslatte, Swann and Feiock 2016). The
appliances and the electronic based products that are manufactured by Samsung are
considered to be the cash cows for the company. The organization has been successful
in reaching the various global markets for with the help of the cash cows. The
management has also been able to recognise the potential of the products to provide a
suitable position to the organization. The products of the company are totally based on
the innovations that have been made and the new technologies that have been used.
 Stars – The stars of the company are those products and services which are considered
to be a part of the evolving areas of the business. Samsung will thereby tend to invest
high amounts of money on the products which will be able to provide the high profits
to the company in the future. Samsung has been investing the resources for the
purpose of expanding its presence in the market. The management of Samsung has
been successful in achieving the objectives that are based on providing the company
with the topmost position in the market (Johnsen 2015). The introduction of new
products in the market has been helpful in increasing the shares of the company in the

7STRATEGIC MANAGEMENT
market. The stars of the company are those products which have the future potential
to increase market share of Samsung and enhance its profitability as well.
 Question Marks – The products that belong to this category are those which are able
to formulate a major part in the industry, however being in the development based
phase. The products of Samsung like the printers have proved to be a part of the
question mark category of the matrix. The investment that is made in the business is
able to make the products a star or the products can also remain in the position of
question mark. The example of the product which is a part of the question mark
category is the Samsung Galaxy 7. The negative image that has been created by the
brand has been the major reason behind the inclusion of this product in the category
of question mark (Barros, Hernangómez and Martin-Cruz 2016).
 Dogs – The products that belong to this category are mainly identified as those which
are not able to provide enough profits to the company. The future prospects of the
company are also not provided much help by these products. The smart watch of
Samsung mainly belongs to the category of Dogs (Punt and Handling editor: Emory
Anderson 2015).
McKinsey GE Framework analysis of Samsung
The GE Matrix is based on the analysis of the business based prospects of an
organization which can be examined based on the operations of the company. The GE
analysis of Samsung is based on the analysis of the operations of the company and ways by
which the profitability is affected by the various external factors. The attractiveness of the
market is one of the major dimensions of the GE matrix. This helps in determining the
attractiveness of the products that are offered by Samsung in the market. The size of the
market is quite high and this is a major reason behind the successful operations of Samsung.
The growth of the company is also quite high which helps in increasing the potential of the

8STRATEGIC MANAGEMENT
products that are provided to the customers. Samsung has been able to create a competitive
position in the market which has been helpful in building the strength of the company
(Dagnino and Cinici 2015). This is also the second dimension of GE framework analysis. The
third dimension is based on the measurement of the factors that are helpful in determining the
market size. The fourth dimension is based on the determination of the strategies based on the
investments that can be made by the company based on its resources. Samsung has invested
its resources in the development of new technologies and products that have been helpful for
the creation of competitive advantage of the company. Samsung has been able to remain
strong in all the categories of products that are offered to the customers (Rugman and
Verbeke 2017). The competitive advantage has been created by the company with the help its
huge product line and the excellent services that they are able to provide to the customers.
The company has been able to maintain its position in the highly competitive technology
industry with the help of its different products and services. The strength of the business units
of Samsung are totally based on the sectors that are growing fast and are being able provide
the growth and profitability that has been desired by the company. The cash cows of
Samsung have been the most successful in providing the maximum levels of profitability to
the company (Inyang and Egor 2017).
Innovation opportunity pursued by Samsung
Samsung is successful in creating its position in the market with the help of different
high quality products that are offered to the customers. The innovation that can be
implemented by the company for enhancing the position in the industry is based on
increasing the features that are provided to the customers. The company needs to implement
more innovative features that are unique and have not been used by the other organizations in
the past. The innovative features can thereby help the company to create a different position
in the highly growing technology market. This will help Samsung to enhance the products

9STRATEGIC MANAGEMENT
and transform the stars into cash cows with the aim of increasing the overall profitability of
the company in the technology industry (Ambrosini, Jenkins and Mowbray 2015).
The McKinsey’s analysis and the BCG matrix analysis has depicted that Samsung has
been able to remain strong in the different parts of the product segments and the various
business units that are operated by the company. The organization has been able to gain huge
profits from the cash cows such as the electronic appliances and the smartphones. The
organization has been successful in maintaining the positions of various cash cows which
have been helped in increasing the profitability of the company in the market. The major
growth vehicle of Samsung are the smartphones and the electronics departments of business
(Inyang and Egor 2017). The company has however been accused many times of copying the
features from its competitors in order to enhance their products. Samsung therefore needs to
be more innovative in the features that are added in the different products. The features can
help the organization to enhance its position in the market in an effective manner. The
increase in innovativeness is the most important factor that can help in increasing the
profitability and the growth of Samsung in the technology industry. MACS framework or
McKinsey and Company framework has thereby shown that innovative ideas are the most
helpful for the growth of Samsung (Ambrosini, Jenkins and Mowbray 2015).

10STRATEGIC MANAGEMENT
References
Ambrosini, V., Jenkins, M. and Mowbray, N. eds., 2015. Advanced Strategic Management: A
Multi-Perspective Approach. Palgrave Macmillan.
Barney, J.B., 2014. Gaining and sustaining competitive advantage. Pearson higher ed.
Barros, I., Hernangómez, J. and Martin-Cruz, N., 2016. A theoretical model of strategic
management of family firms. A dynamic capabilities approach. Journal of Family Business
Strategy, 7(3), pp.149-159.
Dagnino, G.B. and Cinici, M.C. eds., 2015. Research methods for strategic management.
Routledge.
Deslatte, A., Swann, W.L. and Feiock, R.C., 2016. Three sides of the same coin? A Bayesian
analysis of strategic management, comprehensive planning, and inclusionary values in land
use. Journal of Public Administration Research and Theory, 27(3), pp.415-432.
Ginter, P.M., Duncan, W.J. and Swayne, L.E., 2018. The strategic management of health
care organizations. John Wiley & Sons.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an
integrated approach. Cengage Learning.
Inyang, B.J. and Egor, F.E., 2017. The relevance of strategic analysis and control in
managing corporate organizations to gain competitive advantage. The Business &
Management Review, 9(2), pp.253-253.

11STRATEGIC MANAGEMENT
Johnsen, Å., 2015. Strategic management thinking and practice in the public sector: A
strategic planning for all seasons?. Financial Accountability & Management, 31(3), pp.243-
268.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Punt, A.E. and Handling editor: Emory Anderson, 2015. Strategic management decision-
making in a complex world: quantifying, understanding, and using trade-offs. ICES Journal
of Marine Science, 74(2), pp.499-510.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Rugman, A. and Verbeke, A., 2017. Global corporate strategy and trade policy. Routledge.
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic
management and business policy. pearson.