Samsung's Organizational Strategy: A Comprehensive Analysis

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ORGANISATIONAL STRATEGY OF SAMSUNG
Organisational Strategy of Samsung
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Author’s Note

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ORGANISATIONAL STRATEGY OF SAMSUNG
Table of Contents
Introduction................................................................................................................................3
Macro environmental factors.....................................................................................................3
Industry position.........................................................................................................................4
Internal resources and capabilities.............................................................................................6
Stakeholder perspectives............................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................11

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ORGANISATIONAL STRATEGY OF SAMSUNG
Introduction
Samsung is one of the leading names in the field of electronics and been serving a customer
with advance technologies all over the world. It was found in the year 1938, by Lee Byung-
chul, who is one of the biggest business magnates of Korea (Samsung uk, 2019). The
following report will cover all the discussions over the organisational structure and strategy
of Samsung. The paper will discuss the macro environmental factors of the business operated
by Samsung through proper application of analysis tools and techniques. Along with this, the
internal source and capabilities of the organisation will also be discussed in the report by
sharing the perspective of stakeholder.
Macro environmental factors
In the world of technology, Samsung has occupied significant amount of area and is now
competing against other global brands like Apple, Blackberry, etc. The technological supplies
of Samsung are spread across almost all over the world (Alon et al. 2016). At present, the
completion in the global market has reached to their peaks and this has made it difficult for
technology brand to make it to the top. This competitive business environment is very
influencing factors for the business of Samsung and thus needs to be analysed. In order to
analyse the competitive environment of Samsung, the technique of porter five forces analyse
can be exercised effectively. This technique will help in determining the macro
environmental factor of the competitive business environment of Samsung. These five forces
according to porter method are as follows:
Power of buyers
The power of the buyers of Samsung cannot be said as low or high. The customer base of
Samsung is loyal and strong but due to availability of variety of options, the buyers have the
power of switching to other brands when not found comfortable (Howson, 2016).
Power of suppliers
The power of suppliers of Samsung is high as it buys only limited components from the
supplier (Palmer, 2012). This is because Samsung makes its own components and thus is
reliable to only few supplies from the suppliers.
Threat of substitute

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ORGANISATIONAL STRATEGY OF SAMSUNG
Due to availability of many alternative options of technological supplies and due to high
competitive rivalry offered by many global brands in the market, the threat of getting
substituted in high for Samsung (Czinkota and Ronkainen, 2013).
Competitive rivalry
There are various rivals of Samsung like Apple, Motorola and blackberry, who offer great
rivalry for Samsung in global market. Along with these brands, there are various other brands
present in this league and thus the competitive rivalry is high for Samsung.
Threat of new entries
Samsung has already reached to the top positions in its field and there are already many
leading brands present in the competitive market. Therefore, there are very less chances for
new entries to pose any kind of threat to Samsung.
Industry position
Samsung has been leading its industrial region from decades and has been serving its
customers with bets innovative and creative technologies (Blythe and Martin, 2019). On the
ongoing development of its business, Samsung has managed to establish good relations with
its suppliers and buyers. This has helped Samsung to perform business in more ethical and
prosperous manner. Business ethics has been given very much of significance at Samsung. It
is believed that business ethics is a key to successful accomplishment of the organisational
objectives (Samsung uk, 2019). Along with accomplishment of organisational goals, ethics
also helps in creating good industry position and reputation and creates good reputation in the
market.
In the meantime, Samsung has been able to become the world leader in its industry and
current, the Korean conglomerate giant has occupied around 27% of market’s share, which is
way large than the market share owned by any of its rivals. This shows that Samsung has still
acquired the leading position in its industry (Wheelen and Hunger, 2011). It has been made
possible due to successful launch of its galaxy series in the telecommunication market, which
has aided to the enhanced industrial and market position of the company. This data depicts
that the brand portfolio of Samsung is major competitive advantage for the company.
Besides, the research and development department of Samsung has been indulged in creating
new ideas and generating new technologies for introducing them to the world. Samsung can
develop strategies for its expansion in the market and Ansoff matrix is a tool, which will aid

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the company in developing effective strategy for growth through proper analysis and business
planning (Wheelen et al. 2017). For better understanding of this tool, the Ansoff matrix of
Samsung is given below.
Market development Diversification
 Samsung can introduce new technologies
and features in its Smartphone according
to the expectation of the customers
(Baker, 2014).
 The availability of technology at
reasonable price
 Direct investment in the existing
technologies for better provision of
service to its present customers
 Samsung has already diverse and
extensive portfolio and operates in
automotive, equipment, electronic
gadgets, apparels etc.
 Through proper diversification strategy,
product portfolio of Samsung can be
diversified more and can be used for
gaining and retaining its market position.
Market penetration Product development
 In order to take away more shares of the
market, Samsung can practice intense
promotional and marketing activities.
 Providing competitive prices will also
help the company in market penetration.
 The company can ensure the stability of
its customer base by providing more
features in its current technologies and
devices (Baker, 2014).
 For enhanced market penetration,
Samsung is needed to focus on its
research and development department.
 The strategies for product development
of Samsung should be done according to
the market segments and targeted
customer regions of the company.
 Through introducing the customers with
new products or through modified
products, Samsung can facilitate its
development in its industrial position.
 Through introducing Smartphone and
other technologies affordable for both
upper and lower categories, strategic
development can be ensured by Samsung
(Blythe and Martin, 2019).
Table 1: Ansoff matrix of Samsung
(Source: Learner)

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ORGANISATIONAL STRATEGY OF SAMSUNG
Internal resources and capabilities
According to Díaz-Fernández et al. (2014), resources are recognised by the competitive
benefits, which are mainly derived from the internal sources of an organisation i.e., Samsung.
However, resources are mainly two types, one is tangible and another is intangible resources
that can use the company to make their international business strategy. Samsung mainly relies
on these resources as their management has leveraged for the implementation and strategy
formulation. The technical advanced company develops the resources based on organisational
performance. Like many other companies, Samsung has recognised that the resources are
vital aspect for the company and the company takes advantage from both these resources
(Baker, 2014). Resources are given in a table form:
Tangible resources
 These resources are consolidated from
Samsung Electronics and their
financial statement.
 Cash, cash equivalents, which would
utilize to manufacture technical and
innovative advanced items
$250,182,550 in total assets
Intangible resources
 These resources are distinct as the
non-monetary assets, which may not
be touched, seen or physically
estimated.
 Brand equity, Human assets and
Corporate culture
$4,700 million
Table 2: Key Resources
(Source: Learner)
In the competitive market, Samsung has a wide range of products that allows them to grab the
market share from different markets. However, this enables Samsung not only to earn the
highest return but it also enables them to diversify their failure and risk factors. On the other

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hand, the resources are often heterogeneous and serving for the active capabilities (Grant et
al., 2014). Thus, these would be utilized by Samsung to initiate their international business
and upgrade their management in the next level. In order to gain their competitive advantage,
the company has used their resources to maximize their output or end items. According to
Johnson et al. (2011), resources like money, materials, machineries and human resources are
being strategized for being the leader in the international market. Samsung has made working
surroundings that may allow the team members to participate in improving the ideas. The low
cost strategy has allowed the company to be very competitive within the international market.
Besides, this will also be beneficial for attaining an advantageous place within the
competitive market. However, the leading position is obtained by the organisation within
their first establishment and they uphold this place for several years (Stark, 2015).
VRIO analysis
VRIO framework is essential for the company to recognise the resources that may be
beneficial for the company in future. According to Booth (2015), VRIO analysis is a resource
oriented analysis that may give Samsung an opportunity to develop a sustainable advantage
over its competitors within the market. Further, sustainable advantage may support the
company to get the market share and resolve the industrial issues. This is created to make a
clear understanding on the role of resources by recognizing their accessibility in the market.
However, VRIO analysis of Samsung would be estimated in the table below:
Resources Value Rare Imitation Organisation Competitive
benefit
Flexibility of
supply chain
Yes Yes Competitors have
also flexible in
the supply chain
Fully used Keep the
industry
running
successfully
Price
strategies
Yes No These activities
are reproduced
within the sector
Yes Company gets
temporary
benefits
Advantages
within the
adjacent
sectors
May be
valuable as
they would
make new
No Could be
emulated by the
rivals
All the
abilities of
organisation
are nor fully
Has potential

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ORGANISATIONAL STRATEGY OF SAMSUNG
revenue
streams
used
Marketing
expertise
Yes,
companies
are
competing
on the basis
of
separation
within the
industry
No, many
competitors
have the
decent
marketing
value
Price strategy are
matched by the
rivals
Yes Get
impermanent
advantage
Branding
awareness
Yes Yes, Samsung
has the
leading brand
within the
market
No Has used its
branding
position within
several
segments
Gain
sustainable
competitive
advantage
Leadership
vision for the
next
challenges
Yes Not May not be
replicated by the
competitors
Based on the
valuable data
in contrast to
the case
May direct
towards the
competitive
benefit
Local and
global
presence
Yes Yes May be replicated
by the
competitors
Yes, it is the
most
diversified
companies
within the
sector
Giving the
competitive
benefit
Table 3: VRIO analysis of Samsung
(Source: Learner)
Stakeholder perspectives
According to Hawking and Sellitto (2015), stakeholders act a major role to determine the
success rate of a company. Stakeholders may be separated as external and internal

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stakeholders based on their role in the market. However, Samsung takes innovative activities
by conducting the stakeholders to obtain the competitive benefit from the market. Various
stakeholders and their effect in the business strategy of Samsung are given below:
Stakeholders Nature Major roles within the company Impact
CEO and Executive
leaders
Internal In context of Samsung, the role of
CEO is very important as they
make important decision based on
the situations.
Medium
Managers Interior In case of Samsung, leaders and
managers are playing the active
role within the industry. They
mainly monitor the employees.
High
Suppliers External Supply of raw materials, packing
items and other technical are
needed for manufacturing the
products
Medium
Customers External All the manufactured products in
Samsung made are according to
needs and perceptions of
customers. They purchase the
products and support to revenue
generation for the company (Stark,
2015).
High
Employees or workers Internal Employees are supported the
company to manufactured the
items, their ads and sales. In
Samsung, they must be allowed to
follow the rules and regulations.
However, they perform according
to the protocols set by leaders and
they must follow it to attain the
organisational objectives (Johnson
et al. 2011).
Medium

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ORGANISATIONAL STRATEGY OF SAMSUNG
Table 4: Stakeholder perspectives of Samsung
(Source: learner)
Conclusion
From the business report, it is stated that macro environmental factors are recognised to
evaluate the business strategy of Samsung. In this context, Porter analysis is taken to gain the
insight of internal environment of the company. VRIO analysis and Ansoff matrix are also
utilize to understand the industrial position and resources of Samsung. These tools are
necessary for the company to accomplish their objectives. Thus, it is essential that a proper
market research and value proposition of product would be made to obtain the competitive
benefits within the international market.

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References
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practice, and cases. Routledge.
Baker, M.J., 2014. Marketing strategy and management. Macmillan International Higher
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Blythe, J. and Martin, J., 2019. Essentials of marketing. Pearson UK.
Booth, S.A., 2015. Crisis management strategy: Competition and change in modern
enterprises. Routledge.
Czinkota, M.R. and Ronkainen, I.A., 2013. International marketing. Cengage Learning.
Díaz-Fernández, M., López-Cabrales, A. and Valle-Cabrera, R., 2014. A contingent approach
to the role of human capital and competencies on firm strategy. BRQ Business Research
Quarterly, 17(3), pp.205-222.
Grant, R., Butler, B., Orr, S. and Murray, P.A., 2014. Contemporary strategic management:
An Australasian perspective. John Wiley & Sons Australia, Ltd..
Hawking, P. and Sellitto, C., 2015. Business intelligence strategy: a utilities company case
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Howson, P., 2016. Commercial due diligence: the key to understanding value in an
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Johnson, G., Whittington, R., Scholes, K., Angwin, D. and Regnér, P., 2011. Exploring
strategy. Financial Times Prentice Hall.
Palmer, A., 2012. Introduction to marketing: theory and practice. Oxford University Press.
Samsung uk. (2019). uk. [online] Available at: http://samsung.com/ [Accessed 16 May 2019].
Stark, J., 2015. Product lifecycle management. In Product lifecycle management (Volume
1) (pp. 1-29). Springer, Cham.
Wheelen, T.L. and Hunger, J.D., 2011. Concepts in strategic management and business
policy. Pearson Education India.
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic
management and business policy (p. 55). Boston: pearson