An Evaluation of Strategic Management and Leadership at Samsung Group

This report provides a comprehensive analysis of Samsung's strategic management and leadership. It begins with an overview of the company's background and an evaluation of its success, highlighting key factors such as innovation, the Android operating system, and strong leadership. The report then delves into the strategic capabilities of Samsung using value chain and VRIN analyses, identifying competitive advantages in R&D, human resources, and brand value. The contribution of leadership to Samsung's success is evaluated, emphasizing the role of vision, strategy, and employee motivation. The report also examines Samsung's business and innovation strategies, and analyzes the influence of internal and external factors, offering recommendations for future success. The report concludes with a summary of the findings and a list of references.

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STRATEGIC MANAGEMENT AND LEADERSHIP
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Table of Contents
Introduction............................................................................................................................ 2
Background of Company........................................................................................................2
Evaluation of Company’s Success.........................................................................................2
Reason Behind Success........................................................................................................3
Analysis of Company’s Strategic Capabilities.........................................................................4
Value Chain........................................................................................................................ 4
VRIN Analysis.................................................................................................................... 6
Evaluation of Leadership Contribution to the Success of Company.......................................8
Strategies Adopted by Samsung..........................................................................................10
Business Strategy Consistent with Strategic Capabilities.................................................10
Innovation Strategy...........................................................................................................11
Influence of Internal or External Factors in Company’s Success and Suggestions...............12
PEST analysis.................................................................................................................. 12
Recommendations............................................................................................................13
Conclusion........................................................................................................................... 13
Reference............................................................................................................................. 14

2STRATEGIC MANAGEMENT AND LEADERSHIP
Introduction
The strategic management term is used to denote the management branch, which is
concerned with strategic vision development, setting up of the objectives, strategies
formulation and implementation and taking correcting actions for any deviations in order to
reach strategic intent of company (Rothaermel, 2016).
Hence, in this report, evaluation will be done on success of the Samsung and reason
behind its success. Further, detailed analysis will be done on strategic capabilities of
company by the help of Value chain and VRIN analysis. Moreover, evaluation will be on
leadership contribution to success of company. In addition, analysis will on whether business
strategy of company is consistent with the strategic capabilities or not. Lastly, explanation
will be on influence of external or internal factors on success of company and based on this,
suggestions will be given for how company will be dealing with this.
1)
Background of Company
Samsung Group is South Korean company, which is world’s largest producer of
electronic devices. It is specialized in the production of wide variety of the industry and
consumer electronics that is consisting of the devices of digital media, appliances, integrated
systems, memory chips and semiconductors. Samsung has now become most-recognizable
brand name in the technology and it produces almost fifth of the overall exports of South
Korea. Major subsidiaries of the company include advertising, insurance and entertainment
business. The company was founded in 1938 as grocery trading store by Lee Byung Chull,
which later expanded itself in the other businesses (samsung.com, 2020).
2)
Evaluation of Company’s Success
In the world of mobile, Samsung is one of the kings that has built itself into the
massive mobile and the electronic empire by its story that actually commenced much earlier
in 1938. Over years, this Korean company has evolved significantly by bringing innovations
into the countless markets that goes well beyond just electronics and mobile. The success
story of Samsung is interesting one that is full of high and lows (Ceil, 2019). In twenty-first
century, rapid evolution in field of the mobile computing has taken place. Samsung grabbed
this opportunity and able to establish itself into the prominent position (Park et al. 2014).
Samsung has able to maintain sixth rank in the Interbrand list of “Best Global Brands
2018” with the brand value of total $59.9 billion, achieving 6.5 percent hike in the value of

3STRATEGIC MANAGEMENT AND LEADERSHIP
brand. Further, it posted the net profit of 44,344,857 million won on annual sales of
243,771,415 million won. Further, the market capitalization of company stood at approx.
936.20 billion (Blake, 2016).
Table 3: Brand Value of Samsung
In the nutshell, success of Samsung not only depends on product’s quality but it also
depends on reliability and benchmark set by company. The company plays unsurpassable
role in promoting name of the South Korea with the help of enhancing economic status and
creating great job opportunity in country (Ansoff et al. 2018). One of the most exiting policy
of Samsung’s business is to manufacture feasible product by considering the factor such as
circumstances and price that critically assist in impacting people that have different
economic status. Therefore, it can be said that Samsung has able to set imperative
methodology for getting succeed in the business operations by setting great inspiring story of
success (samsung.com, 2020).
3)
Reason Behind Success
There are various factors that have played critical role in success of Samsung. Some
major factors are as follows:
The first factor includes continued launch of the human-driven innovations, which
involves “Galaxy Note 9 smartphone”, “large screen customizable TV The Wall” and
“Quick Drive washing machine”.
The next factor is providing platform of Android operating system of Google. This has
helped the company in Samsung tablets and smartphones ahead of the competition.
The next factor includes potential of sustainable growth based on the future
innovation in technologies, which includes 5G, automotive business, artificial
intelligence and internet of things (Linder & Williander, 2017).
The fourth factor of Samsung’s success includes its number one positioning globally
in semiconductor market as well as its strengthened competitiveness of brand.

4STRATEGIC MANAGEMENT AND LEADERSHIP
The next factor of the success of Samsung is its deployment and alignment of newly
established strategy of brand for offering combined experience of brand to its
customers (Seddon et al. 2017).
Another reason behind huge success of Samsung is huge success in concept of
niche-marketing that helped the company in touching every heart. In contrast with the
narrow approach of its top competitor Apple, Samsung have adopted different
attitudes to sell everything.
The last but not the least reason is leadership of company. The success of Samsung
would never have been possible with the help of strong and dedicated leaders of
company, whose vision, strategy, direction, commitment and hard work has helped
the company to achieve glory. The leadership motivated the employees to work with
the team spirit, who gives their best effort in every arena company is stepping into.
4)
Analysis of Company’s Strategic Capabilities
The strategic capability refers to ability of business for harnessing all its capabilities,
skills and resources for gaining competitive advantage and therefore increase and survives
its value over the time (Fernandes et al. 2017). Hence, the strategic capabilities of Samsung
are analyzed with the help of two framework that is value chain analysis and the VRIN
analysis.
Value Chain
Primary Activities
Samsung’s primary value chain activities are involved directly with the producing and
selling its products to targeted customers. Following are analysis of the primary value chain
activities of the company:
Inbound Logistics
It is already known that Samsung is having its own operations and activities in
process of manufacturing of their products, most activities involved in the inbound logistics
are heavily refined. Currently, Samsung is having logistics entities as its subsidiaries. The
company implements its strategy to schedule and control the inventory that helps in creating
more value without slowing down process of manufacturing (Lasserre, 2017).
Operations
Samsung processes raw material into the end product and launches it into market.
This includes manufacturing as well as service operations. The operational activities analysis

5STRATEGIC MANAGEMENT AND LEADERSHIP
is key to improve the productivity and maximize efficiency that results in ensuring
competitive success of the Samsung Group (Afonina, 2015).
Outbound Logistics
Samsung Group pays great attention on its outbound value chain activities. The
company time-to-awards their global logistic provider for managing warehousing and the
distribution across countries. The good management of outbound logistics maximizes
satisfaction of customer and increases firm’s growth opportunities (Morden, 2016).
Marketing & Sales
Samsung highlights points of differentiation and benefits of the offered products for
persuading customers that their offering is far better in comparison to their customers. It
makes high investment on marketing and sales activities for not only producing products of
high quality at the affordable rate and distinctive features, but also creating its value through
it.
Services
The services offered by Samsung Group, both pre-sale and post-sale plays
significant role in developing loyalty of its customers and overall value of company (Jenkins
& Williamson, 2015).
Secondary Activities
Secondary activities also play significant role in coordination and facilitating of
primary value chain analysis.
Firm’s Infrastructure
Samsung Group effectively manage its infrastructure, which allows the company to
optimize value of whole value chain. Its infrastructure includes perfectly executed financial
support, better corporate governance and well-established infrastructure for supporting new
investment. This helps in strengthening competitive positioning in market (Darmawan, Putra
& Wiguna, 2014).
Human Resource Management
Samsung Group analyzes the HRM by evaluating various aspects of the HR that
includes recruitment, selection, rewarding, training, performance management and the other
activities of personal management. Further, it allows company in reducing competitive
pressures based on the skills, commitment and motivation of its workforce (Savino, Manzini
& Mazza, 2015).

6STRATEGIC MANAGEMENT AND LEADERSHIP
Technology Development
Samsung Group makes effective use of latest technological innovation, for instance
artificial intelligence, internet of things and others in its processes for providing great results
that ultimately adds value to the company.
Procurement
Samsung creates the value from procurement activities by creating opportunities for
the local and global procurement, opportunities for the globalized procurement gives the
competitive advantage to company for securing good suppliers and lastly, establishing well-
managed functions for maintaining relationships with the partners and suppliers (Bettis et al.
2014).
Figure 1: Value Chain Analysis
VRIN Analysis
In order to analyze internal resources of Samsung, VRIN analysis is used. It is the
tool used for analyzing internal capabilities and resources of firm for finding out that whether
they can be the source of sustainable benefit or not. The major reason behind using this
framework is to seek answers of four question regarding resources and the capabilities. If
answer is yes for all the four questions, then respective capability or resources can
considered to be sustainable competitive advantage. The industries, where external
environment changes on constant basis, resource-based view on capabilities of firm
provides much more stable way in the development of strategy (Schroeder & Kotlarsky,
2015).

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Samsung Group
Resources VRIN Characteristics Competitiv
e
Advantage
Valuabl
e
Rar
e
Inimitabl
e
Non-
Substitutabl
e
Design Product
Design
Centres
Y N N N Competitive
Parity
R&D
Centres
Y Y Y Y Sustained
Advantage
Scientists
and
Designers
Y Y Y Y Sustained
Advantage
Manufacturin
g
Production
Bases
Y N Y N Competitive
Parity
Supplier
Network
Y N N N Competitive
Parity
Sales &
Services
Distribution
Network
Y Y Y N Competitive
Parity
Retail
Network
Y N N N Competitive
Parity
After Sales
Service
Y N N N Competitive
Parity
Corporate Managemen
t and
Leadership
Y N N N Competitive
Parity
Brand Value Y Y Y Y Sustained
Advantage
Table 2: VRIN analysis of Samsung Group
The outcome of VRIN analysis gives the outcome that the competitive advantage of
Samsung Group is under following resources:
Samsung has aggressively involved in learning as well as knowledge accumulation
over past two decades. Samsung is the biggest technological company of the world.
It heavily invests in the technology for making it more competitive. This technology
advancement does not only help Samsung in beating its competitor but it also helped
in reducing its cost. This is what makes this company valuable, rare, difficult to
imitate and non-substitutable. Technology resource and the product development
capability of Samsung includes 34 R&D centres in the different parts of the world.
Samsung is known for its care about their employees. They give more preference to
their employees by seeking their advice and imparting training time to time on various
aspects for enhancing their knowledge. This company value its employees and has
maintained the environment and culture, where these employees can show their
talent and commitment at high level. This is what makes this company valuable,

8STRATEGIC MANAGEMENT AND LEADERSHIP
difficult to imitate, rare and non-substitutable. The human resource talent of company
includes more than fifty thousand plus research scientists, product designers and
engineers that comprises of 16 percent of total employee work-force (Dutov, 2016).
Samsung remains one of the most valuable global brands according to the latest top
hundred best global brands list of Interbrand. The strategic partnership that is
spanning past two decades has resulted into transformation of Samsung into most
valuable brand of world. Today, Samsung is globally praised as pioneer of consumer
experience, innovative products creation that helps in empowering people
everywhere and achieving impossible things. This is what makes brand of company
rare, valuable, difficult to imitate and non-substitutable. Samsung’s brand value as
the super brand is having the valuation of US$51.81 million and it ranked seventh in
world (Lin & Wu, 2014).
5)
Evaluation of Leadership Contribution to the Success of Company
During past years, leadership of Samsung at top level has been found to be involved
in different contradictions and scandals. However, since taking over in year 1987, chairman
Lee Kun-Hee as part of the second generation of the managers from ruling the Lee family
has made good contribution to the amazing performance of management and Samsung
development into the leading global business of South Korea. Later, he was also found to be
involved in scandals and got convicted. Currently, this company is led by the Dr. Oh-Hyun
Kwon as CEO and the Vice Chairman. The leadership development program of company is
comprising of all the five levels of leadership all through the company, which is as follows:

9STRATEGIC MANAGEMENT AND LEADERSHIP
Figure 3: Samsung Leadership Development Program
Samsung is world leader in the manufacturing as well as distribution of the new
technological drivers. The major priority of company is to maintain product’s quality. The
practices of leadership support adopted strategy for helping company to maintain leading
position in the competitive market. Samsung, which is South Korean consumer electronic
giant praises the company for its visionary and strong leaders for executing their strategies
of business and for strong track record for the innovations across the multiple segments for
its overall successes. The success of company is attributed to good execution of the
strategies, as strong leaders of company have vision for meeting the objectives that it had
set out for achieving (Effelsberg, Solga & Gurt, 2014).
Samsung acts as the global leader in the technology and innovation, which helps in
providing the new possibilities for the customers throughout the world. It is because of
continuous innovations in technology in electronics field, company is more focused on the
changing of technology for the better smartphones, television, computers, semiconductors
and others. Further, Samsung is focusses on providing the support to the value-based
practices of leadership. In this practice of leadership, shared practices and shared values
plays key role at all company’s organizational levels for complying with established ethical
practices. The leaders of Samsung tend to align the personal values with the values of
organization (Carter & Baghurst, 2014). This leadership allows to promote self-management
of employees, reduces supervision and the control degrees at various organizational levels

10STRATEGIC MANAGEMENT AND LEADERSHIP
by ensuring respect in between the employees, increasing their self-esteem and enthusiasm,
dedication and optimism towards work. It is because of this leadership; employees get the
opportunities for participating in the company’s practice and developing more effective
culture of corporate and practices of team building. As the vision statement of company itself
states that Samsung is dedicated towards development of innovative technologies as well as
efficient processes, which created new markets, enriches the lives of people and it continue
to make company as strong digital leader (Encarnacion et al. 2014).
6)
Strategies Adopted by Samsung
Business Strategy Consistent with Strategic Capabilities
The business strategy of Samsung is manifested with the high flexibility level in the
way that it is focused to change its business strategy dramatically in accordance with the
changes in the external environment of business. The business strategy of Samsung is
consisting of three major pillars, which are effective market readership, scanning and
utilizing the market opportunities and new product’s development. Reader of market means
how closely entity observes the market and quickly replicate or introduce new products or
the new features in market. Samsung has been proved effective in replicating important
features and design from its main competitors (Akter et al. 2016). Further, the business
strategy of company integrates consistently on searching gaps in the market and then
exploits opportunity with the positive implications on the bottom line for business such as
Samsung noticed that the particularly speakers of Asian-language wanted device, which
they could use for drawing characters, Samsung grabbed this opportunity and this has
resulted into Samsung Note series development that was combination of phone and tablet.
Moreover, Samsung is having extensive ranges of product, which includes hundred types of
product that is arranged in three divisions of product that are Device Solutions, Consumer
electronics and Mobile and IT communications. It is second largest holder of patent in US
since 2006. Hence, new capabilities development has established firmly as strong bases of
the Samsung’s competitive advantage (Cohen & Olsen, 2015).
The successful implementation of strategy is not possible without having strategic
capabilities. Samsung makes best uses of its resources and capabilities for achieving the
desired strategic goal. This Korean company is benefitted by the strong supply chain, lower
costs of manufacturing, massive scale, strong carrier relationships, establishing various
channels of sales and extensive research & development activities. The strategy of company
is working well because it has created strong portfolio of products, which are riding wave of
growth such as smartphones, TV and others. Samsung has able to create high barriers to

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the competition entry with the help of investing in the better platforms of technology and the
vertical integration, which gives them better power of pricing and creating the scorching pace
for the development as well as innovation of product (Teece, Peteraf & Leih, 2016).
Innovation Strategy
Long back in year 1996, when Samsung Group’s chairman, Lee Kun-Hee grew upset
by lack of the innovation by company and decided that for becoming top brand, the company
requires expertise in the design that he believed would be battleground for the global
competition in twenty-first century. Further, he set out for creating design-focused culture,
which would support the innovation of world-class. The achievement of his goal was by this
measure and Samsung is now having more than 1,600 designers. It was since company
never looked back. The innovation process of company begins with the research conducted
by the multidisciplinary teams of the engineers, designers, ethnographers, writers and
marketers who continuously search for the unmet needs of users and identifies economical,
technological and cultural trends. In the recent years, Samsung has able to build the
impressive record on the design and achieved more awards in comparison to the other
company. Bold design of Samsung television often challenges conventional style. Samsung
has introduced smartphone’s new category that is phablet. This has widely been copied by
its competitors. Now innovation has become part of corporate DNA.
The journey of Samsung has been bumpy in terms of innovation. Samsung chooses
to create resourceful and committed designer’s corps, who can be able to overcome the
internal resistance through deploying the tools that are used in pursuing innovation, which
are experimentation, visualization and empathy. These corps of company have helped in
instituting structures and policies, which embed innovative thinking in all the functions of
corporate and provides framework for the revaluation of products in face of the dramatic
change in technology. In present scenarios of business environment, all sizes of businesses
face and defeat the challenges that are posed by accelerated globalization and the changes
in technologies. It is not only the innovative strategy that matters, but the innovations, which
applies some strategies on themselves, which are truly a game changer. Samsung game
changing innovation encapsulates the models of business, processes of business and the
manner to position themselves in relation to their competitors. These strategies have made
such giant Korean company to survive till date. There is connection between the innovation
and country’s economy, peoples culture as well as those businesses that runs on it.
7)