Strategic Management Case Study Analysis: Samsung's Strategies

This case study analyzes the strategic management of the Samsung Group, a multinational conglomerate. The analysis begins with an introduction to strategic management and Samsung's business operations, particularly in consumer electronics and digital alliances. The core of the study evaluates the processes and tools used by Samsung to determine its strategies, including SWOT, PESTLE, and Porter's Five Forces. The SWOT analysis examines Samsung's strengths, weaknesses, opportunities, and threats, while PESTLE analysis assesses the political, economic, social, technological, environmental, and legal factors impacting the company. Porter's Five Forces model is then applied to understand the competitive landscape. The study also highlights the importance of change management within Samsung, considering its costs, risks, and sustainability. The document provides critical evaluations of each tool and process, offering insights into Samsung's strategic decision-making and market positioning.

Strategic management-case
study analysis

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Critical evaluation of the processes used by the organisations in determining their strategy.........3
Critical evaluation of the models and tools used by the organisations in determining their
strategy.............................................................................................................................................5
SWOT Analysis...........................................................................................................................5
PESTEL analysis.........................................................................................................................8
Porter’s Five Forces.....................................................................................................................9
Application of these tools to Samsung..........................................................................................10
SWOT Analysis.........................................................................................................................10
PESTLE analysis.......................................................................................................................10
Porter’s five forces.....................................................................................................................10
Importance of change management...............................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic management is the ongoing planning, monitoring, analysis and assessing the
necessities of the organisation which are required to mee its goals and objectives. In every
business, the strategies help in managing the changes in the business environments. The
Samsung group is a multinational conglomerate which comprises of various affiliated businesses
among which most of the items are united under the brand of Samsung. It is headquartered in
South Korea. This result will describe the tools which helps in determining the strategy and will
also apply the tools to the Samsung company. Critical evaluation of the processes in the
company will be highlighted. Furthermore, the importance of change management will be
described regarding the costs, risks and sustainability.
MAIN BODY
Critical evaluation of the processes used by the organisations in determining
their strategy
Samsung company focuses on developing and expanding its products in the division of consumer
electronics. From the time when the company won the market share globally by making the use
of exceptional technology and innovative designs which was the main reason behind the
strengthening of unrivalled leadership in flat-panel, TV’s and monitors. In the Samsung’s
business of digital alliances, the company achieved a remarkable growth by continuously
investing new products with new and differentiated design.
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Figure 1: Samsung's Strategic processes
Source: Strategic processes in Samsung, 2020
Various processes were used by the company to determine its strategy. As the need of the digital
platforms and things are increasing day by day, the Samsung also planned to expand its products
which can contribute in this digital market. It focusses on bringing innovation everyday which
can make the life of its customers better and maximize their convenience. Though the company
was facing rapid success since many years but recently as everything is becoming digital and the
customers also rely on the digital things, the company launched many innovative products which
shifted the paradigms of market such as the AddWash Washing Machine, WindFree air
conditioner and many more. The customers were really satisfied with these products as they gave
great positive feedbacks (Safari, Farhang and Rajabzadehyazdi, 2016). This motivated the
company to strengthen and expand its business through various products like new built in lineup
and system air conditioner . Their main strategy behind this is bringing real value to consumers
through developing differentiated products and technologies. Also, the company expanded its
business and strategies to the medical sector by providing the enhanced accuracy, access and
efficiency so that it can deliver new experience of healthcare to the medical professionals and
patients. The company does so by developing and retailing devices of diagostic imaging such as
ultrasound systems, mobile CT scanners, digital radiography systems and invitro diagnostics
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also. This was happened by the decision of the company to combine the advanced tehnologies
and the design capabilities.
The innovation in Samsung can be seen by launching its mobile communication business which
deepens the value and the convenience for the customers. This made them rose to the top in the
market of global smartphone product capabilities whiuch helps it to solidify its market leadership
(Mehjabeen, 2018). The company does the thorough research of the market and its trends so that
it can provide the most innovative smartphones to the customers which helps in unrivalry quality
management which increases the consumer’s benefits.
Not only this, the company Samsung is also providing the next-generation network infrastructure
and solutions having outstanding technology and the most sucecssful experience. The company
undertook a greenfield project in order to build the largest new LTE (4G) network in the world
whose major client is in India. The company is also working with the leading operators in the
world for testing the next-generation communication technology so that it can become the first to
commercialise 5G FWA technology.
The strategic process of Samsung does not stop here but it is also expanding its goods and
services and its market leadership in the memory business so that it can demonstrate the superior
technology and dramatic cost-savings. The company is striving hard to expand its highly
profitable differentiated products especially for the mobile deviceswhich accelerates the process
conversion and also the company therefore is mainly aiming to develop next-generation products
such as AP and CIS sensors etc.
Critical evaluation of the models and tools used by the organisations in
determining their strategy.
There are many tools used by the companies to determine its strategies. The major tools such as
SWOT, PESTLE and PORTER’S FIVE FORCES are critically evaluated as below:
SWOT Analysis
This is basically a model which is a compilation of the organisation’s strength,
weaknesses, Opportunities and threats. Its main objective is to help the organisations so that they
can eb aware of all the factors which are involved in making decisions and also affects the
company in one or the other way (Sarsby, 2016). This framework is used to make the best
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advantage of the organisation which can help in reducing the chances of failure and also analyses
that the area in which the company is lacking which eliminates the hazards. It can be used in two
ways: as a formal and sophisticated tool and also to kick off the strategy formulation through a
matrix. Among the four aspects, the strengths and weaknesses are considered as the internal
factors while the opportunities and threats are considered as the external factors.
Figure 2: SWOT analysis
Source: SWOT analysis, 2020
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Figure 3: TOWS matrix
Source: Chaffey, 2020
Strengths: These are the positive points of the company which is done well by the organisation
and also which is different form its competitors. By focussing on the advantages of the
organisation, the employees become motivated and encouraged to do the tasks. For example, if
Samsung is the only brand which deals in high quality products then high-quality products is its
strength but on the other hand, if any other company also provides high quality products then it
cannot be treated as strength.
Weaknesses: These are the unpleasant truths which are to be faced by the company. These are
the inherent features of the organisations for which the focus is on the people, systems, resources
and procedures. These are the factors which can be improved by some practices. These are the
areas where the competitors of the organisation re much better than them (SWOT analysis of
Samsung, 2020).
Opportunities: These are the openings or chances for happening of something positive but must
be used by the company to face its benefits. These are raised from the outside of the company in
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the form of developments in the market, technology used by the company and many more
advancements in different areas. The company must focus on the good opportunities to be
spotted.
Threats: This can be anything which negatively affects the company and the business which can
include the supply chain problems, market requirements shift, shortage of recruits etc. This is
must for the companies to anticipate the threats and take certain actions against them before the
stalling of the growth (Mwakasege, 2020). Evolving technology is the most important threat
nowadays as well as an opportunity. Some threats can even damage the overall business such as
cash flow problems which can make the company vulnerable to small changes in the market.
Though, SWOT analysis is instrumental in strategy formulation and selection which makes it the
strongest tool but it requires a great subjective element. It helps in minimizing the negative
impacts and maximizing the positive ones. But still it has many disadvantages which are as
follows:
Disadvantages: Increase in price, legislations of the government, economic environment. Raw
materials or inputs needed, import restrictions which is considered when the searching for new
market regarding the product for which overseas market is not available. There are various
internal limitations such as faulty products due to the poor-quality control, poor industrial
relations, lack of efficient and skilled labour, insufficient research and development facilities.
Also, there is lack of clarity as it does not provide a reliable way to cope up with strengths and
weaknesses. The leaders have to attach their values for taking the decision. Furthermore, there
comes too many opinions to be addressed which misses some of the important opinions. The
PESTEL analysis
This is a framework or a tool which helps in identifying the macro (external) forces
which are faced by the organisations. The macro environmental factors are Political, Economic,
Social, Technological, Environmental and Legal. Before planning or implementing any strategy,
situational analysis is done to analyse the impact of these factors on the organisation.
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Political: These comprise of the impacts of the government and it’s polices such as political
policy, trade, taxation and fiscal policies.
Economic: These include the impact of the economy which includes the interest rates,
unemployment and employment rates, costs of raw material and the foreign exchange rates.
Social: These focus on the social environment and analyse emerging trends. It mainly lays
emphasis on the needs and wants of the customers. These mainly include the change in family
demographics, cultural trends, attitude changes and lifestyles.
Technological: These include the technological innovation and development which affects the
industry. The factors are digital or technological changes, automation, R&D etc.
Environmental: These are the factors of the surrounding environment and the influence of
ecological aspects. These include climate, carbon footprint, sustainability, waste disposal,
recycling procedures.
Legal: These focus on the change in the legislation and its impact on the business operations.
These include consumer law, employment legislation, healthy and safety, trade regulations and
restrictions.
Porter’s Five Forces
It is simple but powerful tool to understand the competitiveness of the business environment
along with identifying the strategy’s potential profitability. This helps the organisations to adjust
the strategies according to the forces in the environment which affects the profitability. The
Porter’s five forces for Samsung are as follows:
Competitive rivalry: This defines the intense of the competition from the competitors for which
the companies attract the customers with price cuts (Rani and et.al., 2016).
Supplier power: This defines that how easy it is for the suppliers to increase their prices. The
greater number of suppliers, easier to switch to cheaper alternatives.
Buyer power: This defines that how easy it is for buyers for driving the prices down.
Threat of Substitution: This describes the customer’s likelihood to find a different way or
decision to choose different shop for making purchase.
Threat of new entrants: This is introduced when the new players in the industry comes. The
rivals can easily enter the market when the cost is less.
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Application of these tools to Samsung
SWOT Analysis
The Samsung company is dominating the market for smartphones for years having 18.5%
market share. It is always on the top regarding the innovative research and development by
providing Mobile phone, TV, memory cards and other accessories. Also, it innovates its goods
and services through the environment friendly strategies. On the other hand, it is heavily
dependent on the American markets which is very unpredictable. Also, the company has been
facing a decline in the sales of smartphones. The failures of some products of Samsung also
considered as its weakness. The company can make use of opportunities like innovating the
products with the latest trends and can move to 5G and 6G. On the other hand, the legal and
regulatory trends and the increased competition can be threats for the company.
PESTLE analysis
The company faces the political pressures from other countries where the political
environment is unstable which affects the operations. The global economic crisis dented the
purchasing power of consumers. The market in which company operates is influenced by the
lifestyle preferences of the customers. The company has to tailor its products to the changing
preferences of customers. The company needs to advance itself in terms of technology so that it
can lead its competitors as the demands of the market is the advanced technology in all the
devices (Won-Pyo and et.al., 2020). There are many penalties for its alleged imitation of iPad
and iPhones. As the environmental concerns are increasing day by day, the ethical consumers are
also increasing. This forces the company to make most of services environment-friendly.
Porter’s five forces
The porter’s five forces can eb applied in Samsung as follows:
Competitive rivalry: This is both high and low. High or intense influences the suppliers,
businesses and buyers. Low or minimal is most preferrable for high profit of business.
Bargain power of suppliers: Less gives the suppliers more power for influencing the prices
whereas the more suppliers mean easier to switch.
Bargain power of consumers: Less consumers meaning is the high influence over the products
or services price and quality.
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Threat of substitution: This is the likelihood of the customers in order to switch to the
competitor in buying the similar product.
Threat of new entrants: This describes how difficult it is for the competitor to enter the
marketplace. This is high in case of Samsung.
Importance of change management
It is a structural approach that is undertaken by companies to improve productivity of
business. The main goal of the change management is to assist employees to understand and
embrace organizational change in an effective manner (Hoe, 2017). For instance, if changes are
taken place in Samsung, then employees can show resistance for the changes. So, change
management policies are implemented by companies after allocating skilled resources. To
manage and lead change in the company is not an easy task. There are four factors i.e.
transformational process, cost, sustainability and risk factors through which will describe
significance of change management in the company. Factors are defined below:
Transformational process and cost
The transformational process is implemented by the company when it wants to bring new
change or need a new life. To smooth running of a company's operations, changes always take
place in the organizational structure. To fulfil a projected goal of the business, this process is
highly essential. However, there are various factors i.e. internal and external factors that directly
affect the transformation process. For instance, employees show resistance in that state
management must implement specific strategies in order to resolve the issue (Hayes, 2018). If a
company does not involve a change management project in the business then the company will
have to pay additional costs. Every project of the company needs a specific budget so it can be a
constraint for the company. For example, if procurement managers of Samsung do not have any
idea which supplier can provide raw material at lower costs with good quality then they are
unable to reduce the cost of production. So, it is important for the company to conduct proper
training sessions then the company can develop a strong supplier network. Or in case if
procurement management will not adopt training sessions then they have to buy products at
higher costs that will ultimately lead to budgeting issues.
Sustainability and risk factors
Different companies have different missions and objectives. To sustain in the highly
intense rivalry of competitors, Samsung requires distinctive benefits. For once if a company
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becomes successful in declining risk factors that it will ultimately ensure sustainability. There are
several risk areas i.e. limitation of resources, inability of employees to perform required tasks,
developing moral hazards and degradation of an individual's ethics. However, these issues can be
resolved if the company hires the right employee for the right job then ultimately the company
will have lots of benefits in the business. It is essential for the company to cope up with the
changing patterns of buyer’s demands by updating individuals’ skills in an effective manner. The
change management program includes a training aspect too (Karaxha, 2020). If a company
ignores the change management program then it can take risky decisions through which
company can receive negative outcomes. In addition, a company's performance will not improve
and affect the company’s reputation. Thus, customers of Samsung can switch towards the
competitors and their market share will be increased. So, a change management program plays a
vital role in declining risk factors and achieving sustainability.
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REFERENCES
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