Samsung's Strategic Management: Company Analysis & Development Plan

This report delivers a comprehensive strategic analysis of Samsung, a South Korean IT giant, focusing on its electronic division. It acknowledges past setbacks like the Galaxy Note 7 crisis and legal battles with Apple, emphasizing the need for a robust 'make good' strategy. The analysis highlights Samsung's internal strengths, such as its diverse product portfolio and brand recognition, alongside weaknesses like product cannibalization and dependency on software. Opportunities include the rising demand for smartphones and the potential of VR/AR technology. Threats involve competition from Chinese phone makers and Apple. The report recommends focusing on CSR activities, creating shared values, enhancing social listening, improving supply chain efficiency, and fostering brand advocacy to regain market share and build a positive brand image. Desklib provides a platform for students to access this and other helpful study materials.

Running Head: Strategic Management
Samsung
Strategic Management
Company Analysis

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Executive Summary
Samsung, a South Korean brand is well known for its high functioning and high technology consumer
electronics product. In the past the company has suffered a major blow because of Galaxy note 7
fiasco and also because of frivolous lawsuit with Apple, the company has a lot to do as a part of its
make good strategy. It is advised that company should focus on three elements to gain the lost
market share and maintain its competitive edge in the highly competitive industry. The company
should create shared values for the nation and focus on building a community, this will help the
company in creating a positive brand image and increased brand awareness. Another aspect the
company should focus is on developing its CSR activities; the CSR activities should focus on
increasing digital literacy across the globe and make people aware of the growing trends and
benefits of the technology. Samsung is an innovative company; it should spend heavily on R&D
activities to come up with superior quality products, products which will resonate on a high note
with the customers, and the technology which can put its competitors to rest. Investment in mobile
technology, Virtual reality and augmented reality will ensure that the company is on a pedestal of
business sustainability. Apple is the biggest competitor of Samsung; it has to ensure that it keeps
strong eye on the marketing strategy of Apple and try to topple it in its marketing strategy through
organic and in organic marketing tools. Samsung as a part of its make good strategy has to create a
strong community of its customers who eventually become its brand advocate which facilitate the
sales process.

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Introduction
Samsung, A South Korean IT brand which has diverse interest in IT solutions, consumer goods,
smartphone and devices is one of the largest recognized names all across the globe. The company
was pivotal in leading the wave of android software around the world and responsible for creating
smartphones for people of all generations. The company has been doing exceptionally well since its
inception, the smartphones of the company are highly innovative, created after extensive study of
the market and are made to deliver high performance for its customers. However, in the last few
years, the image of the company is going down the hill, primarily because of the failure of Galaxy
Note 7. The phone received criticism from all over the world because of a number of fire catching
incident, and all this brought the company in the middle of hundreds of lawsuit and an image which
needs a serious makeover(Grant, 2016).

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Internal Strength
The company which has been in the electronics industry for over 70 years is a well-known brand
across the globe. It is highly advised that company should focus on leveraging on its strength to keep
a competitive edge in the market. Some of these strength which the company should focus as a part
of its right away strategy are, the company enjoys widest range of product portfolio including Mobile
phones, Laptop, Tablet, Home appliances, camera, Printer, memory cards and many more (Xu,
2015).The brand recognition which the company has gained in the last decade, according to industry
estimate the company’s brand recognition increased by 80% over last three years. Samsung is the
Market leader or challenger in most of the product categories, which is a positive sign for the
company. Supplier of LED panels to the world’s biggest mobile company Apple, the biggest
competitor of Samsung. The company has first mover’s advantage in the Asian market by setting up
a manufacturing plant in India to cater the local demands locally. Samsung is a leader in terms of
design and technology, the company was the first one to introduce dual screen phone, 65k TFT/LCD
color phone AND MANY OTHER INNOVATIONS (Shi, 2016).The company’s policy of rolling out an
advanced phone every year gives it a competitive edge. The company creates some of the best
marketing campaigns to lure its target audience. Brilliant customer service and support extended by
Samsung towards its customers are part of its core strength. Company’s products are not only
created for tech-savvy customers, but its products are targeted to people of all ages, good
customization makes the phones easier to use.
Samsung was the flag bearer of bring android software in most of the markets, at the time when
Nokia and Blackberry held maximum market share, the company with its highly customizable
software and open platform disrupted the mobile phone industry.
Internal Weakness
Samsung recently decided to launch a new smartphone every year, which leads to cannibalization of
its own products. Some of the good functioning phones are replaced with new phones thus not
letting the mass penetration of its products (Salah, 2015).Samsung’s high designed and tech savvy
laptops are not doing well as expected, the company is incurring huge losses in its laptop division
due to stiff competition from other brands. The company found itself in middle of lawsuit with

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world’s biggest company and the company’s rival, Apple, this has seriously damaged reputation of
the company and it has left the company in deep losses due to punitive damages(Hartley, 2017).
A lot of Chinese phones are offering more or less the same features as that of Samsung at relatively
low price, diluting the market share of the company. Galaxy note 7 fiasco which tarnished the image
of the company severely, the company incurred a loss of $ 3.1 billion with the rollout of the galaxy
note 7 and the sales dropped all time low by 16%, the company’s stock also suffered due to the
fiasco. Samsung being a hardware leader has a high dependency on its software application.
Opportunities
Opportunities for the companies are external to the organization and the company should take
proactive measures to leverage such opportunities. The appetite for smartphone is on a rise globally,
the world with a population of 7 Billion is seeing more and more users adapting to the smartphones.
The increasing trend of smartphones in the urban and the rural market is a positive sign for
smartphones makers(Chiang, 2015). It has been noticed that customers prefer companies which are
excellent corporate citizens, and put efforts to do good for the society by virtue of co-creation.
Samsung here can leverage this opportunity by doing multiple CSR activity, which will further help
the company in reviving its tarnished image, leading to increased buyer patronage. It has also been
seen that companies which shows strong commitment to socially responsible behaviour reduces the
risk of reputation damaging incident, Samsung here can put this notion to good use by putting a
morally high ground in front of its customers. The socially responsible action and sustainable
business practices are helpful in reducing the cost and also helps in retaining and attracting better
workforce, this is definitely a very big opportunity for Samsung by virtue of its socially responsible
behaviour.
Purchasing power parity of the people across the globe is on rise, which implies that people have
more disposable income and thus can easily buy a smartphone. The rise in income is positive news
for the mobile makers (Dermawan, 2014).The newly launched Samsung gear has been welcomed by
tech enthusiasts and brand loyalists; it has given impetus to the investment in technologies. VR & AR
will bring disruption in the market and the technology will find more and more use in different
industry, thus Samsung can leverage from it being a first mover in the field of Headgear using the VR
technology. Increasing demand of the users for customized product is a welcome sign for the
industry leaders and innovators.

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Threats
Threat of the Chinese phone makers to Samsung, the Chinese companies are rapidly penetrating the
global market based on its low pricing and advanced features in the smartphones category (Collins,
2016).Threat from the market leader Apple and its superior IOS platform is a major worry for
Samsung; the company is coming up with low priced phones for mass penetration in the Asian
market, this has a very serious dampening effect on the company, as the company is losing its
competitive edge to the Chinese smartphone makers. Inefficiency in the supply chain of Samsung is a
major worry; it gives impetus to more such issues in the near future.A number of retail chains are
selling products at a high discount because of increased commission from other smartphone makers,
definitely a threat for Samsung (Smith, 2017).Threats from new players entering into the intensive
competitive market is another major worry for Samsung, MI, Asus & Zen are rapidly capturing the
market sentiments which becomes a source of concern for the company.
Recommendation for Samsung
Focussing on CSR Activity
It has been observed that companies which falter at a global scale have to do a make good strategy
to attract the attention of its target audience. It is highly expected out of Samsung to focus
intensively on its CSR activities to get back the lost customers. Company can focus on the social
issues like education and poverty and work towards it. Certain more initiatives like spreading
awareness about the internet in the rural market, or increasing digital literacy will benefit the
company and the society immensely.
Creating Shared values
Creating shared values is a noble concept which says that companies should focus on the
development of the society, community and the country and not just focus on its own business
objectives. Samsung has to create a marketing campaign where it has to communicate to the people
how Samsung is benefiting the society, the message should be that the company is not focused on
increasing the wealth of the shareholders but it is in the market to do good for the society.

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Increased social Listening
In the present day scenario, it is most important for the brands to have a good presence on the
social media. Social media has to be used not only to increase the brand awareness but to also listen
to what people are saying about the brand. The company needs serious improvement in its digital
marketing strategy and should focus on building a community on Social media, it has to actively
listen to whatever its customers are talking about the product, acknowledge their concerns and
address their grievances. It should also ask the customers about what kind of product they would
want the company to create, it will increase the engagement and the conversation metrics for
Samsung which eventually will help the company to increase its market share.
Efficiency in the Supply chain network
Galaxy note 7 fiasco was an eye opener for Samsung, one of the many suppliers which are the part
of supply chain network of Samsung shipped faulty batteries, which ultimately resulted in the
phones catching fire. The company has to ensure that it maintain a high quality check process before
shipping out any product and at the same time do a ref check on the vendors. The company has to
ensure that the vendors empaneled with them have a good experience and not a bad reputation of
making faulty products.
Brand Advocacy
In online marketing Brand advocate is a person who talks favourably about the brand or the product.
He spread positive word of mouth about the company on his social media, to his peers, colleagues
and his family members which help in increasing the brand awareness which results in sales. Thus
Samsung as a brand has to focus on creating a community of such brand advocates, nurture them,
engage with them on a higher note and use them for organic promotion. These people or the
influencers will help the brand to regain the lost market share and also assist in brand building.

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References
Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Shi, Y. (2016). SWOT Analysis of Purchasing Markets in the Region of Asia. Business and Economic
Research, 6(1), 403-430.
Hartley, S. (2017). The case of the exploding Samsung phones. Busidate, 25(1), 9.
Chiang, L. C. (2015). A Study on the Application and Niche Market of Laminating Technology in Touch
Panel Industry.
Dermawan, A. (2014). A Study On the Entry Strategy of A Multinational Company Into Indonesia: The
Case of Samsung Electronics Indonesia.
Collins, B. (2016). Big data and health economics: strengths, weaknesses, opportunities and
threats. Pharmacoeconomics, 34(2), 101-106.
Smith, A. D. (2017). Integrating Intellectual Property and the Smartphone Patent Wars: Case Study of
Conflicts of Supplier Partnering.(pp. 33-36).
Xu, Y. (2015, July). Swot Analysis of Domestic Market of Wearable Sports Equipment Based on
Internet of Things Technology. In 2015 International Conference on Artificial Intelligence and
Industrial Engineering. Atlantis Press.
Salah, K. (2015, December). A SWOT analysis of TSV: Strengths, weaknesses, opportunities, and
threats. In Microelectronics (ICM), 2015 27th International Conference on(pp. 214-217). IEEE.