Business Strategy Project: An In-Depth Analysis of Samsung's Strategy

This report provides a comprehensive analysis of Samsung's business strategy. It begins with an executive summary outlining the key findings and objectives. The introduction sets the stage by defining business strategy and introducing Samsung as a multinational electronics company. The report then delves into the impact of macro and micro environments on Samsung, utilizing PESTEL analysis to evaluate political, economic, social, technological, environmental, and legal factors. It assesses Samsung's internal environment, including its capabilities and stakeholders. The report employs various strategic models like McKinsey 7S, VRIO, value chain analysis, SWOT, and Porter's five forces to evaluate Samsung's competitive position. Furthermore, it explores potential strategic directions using frameworks such as Ansoff matrix, Porter's generic strategies, Bowman's strategy clock, and TOWS framework, culminating in a strategic management plan. The conclusion summarizes the key insights and recommendations for Samsung's future strategies. Finally, the report includes a list of references.

Submission Front Sheet
Unit Title and Number: Business Strategy (Unit 32)
Project title Business Strategy Project
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I certify that the work submitted for this assignment is my own. Where the work of others has been used to
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understood the Plagiarism and Collusion section provided with the assignment brief and understood the
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Signature: Date: September 2020
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Business strategy September 2020
TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................3
Effect of macro and micro environment on Samsung......................................................................4
Internal environment of Samsung with its capabilities....................................................................7
McKinsey 7s Model.....................................................................................................................8
VRIO model...............................................................................................................................10
Value chain analysis.................................................................................................................11
SWOT........................................................................................................................................13
Porter’s five forces model.........................................................................................................14
Potential Strategic Directions and Recommendation....................................................................17
Theories, models, concepts and strategic planning.......................................................................17
Ansoff matrix............................................................................................................................17
Porter’s generic strategies........................................................................................................18
Bowman’s strategy clock..........................................................................................................19
TOWS framework.....................................................................................................................20
Strategic management plan......................................................................................................21
CONCLUSION..............................................................................................................................22
REFERENCES..............................................................................................................................23
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Business strategy September 2020
EXECUTIVE SUMMARY
The main purpose of the investigation is to analyse the business strategy of Samsung. It is
a South Korean company of multinational electronic consumer goods, and the registered office is
in Seoul, South Korea. Samsung objective is to modify the base of cost by taking the benefits of
new technologies digitally. Samsung is concentrated on the determination of the value of the
environment. The entity looks that correct factors of climate are maintained. Samsung financial
resources are highly valuable because these supports in investing in external change that take
place (Calabrese, 2018). The loyalty of an organization helps the management with operations
and attains competitive positions over players.
Impact of Macro and Micro environment on Samsung’s performance and its development
of organizational strategies has been analysed in this report. With the impact of internal
organizational environment on company's performance has also been evaluated by efficiently
evaluating all the required criteria. Samsung customer’s perception is large as of the cost price of
electronic goods products. It is suggested to the firm to focus on pricing of its services, improve
service line and focus on developing customer service tactics for delivering remarkable
experience to the target market. Implementation of Porter five forces has also been done in this
report and with that effectiveness and implementation of theories and concepts is interpretation
for strategic directions.
Evaluation of Samsung's business strategy is done in this report with the implementation
of theoretical models through which future working strategies can be developed. With that it is
also recommended that Samsung has to increase its involvement in providing high end smart
gadgets through which it can make sure that organization is able to attract new and trendy crowd
towards the organization and also maintaining loyalty of existing customers.
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Business strategy September 2020
INTRODUCTION
Business strategy is basically a way of companies or organization for running their
different operations in effective manner. Currently top-level management within most companies
has focused on making their business strategies very effective to gain long term profit in market
place. Currently those businesses are gaining huge competitive advantage in market place which
has excellent and well-developed strategies of business. This report discusses business strategy
of Samsung. Basically, Samsung is a multinational electronic gadget manufacturing company,
headquartered in Seoul, South Korea. This organisation was established in year 1938 (82 years
ago) (Samsung. 2021). The company mainly knows for its smart phones, because the brand is
highly successful in gaining large customer base in the international smart phone industry
(Gnanakumar, 2017). However, Samsung serves many other products as well, like; consumer
electronics, home appliances, TVs, refrigerator etc. The company’s unique selling proposition is
that Samsung always use competitive bases pricing strategy to sell its products and services in
market place in the high quantity (Park and Mithas, 2020). The main mission of company is to
increases its market share by 10%, and the vision of company is to achieve a large base of loyal
customers by providing quality products.
Currently this company has very large market share in the international smart phone
industry. It generally provides all ranges of products, like; budget products and premium
products etc. The report discusses different factors of Samsung’s macro environment by using
PETSLE analysis model. Internal environment and capabilities of this company also has been
included in this report. The porter’s five forces model is used here to analyse key competitive
forces. At the end, an effective strategic management plan also has been created in this report for
the Samsung. This strategic management plan includes some effective business strategies which
can positively affect to Samsung in market place.
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Business strategy September 2020
Effect of macro and micro environment on Samsung
Macro environment or external business factors have a direct impact on the performance
and decisions of organization. Thus organization uses various models or frameworks such as
PESTEL to analyse the impact of these elements on organizational performance (Iamratanakul,
2018). The influence of theses macro elements on Samsung is as follows.
Political: The entity performed generated good growth and revenues in the U.K., South
Korea, Europe and Asia. Company performance was offset by a reduction in profit margin in
non-Asian market. Currently decisions are taken as per global political stability and Korea
relation with other nations. Regulation of data sharing and taxation policies of South Korea are
being followed. In global branches as per different nations political conditions the decision are
taken. Despite the issues, Samsung maintained its decision making as per stability of South
Korea political conditions (Lestari, S.D. et al. 2020).
Economic: Samsung objective is to modify the base of cost by taking the benefits of new
technologies digitally. Currently South Koran economic conditions are stable and company is
attaining better opportunity. Global economic factors are also good and it is also allowing
Samsung to have adequate growth and expansion. South Korea GDP is 1.65 trillion U.S. dollars
and it is also supporting entity to have easy access to resources (Statista, 2020).
Social: The change in preferences and lifestyle of the customer directly influences the
company's financial health. The demand growth for the internet has been beneficial for both
work aim and entertainment. The difference in the marketer’s educational background and target
market make obstacles to significant information flow. For example, Samsung introduce new
phones and TV according to need of customers, such as, S21 5G according to future demand of
phone market.
Technological: The entity has leverage over its players regarding the infrastructure and
assets but is more emphasized on optimum assets with sustained leader by maintaining the smart
capital infrastructure partnership and have 5g market lead. Use of new tools is being considered
by entity through having focus on different technological resources in global market (Liu, et al.
2019).
Environmental: Samsung realizes the reality that accesses to the future digitally is an
opportunity that must be distributed equally so that the most vulnerable are not left behind. To
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Business strategy September 2020
decline the footprint, the firm has decided to concentrate on switching to the renewable energy
source for vital supply.
Legal: Samsung focuses on the legal aspects and policies regarding environmental
protection and other actions are necessary. Avoidance of legal policies are creating problems and
impacting the working measures. As the firm is incorporated and formed in Korea so while
having operations in India the income tax department regulations should be followed else issues
can be faced.
External Factors Internal Factors Opportunity or
Threat
Reason for being
opportunity or
threat
Political
 Political
instability of
UK is making
changes in
legal
legislations
due to which
Samsung also
has to make
changes in its
working
strategy.
 Events of
Brexit, is one
example in
which
company's
geographic
reach was
affected.
Expenditures have
increased because
new development
requires high
investments which
will make negative
impact on
Samsung's economic
growth.
Threat
It has affected
Samsung's
market share in
negative way.
Brexit's uncertainty
has increased the
expenditures for
Samsung, because
the company now
may have to pay
taxes at areas
which were freely
available before
events of Brexit
(Robinson and
Choi, 2020).
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Business strategy September 2020
Economical
Increasing
unemployment
rates of UK has
forced company
to reduce its
product pricing.
Samsung's sales are
decreased because
buyers can't afford
mobile phones
(Kastrenakes, 2019).
This happens
because customers
are not able to
purchase the
organizational
products due to
which sales are
affected.
Threat
Samsung has to
face decrement in
product sales.
Samsung has to
decrease the
pricing of their
products and
should also provide
affordable products
to their customers,
so they will be able
to regain its
market.
Social
Increasing
popularity of
social media
in new
generation.
online
retailing of
product
involvement
in one stop
shopping
Samsung has to
upgrade its products
such that they are
able to fulfil
customer's
requirements.
Opportunities
Samsung in
enhancing its
sales and
reaching out vast
range of
customers (Wulff
and et.al, 2019).
During COVID-
19 company's
sales and
operations were
affected due to
which goal
achievement
probability was
affected.
Changing attitude
of people towards
technology,
company is making
changes in their
products and also
changing its
services based on
customer's
changing
requirements.
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Business strategy September 2020
Technological
Customers are
showing high
interest in buying
technological
advanced
products at
affordable
pricing.
Company has to
develop high quality
products at
affordable pricing.
Opportunities
Samsung can use
this opportunity
for attracting
wide range of
customers toward
them. With that
company must
also tend to
integrate
technological
advancements
like AI through
which it can
ensure that
customers are
getting best in
class products
through which
their loyalty can
be increased for
Samsung.
Reason for this is
the availability of
high quality
products at an
affordable pricing.
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Business strategy September 2020
Environmental
Government laws
regarding
environment, has
to be followed by
Samsung
otherwise it has
to pay penalties
which will affect
economic growth.
 To reduce
carbon
footprints.
 To make
positive image
of company in
front of buyers
and government.
Threat
Increases the
organizational
expenditures.
Government as
well customer
closely monitors
company's
behaviour
regarding
environment. This
also affect
company's sales.
Legal
Copyright law
implemented by
government.
Company has to
face penalties by
government is
violation of law
accrues.
Both
Samsung have to
fully develop
their own
technology,
which is a time-
consuming
process
Laws and
regulations issued
by government and
it is Samsung's
responsibility to
follow those rules.
Internal environment of Samsung with its capabilities
Internal environment- It consists of internal factors which affect operations in
organization, like management, work culture, operational management and many other factors
which have an impact on Samsung's performance (Montenegro and Barragán, 2018). These
factors are used for deciding the operational strategies, so Samsung can improve their
performance on ground level and easily achieve their organizational goals.
Stakeholder
Stakeholders of Samsung can be an individual or a group of people who are directly or
indirectly affected by the organizational activities (Sia, Soh, and Weill, 2016). In order to
develop efficient organizational strategies stake holders has to be categorized on the basis of
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Business strategy September 2020
their power and interest in company. Skate holders are divided into four different categories
which are as following.
Stakeholder of organization can be an individual or a group of people, who are affected
by the decisions and activities happening in organization. Stakeholders can be grouped into four
different categories based on their interest and power which they are having in organization.
Having high powers with high interest in organization
Higher authorities in organization like board of directors, are involved in this section
because they have high interest in organizational operations and also having high powers.
High power with low interest in organization
Investors are considered in this because they are having high powers to take decisions
within the organization but are less interested in activities happening within organization.
Low power with high interest in organization
Customers can be counted in this category, who are having low powers to take decisions
but are highly interested in activities happening within organization.
Low power with low interest in organization
Non targeted organizational customers can be counted in this category because they are
not aware of organizational working and at the same time are less interested in company.
McKinsey 7s Model
It is a tool which is used to analyse organizational design of the company for increasing
its effectiveness by interacting 7s of organization. Following are 7s of organization.
Strategy
Samsung provide products on the basis market readership such that customers can get
efficient and effective alternative for buying products. Apple, the strong rival of Samsung, could
be described as the business from which Samsung mostly recreates. In addition, Samsung's
growth strategy is focused on the routine screening as well as utilisation of consumer prospects
including new device creation (Gökdeniz, Kartal & Kömürcü, 2017)). The strategy of Samsung
required delegating duties downward.
Structure
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Business strategy September 2020
Samsung is integrate divisional structure and the firm is categorized in; customer
electronic, device solution & Mobile communication and IT for effective communication with
customers (Dudovskiy J., 2017). Nonetheless, the organisational structure of Samsung can shift
in the near term in Matrix or horizontal structure to accomplish the objectives.
Systems
It uses technological advancements for smooth working among departmental activities.
This involve the recruiting and hiring system for workers, the staff development as well as
induction system, the distribution processes for transactions, the system administration for
customer relationships, the business analytics system, the information administration system as
well as others. The system required to develop new guidance and policies for employees to
segment market for successful product development procedure.
Style
Style is the way in which organizational activities are decided thus Samsung uses task
culture for high performance. The firm is integrating participative leadership/management style
that enables the firm to enhance employee motivation (Giachetti & Marchi, 2017). Apart from
this, functional team is the strength of the firm to complete a task.
Staff
Samsung provide efficient training to their employees before implementation of any new
upgrade, so their working can be improved. The main focus of the firm is to hire creative,
dedicated, talented, dynamic, and experience staff members in the firm that allows the firm to
utilize their best talents in the firm’s creativity and innovation. However, it is suggested that HR
should establish systematic process to identify gap in required capacities and capabilities.
Skills
Samsung is able to provide wide variety of electronic items to their customers and with
highly trained employees company is capable for achieving its objectives. It is essential for the
firm to focus on IT staff skill set to build up e-commerce services through online stores. The
skills of the workforce are generated particularly for the job requirements and roles at Samsung
Group to provide competitive edge.
Shared Values
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Business strategy September 2020
The main objective of Samsung is to become world's largest smartphone manufacturer.
The core value of Samsung include; creativity, honesty, quality, transparency, accountability,
heritage and trust. Senior management members in Samsung Group required to promote the
significance of low-end marketplace, consumer’s centric approach will be spread across the
organization.
VRIO model
It is framework which is used by Samsung to identify their commutativity potentials, by
analysing value of their product, rarity, immutability cost and organisable characteristics.
Resource Capabilities Valuable Rare Imitable Organized
Semi-Conductor Processing
Technology
yes no yes yes
Quality of product yes no yes yes
Brand value yes yes no yes
Valuable: It shows that Samsung financial resources are highly valuable because these
supports in investing in external change that take place. This also aids the company in combating
the threats externally.
Rare: Samsung distributed network is rare because the players need lots of time and
investment to come up with an effective network of distribution than that of the chosen firm.
They are further possessed by lesser organizations in the industry. Company is having rare
supply chain network that allow having easy distribution of goods and services. Patents are also
rare as they are not easily present and are also not possessed by the players. Unique phone
features are also considered as rare factor in the product line of Samsung. This helps the
company to consider them without competitor’s interference (Yucel, 2018).
Imitable: The local services are not costly that to imitable. These are acquired by
rivalries also if they invest a vital amount in R&D. They further do not need long experience
years. Thus, the local services by Samsung need it with a temporary competitive edge that the
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