Strategic Plan: Recommendations for Samsung's UK Business Growth

This report presents a strategic plan for Samsung, a multinational conglomerate operating globally, with a specific focus on improving its business prospects in the UK market. The report begins by outlining the relationships between organizational, corporate, business, and operational strategies. It then utilizes the Red Ocean strategy and VRIO analysis to assess Samsung's competitive landscape, emphasizing differentiation through branding, pricing, and product offerings. Critical success factors are identified, including pricing strategies, product extension, and the need to withdraw underperforming products. The report recommends a strategic option centered on competitive strategies, particularly offering better value-for-money products in the mid-range smartphone segment. A force field analysis is employed to identify change factors, such as restructuring the R&D team, improving product design, and enhancing camera quality, while also addressing forces against change. Finally, the report details implementation action plans and potential risks associated with the proposed strategies, offering a comprehensive overview of Samsung's strategic options for the UK market.

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Strategic Plan: Samsung

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Table of Contents
Introduction......................................................................................................................................3
1. The relationship between the organization’s, corporate, business and operational strategies.....3
2. Strategic model............................................................................................................................4
2.1 Red Ocean Strategy...............................................................................................................4
2.2 VRIO analysis........................................................................................................................5
3. Critical success factors................................................................................................................6
5. Identifying change factors by complementing a force field analysis for Samsung.....................8
6. Identifying the change agents and structural changes for implementing the plan.....................11
7. Implementation action plan for introducing the changes..........................................................11
8. The potential risks during the implementation..........................................................................12
Conclusion.....................................................................................................................................12
Reference List................................................................................................................................14

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Introduction
Samsung is a multinational firm that is headquartered in Seoul, South Korea. It is a conglomerate
company having diverse interest in products and services such as automotive, chemicals,
electronics, telecommunication, home appliance, medical equipment and apparel (Samsung,
2019). Samsung also offer service that includes communications technology, medical, financial
services, construction, hospitality, retail and advertising. Samsung serves globally including the
UK market. The objective of this paper is to give strategic recommendation to Samsung to
improve its business prospect in the UK market.
1. The relationship between the organization’s, corporate, business and operational
strategies
Strategy can be defined as long term planning in order to achieve certain objectives (Schrader,
Freimann and Seuring, 2012). Organizations formulate strategies and implement them by
administering all essential steps to achieve the desire objectives.
Figure 1 Types of organizational strategy
(Source: As created by Author)
Corporate strategy is a broader plan that involves overview of the business a company would like
to be (Brewster, 2017). For example, Samsung as a conglomerate firm is engaged in diverse
business as delineated in the earlier section. Corporate strategy also tries to bring value to the
Corporate Strategy Business Strategy
 Determination in the types of business a
company would like to be
 Bringing value to subsidiary companies
 The mechanism or planning
to combat with rivals

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subsidiary companies. On the other hand, business strategy is quite specific. Business strategy is
tailor made to beat the competition. Once the corporate and business strategy is formulated then,
operational strategies are implemented. Operational strategies are concerned with numerous
aspects such as manufacturing, planning, research and development and employment. The key
elements of operation strategy are procurement, human resource inventory management, process
design, the location of business, quality management and product/service design (Gunasekaran,
and Ngai, 2012). Samsung procures resource from manifold suppliers for its diverse products,
Similarly, Samsung hires and recruits human resource from diverse background and countries.
From the above discourse it is clear that, operational strategies are inherently depends upon
corporate and business strategy.
2. Strategic model
The strategic models to be used in this paper are red ocean strategy and VRIO analysis.
2.1 Red Ocean Strategy
Red ocean strategy elucidates about the all the firm that are operating in current state of time. In
Red Ocean, the existing competes against one another to build competitive advantage (Blue
Ocean, 2019). Furthermore, in Red Ocean competition is severe that leads to minimal profit or
reduction in sales volume. In the current context it is clear that, Samsung operates in known
market space in the UK with rival companies such as LG, Hitachi, Apple, One Plus etc.
Figure 2: Red Ocean vs Blue Ocean Strategy
(Source: Blue Ocean 2019)

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The results of Red Ocean strategy is Zero sum game (Aithal, 2016). It means that the gain of
one firm is equal to the loss of another. Samsung is operating the Red Ocean for quite a long
time in the global market. As Samsung is in the Red Ocean, its main focus is to exploit the
existing demand for its products and differentiate itself from the competitors. In a developed
market like the UK, Samsung keenly focuses in the differentiation strategy.
Differentiation Strategy
Differentiation strategy is used to distinguish a companies’ product or service from the
competition (Valipour, Birjandi and Honarbakhsh, 2012). Samsung uses a number of
differentiation strategies such as branding, packaging, pricing, product offering and innovation.
Branding is all about creating a distinct image of the company through numerous ways such as
creating a unique business logo, advertisement, communication strategy, public relations etc.
Samsung’s branding strategy sharply focuses on elements such as innovation. Samsung is
pioneer in display technology that it often employs in its Smartphone. Samsung also brought
innovation in television market through the implementation of curved displays. Samsung choose
to employ different pricing strategies in its Smartphone division. For its high end phones,
Samsung sets Price Skimming pricing strategies. By applying price skimming strategy, Samsung
initially sets the price and then reduces after sometime (Valipour, Birjandi and Honarbakhsh,
2012). Furthermore, in order to maximize sales, Samsung also implements penetrative pricing. In
terms of product offering, Samsung offers multiple products in the consumer electronics division
such as mobile phone, television, laptop, camera, refrigerator and air conditioning.
2.2 VRIO analysis
The VRIO framework is based on four key elements that include value, rarity, limitability and
organization (Cardeal and Antonio, 2012). Value refers to the way a firm can exploit an
opportunity in the market or encounter a threat coming from competition. As a large
organization, Samsung has stepped into many opportunities by taking advantage of technological
change. The UK is one of the most technologically advanced countries. Similarly, Samsung has
also taken the advantage to cash in the robust economic structure of UK. However, Samsung has
also survived many scare from its competition such as Apple. Samsung has been defeated by
Apple in number of times in the sales of Smartphone. As far rarity is concerned, the products and
service cannot be deemed as rare as other competitors are also in the similar line of business

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(Cardeal and Antonio, 2012). However, many companies still choose to purchase display
technology from Samsung. Apple is one of the main buyer Samsung display panels for the
formers laptop and mobile segment. However the sales of display panel have declined in recent
time owing to lower sales of Apple’s Smartphone. In terms of the question of imitability,
Samsung holds number of patents for its various consumer electronics product. Therefore,
imitating Samsung’s technology and design is rather difficult for the competitors. This gives
Samsung a competitive advantage.
Figure 3 VRIO framework
(Source: Brem, Maier and Wimschneider, 2016)
The question of organization pertains to the way; a firm chooses to develop compensation policy,
reporting mechanism and organizational structure. Samsung quarterly and annually releases its
financial statement.
Recommending Strategic Options for Samsung
 Application of price skimming for gaining competitive supremacy over the rival brands Modification of the product features and offerings as per the changing needs and
demands of the consumer Offering products with better value for money
3. Critical success factors
In order to sustain competitive advantage in the long run, Samsung needs to review its marketing
strategies and prospect of product development. In the UK market, Samsung has faced declines

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in revenue and profits. From the above analysis, it is clear that Samsung operates in the Red
Ocean.
Pricing
After conduction of price skimming it could be stated that, Samsung needs to reduce the price of
its existing product or more specifically, they may go for penetrative pricing. Competitors such
as One Plus is offering high end device at lower price, thus giving customers tremendous value
for money.
Product extension
By far, Samsung’s main focus is in television and Smartphone. The preferences of the consumers
keep changing from time to time. While the stronghold of the television market is intact, the
company is facing stiff competition in the smart phone category from companies such as Oppo,
Vivo and One Plus. Focusing on product extension will allow the brand to maintain the overall
stronghold in the competitive market. Likewise, the market for laptop is also anticipated to grow.
Hence, Samsung needs to develop strategies to produce and sell laptop that offers more value
than existing competitors such as Dell, Microsoft and Apple.
Withdraw least sold products
It is notable that the smart phone industry has become really competitive these days. The
company needs to identify the products which are consistently reflecting upon consumer
complaints due to the defective attributes. These products might eat up the prominence of
established products. Products which are disliked by majority of the consumers should be
replaced with the ones that attract consumer interest, thus offering better value for the money
invested by consumers. In this context, Samsung needs to identify the products that are least sold
and preferred. This will not only help in reducing cost but also aid the development of other
products that requires higher capital.
4. Recommending and justifying a strategic option with accompanied business objectives
Samsung can resurrect its market dominance through modification of its strategic plan.
Currently, the market for Smartphone is on the decline. This may be because of number of

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reasons such as existence of large number of companies offering similar product at similar price
leading to consumer confusion. The reduction in Smartphone could be also because of lower
supply or manufacturing of Smartphone. In this current context, Samsung needs to focus in
strategic option such as formation of competitive strategies. In the Smartphone category,
Samsung needs to offer better value for money product in the mid-range segment. This is one
area that Samsung could not able to cash in for long time. Furthermore, it is justified by the fact
that companies such as Oppo, Honor, Xiaomi has able to gain massive benefit by focusing in the
mid-range segment instead of solely focusing in the high end premium segment that eventually is
not sales volume generator. By developing this competitive strategy following the footsteps of its
rival, Samsung can take the opportunity to offer better value for money phones.
The accompanying business objectives are as follows:
 To identify products with least consumer appeal
 To determine the unique selling point of competitor brands through market skimming
 To offer high end products at minimal price
5. Identifying change factors by complementing a force field analysis for Samsung
Force field analysis is conducted to aid the decision-making process in an organization for
bringing transformation in the current status quo (Shirey, 2013). However, change is essential for
the expansion of business and to survive the stiff competition. The magnitude of these factors is
jotted and scale ranges from one to five (Swanson, and Creed, 2014).
From the studies, it is evident that Samsung is losing its customer base at a tremendous pace to
its competitors due to the high prices of their products. The competitors such as Oppo, Vivo, and
Redmi are offering many specifications that too at relatively lower prices than Samsung. Thereby
the mobile phone users are shifting their loyalty to the new brands (Kruglanski et al., 2012).
Consequently, the goal identified for bringing the change in the organization to revive the sales
figure and recapture the market is to increase the features of the smartphone and reduce the price.
The focus of this force field analysis will be to provide better value for money to the costumes
(Burnes and Cooke, 2013).
Forces for change that will drive Samsung to revive their profits are elucidated below:

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 Restructuring the research and development team of the company. More technological
features had to be developed. The outdated aspects should be identified and removed
from the specifications. Moreover, the prevailing technicalities should be impoverished
(Jung, 2014).
 The design of all the handsets is quite similar. The design and outlay of the models
should be unique and different based on the pricing variations (Jung, 2014).
 Camera quality is one of the most attractive features of smartphones these days. The
quality of the inbuilt camera in Samsung smartphones are not up to those handsets
offered by their competitors. Therefore, the camera pixels should be improved (Jung,
2014).
Forces against the change at Samsung are highlighted below:
 When the prices of the smartphone will drop, it will lose the customers who belong to
high society. The company will lose the Veblen effect over their products. Veblen effect
is the psychological phenomenon where the consumer purchase higher priced goods even
if similar product is available at lower price. Veblen goods increase the social desirability
biasness among the individuals that maximize their self-esteem and social status (Moon
et al., 2013).
 Generally, the common people may perceive lowering of price as an indicator of
lowering of quality of the product. Owing to price-quality heuristic, it is a general
tendency to rate the quality of products based on their price (Jung, 2014).
 The old age customers who are not well adapted to recent technological aspects will find
it difficult to operate such a modified version (Moon et al., 2013).

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Figure 4: Evaluation of factors for change and factors against change on the scale:
Total of factors for change = 4+3+4 = 11
Total of factors against change = 4+2+3 = 9
Better Value
for Money
Restructuring the research and
development team of the company
Rating: 4/5
The camera pixels should be improved
Rating: 4/5
Design and outlay of the
models should be unique
Rating: 3/5
Consumer perception
error Rating: 2/5
Old age customers will find it
difficult in operating Rating: 3/5
Loss of Veblen consumers Rating: 4/5

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6. Identifying the change agents and structural changes for implementing the plan
As the statistics revealed that the market share of the Samsung smartphones is declining at a
tremendous pace, to recapture the customer base, the goal recognized in the previous section was
to offer better value for money to the clients. The objective of the brand is to deliver a higher
level of satisfaction to the customers at cheaper rates, as done by their competitors. The change
agents for bringing this modification include structural modifications in their technical features
(Payne, 2013). The design of the models shall be transformed and each one of them should be
unique as compared to the other one offered by the same brand (Burnes, 2012).
The brand shall introduce cutting-edge technology in capturing the scenario through the eyes of
the camera. Camera pixels and quality of pictures offered by the other brands have become their
USP. In this age of Selfies, Samsung is lagging behind due to the lower quality front-end camera
(Moon et al., 2013). The competitors like Vivo have positioned their product as camera phones.
Samsung needs to modify according to the changing trends in the consumer market. To reduce
the prices of smartphones and yet increase the number of specifications, the research and
development team has to develop a certain innovative technique to do so (Payne, 2013).
7. Implementation action plan for introducing the changes
To bring forth the changes in the organization, the systematic plan has to be made. Moreover, the
brand has to implement revolutionary changes to bring down the costs of the products, which
will require lots of experimentation and time (Dayani, and Gelbard, 2015).
Week
1-3
Week
4-6
Week
5-8
Week
9-10
Week
11-14
Week
15-18
Week
19-21
Planning
Research
Data
Collection
Brainstorming
Designing
prototype
Testing

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Launching
Figure 5: Gantt chart to illustrate the action plan for Samsung
(Source: Author’s Creation)
The project will start from the first week of July 2019 and extend until December 2019. The
project requires a lot of brainstorming sessions between the executives and the research teams. It
also requires feedback and survey data collected from the customers to comprehend the gaps in
the existing products.
8. The potential risks during the implementation
Any changes and alterations in the business have certain risks associated with it. These risks had
to be identified to plan strategies to minimize such losses. Samsung is a well-established brand
with a loyal customer base and brand image (Swanson, and Creed, 2014). To bring the changes
in their model, a large amount of modification is required. It involves high financial risks
(Dayani, and Gelbard, 2015).
There is a scope that before the brand introduces the change, certain other companies may launch
the same in the market. This will create the problem of copyright and other legal patent problem
for Samsung. Moreover, in this drastically changing digital world, nothing is constant. Even if
the brand introduces changes, it can be copied and the rivals may launch it at a lower price.
Furthermore, the old generation customers may reject the technically advanced product due to its
complexities (Swanson, and Creed, 2014).
Conclusion
From the above analysis, it can be concluded that Samsung needs to offer better value for money
products for gaining supremacy in the competitive market. Application of price skimming and
modification of product features are also chosen as strategic options after successful
implementation of VRIO and Red Ocean Strategy. After recommending the strategic options, a
force field analysis is carried out for analyzing the strategic option by determining forces for and