Innovation Audit of Samsung UK: A Case Study of Market Analysis

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INTERNAL AND EXTERNAL MARKET ANALYSIS
(A case study of Samsung, UK)
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CONDUCTING INNOVATION AUDIT
Executive Summary
In the present era of globalization, the determination of internal and external market environment
is an important aspect to analyse. In order to analyze the present work culture of Samsung in the
UK, This report has been produced with an innovation audit for Samsung. From the discussion, it
can be found that a wide range of products and the huge availability of loyal customer base are
the most prominent strengths of Samsung. In regards to its weakness, the increasing number of
competitors and worldwide economic crisis are the most reliable conditions. In the later section
of the project, a PESTLE analysis has been considered to determine the external market stability
of Samsung. From that discussion, it can be found the Samsung designs its products mainly
according to the needs and demands of the Korean customers. This is why the company seems to
face a lack of product interest in European and Asian countries.
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Table of Contents
Introduction......................................................................................................................................4
1. The Organization and Industry Overview...................................................................................5
1.1 Thee organization and its innovation history.........................................................................5
1.1.1 Industry overview...........................................................................................................5
1.1.2 Organization’s innovation history..................................................................................5
1.2 The Organization’s Existing Innovation Performance and Capabilities...............................6
1.2.1 Innovation audit..............................................................................................................6
1.2.2 SWOT Analysis..............................................................................................................7
1.2.3 4Ps Analysis....................................................................................................................8
1.2.4 PESTLE Analysis...........................................................................................................8
1.2.5 Existing Innovation Performance...................................................................................9
1.2.6 Capabilities...................................................................................................................10
1.3 The Industry in 2019 and Beyond.......................................................................................10
Conclusion.....................................................................................................................................12
References......................................................................................................................................13
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Introduction
Organizational environment is regarded as the composed forces that collectively affect the
organization's performance, profitability and market persistence. This report will guide the
readers to understand the macro and micro environmental factors and aspects of Samsung in the
UK market. The industry overview of the company and its present organizational strategies will
shade lights on past and present organizational strategies. For analyzing the future strategies, a
performance edit has been conducted in the last section of this report. This will guide the readers
to understand the future strategies that can be applied in Samsung to strengthen their grip in the
UK market. A short overview of the entire project has been shared in the conclusion.
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1. The Organization and Industry Overview
1.1 Thee organization and its innovation history
1.1.1 Industry overview
The electronics industry is one of the fastest growing industries and the second most popular
industries in the UK after finance and banking. Electronic industry has shown considerable
growth in the market since the past many years. Until 2016, the industry provided 1 million jobs
to the aspirants and £98bn annual revenue turnover (Abbott 2017). According to a survey
conducted in ten esteemed colleges in the UK, it has been noticed that around 25% of the
students opt for electronic and electrical engineering as their preferred choice of study. 90% of
the electronic devices that are exported worldwide have basic electronic gadgets designed and
manufactured in the UK. Therefore, the UK is a great source of income for electronic services
and electrical gadgets across the globe (Appiah et al. 2019).
1.1.2 Organization’s innovation history
Samsung considers people as their pioneer asset not only in their present organizational objective
but from the very primitive year it got established in 1969. Back in that year, Korean customers
were considered as the target audience for the company. Samsung developed its first refrigerator
and shared a huge market practice in Korea (Birkin et al. 2017). Gradually with the increment of
share market, the company manufactures microwaves, mini refrigerators and chimneys. The
home appliances of Samsung started to share off from 2005 when the automated regulatory
washing machine got introduced in the US and provided a huge competition to all other
electronic appliance designing and manufacturing company. This significant feature was not yet
inaugurated by any of the companies and Samsung sold these washing machines in reasonable
charges as compared to any other competitors in the target market. As opined by Borland et al.
(2019, this strategy attracted a large number of customers, and gradually, the company started to
increase its market share in global platforms. Back in 2005, the company earned annual revenue
of $470.2B. This made the company sharing a large number of resources in other target markets
as well. The next target market of Samsung was the UK and other developed nations of Europe.
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1.2 The Organization’s Existing Innovation Performance and Capabilities
1.2.1 Innovation audit
Stage 1: Setting stages: In the era of the fourth industrial revolution, Samsung aims to share
standard leadership and ever created focus of the value-added services and future growth (Carroll
and Jarvis 2018).
Stage 2: Anonymous survey: The sustainable growth of the company aims to gather balanced
development for the economic, technical and environmental stability of Korea.
Stage 3: Detailed interview: Improved communication with the internal stakeholders increases
internal environmental stability of Samsung. Hiring skilled and experienced labours by analysing
their abilities in several steps, Samsung maintains its consistency in the target market (Choi
2016).
Stage 4: Executive briefing: Consumer electronics, mobile communication and device solution
are the major job roles for the customer care executives of Samsung. By this strategy, the
company provide deliberate post-purchase services to its customers and increases their brand
image.
Step 5: Rapid adoption: As the newcomers in the company are provided standardized training,
they are able to adapt the newest changes that are supposed to be brought in the company
(Curwen 2019).
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Figure 1: Steps of an Innovation audit
(Source: Dawley et al. 2019)
1.2.2 SWOT Analysis
From the innovation audit described above, the macro and microenvironmental factors of
Samsung can be analysed. The microenvironmental factors of the company are as follows:
Strength Opportunities
In comparison to any other electronic
substances, Samsung enjoys the widest range
of products.
Huge brand image and wide and loyal
customer base are also prominent strength of
Samsung
Triple protection proposition strategy for the
newly launched air conditioners
Increasing demand for electronic gadgets
among the rural population in the developing
nations (Gnanakumar 2017)
Weakness Threats
Cannibalization of the new products launched
by the company faced a huge loss in the global
market
Increasing competition and a decrease in the
product line is the greatest threat that Samsung
is facing right now
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The product demand for LCD panels has
reduced considerably from 2015
Increasing retail sales and companies are also a
tough completion for Samsung
Table 1: SWOT Analysis of Samsung
(Source: Gnanakumar 2017)
1.2.3 4Ps Analysis
4Ps is a marketing mix strategy that also relates directly to the internal and external environment
of a company. Below table shows the 4Ps of Samsung:
Product Price Place Promotion
Samsun delivers a
wide range of
products in different
categories of
electronic appliances
Mobile, TV, IT
appliances and
household appliances
are, some of the most
preferred products of
Samsung by the
customers worldwide
Samsung is a
dominant player in the
smartphone and,
household appliances
category. It sells a
wide range of
products based on the
technical and
economic stability of
a particular area
Corporate sales of
Samsung are
completely headed by
service dealers.
Samsung has a very
clear and diversified
distribution strategy
that distributes
products worldwide at
reasonable prices and
superior quality
(Horst et al. 2018).
Samsung uses both
traditional and
advanced mode of
promotional strategies
for advertising their
products.
Table 2: 4Ps of Samsung
(Source: Horst et al. 2018)
1.2.4 PESTLE Analysis
PESTLE analysis is used for determining the external market environment of a company. From
the performance audit of Samsung, following PESTLE Analysis can be drawn:
Political Conductive operation in politically stable countries
Increased collaboration with the international partners that are
political headwinds
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Economical A huge threat is being faced by the company due to the global
economic crisis
An aggressive push of the company in the economically stable
markets is an opportunity
Social South Korean Chaebol which is mainly a family owned
multinational company (Jung and Chung 2016)
All the products are designed and manufactured by keeping in
mind the trends, demands and lifestyle of the Korean People
Technological Increasing technical advancement in most of the developing
countries is a huge opportunity for Samsung
Hiring skilled labours can share a relevant positive growth to the
company
Legal The company has faced huge penalties in many of its major target
markets
Therefore establishing concerned strategies in a mandatory factor
for Samsung
Environmental Implementation of environment-friendly policies can increase the
chances for Samsung to play safely in its target markets
Table 3: PESTLE Analysis of Samsung
(Source: Jung and Chung 2016)
1.2.5 Existing Innovation Performance
The innovation performance of Samsung delivers a precise idea about the current market
performance as well. Below stated are some of the major performance and innovation of
Samsung from which its consistency can be determined:
 Physical resources: In the world of telecommunication, semiconductor and digital
technology, the physical resources of Samsung are managed by hiring skilled labours and
developing standard product distribution process (Mallinson 2015). Human resources: The human resource management of the company is managed to
maintaining a strong internal working condition. According to the 2017 annual report of
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Samsung, a 16% increase in the entire workforce has been motioned in the company in
one year.
 Financial resources: In the South Korean market, Samsung has 55.4% more market
share than any of its competitors. This increase has been possible due to the increased
investment of foreign investors in the company's portfolio (Son and Kim 2016).
1.2.6 Capabilities
The organizational capabilities of Samsung Are discussed below:
 Strategic capabilities: For bringing the newest strategies in the company, Samsung hires
designers and scientists from the topmost organizations and institutions. Unique and rare capabilities: The leadership and management of Samsung are unique
due to its competitive advantage in the patent products. Inimitable strategic capabilities: As the company has already shared a huge number of
expenses in its target market, is next to impossible for any company to imitate its services
and quality of the products (Wood et al. 2016).
1.3 The Industry in 2019 and Beyond
With its recent development in the Smartphone industry, Samsung claims to share huge market
profitability and flagship with the announcement of MWC 2019. Huawei Mate X and
Samsung Galaxy Fold, planning together to implement Galaxy Mi 9, S10, Mi Mix 3, One plus 7
and LG V50. This collaborative plan was done in February 2019 and is planning to get
implemented in Late July. According to Yun et al. (2019), by the end of August 2019, the
company claims to introduce Note 9 that will comprise of larger screen (6.66 inches) and 58
hours durability of the battery. Moreover, the company also claimed to provide an S-Pen Stylus
and 5G supporting sim for advanced technology. Inspired from the infinity-O display of Vivo,
the company also claims to inaugurate Samsung Note 10 that will have an infinity-O display and
a punch whole style cut-out for selfie cameras. In the new series of Samsung One UI, the
company also aims to improve its fingerprint display that will collaboratively consist of UFS 3.0
Storage and Snapdragon 855/Exynos 982. As aimed for S10, the selfie camera will consist of
four lenses; it is also being rumoured that the selfie camera will be maintained by S-Pen Stylus
(Abbott 2017).
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The jury members of the brand management claim that until August 2019, it is expected that 5G
will be implemented in the developed market. Therefore, launching S10 and other models in the
technically developed countries before the product implementation of any other companies can
be a huge boon for Samsung. The company is all set to sell its S10 and other products in almost
all the prominent online sites (Carroll and Jarvis 2018).
Although it is expected that Samsung will show a great increase in its annual revenue and
production in the industry for the last quarter of 2019, yet consistency and a flow graph is
expected in the first quarter of 2020. As per the views of Choi (2016), the strong sale of
Samsung's QLED TVs is supposed to get declined in the last quarter phase of 2019 due to the
development of new technology in the LED TVs that is the LTPS LCDs. However, incoming
one year, Samsung aims to deliver QLED TVs in some of its major target markets like Korea,
UK and India. The overall annual earning of the company is expected to decline in these
countries due to the weak performance of the Memory business. However, the company expects
to have an increased rate of sale from the second half of the FY2020 because of the development
of OLED panels and growth in the demand of premium household products.
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Conclusion
From the above discussion, it can be concluded that Samsung has maintained its persistence in
the target market very well since its establishment. Its present strategies are sharing a wide range
of competitive advantages to the company. However, the company needs to change its future
strategies because the competition in the target market is increasing day by day. Moreover, if
appropriate strategies are not followed within the stipulated time, it will be difficult for the
company to bring their brand image back to the customers. For this, the firm needs to identify the
needs and demands of the customers, market trends and change their business strategies
accordingly.
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