Strategic Analysis and Planning Report: Samsung Electronics Overview

This report provides a comprehensive strategic analysis of Samsung Electronics, a global leader in the electronics industry. It begins with an overview of the company, its diverse operations, and its global presence. The core of the analysis focuses on a resource audit, examining Samsung's human, financial, physical, and intangible resources, and utilizing VRIO analysis to assess their competitive advantages. The report then delves into Samsung's value systems, emphasizing the importance of customer value and satisfaction. The product portfolio is evaluated using the BCG matrix, assessing the performance of various product lines, like the Galaxy series, and their market positions. Finally, the report explores potential future strategic growth options for Samsung, considering market trends and competitive landscapes. The analysis highlights key strategies for maintaining market leadership and adapting to industry changes.

Strategic Analysis And
Planning

Table of Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY...................................................................................................................................1
Overview of company.................................................................................................................1
Resource Audit............................................................................................................................1
Value systems.............................................................................................................................5
Product Portfolio (BCG Matrix).................................................................................................5
Potential Future Strategic Growth...............................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Strategy planning refers to step by step actions taken by an organisation according to
their pre set priorities so that they can set attain their vision and mission in no time (Rothaermel,
2015). On the other hand, strategic plan is a blue print which consist of activities which company
is going to perform in future. For this report, Samsung is taken for discussions which is one the
largest conglomerate in the world and deals in various industries like electronics, heavy industry
& construction, finance and services etc. Samsung headquarter is in Seoul, South Korea and
employees more than 489.000 people all over world. Resource audit of electronics SBU will be
discussed with the help of different models. Besides this, value system will be conducted with
the help of Value chain analysis so to find out ways through which company can reduce their
cost. BCG matrix will be done to identify their strengths and weakness. At last various options
will be identified and how company can use this to enhanced their future strategic growth.
MAIN BODY
Overview of company
Samsung electronics is the part of the Samsung group which is in top 5 biggest brands in
the electronic industry. Company deals in various products of electronics like mobile phone,
smartphone, computer, laptop, television, LED panel etc. Moreover, it is one of the largest
manufactures of devices like semiconductors, chips, batteries, hard drives to companies like
Apple, Sony, Nokia etc. Samsung electronic has more than 300,000 employees in the world and
headquarters in Samsung digital city, Suwon, South Korea. To enhance their market share in the
market, Samsung is planning to invest up to 20 billions dollars in various sectors like LED, solar
panels, medical devices, energy savings products etc. After protecting position of market leader
in the market, Samsung sales has affected due to slow sales of products like Galaxy S9 and S9+
resulting in negative impact on the profitability of Samsung electronic balance sheet (Samsung
Electronics Announces Third Quarter 2018 Results, 2019). So company have to considered
many aspects which they have considered while launching any new product in the market which
will be explained below with functional examples and various reliable statistics.
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Resource Audit
It is a process of analysing and monitor every types of resources available in the company
and how it can assist company to gain competitive advantage over others by giving sustainable
business performance. This approach is used by company to make various strategies in the
market so that they can beat other competitors in the same industry. There are four types of
resources which Samsung electronics is equipped with i.e., human, financial, physical and
intangible resources.
 Human resources: This is one of the most important for any company as employees are
the one who put their hard work and effort at work so that organisation would be able to
achieve their mission and vision. Human resources is consist of various factors like
number of employees in the company, skills and capabilities which their employees is
equipped with, specific capabilities of company in terms of knowledge, technology etc.
Samsung electronics have to considered these aspects to regain its position in the market
that's why they always spend high amount of funds on their employees. For instance,
Samsung has opened a 1200 seat hall in which they organise different musical
performance of famous artist so that employees can enjoy their life while working hard at
workplace (Organizational Culture,2017). Apart from this, company has started job
posting program in which employees can take the job transfer in their home cities so that
employees focus wont get affected by external factors like families and friends. Moreover
Samsung has modify their policies regarding pay and working time according to the
employees so that they would remain loyal to them. So it can be said that company is
doing every bit they could do to maintain the motivation of employees.
 Financial resources: It is one of the factors which directly affects the sales and
profitability of company. For instance, if company does not have enough resources to
market their products and services then their brand awareness will remain low resulting
in low sales for company. According to the Samsung report of 2018, Samsung electronics
Canada owned more than 762,677 KRW million which means that company has enough
funds to invest in their activities.
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Source: Fair Value Measurement. 2018 (All the values are in KRW trillion)
So from this, it can be concluded that Samsung has strong financial status which could help them
to grow more in future and remains at the top of electronic market.
 Physical resources: It refers to different types of physical products or services which
helps company to grow in the market with highest productivity. It includes machinery,
equipments, building etc which company has in their assets. Samsung is been operating
their business in 73 countries which means that company has large market and customers
share as compare to others. Besides this Samsung has invested 19.8 KRW trillion in R&D
departments which depicts that company is try to innovate the product on a regular basis
so that they can attain product differentiation advantage over other competitors like
Apple, Sony etc (SAMSUNG IN THE WORLD, 2018).
 Intangible resources: These are the resources which can not be touch by any individual
but have a crucial role in the success of an organisation. For instance, if the image of the
brand is not favourable in nature then potential customers will prefer to buy company's
products which has positive image in the market. This factors includes, goodwill, CSR
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Illustration 1: Fair Value Measurement. 2018

activities effect, brand image, customer loyalty, quality of services etc. To reduce the
carbon footprint of company, Samsung has opened one of the largest semiconductor plant
in the South Korea to reduce the usage of limited natural resources. Moreover, Samsung
has invested 17 billion dollars in Vietnam so that more jobs would be created in their
resulting reduce in unemployment rate and increase in standard of living of people in
Vietnam (Empowering Communities Across the Globe, 2018). Apart from this, Samsung
focuses on empowering students all over world that's why they have started Solve For
Tomorrow and Tomorrow solutions foundations to help the needy society (Empowering
People through Education, 2018).
To analyse the resources of Samsung, company can use VRIO analysis as it would help them to
identify factors which they could strengthen more to increase their efficiency and productivity of
working operations. Vrio analysis in the context of Samsung electronics is explained below,
 Value: It refers to how expensive the product or services is and how much intensity any
other company have to put to obtain it.
 Rareness: It depicts how rare or limited the product or services is.
 Imitability: It spells that how hard is it for another company to copy or imitate the
product company is offering.
 Organisation: It says that how much company is capable of utilising their resources to
its fullest.
So according to the four factors it can be said that Samsung electronic human resource is not
valuable in nature as it could be imitate or copy by other companies through poaching so it is a
competitive disadvantage for company. Samsung financial resources is valuable but not rare in
nature as it could be copied by other company through investing or funding. So this factor will
only provide competitive equality to Samsung. Physical resources is valuable and rare is nature
as Samsung is equipped with various advanced level technology which other company's does not
possessed. But it could be imitate or copy by other persons after sometime so it will provide
temporary competitive advantage for Samsung. At last, goodwill or brand image of Samsung is
valuable, rare and no imitable in nature as no other company can match the level of brand equity
which they have attained by performing with full potential. So this factors will assist company to
gain competitive advantage over others.
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Value systems
Set of value or satisfaction which derived by the potential customers by using the product
offered by the company (McLean, 2018). Customers always wants to derive highest value from
their product so that they would be satisfied to use the product. For instance, if Samsung
electronics will make the product according to the needs and preference of customers by
considering all the trends which are running in the country and sets the price according to the
customers disposable income, then it will derive m,maximum value to the customers. On the
other hand, it would help company to increase their sales and profitability over time as through
this, customers will transform into loyal customer. Samsung electronics should considered
various aspects while making their product which is mentioned below with functional example,
 Samsung should consider personal beliefs and values which is inherently in the
customers. For instance, Canada people does not prefers to buy those products which
pollutes the environment while producing. So Samsung should try to reduce the carbon
footprints by using latest technology and investing in CSR activities so that it would be
nullify by it.
 Quality of product provided by the customers should be at top as then only customers
would get highest percentage of value added from the product they are using (Arasa, and
K'Obonyo, 2012). As if customers are happy with the quality of products then they can
also ready to pay more as price sensitivity becomes low in terms of quality.
Product Portfolio (BCG Matrix)
This matrix is helpful for company to identify sources through which company can
enhance their sales and profitability or identification of product which are regularly attracting
loss and should be removed by company to maintain positive balance sheet. This matrix is also
called growth share matrix. BCG matrix will be elaborated by taking Samsung electronics
Mobile sections as an example,
Stars: It is a type of product which has high market share in the market because the
phase of the industry is growing in nature. This product is attracting large amounts of profits but
to grab it company have to spend high amounts of funds in it. For instance, Samsung galaxy S7
and S7 edge is one of the highest selling phone in the market as 55 million units were sold after
launching the product (Samsung Galaxy S7 sales hit 55 million, 2019).
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Question marks: These are the products who usage high amount of cash for its
operations and in exchange does not provide satisfactory result (Friend and Jessop, 2013).
Though the market share available for the product is high in nature but due to low quality or
services, company could not able to attain what they set in the starting. For instance, after
investing millions of money in the galaxy s series, company has seen the lowest single in the
recent quarter due to low performance of galaxy S9 and S9+ phones. Though the market share is
high but it does meet the expectations of customers due to which they switched to other company
resulting in loss for Samsung.
Dogs: These are the kind of products who neither increase cash or profits for company
nor use high amounts of funds. Company could switch this product into question mark category
if the product is modifies according to the needs and demands of customers. In this category, all
the phones, other than smartphones comes under this category like galaxy tab A, galaxy tab E
etc. Samsung electronics should try to regularly conduct market research so that proper
identification of needs of customers would be identified and how then try to satisfy it with the
products offerings.
Cash cows: Products which generate large amount of cash inflows in the company in
exchange of lower investment refers to cash cows products. For instance, Samsung galaxy note
series is one of the most attracting products worldwide as it generates revenue for company on a
regular basis and without investing large amounts of funds.
Potential Future Strategic Growth
Every company needs to attain growth in the future so that overall company can earn
more profits and sales as compare to other companies (Al-Turki, 2011). Samsung electronics can
use Bowman's strategic clock to identify ways through which company can achieve growth in the
market. This theory is based on two variants i.e., perceived value and price. There are various
options which Samsung electronics can use is explained below with functional example,
 Low price and low added value: This is one of the options which any company does not
wants to follow but sometimes it could assist company perform better in the competitive
market. In this approach, company sets their price to its lowest so that it would be hard
for other company to compare the price. But on the other side, there is no differentiate on
the basis of product design or specifications. For instance, if Samsung electronics make
any new product which is low in price and no differentiation of products then chances of
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getting high return is low as customers does not want to buy any products which does not
provide high value to the customers. So Samsung should not opt this approach as this
strategy will affect the goodwill of Samsung in the mind of customers as Samsung is
famous for elegant and value less products which is opposite to this one.
 Low price: This is the approach which focuses on cost instead of other factors like
product differentiation because in today's era, driving force in the mobile industry is
price.. For instance, Samsung can launch their new mobile phone in the market by
assigning low price to it as compare to competitors pricing. This means that company
will earn less or no profits on the phone they are selling but on the other side this will
attract high number of customer and market share which is beneficial for their future.
Samsung electronics is capable of doing this as they have advanced technology which
could help them to decrease price to a certain level. So it can be said that Samsung should
opt low price strategy to launch their new product in the market.
 Hybrid: As the name implies, it is a combination of low price and high value in which
company will provide high value added with low price products so that customers would
be more than happy to use it to satisfy the needs and demands. For instance, Samsung can
launch a product which have lower price then expected with high value added services.
As mentioned above, Samsung electronic is equipped with high financial resources with
advanced technology which could assist them to produce these types of product.
 Differentiation: Main purpose of differentiation strategy is to provide high value added
services to the customers so that their customer experience engagement would be
increase to a level which can not be provided by other companies (Smith, 2013). For
instance, Samsung electronics will launch a product with innovative specification which
is not opted by any other competitors with the price according to the customer ability to
pay. This can be easily adopted by Samsung as they have every resources which could
help them to implement on the business operations. So Samsung electronics should
definitely try this approach to gain competitive advantage over other in the future.
 Risky high margins: In this approach, company sets the price of product high without
offering any extra value added services to the customers. Main purpose of using this
approach is create a fake hype in the market related to product so that customers will buy
it by considering it as a high social status. Samsung should not opt this approach as there
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is a high risk margin in this. Moreover, chances of affecting brand image in a negative
way is high in nature.
 Monopoly pricing: In the recent era, monopoly is unimaginable in nature as only one
business should be there in that but government is now strict and try to avoid monopoly
market as then customers has only one option i.e., to buy the product or not. So Samsung
should not try to opt this approach as there are lots of company in the market who is
providing same product as Samsung electronics.
 Loss of market share: This approach states that when company sets the middle price of
the product while providing same or low value added services to customers. It is
disastrous in nature as due to increase in competitions, customers prefers to buy the
product in cheapest price and expects a high value return from the products. So it can be
said that Samsung should not opt this approach as then only they can secure their market
leader position.
CONCLUSION
From the above report it can be concluded that company should regularly audit their
resources which includes both i.e., tangible and intangible. It would assist company to identify
their strengths and weakness and how they could improve their business performance by
removing obstacles which are coming in their way of success. Besides this, to remove the extra
efforts and cost at the time of productions, company can use value chain analysis model as it
depicts factors which company can work on to remove those actions which are not doing their
part in final products. BCG matrix would assist company to identify resources which company
should remove from its product list to reduce losses which organisation is facing. At last, before
bringing any change in the organisation, they should analyse every options which coming in their
way and then evaluate it according to the resources available in the company as this will help
them to choose the best strategy out of different factors.
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REFERENCES
Books and Journals
. 2018. [Online]. Available Through:
<https://images.samsung.com/is/content/samsung/p5/global/ir/docs/SustainabilityRepor
t2018_en.pdf>
Al-Turki, U., 2011. A framework for strategic planning in maintenance. Journal of Quality in
Maintenance Engineering. 17(2). pp.150-162.
Arasa, R. and K'Obonyo, P., 2012. The relationship between strategic planning and firm
performance. International Journal of Humanities and Social Science. 2(22). pp.201-
213.
Empowering People through Education. 2018. [Online]. Available Through:
<https://images.samsung.com/is/content/samsung/p5/global/ir/docs/SustainabilityRepor
t2018_en.pdf>
Friend, J. and Jessop, N., 2013. Local Government and Strategic Choice (Routledge Revivals):
An Operational Research Approach to the Processes of Public Planning. Routledge.
McLean, M., 2018. Understanding your economy: Using analysis to guide local strategic
planning. Routledge.
Online
Organizational Culture. 2017. [Online]. Available Through:
<https://www.samsung.com/us/smg/content/dam/samsung/us/aboutsamsung/2017/
Samsung_Electronics_Sustainability_Report-2017.pdf>
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education,.
Samsung Electronics Announces Third Quarter 2018 Results. 2019. [Online]. Available
Through: <https://news.samsung.com/global/samsung-electronics-announces-third-
quarter-2018-results>
Samsung Galaxy S7 sales hit 55 million, 2019. [Online]. Available Through:
<https://www.gsmarena.com/samsung_galaxy_s7_sales_hit_55_million_milestone-
news-24813.php>
SAMSUNG IN THE WORLD. 2018. [Online]. Available Through:
<https://images.samsung.com/is/content/samsung/p5/global/ir/docs/SustainabilityRepor
t2018_en.pdf>
Smith, R.D., 2013. Strategic planning for public relations. Routledge.
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