An Analysis of Strategic Decision-Making in Samsung's Mobile Business

This report delves into the strategic decision-making processes within Samsung's mobile business, examining the company's current strategies and challenges. It provides an overview of Samsung's history, industry analysis, and product offerings, with a specific focus on its mobile division. The report identifies Samsung's strengths, such as product diversity and global presence, while also highlighting weaknesses like lower profit margins and reliance on third-party software. A SWOT analysis is conducted to assess the company's position in the market, followed by recommendations for improvement, including strategies to enhance sales, address security concerns, and leverage opportunities in developing markets. The report aims to provide a comprehensive analysis of Samsung's strategic decision-making to foster growth and competitiveness in the mobile industry.

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INTRODUCTION
Usually, the path the businesses take depends largely on the decision-making skills
and strategies that take up. Usually, managers in the firms are responsible for the designing of
the managerial structure so that the organizations can attain success at a faster rate. This is
why the strategic decision can be a key process that can either make or break an organization
(Mullins et al. 2010). Furthermore, many scholars have discussed the topic making it widely
important for the organization to take up.
By definition, an act of decision can be the activity where a person or a group reaches
the conclusion. The familiarity with making a decision is common in every field, even in an
industry (Dimitratos et al. 2011). The assumption is most common that the usual decision-
making process brings one to an appropriate result. A good decision occurs when the
objectives of the organization are clear and concise. The person or the organization should
contain all appropriate information about the event. They also reflect on the strategies
designed and strive to make it better for attaining higher competitive advantage (Shepherd
and Rudd 2014).
This essay would similarly discuss the strategic decision-making practices in
Samsung at present and few recommendations. This would provide a better vision of the
decision-making practices that a business use in order to achieve success. Several
frameworks and models would be used to recommend solutions for the problems that the firm
would be facing at present.
Company Overview
For this essay, Samsung company was chosen for many reasons. It would specifically
focus on the mobile business of the entire company. One of the possible reasons is that the

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business had several difficulties that can be analyzed in order to find out more about strategic
decisions in the organization. The company is an international firm based in Asia that has
achieved heights due to the higher policies. However, they also faced several obstacles
because of rising competition. The possible recommendation can further help the firm to
achieve great heights again. It would give appropriate opportunities to learn more from the
process that would enable one to make strategic decisions.
This firm was founded in South Korea in the year 1938. The company became a
leader in the industry of home appliances in the year 1969, which is now most famous for the
innovative technology and IT solutions. By the 70s the firm was able to develop several
strategies to become worldwide famous in the corporation by the arrangement of the
production of semiconductors and telecommunications, which started to grow faster. They
also focused on the heavy industry by focusing on shipbuilding and aircraft manufacturing.
Later, they stepped in the chemical industry along with entrance in the large overseas market
by the 80s. They started to expand their business after the 80s in the US and the UK and other
parts of the world (Friedman 2017).
INDUSTRY ANALYSIS
Products and target market
The company has been divided into three main components under which they are able
to offer various services to the customers all around the world. These components include
consumer electronics, IT & mobile communication, and device solutions (Chang 2010). They
have a number of businesses under these components. For instance, the consumer electronics
have three important business under the entire corporation Samsung such as health & medical
equipment business, Digital Application business, and Visual Display business. The IT &
Mobile Communication includes network business and mobile communication business.

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Lastly, the device solution includes system LSI business, Foundry business, and Memory
business (Samsung 2017).
Their products and target market vary depending on the availability of the product and
demand within the people. For instance, the visual display business offers general television
sets and other similar equipment to the families in general. Their television industry has been
facing wider growth because of the technological advancement and the rising demand within
the families. Other products they offer include digital appliances such as a refrigerator and
washing machine. The target market for such equipment generally includes all the women, or
even men sometimes, that are in need of such equipment at the household or offices. They
also offer CT scanners, ultrasound, and other equipment for the hospitals so that they can
achieve betterment for the patients. Among all the products, their mobile industry is vastly
famous all around the world that offers high quality of phones to all the people. Their target
market is the teenagers and the youths that seek to get a highly advanced phone. Other than
that, they also offer LTE services, memory for tablets and smartphones, and much more
(Samsung 2017). This essay, however, would focus mostly on the Samsung mobile business
and present powerful recommendations that can lead the company toward higher growth.
Strengths of the firm
Some of the biggest strengths of the company are the diversity and volume of the
availability of the products in the international market. They already have a higher quality of
products available for the people and they strive to take step toward innovation by the year
2020 (Michell 2010). They also have higher growth in the field of research and development
that has enabled them to achieve greater growth. The organization is able to hold extensive
research that usually includes scholars and experts are responsible for the research and
development of the firm after having intensive competitive research. They desire to increase

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the competitive advantage of the business by incorporating the development process.
Furthermore, they also have a vast global presence that places them at the higher place. They
have many partners all around the world that makes the company better at presenting the
world better products in many ranges and fields (Samsung 2017).
Present strategy for decision-making
Their business is centered on the market mix strategy that enables them to get the
benefit of the competitive market. It usually involved two primary pricing strategies such as
skimming price and competitive price. The brand believes in skimming their price tag and
they add a new slogan with every updated model. In fact, when the new model of Samsung
was released called S6 Edge, the company claimed it to be the most beautiful phone in the
entire world out there. Furthermore, they believe in innovation and competition to make sure
that they do not lag behind concerning the competition in the world (Grant 2016).
Problems identified
Even though the company has stronger sales growth at present, they face a greater
problem concerning especially mobile division. This is because the Samsung mobile business
has been facing problems concerning the exploding and higher pricing (Huang 2016).
One of the primary weaknesses of the firm is the lower profit margin that leads the
organization toward the attainment of less economy. Furthermore, the organization is also not
able to get appropriate reliance on software (Choi et al 2012). Since there are many
organizations better than the company, many other competitors have started to take its place.
They have started to focus on other products that can offer higher resolution and technology
at a cheaper rate. This fact has decreased the brand quality of the firm to a larger extent.
Moreover, many consumers face security problems while using Samsung phones because of
while they prefer to use Apple or other products (Tzeng and Tsai 2010).

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RECOMMENDATIONS
This section would provide effective recommendations to raise the sales of the mobile
industry of the corporation Samsung. This would be further done by using several
frameworks that would also help in designing better recommendations by the perfect analysis
of the market available out there. After that, list of recommendations would be made that can
further enhance the growth factor of the company at large. This step is necessary so that the
company can get the benefit of having enhanced growth by using the appropriate techniques
for the growth as fast as possible.
SWOT analysis
This section would provide elaborative knowledge about the strengths, weaknesses,
opportunities, and threats in the mobile business of the corporation Samsung. It would
provide the summary of the current market and strategic situation of the firm. This
information would be further helpful in providing an effective recommendation that can help
the organization to attain higher growth (Lee et al. 2010).
Strengths
The company offers innovation and higher quality design in their smartphones and
they are the closest competitor of the worldwide company like Apple (Rapp 2014). This
factor has enabled the company to use effective technology that can make the users more
comfortable. They did this specifically to attract as many customers as possible. Furthermore,
the company also gives the benefit of having the adaptation of the better system for their
smartphones such as Android that is an open operating system for many phones. This
significantly reduced the prices as compared to the iPhones. Furthermore, the world is
starting to choose the smartphones more than the iPhones because of rising innovation and
more opportunities available in this sector. People can readily use many applications in the

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android freely than in the iPhones, which has further attracted many users all around the
world (Yang et al. 2016).
In addition, the company focuses on cost reduction and largely because of the fact that
the people like to purchase cheaper material at higher quality. This is why the company has
started to consider giving better options to the users by reducing the price and finding
innovative solutions to enhance the quality of the smartphones (Xu 2016). This has enabled
the organization to attain a competitive advantage in the international market. They also have
varieties of products available for the youths concerning the phone model and technology
use. Hey also have low production cost and largest market concerning the mobile due to
lower cost. The brand is also famous all around the world that has given them the power to
get in every house easily. They also focus highly on saving the environment. For this, their
production of the smartphones has been focused on the reduction of the environmental
damage. They follow the environmental related policies of the country they settle in (Shi
2016).
Weakness
Even though the company has been able to attain higher growth, they were able to
face difficulties due to lower profit margin. This has enabled the competitors to attain higher
growth even with a similar number of sales of the smartphones (Dess 2014). Moreover, the
company is accustomed to offering their products at lower prices that have enabled them to
get a lower profit margin for a long time. Furthermore, they have also been facing problems
due to the damaged image. This has happened due to recent problems with their smartphones
such as exploding or security issue. This has caused the customers to focus on other
companies that offer better products with promised security concerning both internal and
external factors. They also lack their personal operating system that could have made their
market more effective and larger (Rani 2016). Furthermore, the company faces problems due

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to the less product quality as compared to Apple, which has created problems in the firm.
Moreover, the operating system also lacks perfection as commented by many customers.
They also largely depend on the software created by third parties (Abhishek and Garg 2018).
Opportunities
Countries like India have many opportunities for the company to have market growth
because of the utter dependence on technology. People are likely to have communication
through the phones. It is estimated that about 2 out of 4 people are the owners of smartphones
in India only. Many other developing countries have created opportunities for growth for the
company. Due to this, the company has the opportunity of growing ahead. Since smartphones
are becoming alternatives to computers, many people are seeking the company that is ready
to offer the best solution at a cheaper rate, for which the company is quite famous. This is
why some people choose Samsung instead of Apple, but still, Apple is at a higher place as
compared to the market position of the company Samsung. They also possess a strong
financial position in the international market that has enabled the organization to attain
greater benefit. Furthermore, the company is focused on expanding their business by finding
ways to enhance the products for the benefit and satisfaction of the customers and mobile
users. They also have opportunities in the new market of the tablet because of having new
acquisition with companies like NewNet Communication Technologies and Harman
(Samsung 2017).
Threats
The smartphone business of Samsung has been facing several problems due to the
rising competition in the market concerning the mobile phones. This has created problems for
the firm. Samsung has many competitors such as Apple and HTC in the international market
that provide products better than the company even after having a higher rate (Almitra and
Salamah 2017). The latest Asian model called Xiaomi has reached in every user and caused

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them to get the benefit of having a higher quality of services at reasonable rates. This has
lowered down the users for the company especially in the Asian countries. Furthermore,
many other Chinese companies offer high quality of phones and tablets as compared to
Samsung. People are considering the company if they only desire to have cheaper phones
otherwise; they mostly head over toward the innovative products offered by other Chinese
companies. This has enabled them to attain competitive advantage as over Samsung. There
have had several instances where the products failed and some even exploded causing the
customers to be reluctant to buy another one again (Abdelshafie 2014).
PORTER’S FIVE FORCES
This section would be providing the market growth of the firm in the international
market. It would give the right direction to the possible recommendation that can enable the
firm to attain a global advantage. It would also provide the overview of the current market
position concerning the strategies they used.
Bargaining power of suppliers
Suppliers are vital sources for an organization since they are able to create better
opportunities for the firm in the international market out there (Rothaermel 2015). The
suppliers are crucial for the organizations because they are able to provide force for
production. However, they also have the power to have further bargaining over the products
in some cases where the company has a limited number of suppliers all across the world.
Samsung has several businesses including the mobile phone industry. Furthermore, they
would also be able to get the benefit of having various suppliers out there that can help the
company to get raw materials at lower prices. Therefore, the company faces lower bargaining
power of suppliers since they already have many options available (Van Alstyne, Parker and
Choudary 2016).

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Bargaining power of customer
The company has been facing problems concerning lower profit margin due to the
lower rate of product cost in the market. This has been possible because the customers mostly
are expecting similar lower price from the organization. Since the price is lower, the
customers do not have the power to bargain more for a lower price. However, they can easily
do so if the organization strives to attain growth through the further development of the prices
due to delayed profit (Rothaermel 2016).
Threat of substitutes
The brand faces more challenges concerning the alternatives that are available in the
market at presents such as Apple, LG, HTC, Xiaomi and much more (Lim and Goggin 2014).
The organization has already strived to attain a competitive advantage by decreasing the
prices but they only faced the problem of having a lower profit margin in the international
market. Moreover, other local brands in many countries also become a threat to the
organization.
New entrants
Samsung is already a famous brand that has attained a place in the hearts of people.
Even after difficulties, the company still poses to be one of the oldest firms. This has enabled
many customers to get attracted to the smartphones. It would be difficult for the new
company to attain the market position as higher as the Samsung in the smartphone section.
This shows that the company has a lower level of threat to the new entrants (Hjorth and Khoo
2015).
Rivalry power in the industry
This aspect is much higher because the company has many competitors out there that
can create problems for the company. Many products have launched by famous companies

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giving the higher benefit of better quality at many reasonable rates. This has enabled the
customers to choose other brands rather than going for Samsung (Friedman 2017).
ANALYSED RECOMMENDATIONS
After identifying the problematic areas of the smartphone business of the corporation,
it is mandatory to make sure that possible recommendations are made in order to help them
achieve a higher advantage. Among the topmost problem in strategy, one of the higher was
observed in the lower profit margin and higher competitive advantage. The organization is
able to attain lower profit by selling a similar quantity of products as compared to other
brands like Apple. This has created problems in the firm and it mainly happened due to bag
strategic decision.
At this time, the company can strive to arrange for competitive analysis to gain a
perception of the other firms and their market situation. This would also enable the firm to
get the overview of the pricing strategy that the other companies as Apple use to make sure
that they attain more profit.
After that, the company should also strive to have innovative strategies to enhance the
growth of the firm by the using innovation in the mobile phone sector. This can again be done
by analyzing the technology the other organization's use in order to satisfy their customers.
The organization can also take regular feedback from the customers so that they can
get the benefit of getting the actual desires of the customers. This would enable the company
to use appropriate technology to have further advanced that would ultimately attract the
customers at large.

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CONCLUSION
This essay discussed the present market and strategic situation of the organization
Samsung in the mobile industry. It provides the summary of the present situation of the firm.
Moreover, SWOT analysis and Porter’s five Forces were used to analyze the market situation
and the problems faced by the firm, which would base the possible recommendation. It was
observed that the primary problem the organization faced is concerning the rising competition
and lower profit margin in the organization all around the world. For this purpose, few
recommendations were made to tackle the problem. One of them was market and industry
analysis of the famous companies like Apple that would enable the firm to get the benefit of
having their perception of the strategic decision. Furthermore, the company was also
recommended to have positive innovation in technology by taking regular feedback from the
users.