STRA60093 - Strategic Management of Samsung: A Detailed Report

This report provides a comprehensive analysis of Samsung's strategic management, examining its competitive environment, objectives, and internal organization. The report begins with an executive summary and an introduction, then delves into the environmental suitability of Samsung, analyzing its current and future conditions, as well as its SWOT analysis. The external environment is assessed using PESTEL analysis focusing on India. The report evaluates Porter's five forces, value chain analysis, and strategic group mapping to understand Samsung's market position. It assesses Samsung's current strategies, including market development and product innovation, and explores stakeholder satisfaction. The report also discusses the company's use of open management systems, digital marketing strategies, and the impact of competition. Finally, the report analyzes whether Samsung operates in a Red or Blue Ocean strategy and concludes with recommendations for the company's strategic direction. The report is based on the provided assignment brief for the Strategic Management in Organizations module (STRA60093) and aims to fulfill the specified learning outcomes, offering a detailed overview of Samsung's strategic approaches and challenges.

Running Head: Management
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samsung
Strategic Management in Organizations
4/17/2020

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Executive Summary
The strategic management in the company Samsung involves certain things like its competitive
environment, objectives of the company, internal organization, etc. The business environment is
dynamic so the companies require the appropriate strategy to respond to those changes. In this
report, the company Samsung has done the external environment analysis of the country of India
to evaluate its market conditions so that business can be operated effectively. The current
strategy of the company is to maintain its market shares by offering innovative products to its
potential customers which have clearly described in this report. Stakeholders mapping is an
effective strategy for satisfying the key stakeholders of the company Samsung. The company
Samsung operates in the Blue Ocean Strategy as it helps in creating the demands for the product
of the company.

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Contents
Introduction......................................................................................................................................3
What is the environmental suitability for the Samsung?.................................................................3
What is the current strategy of Samsung and its suitability?...........................................................5
What strategies you could recommend for the satisfaction of the key stakeholders of Samsung?. 7
Do you consider Samsung operate in Red ocean or Blue Ocean?...................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
The report is made in analyzing the strategic management of the company Samsung by applying
the generic chai value model. Samsung is the world's largest information technology company
which was founded in 1938. The company was the trading company that was founded by the
LEE Byung Chul. The headquartered of the company South Korea and they serve their services
worldwide. In the 1960s the company has entered into the electronic industry and dealing with
several products like electric components, consumer electronics, telecommunication, etc.
In this report, the comprehensive environment of the company Samsung will be scanned to
analyses the current and future conditions of the company. The current strategy of the company
will also be evaluated and their suitability will also be analyzed (Hacklin, et al., 2013). The
stakeholder analysis of the company Samsung will be done and recommendations will be
provided for satisfying the key stakeholders of the company. The red and blue ocean strategy
which is aligned with the company Samsung will also be recognized ion this report.
What is the environmental suitability for Samsung?
The company Samsung offer several product and services to its customers so they practice in a
sustainable environment. The company Samsung electronics has an effective environment and
also laid the foundation for Eco management. The main aim of the company is to create
integrated values and to deliver innovative products and services to the people (Lasserre, 2017).
The environmental suitability for the company Samsung is that they have an effective value
chain that is based on the core values and helps in generating an effective environment, society,
and economy.
The current condition of the company
The company is currently facing many challenges as the competition in the market has increased
and the company has to make the innovation of the product frequently to grab the attention of its
customers. The company Samsung is facing the downward cycle as the global memory market
has entered which results in falling the prices of the products of the company. In the environment
of the company have a big brand and even a large number of targeted customers. The company is

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also operating the function effectively which results in earning a good profit. In the year 2019,
the company Samsung has reported the operating profit of KRW 27.77 trillion and revenue of the
KRW 230.40 trillion (Jung, 2014).
The future condition of the company
The company Samsung always brought new innovative products and services with
transformative ideas and technologies. The future environment of the company is effective as
they provide the premium product and service with the innovation (Chang, 2012). The company
also has a good market share so it also gives a competitive advantage to the company and
enhances its profit for the future period also. The company Samsung future environment will
also be effective as they are killing with its semiconductor business and making a good market
share (Hacklin, et al., 2013). It was forecasted that the company will raise its revenues by 5%
and enhance its profitability also.
Internal Environment of the company (SWOT)
Strength: Samsung electronics company has innovative designs that offer a lot of handsets and
helps in capturing a large number of customers. The company is integrated with the Android
operating system whose software has a lot of features and options which gives a competitive
advantage to the company. The company has a large product diversity and has a low production
cost which helps in attaining a large market share (Osipov, 2013). The company provides
energy-efficient products and also fulfills the responsibilities towards the environment.
Weakness: The profit margin of the company is low as the competition in the market is high.
The company is lacking in its operating system (Chul Jung, 2014). The company has large
product diversity so it is the weakness that the company Samsung could not focus on a specific
one. The company is highly dependent on the other software so there is a lack of perfection.
Opportunity: The Company Market share is growing so In India the company has become the
tech-dependent and most used smartphone. The demand for Samsung iPhones in India is higher
which creates the opportunity for the company to enhance its market share. The company has
also acquired a new company so it creates an opportunity for them to ensure its future growth.

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Threat: The biggest threat in the Samsung environment suitability is related to its competitors
who are growing in the market and affecting the profitability of the company (Storchevoi, 2015).
Although the customers want new products with great innovation as Chinese competitors are
gaining the advantage and providing better qualities now.
External Environmental of the company (PESTEL in regards to the Indian country)
Political: The political environment of the country India is stable and their economy is also
growing. The company does not have to face any political pressures in India and the country also
has a good trade relation which helps in enhancing the growth of the company. The business
political environment is India favorable which helps the Samsung Company to exploit their
market opportunities (Banerjia, et al., 2019).
Economical: The economy of India is strong and its stock market is highly volatile. India is an
emerging nation so the company Samsung can expand its profitable ventures in this country. In
the economy of India, employees are getting at a slower rate so the company can recruit
thousands of employees.
Social: In India, some diversified people have a difference in their social status so the demand
for the product is also get affected by that. In India, the preferences of the customers are
changing rapidly so the company has to take care of the socio-cultural forces to maintain their
brand worth in the market (Storchevoi, 2015).
Technological: The technology is emerging rapidly so the innovation in Samsung Electronics is
required frequently. Innovation is creating a competitive advantage for the company. The
company Samsung also uses the digital marketing way to establish a good relationship with the
customers (Hitt, et al., 2014).
Environmental: The Company Samsung is making the products that are sustainable to the
environment. The customers of India only prefer those brands which are sustainable to the
environment so the company Samsung majorly focuses on reducing their carbon footprints. The
company also uses the manufacturing products hose environmental impact is minimal.
Legal: There were several rules and regulations in India which have to be company by the
company Samsung so that they can attain a good market share. The company Samsung also has

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to follow the tax-related laws and the several employment laws of India so that company can
attain huge profits.
Porter’s five forces
Bargaining power of suppliers: The suppliers bargaining power in the company Samsung is
low. There are many suppliers of raw material for making the product in the market which has
scattered in the world so if the supplier of the company raises the prices the company switches to
the new one.
Bargaining power of customers: In the company Samsung the bargaining power of the
customers is high as there are many competitive brands on the market so the customers switches
to another if they were not offered the product at the discounted or the lower ;prices.
Threat from substitutes: There is the high threat of substitute to the company such as Apple,
Sony, Vivo, MI, etc. the customers have several substitute brands which are offering similar
products and services with the technological innovation at the moderate prices.
Threat of new entrants: The Company Samsung has low threat of new entrants as this
technological industry requires many investment and good marketing strategy. To compete with
the high brand like Samsung in the market there were also legal and regulatory pressures.
Level of rivalry: The competition in the electronics industry is high in the market so the
company Samsung also has many rivalries that are competing for the market share.
Technological innovation is very rapid which is increasing the level of rivalry in the industry.
Value chain analysis
It is the process through which the company adds the value by delivering the valuable product in
the market. The company Samsung value chain analysis is effective in the market as they deliver
the product timely to their customers.
Samsung Inbound logistics
The company Samsung has many suppliers in the market and their supply chain includes over
2700 suppliers in the industry across globally. The company owns many logistics firms as its

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subsidiaries. In the inbound logistic the company has 8600 partner employees and 540
employees around the globe.
Samsung Outbound logistics
The company Samsung launches its product quickly and competes their products with their
competitors. The company Samsung passes through the different intermediaries to deliver the
product to the customers. The perishable products are offered by the company so outbound
activities help the company in maximizing the customer’s satisfaction.
Strategic group mapping: It is technique used by the company Samsung to evaluate their
position in the market. it is the process through which the firms competitors are analyzed. It is
the technique in which the financial and customers goals are set and helps in connecting between
the different ideas to make the business process change effectively. The company Samsung has
several competitors in the market so this technique helps in analyzing the future market and
helps in rectifying the market position of the company.
What are the current strategy of Samsung and its suitability?
The current strategy of the company Samsung focuses on the current product which is offered by
the company and makes it more innovative to attain the potential market. The current strategy of
the company Samsung is relying on certain factors like Market Development, Market
penetration, product innovation and development, etc. (Choi and Park, 2016).
The current strategy of the company is to maintain its market shares by offering innovative
products to its potential customers. The market penetration of the company Samsung was to lead
the market share by satisfying the customers with the new innovative products. The current
strategy of the company is to develop its market share by launching new products so that new
customers can also be grabbed (Ramiz, et al., 2014). The company Samsung has used the
strategy of digital marketing product development and making aware of the product to the
customers.
The company uses Social media digital marketing, newspapers, TV, pamphlets, etc. for
advertising their product. The current market strategy of the company is developing its product

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in the new market and the new city so that they can target the new customers in the other area
also.
Open management system
The current strategy of the Samsung electronics company is also to adopt open management in
the era of personnel management. In the open management system, the company has to respect
the creativity of the employees and promote autonomy so that they can enhance efficiency. Open
management also helps the Samsung Company to remove the obstacles and enhance the
competitiveness (Jung, 2014). This management system promotes an equal opportunity for
everyone and makes no discrimination and restriction in the company. The current strategy of the
company is that it can entire the global market by taking the role in the pioneering emerging
markets.
Marketing and design
The marketing strategy of the company Samsung follows the imperatives of six marketing which
helps them in playing the success role in its market. The current marketing strategy of the
Samsung Company is to develop a strong customer focus and put the major emphasis on the
wants and needs of the customers (Lee, et al., 2015). The current strategy of the company is to
design the products creatively and uniquely so that more users can interact with the company and
maximizes the long term growth of the company.
Samsung‘s Hybrid Management System
Earlier the company was using the Japanese and the American style of the management but the
current company is using the hybrid management system which focuses on the continuous
process improvement and the innovation of the products and services. The company Samsung
has a dynamical system which not only streamlined the cost management but also helps in
simplifying the governance (Chul Jung, 2014). Hybrid Management System improves the
analytics of the company and also increases the efficiency in the company.

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What strategies you could recommend for the satisfaction of the key stakeholders of
Samsung?
Stakeholder’s analysis of the company Samsung
There are several stakeholders in the company Samsung which includes directors, creditors,
employees, government, suppliers, owners, unions and community. The company has pursued a
different strategy which helps in enhancing and supporting the company. The company Samsung
has good communication with its stakeholders which helps in making a good relationship with
them.
The objectives, policies and the measurement of the company are getting affected by the
organizational stakeholders. The company meets with its stakeholders frequently so that they can
address the significant decisions in the company. It is recommended that the company Samsung
should have open communication with the customers and the employees so that they can satisfy
their needs and understand their concern also (Dess, 2013). Direct communication with the
stakeholders helps the Samsung Company in making better relations and also enhances customer
satisfaction.
It is also recommended that the company should follow the rules and regulations which are set
by the government so that they can satisfy the requirements of the government and satisfy the
stakeholders. It is recommended that the company can generate an effective management system
by participating in government policies. The supplier’s in the company Samsung get satisfied
when the company offers innovative products and makes the unique design (Storchevoi, 2015).
The customers are the most essential stakeholders of the company Samsung which can be
satisfied by the strategy of giving them unique features and quality products so that they can
value the management system of the company.
There were several strategies which are recommended for satisfying the key stakeholders
of the company Samsung which are stated below:
Stakeholders mapping: Stakeholder mapping is the best strategy which the company Samsung
should follow so that it could effectively examine its stakeholders and satisfy its key stakeholders
by examining their needs, concern, demographics, and interest in the company, expectations and
the public statement. To gain an understanding of the internal and external stakeholders is

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essential ion the company so that an effective understanding can be gained and stakeholders can
be satisfied (Vecchiato, 2015). The company should recommend doing mapping of their internal
stakeholders such as suppliers, contractors, employees, investors and the other border alliances.
This will help the company to investigate whether the stakeholders have the right resources or
not and whether the team is working effectively or not.
Identify the triggers: It is recommended that to satisfy the stakeholders it is important to
identify the triggers so that preventable complaints can be avoided and several actions and
measures can be taken to mitigate the things (Hong, 2012). The stakeholders get satisfied when
the company will correlate its stakeholders with the potential triggers and provide an alternative
solution and mitigation.
Knowledge management system: The strategy of applying the knowledge management system
in the company Samsung is also recommended as it is the kind of the IT stores which is the
knowledge base for the users and helps in collaborating, understanding and aligning the process.
This strategy will boost up the efficiency in the company and make effective decision ability
which will help in satisfying the stakeholders (Vecchiato, 2015).
Open communication: Open communication and direct communication with the employees and
the customers of the company Samsung helps in building a good relationship through which the
wants and the needs of them can be identified by the company (Moon, et al., 2011). This strategy
helps in satisfying the customers and employees when they want are fulfilled by the company.
Do you consider Samsung operate in the Red Ocean or Blue Ocean?
The company Samsung operates in the Blue Ocean Strategy which helps in a growing market.
This strategy helps the company in getting more success in expanding its business and also
increases its profit in the blue ocean market. The risk in the company is lower as it captures the
uncontested market space where the new market space creates new demand for the product. The
company Samsung has adopted the Blue Ocean strategy and also gets successful in generating
profits in the last years (Haroun, 2016).
The red ocean strategy is the one that focuses on the competition which already exists in the
market. Their main aim is to fight and beat the competition of the market so the company

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Samsung does not adopt this strategy (Kim and Sung-Choon, 2013). This strategy is also adopted
by the company as it helps in building confidence among the employees and also helps in
evaluating the constraints which can evaluate into the opportunity. The company Samsung
operates in the Blue Ocean strategy which cooperates with the uncontested markets. This
strategy is also effective for the company as it provides sound management to the company and
achieves the desired results in the company by cutting the cost (Doval, 2016).
The major advantage of the blue ocean strategy is that it breaks the value cost trade-off and
makes the competition irrelevant. The company Samsung does not uses the red ocean strategy
because that strategy only exploits the existing demand and does not capture the new demands.
So the company Samsung uses this strategy as they have several new products and services
which capture the new demand at the new market place.
Conclusion
From the above report, it is concluded that the company Samsung has a great market share and
its brand position in the market is also effective. In this report, the SWOT and PESTEL analysis
of the company Samsung has done to evaluate the internal and external environment of the
company so that future predictions cam be done and an effective strategy can be made. The
future environment of the company is effective as they provide the premium product and service
with the innovation. The current condition of the company is also effective as they earning a
huge profit by increasing their revenues.
It is recommended that the company can generate an effective management system through
participating in the government policies and with the help of the strategy of the stakeholder
mapping the company can satisfy its stakeholders. The company Samsung operates in the Blue
Ocean strategy which cooperates with the uncontested markets breaks the value cost trade-off
and makes the competition irrelevant which has also elaborated in this report.