Discuss about the Competitive Business Strategy of Samsung Corporation.
Samsung is a South Korean organization with its headquarters in Samsung Town, Seoul. Samsung is a multinational conglomerate comprised of numerous businesses. Samsung Electronics Company Limited is part of the Samsung Group. This company has its headquarters in Suwon, South Korea. Samsung Electronics majors in electronics and information technology. The company has establishments for assembly in 80 countries around the globe. The company employs more than 300,000 workers and has amassed market cap top of $350 billion (Stickler, 2013).
Samsung Electronics is a leading manufacturer of electronics and electronic components. Some of the items are mobile phones, smartphones, laptops, tablets, and household components such as television sets, home theaters, video players, refrigerators and kitchen appliances. Some of the components are hard drives, flash drives, lithium ion batteries and memory chips (Samsung Company, 2018).
The electronics industry has major traits that define it. There is high degree of innovation across the industry with major players reinventing their products. There is much effort and investment put into product design. Technology has led to increased demand for smart products. Smartphones and smartwatches have widely reached across diverse markets. Smart TVs are now on the rise. There is high demand for electronics in general around globe. One drawback is that electronic products tend to have short life cycle before technology evolves (Lasinskas, 2016).
The business strategy of Samsung is orchestrates to aid the strengthening of the company’s competitiveness and profit structures. Focus is based on production of premium products. The business strategy that Samsung Electronics employs involves high degree of flexibility. This is mainly due to the changes that occur in the external business climate. The company therefore is able to make dramatic changes according to the world trends. Samsung has prospered on the back of efficient and effective reading of the market. The company observes the market progress and is able to learn from other competitors (Dudovskiy, 2017). The corporation comes up with products that are replicated or innovated based on the products of other brands in the market. The products are manufactured with similar important features but with some basic alterations such as screen size.
Samsung has a catalog that features extensive product range. The company is invested in new product development which results in numerous product types available for customers. Samsung Electronics provide their products in particular divisions: Consumer Electronics (ME), Device Solutions (DS) and IT and Mobile Communications (CE). This development is enhanced by R & D centers of the company located in more than 35 areas across the world (Samsung Electronics, 2016).
Samsung has benefited from integration of its business strategy with market gaps which takes advantage of opportunities that can be gained. In this way, the company engages the market through addressing a particular need in a specific place. The choice of new marketplaces is based on achieving economies of scale. The regions are mostly characterized by inexpensive production factors and the company is able to sell standardized items. In general, Samsung Electronics displays preference of cost leadership over strategic differentiation (Samsung Electronics, 2017).
Samsung has faced a number of issues that have affected the company. There have been some periods of turmoil but for the most part the organization has seen positive business outcomes. In the recent years, the company has seen its earnings increase steadily. In 2017, Samsung was able to achieve its best ever performance, posting quarterly operating profits $13.02 billion. It was listed the top company in the year. Samsung Electronics’ market value surpassed $360 billion. Close to end of the year, its stock price and preferred stock rose by 3.89% and 4.24% respectively to record numbers (Samsung Newsroom, 2018).
This performance has been driven by innovation and development of wide range of products. Samsung have manufactured a myriad of quality products which customers have embraced. The products are able to reach many people due to the company’s market presence. Samsung Electronics The company has been aggressive in pursuing market trends based on how their observation of the market. This has helped the company stay abreast in technology and developments which has greatly promoted their sales. Samsung Electronics use a large share of its revenue in research. 5.7% of the revenue it amasses in research activities. Combination of the company’s market research and innovations have made the Samsung Electronics a leading organization in the industry (Samsung Newsroom, 2018).
Samsung Electronics is part of the conglomerate that is Samsung Group. This gives the entity a great supply chain and distribution system. There is cost advantage in the company producing the components that they required in making the electronics (Kline & Rosenberg, 2010).
The performance is in line with the business strategy that they have employed. The positive results are the direct outcome of the strategies that have been implemented by the organization. Their extensive market research and growth of innovation have led to production of items that have received global appeal firm customers. New product development has enabled the company to capture wider market.
The company has performed remarkably well over the course of years. It is currently performing better than its competitors having surpassed top competitor in Apple (Sherisse, 2017).
The performance of Samsung Electronics has received wide acclaim from major stakeholders. The significantly high revenue is impressive for the company and offers some satisfaction to those invested in the company. The design and quality of the products of the company have received mostly positive reviews and reactions with a number of awards going the company’s way (SCMP, 2017).
The company has however had issues that have negatively impacted the perception of stakeholders. Some products of the company have been faulty. The company admitted that Samsung Galaxy Note 7 had issues with manufacturing and battery design (SCMP, 2017). Customers had reported cases of their devices exploding. Stakeholders have also been concerned with legal matters that the organization has faced such as arrest of company official (Mozur & Sang-Hun, 2017).
Much of the world’s population has taken to technology. The growth of electronics industry has led to spread of technology across the globe. The demand that is created is working towards the benefit of the industry. The continuing development ensures that the companies keep on raking in increasing revenues while customers become more inclined to smart products. Technology is a major driving force in this sector.
Among demographics, the youth have played a central role in the progress of electronics industry. The adoption of technological products is quite high among the younger persons which has driven the growing demand (Marketresearch, 2018).
Industry production needs to be efficient in order to realize the type of profits envisioned before. One of the demands that companies need to achieve to be competitive is improvement of productivity and efficiency in their organizational systems. It will be impossible to compete with major companies without having sound processes that maximize the gains for the company. The growing trend has seen companies become keener on coherent production processes to increase their profits (Marketresearch, 2018).
An important factor impacting the industry concerns environmental aspect. There is growing pressure exerted on organizations to produce more eco-friendly products. This is a worthy cause that people are pushing for. The electronics industry has massive impact in the lives of individuals. It makes sense that they should be part of the social responsibility given their capabilities. Technology is essential in production of green electronics.
Electronics industry has some key aspects that have promoted the success. The public in general has constantly demanded technological product over the past decade thus providing the necessary market that the industry needed to prosper. Outsourcing of production units has led to improved earnings for electronics industry. There are benefits that companies reap in cheaper production resources and labour costs overseas.
The competitive environment in electronics industry has driven the success of companies. Competitiveness has led to more innovativeness and development. Most of all, the pursuit of technology by companies provides the means for success for the organizations (Lee & Sturgeon, 2015).
The use of technology and technological products has mainly involved persons of the younger generation. This part of the population has provide the most avid customer base for electronic companies worldwide. Young people are more in touch with these developments. In future, the customer base will include higher figure of persons of advanced ages. The customer base will grow larger with full inclusivity is achieved.
There is growing digital and mobility services in the electronics industry. The future of electronics is uncertain for products such as tablets and personal computers. Instead, companies may need to pursue other avenues which are influenced by customer needs. The products that are expected to have higher demand in future are Internet of Things (IoT), cloud computing, automation devices, M2M communications products and data storage devices (NCSU, 2018).
Stakeholders are involved majorly in the progression of the company. One aspect that stakeholders are driving forward is the production of environmentally-friendly products. Future strategy of the company and other industries involved electronics will feature more eco-friendly efforts. The stakeholders of the company are likely to implore more diversification for the company. Technological developments make the business environment volatile. Divulging into other business such as biotechnology and clean energy will ensure further growth and development. Smart healthcare is a promising business strategy for future expansion (Lee & Sturgeon, 2015).
Stakeholders need Samsung Electronics to continue reinventing itself in a bid to continue the dominance that has been exhibited. Involved parties seek more technological innovation to make the products of the company more outstanding and game changing. The company is expected to continue being a global leader in the industry. The efforts put in business strategies are expected to maximize the shareholder value. Additionally, the company need to increase its corporate citizenship and interaction with customers and the community (Khan et al, 2015).
More developments that are future oriented include integration of personal security technologies with other innovative technologies. This is expected to enhance realization of next-level information technology (Khan et al, 2015).
Samsung Electronics will be aided by more investment in software development. The Big Data center is used in tracking market and consumer trends. Big Data entails data collection of large sets which include imaging and text data generation in the digital environment. This is expected to bring more productivity and generation of business innovation.
Conclusions
The business strategy that Samsung Electronics has utilized has worked impressively leading to global market leadership. These strategies have resulted in improved financial performances for the company. In future, the strategies will be effective, but the efficacy will not be as rewarding as has been the case in the recent past.
The strategy of observing market products and production of more or less similar features on items will not be viable going forward if the organization keeps utilizing it. The company has faced issues of concern with the replication of the developments of other entities. This strategy will not be conducive for their market in future. Substantial market reading will, however, be vital in establishing market gaps that the company can exploit for future success.
Other strategies will be more effective. The extensive research and development will be vital for the progression of the company. This goes hand in hand with innovativeness which drives the success of the electronics industry. Well-developed R & D is crucial in invention of other technology that will promote the future performance of the company (NPD Group, 2018).
The diversity that Samsung Electronics has demonstrated will be helpful in ensuring more success in future. The strategy will be useful in increasing market reach and value. As aforementioned, though, the strategies will not be as impactful as has been the case. There is need for new business strategies to be integrated with current viable strategies for the company to achieve the continued growth that has been characteristic of the company.
Stickler, D. (2013). Samsung: A Short History. Retrieved from https://www.mercurynews.com/2013/04/08/samsung-a-short-history/
Samsung Company. (2018). About Us. Retrieved from https://www.samsung.com/us/aboutsamsung/company/history/
Lasinskas, J. (2016). Changing Industry Patterns – New Opportunities for Western Electronics Companies. Retrieved from https://blog.euromonitor.com/2016/11/changing-industry-patterns-new-opportunities-for-western-electronics-companies.html
Dudovskiy, J. (2017). Samsung Business Strategy and Competitive Advantage. Retrieved from https://research-methodology.net/samsung-business-strategy-competitive-advantage-effective-exploitation-market-readership/
Samsung Electronics. (2016). Samsung Sustainability Report 2016. Retrieved from https://images.samsung.com/is/content/samsung/p5/global/ir/docs/2016-samsung-sustainability-report.pdf
Samsung Electronics. (2017). Samsung Sustainability Report 2017. Retrieved from https://images.samsung.com/is/content/samsung/p5/global/ir/docs/Samsung_Electronics_Sustainability_Report_2017.pdf
Samsung Newsroom. (2018). Samsung Electronics Announces Fourth Quarter and FY 2017 Results. Retrieved from https://news.samsung.com/global/samsung-electronics-announces-fourth-quarter-and-fy-2017-results
Kline, S. J., & Rosenberg, N. (2010). An overview of innovation. In Studies On Science And The Innovation Process: Selected Works of Nathan Rosenberg (pp. 173-203).
Sherisse, Pham. (2017). Samsung’s profit on track to beat Apple. Retrieved from https://money.cnn.com/2017/07/27/technology/samsung-profit-apple/index.html
SCMP. (2017). Samsung’s Galaxy Note 7 fires caused by battery design, manufacturing issues, says company. Retrieved from https://www.scmp.com/business/article/2064560/samsungs-galaxy-note-7-fires-caused-battery-design-manufacturing-issues
Mozur, P. & Sang-Hun, C. (2017). Samsung Heir’s Arrest in South Korea Intensifies Calls for Cleanup. Retrieved from https://www.nytimes.com/2017/02/17/business/samsung-heir-arrested-south-korea.html
Marketresearch. (2018). Electronics Market Research Reports & Industry Analysis. Retrieved from https://www.marketresearch.com/Technology-Media-c1599/Computer-Hardware-Networking-c73/Electronics-c77/
Lee, J. R., & Sturgeon, T. J. (2015). Industry co-evolution: a comparison of Taiwan and North American electronics contract manufacturers. In Global Taiwan: Building competitive strengths in a new international economy (pp. 55-97). Routledge.
NCSU. (2018). Key Sustainability Issues in the Electronics Industry: Sustainability Industry Report. Retrieved from https://scm.ncsu.edu/scm-articles/article/key-sustainability-issues-in-the-electronics-industry-sustainability-industry-report
Khan, F., Godfrey, J., Kubik, R., Director, P. P., & Merlis, S. E. (2015). Reply Comments of Samsung Electronics America, Inc., And Samsung Research America.
NPD Group. (2018). Solutions. Retrieved from https://www.npd.com/wps/portal/npd/us/solutions/
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download