Discuss about the Operations Management at Samsung.
Samsung Electronics Company Limited is the electronic goods manufacturing arms of the South Korean business conglomerate Samsung and dominates the global electronics market. It is listed on several stock exchanges around the world like Korea Exchange and London Stock Exchange. The company is the leading manufacturer and marketer of television sets globally (samsung.com, 2018).
The statistics shown above shows that Samsung holds approximate a fifth of the global television market. Samsung Electronics manufactures television sets of different types like flat television, curved TV, UHD television and LED television sets. The company specializes in marketing television sets of both high end and medium prices. The company charges high prices and low prices respectively for these two ranges of TV sets. As far as television as a product is concerned, the product is in demand from all round the world in both business sectors and household sector. This means that Samsung Electronics engages in both B2B and B2C business as terms of television sets. The domestic customers of Samsung Electronics include middle and upper class customers who purchase the lower and higher versions of television sets manufactured by the electronics giant. The business customers of Samsung Electronics consist of business organizations which purchase the Samsung television sets to install in their premises. These organizations consist of hotels which install television sets in their lobbies and rooms to maximize the satisfaction of the guests. The customers of the electronics giant includes wholesalers and retailers which sell television sets. The business customers of Samsung Electronics as far as television also include international and national retail chains which sell electronic goods. Samsung electronics is the largest manufacturer of electronic parts used in television sets. Thus, the customers of Samsung Electronics Company Limited also consist of other television set manufacturers like LG and Sony which are also its international competitors.
The competitive strategies which Samsung Electronics Company Limited uses in terms of television sets are as follows:
The main competitive advantage which Samsung possesses is product differentiation using its superior technology and marketing strategy. The electronic giant achieves this in two ways, first by using technological features which it creates in its own laboratories. The second differentiation factor is that Samsung manufactures components which other companies use. Thus, in a way Samsung can control their production and maintain individuality in its own products. This enables Samsung to manufacture electronic products with unmatched technology excellence. Samsung uses superior technology in its television sets which has earned it a high degree of product differentiation. For example, 108cm (43) N5380 Smart FHD TV comes with highly advanced technology like Ultra Pix Colour Technology, Surround sound and Bluetooth two way audio. The product also allows synchronization with other electronic devices like smart phones which enables the TV sets exchange information with the smart phones. This superior technology has become an indispensable part of every Samsung Electronics product, including television sets. The company offers attractive discount offers on its television sets which maximizes the value of their purchase. Samsung television sets also comes with financing offers which enables more customers buy them. Thus, a combination of technological and marketing prowess attributes the company with its competitive advantage.
Samsung Electronics Company is able to maintain low cost of production in spite of high technology which owes it its second competitive advantage. The multinational has strong presence in the main markets of Asia, Europe, North America and Oceania. The company besides being listed on the Korea Exchange, in its home country is listed on international stock exchanges like London Stock Exchange. This means it can generate capital from several markets like Asia, Europe and North America which it can channelize towards manufacturing Smart FHD TV. This means capital generation strategy of Samsung Electronics is one of the most important competitive strategies. The company as a result is able to maintain low cost of production compared to its immense capital generation. Samsung can thus generate immense revenue which again it reinvest its manufacturing activities.
The deadly marketing strategy of Samsung Electronics in response to customer requirements comes to use in the marketing of television in the global market. The tag line of Samsung television sets ‘Feel the picture Feel the love’ reflects the technological prowess of Samsung Electronics which finds use in the television sets as well. The phrase ‘Feel the love’ to certain points out to the satisfaction which the customers can feel on purchasing Samsung TV sets. The TV sets from the electronic giant are available in the brick-and-mortar stores owned the Samsung and of its partner retailers. The customers, both business and individual customers can also view and purchase Samsung TV sets online. The company and its partner retailers give attractive discounts. This deadly marketing strategy enables Samsung Electronics market its TV sets all over the world and generate high revenue.
The term modular design is the product manufacturing strategy in which a number of parts can be assimilated to form different models of product. The technology is used in a number of diverse industries ranging from fast food to automobile and electronics. For example, a tear down of a Samsung Smart FHD TV shows that the product consist of 2500 high-tech components which house the cutting edge technology the television sets have. The components like Bezel, Crystal black panel, frame middle mold, optical sheet, LED, bottom chassis, middle cover, rear cover and several other parts which are outcome of the precision and cutting edge technology which Samsung possesses.
The following are the two internal failures which Samsung Electronics is facing:
The term cost of quality refers to the financial costs which multinational companies incur to get access to resources it requires to prevent defects and mistakes. As far as Samsung Electronics is concerned, the company faces competition from multinational companies like Sony and LG. The electronic giant in under continuous pressure to conduct research in technology to ensure zero-defect products. This places immense cost pressure on the company. The cost of quality keeps on increasing because often old technology and methods are rendered redundant which leads to total wastage of the financial resources that had gone into making the product. Moreover, Samsung requires to continue this investment because its competitors like LG to keep on carrying out similar R&D.
The term total quality management or TQM refers to management of quality which business organizations engage into by collaborating with the stakeholders like suppliers and customers. As far Samsung Electronics is concerned, the company has to spend immense amount of money to collaborate with suppliers of components to ensure that they maintain zero-defect parameters as well. Similarly, the company has to collaborate with customers on the social media websites to gain feedback about its products. The company has to spend immense amount of money in maintaining and updating its pages on the social media platform. This shows that total quality management places immense stress on the financial resources of Samsung Electronics.
The following are the two external failures which Samsung Electronics Company Limited faces while operating in the television market:
Competition refers to the challenge which one company faces from companies making and marketing similar products. As far as Samsung is concerned, it faces competition from international electronic manufacturers like Sansui and Sony. This is a failure because it has prevented Samsung from dominating the market. The multinational giant has to continuously invest in promotion of its products and marketing new TV sets like Smart FHD TV to sustain in the competition. This is a failure because it puts immense on the financial, material and human resources of the company.
The term sustainability refers to the operations of business organizations to reduce their environmental footprint and minimize pollution. As far as Samsung Electronics is concerned, the company manufactures products all over the world. This means that the company results in immense pollution while manufacturing products. The company is under continuous pressure to comply with the environmental and sustainability laws in power in different countries. This is a failure because it leads to plummeting the operating costs of the electronic giant.
The company uses the following processes to manufacture its products:
Samsung uses four process strategies to manufacture its products like Smart FHD TV. This manufacturing process is used to manufacture low volume and high variety outputs. The process is supervised by various departments like marketing, finance and production. The outcome of the process is high degree of flexibility but leads to low equipment equalization.
The product focus revolves around high volume and low variety products. The emphasis remains on manufacturing standard products.
The comparison and analysis of the two production methods woulfd show that Smasung Electronics stresses on manufacturing both standard products like television sets. The company produces a small number of variants of TV sets like Smart FHD TV which uses its technological prowess. This standard follows the product strategies of Samsung which is continued to other products as well. Thus, it can be pointed out that Samsung uses product focus method to manufacture TV sets. It is this process which ensures that the company dominates approximately a fifth of the global television market and generate immense revenue.
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