Category: Samsung

Executive summary

This paper examines the marketing strategies employed by two electronic companies Sony and Samsung. The industry background gives an overview of the electronics industry in terns of market segment and regional stakeholders in manufacturing. Both companies background are summarised and an insight about their areas of operations and size of their businesses in terms of sales and product development is given.

An analysis on strategic marketing and planning on both companies follows with a somewhat in-depth analysis of macro and micro environmental factor such as competition and economic factors being tackled. There is a SWOT analysis on each company highlighting their strengths, opportunities, weaknesses and threats based on their operations and positions in different markets.

Additionally there is an analysis on target marketing, segmentation and position generally and as applied to each company. Finally, there are recommendations on the way forward for the companies and those that deal in the same products.

Introduction

The 21^st century has been characterised by unprecedented advances in technology. The global electronic industry is so dynamic to an extent that technologies become “obsolete” even before they penetrate all the market segments that they were initially meant for. American and Japanese had for a long time dominated the global technology sector. However, companies from rising economies such as China and Korea have perfected the technologies that exist while coming up with innovative electronic products.

The result has been increased competition and saturation of the market that has seen technology pioneers like Hewlet Packard pushed from the top spot. To compete for and maintain the market niches, companies have had to come up with innovative marketing ways that in order to ensure long-term market survival.

This paper will analyse marketing theory and practice as applied today through a comparison of two electronic companies; Sony and Samsung. There will be in-depth analysis on the ways the two companies have integrated marketing theory with company activities to curve new market niches while maintaining current ones the backdrop of increased competition globally.

The Samsung group of companies is among the largest electronics corporations that has a global consumer base and numerous affiliate businesses. Since its first investment initiative in 1939, the company has transcended various industries in search of an effective and market aggressive industry. The electronics initiative came in late 1960s with several related branches in electronic devises mechanics and telecommunication devices.

The Sony Corporation on the other hand is a conglomerate of several media and electronic companies that specialize in the electronic business unit and the entertainment industry as a whole. Since the 1945 initiative following the invention of the transistor the company has diversified its investments it both mechanical and telecommunication sub segments (Chang, 2011, 90).

Industry background

The global electronic industry is vibrant with a growth rate matched by only a few sectors. In 2008, the industry was estimated to be worth 1.2 trillion Euros. The world production per application sector in the industry by the same year included 6% for home appliances, 15% for audio video, 23% for data processing, 25% for telecoms, 7% for aerospace and defence, 8% for automotive and 16% for industrial and mechanical.

In terms of world production per region, china was ranked the highest with 27%, followed by Europe with 21%, North America with 20%, other Asia Pacific with 15%, Japan with 13% and the rest of the world with 4% (Drummond, et al. 2007, p. 67). The above figures are represented in a graphical format below.

World production per application sector

Source: Sony Vs Samsung: The Inside Story of the Electronics Giants. London: Mcmillan Publishers.

World production per region 2008

Source: Sony Vs Samsung: The Inside Story of the Electronics Giants. London: McMillan Publishers.

The industry like any other has been affected by the global financial crisis through financial instability in terms of currency fluctuation and the credit crunch. There is also growing competition from China whose products are perceived by consumers to be affordable compared to any other in the world.

Company background

Sony Corporation is part of the world’s fifth largest media conglomerate Sony Group with total assets worth over $86billion and headquartered in Minato Japan. Sony Group operates six business segments including consumer products and services group, financial services, music and picture, professional and Sony Ericsson which the cell phone unit of the group. The group is also involved in financial and internet services.

The group has manufacturing and operations network serving the world market. According to (Chang, 2011, 78), almost half of the company’s annual production takes place in Japan. Computers, digital cameras, television sets and memory sticks are among the products manufactured in Japan. It’s important to note that over 60% of all the production that took place in Japan was destined for other regional markets worldwide. The rest of Asia excluding China and Japan, Europe and Americas accounted for slightly over 35% in annual production. The graph below shows the total annual sales and distribution by geographical regions in the year 2009.

Sales and distribution in 2009 (sales in 000,000)

Source: Sony Vs Samsung: The Inside Story of the Electronics Giants. London: Mcmillan Publishers.

Samsung on the other hand is a conglomerate like Sony Group but headquartered in Samsung Town in Seoul South Korea. The multinational conglomerate operates a series of affiliated business touching on industries such as electronics, ship building and engineering, insurance and hospitality.

However, Samsung is known more for its electronic products which include the cell phones and television sets, smart phones, home appliances, slimmer panels and 3D experience. In the year 2010, the company posted a net income of $13 billion. The table below shows some of the company’s electronic products and market share.

Source: Chang, S. (2011). Sony Vs Samsung: The Inside Story of the Electronics Giants. London: Mcmillan Publishers.

Strategic marketing and planning

Both companies fall belong to the category of multinational corporations. In there level strategic marketing and planning must incorporate the elements of hierarchical or enterprise strategy. The hierarchical structure incorporates the corporate level, business unit level and the functional or departmental levels of enterprise strategy.

Both companies display a highly defined corporate hierarchical structure that is very specific and that is aimed at dealing with prevailing market competition.

Microenvironment forces

The technology industry in which Samsung and Sony Operate in is competitive and only innovative marketing can guarantee long-term survival. Marketing of the electronic products produced by both companies is shaped by demographics, economic and political factors.

In demographic factors, the companies have to consider the demographic trends of the target markets they want to venture into. The size, density, location, gender and occupations of the target markets affect the marketing of electronic products.

For instance, the gadgets like the Samsung Galaxy tab can only be marketed to young people and people in business. It’s highly unlikely that older people say baby boomers are likely to buy the product. Additionally, different sections of the population have different occupations which dictate their income and way of life. People in business are likely to buy the Galaxy tab compared to farmers.

While marketing, the companies consider the economic factor which more or less refers to the economic strength of the target market. Further to that marketing managers of the two companies will likely consider the purchasing power of the people in potential markets. For instance the gadgets are likely to do better in the US, Europe and Japan and some parts of Asia owing to the high purchasing power of their populations.

Furthermore, the above markets are more industrialised unlike sections of the developing world where the populations still practice subsistence economy. The above conditions dictate how people spend their money which in turn influences marketing decisions of the electronic companies.

Political forces include all government policies and legislations that regulate business transactions in particular territory. In some territories, some gadgets which may be manufactured by the above electronic companies may not be sold to some sections of the population. Additionally, different governments have different policies for instance on taxation which may affect pricing of electronic gadgets.

The marketing of both the Sony Bravia KDL-40W4000 LCD TV and the Samsung LE40A656 LCD TV can be affected by the above factors.

These are the internal forces that affect the marketing of the electronic companies above. They are forces that the companies can easily alter to suit their marketing approaches (Wilson, S. & Gilliga, 2005, p. 88). Both Sony and Samsung have diverse ranges of products that are much differentiated.

Though they are both located in Asia, some microenvironment forces under which they operate dictate their marketing approaches that are unique in their own ways. This section will analyse both companies in relation to competition, consumer bases and market intermediaries.

Competition is a big factor in marketing of electronics. The intensity of the competition determines the amount of resources and tactics used. Despite Samsung’s success in producing LCD panels, it faces competition from Sony and more closely LG, another Korean electronics maker.

In 2008 fro instance, LG had a market share of 25.8% compared to 26.2% of Samsung in the same year. Sony Bravia is currently the top selling LCD television brand in the US. However, it faces growing competition form Samsung and LG which have the majority global market share.

Another factor that influences the marketing approaches of the two companies has been the consumer bases. In their marketing the companies have concentrated on reinforcing the value of their products to the consumers. The assumption among the electronics makers has been that the skinny the TV is the more appealing it is to consumers.

In 2009, Sony fronted the Bravia to the consumers as the world’s skinniest TV in an apparent challenge to Samsung and JVC’s models that were skinnier. Since then the competition between the two has shifted to picture quality and visual characteristics like 3D images that consumers value more.

Both Sony and Samsung have adapted different marketing approaches as far as market intermediaries are concerned. Market intermediaries’ help in product penetration where the company is unlikely to achieve its targets in the short tem were it to do it alone.

Sony has been the market longer than Samsung and has therefore managed to establish a wider network of regional offices that spearhead marketing compared to Samsung. Though Samsung is adopting the same approach, it has a large network of intermediaries who aid in its marketing.

Swot Analysis

Sony has dominated the electronics industry for a long time. Samsung has however matched the innovation and marketing strategies of the Japanese rival by exploiting its competitor’s weaknesses. A swot analysis of both companies puts into perspective the position they are in right now.

In terms of strengths Sony has a diversified business operations machine that guarantees stable revenue. Additionally, it has a strong brand that has played a crucial role in its gaining acceptance. Furthermore, it has a diversified client base spanning many geographical places effectively reducing business risks.

In terms of opportunities, the company has undertaken reorganization, which is likely to contribute to its savings. Also, there has been a focus on emerging economies which is likely to contribute to long-term growth of the company. The partnership with FIFA is another opportunity if well utilised will enhance corporate value.

The company experiences weaknesses in the high cost of manufacturing that in the long-run will lead to lower margins.

The threats to its progress include the unstable international exchange rates that may affect its margins and the long-lasting impacts of the economic slowdown.

Samsung on the other hand has a very strong advantage when it comes to technology. The company’s investment in advanced technology has enabled it crush competition from market leaders. Additionally, its investment in human resources and product design also form part of its strengths.

Samsung has however not created niche markets like its rival Sony Corp. Its target on the mass market and the low pricing strategy can be considered a weakness because customers are likely to consider them low quality. Furthermore, some of the company’s products have been reviewed as not being user friendly.

There are however many opportunities the company can exploit. The company has a head start in the mobile telephony through the introduction of low priced and user friendly cell phones. Further variation of its products is also another opportunity that Samsung can exploit to increase its market share.

The biggest threat the company is facing is competition from other electronic manufacturers like Sony and LG, and Panasonic and Nokia.

Market segmentation

Effective marketing takes into account different segmentation variables when dividing the market into target segments (Reed, 2006, p. 43). There may be many segments depending on the nature of the market and the products on offer. However, the most common variables include benefit variable and demographic variable.

Benefit variable deal with the needs and benefits expected by customers. Demographic variables on the other hand define the characteristics of the target customers and potential clients. Variables like gender, age and occupation are critical in market segmentation.

Sony and Samsung have numerous products that are suited for different markets based on their use and need. In terms of the market segments the products under discussion from both companies are targeted at the same markets. The Sony Brava KDL-40W4000 LCD TV and the Samsung LE40A656 LCD TV are both targeted at middle class and high end customers in the regions where the two companies operate.

Target Markets

Both the Sony Brava KDL-40W4000 LCD TV and the Samsung LE40A656 LCD TV are targeted at the upper middle class and upper class signets of the population in the areas where the two companies operate. Also targeted, are working male and female consumers, men and women in their late twenties and seniors. They above groups are the only ones likely to afford the prices imposed on the products. The above characteristics fit into the variables that were discussed earlier as shown in the table below.

Targeting strategy

Targeting strategies can be classified as differentiated, undifferentiated and concentrated (Palley, 2000, p. 54). Differentiated targeting strategies include different promotional messages each conveying different product benefits. Undifferentiated targeting strategies on the other hand involve sending of one promotional message to about the benefits of the product to the market.

Concentrated targeting strategies on their part carry messages that communicate product benefits to specific segments of the consumer base. Many businesses choose a target strategy based on the benefits they expect from the market, the market segment they are tying to reach and the costs of the passing the message to the target market.

Sony Corp. uses all the above targeting strategies because compared to Samsung; it has curved clear market niches. Samsung on the other hand mostly uses differentiated targeting because its marketing mostly targets the mass market. Samsung is yet to carve its niche market hence the need for concentrated targeting is low.

Positioning strategy

In the market, different companies use different positioning strategies. They include, price and quality, use or application of the product, product class, competitors (McDonald & Wilson, 2011, p. 90).

In product attributes, business use one or few of the products attributes through which they popularise it to the consumers. In pricing and quality, companies use varying prices and qualities to attract different classes of consumers. The quality can be superior or lower quality both of which will cost differently.

The use or application on the other is used when companies position their products to suit the habits and chores that the target population engages in. in competitor positioning, some companies engage in direct and purposeful comparison of their products to similar ones in the market to gain entry.

Samsung has engaged in the pricing positioning where its products including the Samsung LE40A656 LCD TV are low costing compared to similar products from Sony. Both firms have however perfected the quality positioning strategy where every time they emphasise every little modification that adds to the comfort that consumers are interested.

Recommendations

• Given the dynamism in the electronic technology, companies are only assured of survival through investment in research and technology.
• There is need to focus on diversification because there are all indications that gadgets market may be saturated given the fast development of electronic products.

References

Chang, S. (2011). Sony Vs Samsung: The Inside Story of the Electronics Giants. London: McMillan Publishers.

McDonald, M. & Wilson, H. (2011). Marketing Plans: How to Prepare Them, How to Use Them. NY: Infobase Publications.

Palley, N. (2000). How to develop a strategic marketing plan: a step by step guide. NY: McGraw Hill.

Reed, P. (2006). Strategic Marketing Planning. London: Sage Publications.

Wilson, S. & Gilliga, C. (2005). Strategic marketing management: planning, implementation and control. NY: Jones & Bartlette Publishers.

Introduction

Strategic planning refers to the process of identifying the most appropriate approaches towards realizing every targeted organizational goal. Strategy formulation focuses on adequate courses of action that will ensure the vision and mission of an organization are achieved. Several steps should be considered depending on the targeted business objectives. One of the most important things to understand is that strategy formulation and planning is a critical process in every organization (Lager, 2016).

At Samsung Electronics, evidence-based strategies are undertaken in an attempt to realize the targeted goals. The strategy formulation and planning phase is critical because it outlines the most desirable approaches towards achieving an organization’s mission. Samsung embraces this phase in an attempt to produce superior products that can compete successfully in the global market.

• Thesis Statement: Samsung Electronics can produce innovative devices and use customer-focused marketing initiatives to create a new strategic plan.

Strategy Formulation and Planning Phase at Samsung

Samsung is one of the leading companies in the consumer electronics industry. The firm has been focusing on the most appropriate initiatives that can deliver positive results. For instance, innovation is taken seriously to produce superior devices and appliances that can compete successfully in the global market. The company’s R&D department embraces various procedures and strategies depending on the changing needs of the global consumer (Hadjikhani, Lee, & Park, 2016). The strategy formulation and planning phase is executed by the needs of the consumers. The strategic formulation phase is characterized by specific actions such as evaluation of the global business environment, identification of targets, and analysis of past performance (Hadjikhani et al., 2016).

The above aspects are used to derive the most desirable strategy for Samsung. The strategy is founded on specific attributes such as opportunities, organizational goals, and existing strengths (Son & Kim, 2016). After identifying the best strategy, the right team is assembled to achieve targeted goals. However, specific recommendations have the potential to redefine the company’s future performance.

Recommendations

Several recommendations can make it easier for Samsung to achieve its business potentials much faster. The best suggestion is for the company to combine the continued introduction of innovative products with customer-centered marketing campaigns (Hadjikhani et al., 2016). The company has been producing superior smartphones and mobile devices that support the needs of more customers. However, Samsung Corporation can focus on the best strategies to produce new devices that deliver exemplary and user-friendly applications (Hadjikhani et al., 2016). The features included in these devices should be able to improve people’s lifestyles.

After producing such superior devices, Samsung Electronics should employ the use of strategic marketing campaigns (Son & Kim, 2016). Such campaigns should be characterized by the best attributes such as effective advertising methods and promotional approaches. The strategy will inform more people about the benefits of newly-produced innovative products (Lager, 2016). Feedbacks from different customers should be used throughout the research and development (R&D) process. Platforms such as Twitter and Facebook will inform more people about the company’s products.

Cirjevskis (2016) argues that “the use of customer-centric marketing models will attract more people” (p. 4). Samsung’s external environment is characterized by numerous opportunities and threats. To begin with, the number of people using different handheld devices and mobile phones has increased significantly within the past decade. More customers are using handheld devices for marketing, socialization, and academic purposes (Son & Kim, 2016). This situation explains why Samsung has the potential to realize its business objectives. The strategic formulation phase should, therefore, be guided by these consumer needs.

The question of competition in the external environment cannot be ignored. Samsung faces competition from giant corporations such as Apple and Nokia. Newcomers such as Tecno Mobile and HTC are posing new threats to the firm. To deal with such threats, the above recommendation will ensure Samsung is on the frontline towards realizing its business potentials. The availability of superior devices will encourage more people to support Samsung’s business model. New studies should also be conducted to identify the best measures that can improve the firm’s level of performance (Mohapatra, 2016). The economic growth experienced in many developing countries should become a new opportunity for Samsung. This understanding will ensure the firm designs new customer-focused marketing models for each region.

Samsung can benefit from the corporate social responsibility (CSR) concept. The corporation should undertake a wide range of activities aimed at improving the lifestyles of more people. This effort has the potential to attract more customers in the future. The CSR concept should become part of the firm’s strategic choice. By so doing, the reputation of the company will increase and eventually attract more stakeholders. Mohapatra (2016) believes that a marketing initiative supported by various CSR practices will deliver positive results.

The takeaway for the Targeted Audience

Strategic planning can help more companies realize their business goals (Cirjevskis, 2016). During the strategy formulation phase, business managers should consider the most favorable and attainable goals. The phase should also be guided by the organization’s external environment. This is the case because numerous forces dictate the performance and profitability of every business organization. The existence of opportunities in the external environment is something that should be analyzed carefully (Cirjevskis, 2016). The gained knowledge will make it easier for the targeted organization to design the best business strategy.

Threats should also be considered during the strategy formulation phase. The organization should identify the most appropriate strategies for dealing with the existing obstacles and threats (Mohapatra, 2016). It is also appropriate for business managers to combine various strategies whenever creating the best business model (Cirjevskis, 2016). For instance, companies can focus on the best R&D initiatives to produce superior products. The next stage is using evidence-based marketing campaigns to ensure the products are marketed successfully to the targeted customers.

Corporate social responsibility (CSR) should be taken seriously during the strategic formulation and planning stage. This idea will ensure every business model focuses on the diverse needs of more customers and their respective societies (Mohapatra, 2016). Companies should also collect feedbacks from different stakeholders to ensure the newly-designed strategy is applicable. The initiatives undertaken by Samsung should be embraced by business managers who want to make their companies successful (Son & Kim, 2016).

They should begin by designing the best products or offerings that appeal to more customers. These lessons can be applied in a wide range of settings and eventually ensure the targeted companies realize their business potentials. Finally, different social media platforms should be embraced by business people who want to sensitize more people about their products.

Reference List

Cirjevskis, A. (2016). Designing dynamically “signature business model” that support durable competitive advantage. Journal of Open Innovation: Technology, Market, and Complexity, 2(1), 1-15.

Hadjikhani, A., Lee, J., & Park, S. (2016). Corporate social responsibility as a marketing strategy in foreign markets: the case of Korean MNCs in the Chinese electronics market. International Marketing Review, 33(4), 530-554.

Lager, T. (2016). Managing innovation and technology in the process industries: current practices and future perspectives. Procedia Engineering, 138(1), 459-471.

Mohapatra, D. (2016). A study on the product life cycle of Samsung smartphone’s in India. Emerging Trends in Management & Information Technology, 1(1), 41-49.

Son, I., & Kim, J. (2016). The effect of Samsung pay release event on Samsung pay’s strategic alliances in Korea Equity Market. International Journal of u-and e-Service, Science and Technology, 9(3), 121-130.

Introduction

Samsung started its business in the year 1938 as a petite trading company in Taegu, Korea. The founding chairman of Samsung was Byung-Chull Lee. Even after facing several hurdles, the Korean War of 1950 and the financial crisis of 1997 being the two major setbacks, Samsung has been able to carve an enviable niche for itself in the world electronics market.

According to the vision of Samsung, “Samsung is dedicated to developing innovative technologies and efficient processes that create new markets, enrich people’s lives, and continue to make Samsung a digital leader.” (Samsung).

History and Nature of Business

The initial name of Samsung group was Samsung Sanghoe when Byung-Chull Lee started it as a trading company based at Taegu city. During the ensuing years, Lee diversified the business in various fields such as sugar refinery, woollen mill, insurance, securities, and retail.

In 1960, the Samsung group forayed into the electronics market. New companies were formed such as Samsung Electronics Devices Company, Samsung Electro-Mechanics Company, and Samsung Corning Company. In the year 1980, all the companies related to the electronics business were merged in the parent company Samsung Electronics Co. Ltd.

The first product launched by Samsung in the electronics sector was a black and white television set. During the ensuing years, Samsung opened facilities for manufacturing electronics in countries such as England, Portugal, United States, Japan, etc.

Today, Samsung has stake in various fields such as electronics, construction, chemicals, heavy equipments, life insurance, securities, hotels, etc. Following are the affiliated companies of Samsung that are listed with the Korea Composite Stock Price Index (KOSPI):

Source website: Wikipedia, Samsung.

Scope of Management Information System

“Information, a key resource, plays an important role in information society. Treating information as resource itself is a change in information management. Different issues on information management are management of change, systems and services, technology, collection development, personnel management, finance and planning.” (Rao, 1999)

The scope of Management Information System is defined as, “The combination of human and computer based resources that results in the collection, storage, retrieval, communication and use of data for the purpose of efficient management of operations and for business planning.” (Coursework, 2003)

An effective management information system can be developed only by having an unambiguous strategy for implementing various tasks. The following points should be pondered upon:

• Information pertaining to the end-users.
• Evaluating the present information system.
• Which are the sources and their availability?
• Will it be cheaper to access information than acquiring it?
• The consequences of absence of information.

Following is a flowchart of the Management Information System:

Figure 1: Management Information System

As the name suggests, Management Information System is based on information. The purpose of Management Information System is to provide information pertaining to the functioning of the business (like functioning of accounts). Such information is interpreted by the staff at various levels and decisions are taken for the improvement of the business and also to ensure that the business is game for competition. Management Information System is employed in businesses all over the world. Following is a flow chart that depicts the flow of information:

Figure 2: Flow of information

Features of Management Information System

Following are the advantages of Management Information System:

• Of late, organizations throughout the world have grown in size. As such, it has become difficult for managers to manage the various functions of the business. The reason being the information is very vast and it is difficult for them to interpret the same. Management Information System provides only the relevant information to the managers so that they can take proper decisions.
• Due to the vast information, managers get confused and this hampers the decisions to be taken. Management Information System eases the difficulty by summarizing the information.
• Management Information System helps in decentralizing the authority.
• Management Information System helps in sending information to the concerned departments of any business. As a result, all the departments have up-to-date information.
• Management Information System maintains a link between all the departments of any business.
• Management Information System helps in maintaining a link between the planning and control procedures of any business.

Management Information System Architecture

“Information architecture is the term used to describe the structure of a system, i.e. the way information is grouped, the navigation methods and terminology used within the system.” (Barker, 2005)

“Architectural artefacts are created in order to describe a system, solution, or state of the enterprise… The architect has a responsibility for ensuring the completeness (fitness-for-purpose) of the architecture, in terms of adequately addressing all the pertinent concerns of its stakeholders…” (Togaf)

There is a certain procedure to be followed while crafting effective information architecture:

• The requirements should be understood properly.
• Stakeholders should be interviewed.
• Cards sorting should be performed.
• The cards sorting results should be evaluated.
• Information should be grouped.
• Draft architecture should be made.
• It is not necessary that the information architecture will be perfect in the first try. It might have to be changed and the process might have to be followed a number of times.
• Several user tasks should be identified and the process of each task should be sketched out.
• Comments from other staff members should be invited on the process.
• Once everything is perfect, annotations of the procedure should be made.
• Guidelines for the procedure should be included in the annotations.

Business domain is an essential perspective for architectures of Management Information System. The perspective is, precisely, as follows:

Following is a flow chart that depicts the Management Information System architecture:

Figure 3: MIS Architecture

Management Information System Networking

While creating, refreshing or recreating an infrastructure of a business, it is very important to take the technological aspect into consideration. It becomes all the more important due to the fact that today businesses are becoming global and as such, in order to keep pace with the competition, having the latest technology is a must. According to an article posted at the Website of California Miramar University:

Infrastructure considerations in the local environment are extremely important. The reason for that is that the connectivity typically in the local environment extends not only from the individual machine, that the user might be using, but also back to the system components that allow access to those applications that provide business services, such as email or database access, etc. (Calmu, 2012)

Management Information System Database

“Strategically managing your critical information and resources is essential for success, and will keep you one step ahead of your competitors.” (Steps)

Benefits of having a proper database for the information are as follows:

• Items can be defined in a preferred manner.
• Information is safe because users are allowed to enter into the system on an approval basis.
• Owing to the automated notification feature, the stakeholders are automatically informed about any change in the information. Subsequently, stakeholders can take the required actions.
• A systematic approach makes it easy for the end-users to operate.
• Time and money are saved.
• Features that were previously included in the interface and are not being used are automatically deleted. This helps in making it user-friendly.
• Since the system is centralized, the users don’t need any software to work. They can simply work through their internet connections.

IT-Enabled Business Processes

“The purpose of business process management (BPM) is to define and manage business processes as an asset of the organization, in much the same way an organization’s customers, intellectual property, financial and physical assets are managed.” (Welke, 2010)

There are certain constituents for successful IT-enabled business processes:

• A vast span is covered by these processes. Care should be taken that such processes are not too large if the business is new or the processes are being employed for the first time.
• Instant results can be achieved.
• The characteristic of such processes is very precise.
• There is consistency in these processes.
• Supervision becomes easier.
• The spotlight of these processes is business.
• Incessant enhancement in the business can be witnessed.

The main aim of business process management is to simplify performance management. It manages the organization’s performance. All available assets are put into use while achieving the aim. All the individuals involved in the process are able to work individually and the collective results help in the success of the management process.

Problems and Opportunities of the Current MIS

In order to implement new technologies for Management Information System organizations have to invest a lot. But by merging the business information and the business process management, this investment can be averted. This proves to be a cost-effective measure.

There are certain key issues that should be considered by any organization:

Building a responsive IT infrastructure

The basic rule should be to develop such an infrastructure that supports the existing applications and at the same time responses to the changes. But this task is not as simple as it seems. The incessant changes and developments in technology make it all the more difficult.

Facilitating and managing business process redesign

Organizations worldwide frequently change their methods of doing business due to the pressure from the market. Information technology has a vital role to play in this process. It allows the redesigning of the main business processes in a ground-breaking manner.

Developing and Managing Distributed System

Cost-server applications are economic as compared to the centralized application. But there are certain problems that arise like keeping pace with the latest software, maintaining reliable data, managing common development projects, etc.

Developing and Implementing an Information Architecture

Information architecture is crucial in order to identify the main information categories being used by any organization and their link with the business processes. The same is important in order to execute application developments and facilitate the assimilation and sharing of data.

Planning and Managing Communication Networks

In today’s world, organizations have become more of information processing systems. Processing information by the help of technology requires admission into the suitable networks, internal or external.

Improving the Effectiveness of Software Development

Even after so many years of computing, the backlog of application development is quite high. The conventional methods of development are very slow. New methods like establishing the client server have not proved to be successful. In spite of all these hurdles, organizations have to develop and keep pace with the competition.

Making Effective Use of the Data Resource

Worldwide, organizations are experiencing an increase in their data resources. Most of such data is unrecognized and hard to find. Therefore, such an atmosphere should be built within the organizations that people start treating data as valuable asset.

Recruiting and developing IS human resources

Use of information technology requires professional and well qualified information technology executives. Organizations are facing a shortage of such executives. Moreover, there should be a sense of unity and teamwork within the organization. The information technology executives must be acquainted with the latest developments in the information technology sector.

Aligning the information system within the organization

The efficiency of the information system also depends on its standing in the organization. In other words, the efficiency depends on the place it has in the organization. It has been observed that this particular department is not given its due importance in the organization. Moreover, sadly though, sometimes the cultural and social factors have a great effect on the performance of the information system.

Improving IS Strategic Planning

It is very critical for information system to make long-term plans. But due to the incessant change in business environment all around the world and continuous change and improvement in the technologies, making long-term plans is a difficult task. Short-term plans require too much flexibility.

Apart from these key issues, there are several other factors, some of which are listed below:

• Implementing and Managing Collaborative Support Systems
• Measuring IS Effectiveness and Productivity
• Increasing Understanding of IS Role and Contribution
• Facilitating Organizational Learning
• Managing the Existing Portfolio of Legacy Applications
• Facilitating and Managing End-User Computing
• Using Information Systems for Competitive Advantage
• Planning and Integrating Multi-Vendor Open Systems
• Developing and Managing Electronic Data Interchange
• Outsourcing Selected Information Services

Figure 4: Key issues of MIS

Recommendations

The future holds a very important role for management information system. Since this kind of system is mainly based on the information technology, it seems that in future the world will become a sort of wired community.

Organizations should give more importance to acquiring and adopting the latest technologies in the information technology sector. This will help them to be in the race for the top slot. By adopting the new methods, organizations will be competent enough to survive the fierce competition for excellence. This will also enhance their performance and chances of errors will be minimised.

As discussed earlier in the paper, competent information technology professionals or personnel are very crucial to any organization that has adopted the management information system. Without such professionals, even though the organization has adopted the latest information technology, it will be difficult for it to cope up with the requirements of the management information system. A strong network of information is required in order to get the up-to-date information.

This is possible if the organization has registered its website with some reputed SEO service company. SEO means service engine optimization. Business houses around the world rely on SEO services to enhance the page ranks of their company websites. The advent of such services dates back to the mid 1990s. It helps business houses in garnering more attention for their products or services on the web. Websites play a critical role in the success of any business.

When a person searches for any particular product, the names of the companies that have employed such services and deal in that product appear first. During the years, there has been an upsurge in the quantum of sites and the web users. People find it easy and time-saving to gather information available on various search engines. The SEO services are helpful in extending information to such people.

It has become inevitable for any new business to make use of such services in order to enter the market and also for the existing businesses to sustain the competition. There are various reasons as to why companies should make use of SEO services. One of the most important reasons is that a company might have a perfect website with all the required information for promoting its products or services but unless the website is viewed by the customers, it is futile. So optimization of the websites is very crucial.

Choosing a good search engine for optimization can enhance the traffic to a company’s website. Consequently, there will be an increase in the opportunities and possibilities of getting business. Another important feature of having SEO services is the blogging within the website. People will be able to see comments on the products and/or services of that company and this will help them decide on the purchase.

Adding fresh keywords will also help in attracting new traffic. It is believed that fresh stuff supported by fresh keywords and an operational blog, result in higher page ranks and higher business. There are two kinds of SEO services namely, short term and long-term. As the names suggest, the difference between the two is the duration. Basically, the short-term services are not encouraged by reputed companies due to the fact that such services have more of drawbacks than the positive effects.

Moreover, search engines like Google also discourage the short-term services. There are certain benefits of choosing the long-term SEO services. First of all, the business house will be game for competition for a longer duration. The likely customers will have a continuous relevance when they see the company listing incessantly.

Secondly, by changing keywords at regular intervals, a company can keep pace with the savoir-faire of the customers. Finally, a long presence at the pinnacle of the SERPs enhances the company image and indicates its stability. It also shows that the company has a long-term strategy and will keep on making its presence felt to the web community.

Conclusion

In concluding, we understand that information plays a crucial role in the management information system. Information is indirectly or directly related to information technology infrastructure. The information technology infrastructure is handled by the IT professionals. So it is an acceptable fact that IT professionals are a key to the successful implementation of management information system in any organization.

References

Barker, I. (2005). What is information architecture?. Web.

Calmu. (2012). Management information system: Networking technologies video lecture from MIS 6110. Web.

Coursework. (2003). The purpose and scope of mis – management information systems. Web.

Rao, I. K. R. (1999). Information management: Scope, definition, challenges & issues. Web.

Samsung. Corporate profile. Web.

Steps. The ultimate information management system and database. Web.

Togaf. Architectural artefacts. Web.

Welke, R. (2010). In J Dibbern (Chair). Research in the emerging area of IT-enabled business process management. Paper presented at Bern IT-enabled business process management, Engehaldenstrasse. Web.

The Business Case

Performance appraisal is part of performance management, and plays a critical role in encouraging employees to adopt desirable performances. Virani (2012) defines a performance appraisal as the “systematic and objective way of judging the relative worth or ability of an employee in performing his job” (p. 1). This report analyses the performance appraisal at Samsung Electronics – a Korean company.

As a player in the competitive information technologies (IT) industry, Samsung strives to hire and retain some of the best IT talent available globally. Like most businesses, however, Samsung seeks to retain the best performers, encourage the average performers to enhance their performances, and fire employees who do not perform well (Samsung, 2013). To do the foregoing, the company has a performance appraisal system that involves self-evaluation, competence evaluation and performance evaluation.

One of the main benefits of performance appraisal at Samsung is that, the company is able to adopt a performance-based compensation approach (Samsung, 2013). Performance-based compensation is, however, awarded in bonuses, and/or promotions, because as Samsung (2013) indicates, its payment system is non discriminatory.

As such, employees working in the same position receive equal pay regardless of their nationalities, age, gender or other points of diversity. Samsung (2013) however, underscores the importance of individual performances, because they determine the reward that an employee gets. Such rewards are given in the form of merit-based pay. Bae, Rowley and Sohn (2012) indicate that at Samsung “merit pay increases individual compensation based on competence and performance” (p. 155). In order to determine personal competences and performances among its employees, Samsung conducts annual performance appraisals.

Impact of performance appraisal

Performance appraisal methods used at Samsung

Samsung uses the ‘absolute standards approach’, which, according to Lunenburg (2012), provides a “detailed description of the actual behaviour necessary for effective performance” (p. 3). Specifically, Samsung uses checklists, which are a common method in the ‘absolute standards approach’ of appraisal. Checklists are used in three methods, namely: self-assessment, competence evaluation, and performance evaluation.

Self-assessment

In this method, employees are given the mandate to gauge their own performances. They are required to fill the self-appraisal forms annually, and send them to their supervisors. The supervisors then use an ABCD grading system, where ‘A’ denotes excellent performance, while ‘D’ denotes poor performance (Bae et al., 2012). The results obtained from self-assessment are used in education (specifically in training and development programs), and in job rotations. Through self-assessment, employees understand whether they are meeting job-related expectations.

Additionally, self-assessment enables employees to assess their contribution to a job. Moreover, employees are able to identify their strong areas of performance, while pinpointing areas that could benefit from training programs (Bae et al., 2012). The foregoing is important because it helps employees at Samsung to be self-directed, and much as it benefits the organisation, self-assessment also benefits employees since they are able to plan for their professional development and careers.

Competence evaluation

At Samsung, competence evaluation is done once a year among all employees (Bae et al., 2012). Evaluations are conducted by the supervisors and executives using relevant checklists. The evaluation involves appraising employees on “knowledge, skills, abilities and other characteristics” (Bae et al., 2012, p. 152). Like self-assessment, competence evaluation uses an ABCD grading system with ‘A’ denoting excellent performance, while ‘D’ denotes poor performance. The results obtained from competence evaluation are critical to promotions of employees at Samsung.

Performance evaluation

At Samsung, performance evaluation is conducted twice annually by supervisors and executives in the company. All employees undergo the performance evaluations, since they (evaluations) are used to determine individual performances on “tasks, duties and responsibilities” as indicated in relevant checklists (Bae et al., 2012, p. 152). Once again, the ABCD grading system is used, and as Bae et al. (2012) notes, the results of performance evaluation are critical to the issuance of promotions and bonuses.

The role of human resource (HR) personnel in performance appraisal

The role of the HR personnel at Samsung in relation to the performance appraisal system is perhaps best reflected in the fact that performance appraisal is deemed part of the larger human resource management (HRM) system. Bae et al. (2012) note that the current performance appraisal system, was designed by the HR personnel for incorporation in the new HRM policies.

The HR personnel at Samsung also work with department managers/supervisors to enhance the adoption of the new system by employees. At Samsung, for example, there was a risk of resistance by employees when the new system was put in place, but the HR personnel managed that risk effectively (Bae et al., 2012).

The HR personnel also have a role to constantly assure employees that the performance appraisal system is not meant to prevent them from working together. This is especially critical because of the strong Korean labour unions, which have argued that the new performance appraisal methods are dividing workers along self-interested pursuits, rather than encouraging them to work for collective goals (Bae et al., 2012).

The HR personnel further have a role of ensuring that employees are provided with learning and development opportunities. The content of the learning and development programs is based on the skills gaps, or areas where knowledge is deficient as identified by the HR personnel when analysing performance appraisals. Bae et al. (2012) further notes that, the HR personnel have a role to go through the performance appraisal checklists for purposes of identifying top performers, endorsing them for promotions, and identifying the best incentives that can be used to improve and retain the best talent that the company has.

Overall, it would seem that the role of HR personnel in performance appraisal starts right from the development of an appraisal system, to its administration. Critiquing the results of the performance appraisal and using the results to develop policies and activities that enhance the human resource of the company, is also the role of the HR personnel. They also recommend bonuses and merit-based pay for good performers.

The strategic role of performance appraisals at Samsung

The effects of performance appraisals at Samsung are wide-reaching. Bae et al. (2012) for example, note that such appraisals form the basis of merit-based pay. The foregoing is significant because Samsung had in the past decade, shifted to a pay system that recognizes and rewards individual performance and effort. Strategically, the company uses performance appraisals to encourage its employees to perform better and as a result, make Samsung a better performer compared to its competitors in the IT, electronics, and device solutions markets (Samsung, 2013).

Specifically, Samsung aims to “secure its position as a global electronics leader through creative business strategies that aspire (sic) future innovation and create opportunity for people around the world” (Samsung, 2013, p. 3). To meet the aforementioned aim, Samsung recognises the important role that its employees have to play, hence the need to appraise them, train them when the need arises, and inspire them to enhance their performances.

The role of performance appraisal on employee motivation and productivity

At Samsung, performance appraisals are used to help employees understand what is expected of them. Additionally, the self-assessment checklist helps employees gauge their skills, and indicate areas where they can benefit from more training. An example in Samsung is whereby, employees are asked to indicate which areas they think/feel they can benefit from further training.

Moreover, through checklists used in both competence and performance evaluations, the HR personnel identify employees whose performance is exemplary, and who have the skills, knowledge and abilities to handle larger roles in the company. Performance evaluation is also used as the basis of awarding bonuses to well-performing employees. For example, Samsung’s HR department uses performance appraisals, as the basis for promoting employees, and awarding bonuses to others.

The foregoing not only encourages competitiveness in the workplace, but also motivates employees to put in more effort in their respective jobs. Performance appraisals also improve productivity by: identifying skills that would benefit from training; encouraging people to work harder in order to benefit from bonuses; and enhancing hard work in view of possible job promotions and career progression. Arguably, performance appraisals also discourage unproductive behaviour because every employee wants his performance to receive good ratings.

Performance appraisal and automated systems

A search through Samsung’s publicly available documents reveals that the company does not go into details about whether it has automated its performance appraisal systems. Being in the IT industry, however, one would expect that the checklists are at least computerised.

How automation helps with performance appraisals

The foregoing means that employees, supervisors and executives do not fill the checklists manually, but via a computer program. Automating the appraisal systems has several advantages. For example, the performance appraisal checklists are standard for all employees holding the same job titles (Cohen & Hall, 2005). The foregoing makes the appraisal systems easy to administer and analyse. Automation can be effected in a manner that enables email notifications to each employee, reminding them to fill their annual self-assessment checklists.

The foregoing is a good way of enhancing accountability and ensuring that every employee fills their checklist. An additional advantage is that automation makes data aggregation easier, and this enhances the supervisors’ and executives’ abilities to review performances effectively and efficiently (Cohen & Hall, 2005).

An easier review guarantees faster issuance of feedback, and targeted development planning (e.g. when developing training programs for employees). Automating the appraisal systems also makes it easier to align employees based on their performances. Additionally, automation makes it easier for the HR department to access appraisal data and use it to forecast future HR needs and plan for the same (Cohen & Hall, 2005).

Challenges of automated appraisal systems

The automation of appraisal systems at Samsung has its fair share of challenges. As Cohen and Hall (2005) indicate, automation of appraisal systems brings about a remote way of gauging how well the employees are performing their duties. It can therefore minimise the face-to-face interaction between employees and supervisors/managers. Automated feedback may also not have the same effect as face-to-face feedback.

Cohen and Hall (2005) also indicate that some employees do not consider automated appraisal systems as trustworthy; hence, they may consider the reviews based on the same as unfair. To remedy such a situation, Samsung might need to ensure that all its employees have full confidence in the automated performance appraisal system.

Reflection

The learning experience

The process of researching and writing this report presented a learning experience, mainly in the form of understanding the importance of appraising job performances. It is now clearer that appraising performance is not only a way through which the organisation ensures that employees are performing as expected; but is also a way through which employees can be motivated to perform better and even stay at the company longer.

It is also clear that automating the performance appraisal systems have several advantages, which include making the appraisal system easier to administer. Additionally, automation makes analysing the appraisal results much easier. Overall, it appears that Samsung has strategically used performance appraisal as part of the larger performance management system, which it uses to ensure that it has the necessary HR capital needed to attain its aims and objectives.

Challenges

One of the main challenges in researching and writing this report was in getting relevant information from Samsung. Understandably, profit making companies like Samsung do not disclose all information to the public due to competitive reasons. Luckily, the book authored by Bae et al. (2012) and the annual report authored by Samsung (2013) provided critical details that were important in understanding how the company conducts its performance appraisals.

A clear understanding of what Samsung does (i.e. using technology in the creation and development of IT solutions and consumer products), made it easier to link the company with automation. Hence, the report argues that even though there are no details about its automation of the performance appraisal systems, it should be expected that the Samsung has in the least, computerised them.

Reference List

Bae, J., Rowley, C., & Sohn, T-W. (2012). Managing Korean business: organisation, culture, human resources and change. New York: Routledge.

Cohen, A. J., & Hall, M.E. (2005). Automating your performance and competency evaluation process.

Lunenburg, F.C. (2012). Performance appraisal: methods and rating errors. International Journal of Scholarly Academic Intellectual Diversity, 14 (1), 1-9.

Samsung. (2013). Samsung electronics 2013 sustainability report.

Virani, S. R. (2012). An analytical study of performance appraisal system of the selected information technology enabled services (ITES) companies. International Journal of Multidisciplinary Research, 2 (5), 135-145.

Need to write a case study on Samsung? Challenges faced by Samsung company are fascinating to explore! Check out this essay to get interesting ideas related to Samsung company. Problems and solutions related to its quality issues are explored here in detail.

Samsung Challenges: Introduction & Background

Samsung is one of the leading manufacturers and distributors of electronic products in the world. Over the last ten years, the firm has experienced impressive market growth because of its marketing strategies. According to Chang (64), Samsung has become the leading electronic firm in the global market because of the pricing and market communication strategies. Most of its high-end products are fairly priced compared to those of its major competitors such as Apple Inc. it has also learned the art of communicating with its clients in the market. However, the firm is now facing a number of challenges that may affect its profitability in the market. In this paper, the researcher seeks to analyze the main challenge that this firm is currently facing.

According to Bradley and McDonald (117), the biggest marketing challenge that is currently facing the firm is how to sell its Smartphone to organizational buyers. This is considered the main problem facing Samsung Inc because organizational buyers no longer trust its products. In order to succeed in the current market, Samsung cannot afford to ignore this market segment. Chang (32) says that organizational buyers are becoming important to firms because of their purchasing power.

Many firms are now using Smartphone and other related electronic gadgets to address various activities. Multinational corporations rely heavily on these devices to monitor the operations at various branches across the world. Firms such as Blackberry and Apple have remained very successful in marketing to the organizational buyers. However, many firms have rejected Samsung devices citing a number of reasons.

Challenges Faced by Samsung Company: Security Issues

The major reason why Samsung smartphones and other communication gadgets are less popular among organizational buyers is because of the issue of security. Samsung’s Smartphone runs on Google’s open-source Android OS. This operating system is more vulnerable to viruses and can easily be hacked as opposed to that which is used by Apple Inc and Blackberry. According to Butow and Watson (29), the chief executive officer of Samsung admitted that the operating system used by the firm’s Smartphone has a number of security problems. This confession came after complaints from some of the organizational buyers who had used the Samsung communication gadgets. These customers complained that their data was easily breached because of poor security system. They also complained that they were slowed in their work because of the constant malware interference every time they went online.

Samsung Company Problems and Solutions: Regaining Trust

The complaints have earned Samsung a negative image in the market. Organizational buyers no longer trust their communication gadgets. As Doole and Lowe (78) say, firms highly value the security of their data. In order to have a competitive edge over market rivals, it is necessary to have superior marketing and production strategies. Such strategies should not be accessible to rival firms. To do this, these organizations need communication gadgets that can protect their internal database even when it goes online. However, it has been proven that Samsung gadgets cannot offer this security.

The breach of private data by third parties can cause serious consequences depending on the database that has been compromised. Sometimes hackers may destroy important files that are needed for normal operations. When this happens, such a firm will be grounded until such a time that the mess can be addressed. In order to win the trust of the organizational buyers, Samsung will have to address the weaknesses that have been identified in its communication gadgets. It may take longer to win back this trust, but it is the only way of addressing this marketing problem.

Works Cited

Bradley, James and Mathew McDonald. The social organization: How to use social media to tap the collective genius of your customers and employees. Boston: Harvard Business Press, 2013. Print.

Butow, Edwin and Linnet Watson. My Samsung Galaxy Tab 4. Hoboken: John Wiley & Sons, 2015. Print.

Chang, Samuel. Sony Vs Samsung: The Inside Story of the Electronics Giants’ Battle for Global Supremacy. Hoboken: John Wiley & Sons, 2011. Print.

Doole, Isaac and Richard Lowe. Strategic marketing decisions in global markets. London: Thomson Learning, 2005. Print.

Abstract

This report examines supply chain techniques used by The Samsung Group. It reflects on historical management aspects of the corporation and its quality management systems. The Group adopted Six Sigma and supply chain management (SCM) shortly after its establishment in 1938. In 1994, it realized that it had not exploited SCM and modified it.

The corporation’s supply chain strategy has six components, namely, leverage, strategic communication, process and operating efficiency, risk management strategies, and continuous improvement plans. SCM has led to improvement of quality management systems used by the corporation. However, the corporation can achieve more of its objectives by adopting enterprise resource planning (ERP) tools.

Report on Samsung Group’s Supply Chain Management

A business can manage its operations effectively by adopting relevant operational and supply chain techniques. Before the early years, supply chain management was not considered a resourceful management tool. However, in the 1990s, companies began to realize the impact of supply chain techniques on their business operations (Yang, Choi, and Chae, 2007).

The Samsung Group of companies began to implement the technique shortly after it was founded in 1938. It is known globally as an important manufacturing, financial, and Services Corporation. The Group has made significant steps and witnessed impressive increase in profits since the 1990s. The corporation regards this achievement as reflecting its effort to prove global business operations. For a long time, supply chain management has been one of the main pillars of business improvement at this corporation.

Its performance has been improving due to the remarkable use of SCM solutions. In 1994, The Group decided to exploit the potential synergy linking supply chain management and Six Sigma. It created a supply chain solution with six components that play crucial roles in enhancing vendor management strategies (Yang, Choi, and Chae, 2007).

The first component of the corporation’s SCM is leverage. This tool has helped the corporation to take advantage of its potential spending power and further improve profitability (Casemore & Co., n.d.). The Group creates leverage through financial instruments such as futures and margins. It also uses debts to finance its operations.

Despite this investment method being a risky tool, it has helped the company to operate for many years. The Samsung Group has developed an effective system to overcome risks associated with leverage. It has a policy that requires initiation of leverage based on information generated and supported by independent and trustworthy sources.

The next component of The Samsung Group’s SCM is Communication. The corporation uses the tool to get support from internal and external business sources. It understands that obtaining value from service providers or product suppliers to meet developing company goals requires an effective communication plan. It has developed a communication model that ensures external parties supporting organizational objectives are aware of current business challenges such as the frequent changes in technology.

It has developed a “supplier feedback” model to ease communication with the external stakeholders. This essential component of SCM is costly to develop and maintain. The corporation invests in education and research to over come some challenges associated with it development and maintenance. It has been using it while supplying electronic components to Apple, a company that manages a series of global chain stores (Yang, Choi, and Chae, 2007).

Additionally, the company utilizes process and operating efficiency solutions. It has recognized that an increment in production translates to an increment in volumes of supply of raw materials and production machineries. Moreover, when new quality standards were introduced, the supply chain systems were affected (Casemore & Co., n.d).

This encouraged the corporation to develop efficiency solutions. For example, when the corporation began to implement the ISO quality management, it developed new inventory management methods. The long-term benefits of efficiency are numerous. However, when beginning to improve supply systems to meet customer needs, a company may invest a lot of money.

It may need to employ a larger number of trained and experienced managers, buy modern production machines, and increase employee salaries. The main problem companies often face when implementing this component of SCM is delay in increase of equity. The Samsung Group invested in the process and ultimately increased its customer base (Yang, Choi, and Chae, 2007).

The Group’s supply chain management also incorporates innovation solutions. The company has managed to keep its daily operation on course as it initiates innovation plans. It has been managing innovation by getting support from external suppliers and other trade partners. Samsung has been a supplying electronic product to Apple. The two companies have attained exceptionally high success levels due to the co-operation.

Currently, both Samsung and Apple are leading global competitors. The companies are using innovation strategies to control the market (Yang, Choi, and Chae, 2007). The companies, therefore, need to spend heavily in technological research to remain economically viable. The Samsung Group have managed it innovation plans effectively, added more services, and reduced costs. It has also been improving its relationship with other companies.

The other component of supply chain management that Samsung uses is risk management strategies. External businesses that support Samsung present high levels of uncontrollable risk to the company. These risks are invisible and not easy to manage. However, The Group has developed a system that mitigates external risks. For the system to work successfully, it requires the support of both internal and external stakeholders.

Since managing suppliers, for example, is not easy, the company has faced obstacles is trying to coordinate with them. The Samsung Group, currently, cannot have no information regarding Apple’s next step of action after it emerged that the former is emerging as a strong competitor. The Group needs to examine its strengths and weaknesses and choose to trade with new partners or rebuild business ties with Apple (Yang, Choi, and Chae, 2007).

The final component of the system is continuous improvement plans (Casemore & Co., n.d.). Samsung engages in many activities to improve its performance. Most of the improvements have impacts on external stakeholders. Improvements done on Samsung phones, for example, would lead to reduction of costs and influence the supply chain management to reduce costs through different internal and external efficiency parameters.

The Group uses control charts to decide whether to reduce costs or not. For example, if it generates a control chart like the one shown below, it increases investement in communicaction and efficiency systems. The chart shows that the SCM components are under performing. The centre line acts as the average postion. Therefore, when the other lines fall below it , it is an indication that the affected components may hinder the corporation from meeting its quality targets (Yeung, 2008).

Samsung Control Chart for Communication and Efficency

Supply chain management has created reductions in working capital and organizational risks for Samsung due to improvement in product quality. However, the corporation can make more profits by using enterprise resource planning (ERP). ERP can help the corporation to improve the way it undertakes the order fulfilment processes and enable customers to get their goods in time and with fewer errors than before (Robertjacobs and Tedwestonjr, 2007).

References

Casemore & Co. / The 6 Elements of Supply Chain Strategy. (n.d.). Casemore & Co. / Operational Excellence. Web.

Robertjacobs, F., & Tedwestonjr, F. (2007). Enterprise Resource Planning (ERP). Journal of Operations Management, 25(2), 357-363.

Yang, H. M., Choi, B. S., & Chae, B. (2007). Supply Chain Management Six Sigma at Samsung. Upload & Share PowerPoint Presentations and Documents. Web.

Yeung, A. (2008). Strategic Supply Management, Quality Initiatives, and Organizational Performance. Journal of Operations Management, 26(4), 490- 502.

Background information

Samsung is a South Korean corporate entity that engages in diverse commercial activities around the world. During its inception in 1938, the organization sufficed as a trading company (Schein 2012). According to Lee Byung-Chul, its founder and inaugural chairman, there was need for an organization that catered for numerous needs that characterized human existence during that period. The organization sought to establish operations in lucrative areas of interest within the global economic landscape (Schein 2012). The company ventured into diverse areas such as manufacturing, construction, insurance, hospitality, and retail distribution. Involvement in such areas ameliorated the company’s stature as a leader in global commerce and industry. In the late 1960s, the company initialized operations in development and distribution of electronic goods (Schein 2012).

Following the demise of its founder and chairman, Samsung split into four corporate entities that would spearhead its clamour for dominance in diverse areas of interest. The entities included Samsung Group, Shinsegae Group, CJ Group, and Hansol Group. The company has several subsidiaries that coordinate business undertakings across the world. Samsung Electronics Company Limited is an example of its subsidiaries that continue to achieve unprecedented success in contemporary commercial undertakings (Schein 2012).

Samsung Electronics Company Limited continues to expand its operations into new market across the world. By the end of 2013, the subsidiary had 236, 000 employees. These employees contribute to daily operations that characterize existence and propagation of this corporate entity in contemporary corporate landscapes. Samsung Electronics Company is a competitive organizational entity that offers solutions in realms of technology and relevant devices that suffice in this area of interest (Schein 2012). It focuses on innovation and customer innovation at all times.

All its products are usually relevant and cognizant of prevailing needs in the market. Samsung Electronics Company operates over 200 subsidiary outlets in 80 countries. This gives it competitive advantage over other players in the market. This has contributed to recurrent profitability and progress in the market. For instance, the company’s profits in 2012 totalled to USD 22.8 billion (Schein 2012).

Products offered by Samsung Electronics Company

Samsung Electronics Company limited is known for its diverse products and services that guarantee customer satisfaction. Most of its products are innovative and compliant with recurrent needs in the market (Hughes 2011). Through extensive market research and product development, the corporate entity creates products that fulfil needs that manifest among its customers. The company offers home and digital appliances under the Consumer Electronics (CE) division (Hughes 2011). This segment also consists of printing solutions and medical health equipment. Samsung Electronics Company also offers visual display solutions through its innovative designs and product development regimes (James 2005). Under this segment, the company offers digital television sets and other appliances with innovative features.

IT & mobile communications division is the largest and most lucrative (James 2005). This division embodies mobile communication devices, network solutions, and digital innovation and imaging. This segment is the current leader in development and sale of Smartphone. Through its GALAXY series, this division has managed to edge out competition from similar companies in the market. Before the launch of Samsung Galaxy S4, Samsung had Galaxy SIII that had features similar to those of Galaxy S4 (Robertson 2013). Although the previous product had similar design to that of Galaxy S4, its hardware was different and less effective. It did not support certain vital operations that suffice with regard to Samsung Galaxy S4. Samsung Galaxy S4 possesses software features and capabilities that manifest in its ability to support modern innovations in communication and telephony technology (Robertson 2013).

Launch of Samsung Galaxy S4

Samsung Galaxy S4 was launched in Newyork on March 14, 2013. During its launch, the company displayed its android capabilities and other features that made it better than Samsung Galaxy S III (Kelly 2013). The launch was colourful and well orchestrated because it aired in television stations around the world. The inauguration created impetus for adoption and propagation of technological advancements that add value to human existence. Although the gadget was launched in March of 2013, its availability in the market materialized towards the end of April 2013 (Kelly 2013). The company availed it to markets in over 150 countries. Its market reception was positive because it recorded high sales.

According to market surveys, Samsung Galaxy S4 recorded highest units of sales in the history of Samsung Electronics Company. It was necessary for the company to launch Galaxy S4 because existent gadgets did not satisfy consumer needs within the market. After conducting market survey and research, the company discovered discrepancies that necessitated creation of a superior product (Kelly 2013). For instance, there was a high rate of technological advancement in realms of communication and telephony services. Therefore, it was important for Samsung Electronics Company to develop a product that aligned with prevalent needs within the market (Kelly 2013).

Conclusion

As earlier mentioned, Samsung Electronics Company is a global corporate entity that operates in diverse areas of interest within the market. Its operations are controlled from its head office in Seoul, South Korea (Schein 2012). Its innovative and focused approach to business enables it to overcome numerous challenges that affect businesses in contemporary settings. The organization has operations in lucrative areas of interest within the global economic landscape. The company accentuates diverse areas such as manufacturing, construction, insurance, hospitality, and retail distribution. Involvement in such areas ameliorates its stature as a leader in global commerce and industry (Schein 2012).

References

Hughes, A 2011, Samsung Overtakes Apple as top Smartphone Maker. Web.

James, A 2005, Demystifying the Role of Culture in Innovative Regional Economies, Regional Studies, vol. 39. no. 9, pp. 1197-1126. Web.

Kelly, H 2013, Samsung Galaxy S4 Named Top Smartphone by Consumer Reports. Web.

Robertson, A 2013, Galaxy S4’s ‘S View Cover’ Shows Phone Notifications Through a Cut-Out Window. Web.

Schein, E 2012, Organizational Culture and Leadership, San Francisco, Routledge. Web.

Fundamentally, some of the specific challenges that Samsung Company faced after it decided to begin its Six Sigma thrust include challenges of poor execution, absence of commitment, and inadequate understanding of the Six Sigma concept. In its initial quest to undertake the concept, the company faced the challenge associated with poor execution, which regards the wrong application of the concept by the human resources and the management. The company also experienced the challenge of commitment. It is notable to explain that some human resources, as well as the managers of the company, were initially unwilling to commit fully to the concept because they were uncertain about the results. Additionally, the challenge concerning inadequate understanding transpired in the company because several employees working for the organization did not adequately understand the concept. Practically, the challenges took place because the concept that the company decided to introduce to its operations was new.

The prior focus on quality that Six Sigma focuses on made it easier to implement in Samsung Electronics Company (SEC). Since the focus of the concept entailed quality improvement, managers and human resources working in the company saw it as a way of developing its product to achieve increased sales and profits. The fact that the concept aims at minimizing the processes that a supply chain undergoes before delivery of products to consumers makes it attractive to management and employees of any given organization, which includes Samsung. As such, it was easy to convince the human resources and management of Samsung Company to implement the concept in its operations.

Some of the specific types of Six Sigma projects evident in the supply chain include the improvement of communication, the use of effective facilities, and extensive research on client requirements. These projects are among the main projects that SEC undertook in its attempt to improve the efficiency of its supply chain and ensure that the final products are those desired and demanded by its potential clients in the market.

Remarkably, the guiding principles of Toyota represent growth and development. The meaning that these guiding principles represent emanates from the fact that they focus on the integration of product development with the cultures, demands, and expectations of consumers in the global and national markets. Since these principles champion for respect and harmony among the diverse cultures within the areas that Toyota operates, they represent success and overall development. On the other hand, the guiding principles of Toyota Company have a close relationship with the principles of total quality. The principles of total quality emphasized the consumer, effective communication, employee involvement, continual change, and integration. These principles are a replica of what Toyota’s guiding principles represent. For instance, continual improvement is a total quality principle that has a close relationship with the Toyota guiding principle that advocates for innovation and harmony.

Non-manufacturing companies have a lot to learn from the philosophy and practices of Toyota Company. Some of the important lessons that non-manufacturing companies can learn from Toyota Company include equal involvement of employees in an organization, an effective system of communication, continual development, as well as research on consumer demands. By understanding these issues, which are part of the Toyota philosophy and practice, non-manufacturing companies will succeed and enjoy an increased consumer base. Consequently, education and government can also learn from the practices and philosophy of Toyota Company. Practically the government can employ concepts such as harmony, continued innovation, and respect for individual culture in its quest to provide fair and just treatment and efficient service delivery. As such, the philosophy and practices of Toyota Company are useful to other companies, the education sector, and the government.

Social Responsibility to The Community and The Environment

Samsung is a corporation that strives for innovations and has a big impact on the global economy. However, while the influence of this giant company is massive all over the world, Samsung’s social responsibility agenda is not at the same level as its profit, management, and investment value. The major issues are highlighted by Samsung’s policies regarding environmentalism and human rights. There is potential for improvement in regard to these domains of social responsibility. However, certain changes have to be made in order for the organization to achieve the next level of social consciousness.

Ramifications

Certain ramifications are connected to the underperformance of Samsung in regard to social responsibility to the community and environment. The first one is the management’s inability to have fully transparent business practices because the company does not publish all the sources and the suppliers of raw materials. Moreover, because of Samsung’s lack of a proper environmental agenda, potential consumers can criticize their practices and, sometimes, refuse to buy their products. Such strategies also illustrate unclear corporate values. Since Samsung publishes information that contradicts data gathered by researchers, the organizational values are undermined, which can create uncertainty. It is also important to point out that the brand’s reputation suffers when people are doubtful about the organization’s controversial strategies.

Organizational Aspects

Samsung’s organizational structure is a divisional one due to the fact that there are three divisions (IT & Mobile, Consumer Electronics, and Device Solutions). According to researchers, this type of structure correlates with positive plan implementation (Abuga et.al., 2019). This is a beneficial structure that positively influences the potential for better social responsibility due to the fact that one department can dissociate from others on some level and have a separate policy.

The matrix design suggests that employees have multiple bosses yet one general manager. Samsung’s controversy regarding corruption between the head of the corporation and politicians illustrates the negative connotations in terms of social responsibility and the company’s effectiveness. Samsung is a technological giant, so its innovation-based culture is obvious. However, the organization has been sued for plagiarism multiple times, which creates tension in regard to the socially responsible policy they claim to have.

Values of Conscious Culture and Management

The culture of an organization is linked to the responsibilities that it has (Jehan et al., 2020). The core values of conscious organizational culture and management start with transparency. While Samsung is open to publishing certain information, the corporate strategy involves not sharing information about suppliers to be honest with customers, which does not favorably influence organizational functions.

The company does, however, state a clear goal, which is improving the world by creating useful technology. In regards to conscious leadership, Samsung has not been efficient in this domain due to the fact that the head of the organization has faced the consequences of engaging in corruption and bribery. According to researchers, low social responsibility increases the risk of corruption (Krishnamurti et al., 2018). Moreover, not all stakeholders who participate in organizational processes are taken into consideration when creating an organizational plan.

Researchers point out that in modern times, social expectancy for organizational consciousness is more relevant than ever (Latapí Agudelo et al., 2019). Since respect for all stakeholders is one of the aspects included in this domain, it is important to examine Samsung in regard to this topic. Based on the evidence, not all stakeholders who participate in organizational processes are taken into consideration when creating an organizational plan.

Samsung does use cheap labor, and some of the workers face difficulties because of bad work conditions and low wages. It is also important to mention that the organizational function has not been fully fulfilled due to the low level of certain devices that caused controversy among consumers. In terms of fair hiring and equal opportunity, Samsung is quite certainly an employer that makes a point to hire different professionals from all over the world. A part of their campaign is based on inclusion and equality, which is an effective management strategy that allows them to acquire the best professionals.

Kotter’s Eight-Step Change Model

Based on Kotter’s model, the first step toward a more environmentally-friendly corporation is increasing the urgency. This means it is essential to start talking about the main issue (improper disposal in this case). Then it is important to create a coalition by having stakeholders agree with the premise. It can be done by showing previous practices (such as dumping millions of phones after the release of a compromised model). Moreover, by creating a vision and determining the main goals, the plan will start to become more substantial. In this case, the plan is to focus resources on finding better recycling or repurposing ways for devices that either can not be repaired or cannot be sold for technical reasons.

It is certain that certain stakeholders will be concerned about the financial side of the plan. It is important to be transparent and have an honest conversation in regard to future expenses and the whole impact on the company’s economic potential.

The next step in creating a system for better disposal is to remove the obstacles by hiring specific people whose main goal is for the change to happen and rewarding employees that put effort into making the change possible such as engineers, policymakers, and researchers that deal with improper disposal. Moreover, it is essential to focus on short-term wins, such as implementing other companies’ proper disposal practices that are not expensive yet more effective than the current system. The next step is building the change and encouraging employees that are on the right track. If the research team is preoccupied with finding the most efficient disposal method and has small goals, this has to be acknowledged.

Last but not least, implementing the change into the organizational culture by letting the media know about Samsung’s desire to create less waste and be more eco-friendly by having certain guidelines in place will consolidate the reform. It is also important to let every employee know about the company’s desire to create an ecosystem of like-minded individuals who share the same environmental values and carbon footprint.

Challenges

Certain challenges may occur while implementing a new plan for disposing of devices and materials the proper way. Researchers point out that making an organizational change is hard due to the fact that there is no consensus on the exact principles that should be used during the process (Stouten et al., 2018). This is why it is important to take into consideration each domain. From an economic standpoint, the expenses will rise due to the high budget of the operation. Moreover, the entire organizational culture will go through certain reforms unfamiliar to employees at the present moment. It is also important to take into consideration that management will have to switch from regular strategies to different ones on the structural level. This means that Samsung as a company will go through a drastic replacement of environmental policies, which is a big step that is not only risky but also challenging.

Solutions

While the fact that the new implementation will create new expenses for Samsung, it is essential to implement a new budget and have a favorable approach to the costs of the reform. This is why it is essential for the finance department to not only manage the possible monetary problems but also find new ways to attract customers. An environmentally friendly company has the potential of attracting customers who would like to support such initiatives, so it is important to involve the media and create resonance regarding the new plan.

Moreover, the solution to the risk of certain departments and employees being dismissive of the new change is to be open and clear about the benefits. Letting employees know how favorable and ethical the policy is can minimize such challenges. In terms of the change being revolutionary on all structural levels, the only solution is planning and efficient management that can not only handle the structural implementations but also make them beneficial for all the stakeholders.

Summary

Samsung is a global corporation that appears to be underperforming in terms of social responsibility to the community and the environment. Specifically, Samsung has been in a couple of controversies over the years regarding improper sourcing of raw materials and unethical practices. One of the problems that occurred several years ago was the improper waste disposal of devices that were not technically ready to be purchased by consumers.

This is why it is vital to have proper waste disposal practices involving recycling, research, repurposing, etc. Such a drastic shift requires changes in terms of budgets, organizational culture, and management. However, proper planning and reforms on structural levels can minimize the risks and create a beneficial environment for all the stakeholders, from producers and managers to customers, who will appreciate the new ethical practices.

References

Abuga, R., & Deya, J. (2019). Effect of organizational structure on strategy implementation: A case study of Safaricom Kenya Ltd. International Journal of Human Resource and Business Administration, 3(5), 247-254.

Jehan, N., Gull, S., Khan, N. A., & Hussain, A. (2020). Relationship between organizational virtue and the perceived role of ethics and perception of social responsibility in business: Testing a mediation model. International Journal of Business Governance and Ethics, 14(2), 166. Web.

Krishnamurti, C., Shams, S., & Velayutham, E. (2018). Corporate social responsibility and corruption risk: A global perspective. Journal of Contemporary Accounting & Economics, 14(1), 1–21. Web.

Latapí Agudelo, M. A., Jóhannsdóttir, L., & Davídsdóttir, B. (2019). A literature review of the history and evolution of corporate social responsibility. International Journal of Corporate Social Responsibility, 4(1). Web.

Stouten, J., Rousseau, D. M., & De Cremer, D. (2018). Successful organizational change: Integrating the management practice and scholarly literature. Academy of Management Annals, 12(2), 752–788. Web.

Company Overview

Samsung is a South Korea based market player and electronics giant producing a range of innovative products and operating for than seventy years by carrying out successful business throughout the world with 337 offices facilitating in fifty-eight countries and employing about 222000 human resources worldwide; moreover, it is the second largest company of the world market, possessing extremely strong financial-position.

It is notable that Samsung is one of the giant players in the global market with operations in numerous countries; therefore, it possesses a complex organizational structure. However, the organizational structure of the company is illustrated in a simplified format below –

Figure 1: The organizational structure

Source: Samsung Electronics (7)

Samsung has experienced outstanding growth in spite of the adverse impact of global financial crisis and the management of this company has taken advance actions in order to reduce negative impact on the company and gain competitive advantages by using strong financial capabilities, long experience of the employees, and key strengths.

Table 1: Financial Overview of Samsung for the year 2007 to 2010

Source: Samsung Electronics (21)

Even though the after effects of the recession are still present to some extent, the sales trends of the business remained quite high as demonstrated in the chart below:

Figure 2: The sales trends

Source: Samsung Electronics (12)

According to its sustainability report 2011, Samsung is a highly ethical business, which operates in an ecologically friendly manner and conforms to its principles of corporate social responsibility. The CSR policy framework of the business has shown below –

Figure 3: The CSR policy framework

Source: Samsung Electronics (22)

The company believes that maintaining good communication with the stakeholders by formulating an ethical stakeholder communications framework is the key to operating successfully; the stakeholder policies of the company along with the major issues in 2010 include the following:

Figure 4: The stakeholder-communications framework policy

Source: Samsung Electronics (23)

The company’s operations are carried out in terms of equal opportunities for all employees; it does not discriminate with the employees in terms of ethnic origin or race. For expatriate employees, the company follows the following diversity management framework:

Figure 5: Diversity Management Framework

Source: Samsung Electronics (30)

To manage the human resources efficiently, the company’s HR organizational configuration has simplified as much as possible:

Figure 6: HR organizational configuration

Source: Samsung Electronics (37)

Ten years history and Product lines

Samsung has a glorious history and events of its product development, here, this part of the report presented a small part of the company’s historical event for last ten years as follows-

Product line and Feature /Events

1. Consumer Electronics Show
2. Solid State Drive
3. Through Silicon Via

Table 2: Ten years history and product line

Source: Self generated from Samsung Electronics

Market analysis of Samsung

Market Size (current and future):

Scribd (7) reported that LG Electronics is the market leader of global consumer electronics industry and Samsung is the nearest competitor; however, the following table presents the market shares of different companies and the subsequent figure shows the position of different products of Samsung –

Table 3: Share of Consumer Electronics Industry

Source: Scribd (7)

Figure 7: Share of sales by business segments of Samsung

Source: Samsung Electronics (21)

According to the sustainability report 2010, Samsung occupies thirty three percent market shares of the digital media, eighteen percent of Semiconductor, fifteen percent LCD market share, twenty percent of telecommunication sectors and six percent market share of other sectors in global industry.

Market profitability

Market profitability will be considered in accordance with Porter’s five forces model analysis of Samsung: –

Figure 8: – Porter’s five forces model of competition for Samsung

Source – Self generated form analysis

Bargaining power of suppliers

The bargaining power of suppliers is varying in accordance with the brand value of the suppliers, for instance, this power of Microsoft and Intel is more due to high demand of the products (both hardware and software) of these companies. As a result, the management of Samsung maintains good relationship with the suppliers of technology and update contract before the deadline, which reduces overall force of suppliers;

Bargaining power of buyers

According to the report of Scribd (9), the performance of the company mainly depends on the customer base. Most of the multinational companies particularly those offer consumer electronics products prefixed their target group and prepared plan to create loyal consumer base.

The bargaining power of the buyers is too high in this industry because there are many players in the market of consumer electronics those offer similar products at competitive price; however, the customer of Samsung are not willing to switch off due to advance quality and service;

Threats of substitute products

Samsung Electronics faced strong competition from both national and international rivals those firms manufactured similar consumer electronics products, which decrease the demand of any brand of this company. For example, Samsung needs to innovate new products to attract customers as the technology of this company cloned by other companies and these companies ask low price of the products;

Barriers of new entrants

Threats of new entrants in consumer electronics is minimal for the multinational company and high for small companies of developing countries because it should require large investment to enter new market. However, Samsung experienced huge success in Indian market due to low entry costs, availability of resources, low establishment costs and flexible rules and regulation; therefore, Samsung is interested to enter new markets and create loyal customer groups;

Rivalry among existing firms

Samsung has a number of competitors all over the world since consumer electronics market is highly competitive. Here, it is important to mention that the rivalry among the companies is enormous due to frequent change of customers, cloning trends of the companies, low switching off costs, lack of corporate social responsibility, future growth plan and so on.

However, Samsung’s different products have faced intense competition with different companies though most of these companies also influential buyers of Samsung, for example, following tables provide the list of major competitors and buyers of Samsung –

Table 4: Direct Competitor Comparison of consumer electronics industry

Source: Self generated

Table 5: Major buyers of Samsung

Source: Generated from Yoo-chul (1)

Porters Value Chain Analysis of Samsung

Value chain model includes both primary and supportive functions of the company; however, value chain of Samsung Electronics includes philosophy, values and business principles to guide all employees to improve performance; however, the following figure shows it more elaborately –

Figure 9: Value Chain Analysis of Samsung

Source: Samsung Electronics (21)

• HRM: The value system of the company has designed considering the development of the performance of the employees, as human resources are the most valuable asset. Therefore, Bokki Moon, Corporate Human Resources Team of Samsung arranges many programmes such as the global mobility programme,
• Procurement: These activities concern on supply chain management; therefore, Samsung introduced innovative logistics system like Global Logistics Network Systems (GLONETS) to connect its sales department with headquarters;
• Technology: As technology is one of the important factors for the development Samsung, it invests large amount to research to develop products.

At the same time, primary functions of Samsung are focusing on the pricing strategies, cost effective strategies, customer cares, evaluation of market position, product differentiation and new product developments, face external challenges and so on.

Distribution channels

Scribd (37) reported that Samsung is trying to boost annual sales revenue by developing distribution channels and starting operation in new market; therefore, the management of this company gives more attention on the development of the performance of subsidiaries.

According to the sustainability report 2010 of Samsung Electronics (12), this company has a total of 196 subsidiaries (manufacturing, sales, R&D subsidiaries and among them more than 80 subsidiaries are using to distribute its products and performing other functions) all over the world; however, following figure gives more information regarding this issue –

Figure 10: Global Network

Source: Samsung Electronics (9)

Samsung has six distributors in Europe, numerous State-level distributions and a direct dealer interface, innovative logistics system and so on.

Market trends

The marketers of Samsung products need to concentrate on the possible risks and market demands in order to understand the market trends to plan for the future expansion to gain competitive advantages.

According to the annual report 2010 of Samsung, this company observed less growth rate in developed countries (mainly EU zone) as the purchasing power of the customers of those countries is high and they like to purchase local products instead of Korean companies’ product. However, other factors influence the company to change strategy in accordance with the trends of global consumer electronics market, such as –

• Chinese customers appreciate the products of Japanese company, which helps competitors gain competitive advantages;
• Many companies of the United States (for example, Motorola) successfully developed strong distribution channel to draw attention of the customers;
• Remuneration policy for the executives create barriers for the practice of effective governance system;
• At the same time, the trends of the customers of developing and least developed countries have changed due to low price offerings of the competitors and comparatively high price of the products of Samsung.

The management of Samsung needs to take into account the above-mentioned factors and provides concentration on following factors –

• New strategy of Samsung should be more cost effective for the customers of developing countries to increase profit from global market and become market leader in this industry;
• However, global financial crisis is one of the burning challenges to this company; therefore, it needs to focus more on the vision of the company;
• It should always engage to introduce new products.

Key Success factors

• Brand awareness and strong customer base are the main success factors to this company;
• Samsung Electronics has strong presence in the global market, which is the competitive advantage over many competitors;
• Lon experience helps the company create loyal customers, which is the inspiration of the company to expand business operation all over the world;
• Financial position of the company is one of the key success factors as it is important for minimising risks of the operation system;
• This company arranges reward facilities along with six-sigma facility training to the staff, which helps Samsung to develop their performance;
• Samsung Electronics (42) published that protecting intellectual property is critical to its success; however, it includes protecting proprietary technology of the company and information of others;
• Efficient, dynamic and active employees, engineers and other members of the research and development team are the crucial success factors (Samsung Electronics 19);
• On the other hand, IT sector integration with 4G mobile communications, 32/28nm high-k metal gate (HKMG), and the 2.5-inch, 250-gigabyte (GB) HDD, 1 GB DRAM, next-generation wireless communication method Mobile WiMAX (WiBRO) and 32 GB NAND also open new dimension to gain economics of scale (Samsung Electronics 19;
• Other success factors are distinctive competencies, advance supply chain management system to control entire market, administrative control, innovative technology, and core values, CRM, activities of R&D, and so on.

Market Trends Analysis

The innovation driven global electronic giant Samsung has analysed its global market trends in January 2011, during the announcement of the 4^th Quarter financial reporting while the company pointed to the weakening market trend in the global operation and at the same time as global electronics market is suffering from falling prices.

The company added that it was capable of continuing its steady growth for a few hot selling products like memory semiconductors and smart phone, while TV, LCD panels and other product line demonstrated huge competition with throat-cutting price fall and remarkably lower profitability.

Under the recessionary economy and complicated environment, the demand for ICT products has seriously fallen; consequently, the global economic marketplace has slowdown that seriously damaged the company’s profitability in the last quarter of 2010.

As a result, considering the overall market trend, the company has aimed to sustain a stable growth in 2011, depending on its traditional earnings trend while the first half of the year would be less revenue generation and less profitability and expected for better returns in the second half of the year.

Based on such a diminishing market trend, Samsung Electronics hope that the price antagonism to make stronger in the product line of end user electronics, ICT products, along with mobile handset market in 2011 as the market trend demonstrate that foremost prices of the components are declining with significance while Samsung and other competitors are striving for long-term sustainability.

To encounter with the adverse market situation and market trends, Samsung would emphasis on strategy of cost competitiveness by reducing production cost, shipment frights and marketing expenses and keep better than ever emphasis on the product, those demonstrated increasing sales in the previous year like memory and high-end smart phones.

Moreover, the market trends have driven the company to be aware with any negative impact of foreign currency mix, and strategically aimed to diversify the different currency rather than aligning with a single currency risk.

The market trends also demonstrates that Samsung has to spend a huge amount for capital expenditure due to the shifting dynamics of the market, it was predicted early that the company would spend in this regards for an amount of 10.3 trillion won, but it practically reaches 23 trillion won.

The best contributor in the revenue generation for the company is semiconductor and for the full year of 2010, the operating profit accounted 1.80 trillion won and the net profit generated for this product is 9.25 trillion won and it is the 16% better growth than the previous year.

In spite of a deteriorating market trend, Samsung leads to protect its profitability next to accelerating the segments of highly profitable products like server CPU along with mobile DRAM and 40 nm-class processes, and emphasised to enhance its market, but the products are very slow selling, by reinforcement costly product market the company has kept its efforts to get sustainability.

At the same time, DRAM memory market evidenced with seriously falling price at the first half of 2010, all other IT product line of Samsung demonstrated a mixed trend, just falling and raising, but not steady growth has not been evidenced.

Samsung always drives to add more innovative products to its product line, 1n 2007 the company added a Computer Printing to its product line and aimed to the market leader within three years, and engaged its effort to gain the market with 3-years strategy with leaser printer category.

With its charismatic strategy, the company has gained second position in the global printer market by exceeding Brother and Lexmark, while Hewlett-Packard is still at the first poison. The aggressive goal of Samsung is to accomplish the numbered one position by 2010 and to gain such is a forceful goal would necessitate choosing the right products with right solutions including a strong market strategy to address the affordability of the customers with superior service quality.

Being the pioneer of innovative technology, Samsung has positively attitude to keep its position at the top of market trends, and the company introduced the leaser printer, which is designed to convene the raising demands of the global consumers (Samsung Electronics 1).

Kim (3) pointed out that the concurrent global market has branded by means of condensed trade barriers; aggressively strengthening competitions, short-run product life cycle along with expanding market segmentation, while the companies are striving at their own ways to competitive advantages under such environment.

At the beginning of its journey Samsung is an innovation driven company who always look for competitive advantages from its innovative technology and introducing newer product line, there is evidence that the company has expended its market for 38% within a year by adding wider variety of electronics and home appliances. In the IT era, Samsung continues its innovativeness by deliberating huge investment for research and development that contributed the company an enhanced sustainability (1).

Samsung leads its global market from its ten regional headquarters with one hundred and ninety-nine subsidiaries for production, distribution, sales, marketing and research and development, while the USA, Europe, and China have three individual Samsung head office, in Asia, it has four, and another three are in Latin America, Africa and CIS ahs one headquarters to control over the market.

The headquarters of the company is individually responsible for the regional markets, while the African and Middle East has separated to emphasis on more localised operations in this region. The African market of Samsung has demonstrated a steady growth of over 5% in the promising market, to take hold of the prospects evidenced in the continent; Samsung established the regional head office in 2009, although this market previously looked after by the Middle East office.

Samsung accelerated its fast growth all over the global market with its electronic and home appliance and IT product, while it’s TV and mobile phone and Digital Media has achieved remarkable market response in the USA, China, Europe and rest of the world and the company continuously enjoying highest market share in those markets for the mentioned product liner.

The memory cards semiconductor is the most fortunate product of the company that touched revenue of KRW 10.8 trillion in 2010, which was KRW 3.6, the exceptional performance with higher density chips and stability of the memory cards boosted its demand in the global and turned Samsung as a global market leader with rapidly changing landscape.

In the global market, Samsung is implementing its vision 2020 with creative opportunities of quick shifting dynamics of localisation, innovation along with turning business for the future generation by resulting its principle objective to become the giant of electronic home appliance and ICT product line. The company’s eagerness to innovation derived it to add newer product category of biopharmaceutical and solar power sector and it is leading the way to growth and innovation in the global market.

Three Years, Five Years, and Ten Years Marketing Strategy

In this part of the paper the researcher will develop the marketing strategy of the company for the next 3 years, 5 years, and 10 years. However, before suggesting new strategies for the future, it is important to analyze briefly what the strategy makers of the company has planned for upcoming years; for example, on its fortieth birthday, the firm has approved a fresh idea of turning into an inventive business that constructs new markets helping to compete better in such a competitive market.

According to Samsung Electronics (16), the corporation will follow three strategic approaches under vision for 2020, which is creativity, partnership and talent; under creativity management, it will discover new technology, generate new markets, and suggest new lifestyles; in partnership management, it will fabricate a network for assistance and endorse partner relationship; conversely, in talent management, it will cherish superlative professionals:

Figure 11: Samsung’s vision for 2020

Source: Samsung Electronics (16)

On the other hand, it is notable that at present the corporate arrangement of Samsung focuses more on information communications technology, telecommunication, AV, along with an orientation towards sets and gears; however, the vision for 2020 of the firm contains policies regarding integration of new business areas, like medical facilities, energy, and expediency with a highlight on software and solutions:

Figure 12: New business areas under vision for 2020

Source: Samsung Electronics (16)

It is important to argue that although all these future strategies seem quite impressive, for long term development of the company in terms of growth and increasing market share, it is essential for it to come up with a number of fresh and innovative marketing strategies that can help achieving the objectives of the company successfully. Some such strategies will now come into focus; however, two of these marketing strategies should be consecutively short- term and middle- term, whilst the other would be long term.

Marketing Strategy 1 – : Multimedia Marketing Advertisements

By means of a proper integrated multimedia campaign, the company would be able to come up with stronger brand identity and more customer involvement. This variety of promotion may comprise in web marketing, including Search Engine Optimization (SEO), company’s own website development, blogs, e-mails, and more essentially, advertisement throughout social networking sites.

Social-networking websites are remarkable for constructing consumer relationships; furthermore, it is quite simple to connect with consumers at social websites; it comprises creating accounts at popular social-sites, assembling community/customers, providing accommodating information about product, and updating information frequently; conversely, consumers will enjoy joining the community as a place to share their experience and find information about what to acquire.

In addition, undeniably, the multimedia advertisements will be successful based on the fact that as individuals in any particular community “trust” each other, they would surely come up to go for buying electronics of Samsung if one says the electronic was an absolute pleasure to use; conversely, this strategy has strong appeal on the online consumers and regular internet users.

Moreover, another feature of online multimedia advertisement is that individuals connect in frequent, dynamic involvement and there are usually passionate communications, strapping emotional bonds and collective actions taking place amongst partakers; besides, there is trustworthiness of data, assistance, and amenities among individuals with the scope of mutual circumstance of communal gatherings, verbal communication, and procedures exist in these communities. Some other evaluation criteria of why choosing this strategy has outlined below:

• Image creation -This company is one of the leading brands in the global electronic product market; however, it has to face intense competition from some of the rivals with close substitutes, so, the decision-maker of the come should focus on multimedia advertising campaign to develop brand awareness further
• Aligns with mission – As this company would like to provide the best quality products to the customers, this multimedia advertising campaign would help the company to aware target customer regarding quality of the products
• Exploits core competency – It has already developed the product quality to avoid any controversy or dissatisfaction from the part of the customers; in addition, it uses its core competencies to operate in an ecologically friendly way; however, this information can pass on to the customers through the campaign
• Competition – To compete with the large competitors like some of the global giants like LG, the campaign will play vital role
• Creating loyal customer base – As some of the competitors offer similar products at lower prices, this campaign would help creating loyal customer base and would increase sales
• Financial risk – Considering the previous experience of some of the other companies it is arguable that the campaign has no financial risks for Samsung because the cost of carrying out the online multimedia advertisement is minimal
• Short and long term Growth rate – It would only boost short- term growth rate
• Think customer first – As the campaign would emphasis on the positive factors of Samsung, customer must be benefited from it

Marketing Strategy 2 – : Reformation of the Pricing Strategy:

The company should reform its pricing strategy to help all types of customers of being able to buy the product; therefore, the price of the products will have to be reasonable. The prices can be lowered down be reducing operational costs; some evaluation criteria of why the company should choose this strategy has outlined below:

• Aligns with vision – This strategy meets the vision to best serve the customers
• Exploits core competency – It should lower operational costs to implement this strategy; this can be done by more capacity utilisation
• Competition – This strategy will make the firm more competitive
• Differentiates and helps creating unique experience – This also creates price differentiation
• Creating loyal customer base – This will creating loyal customer base because of lower prices
• Short and long- term growth rate – This boosts long- term growth rate
• Degree of Flexibility – This makes the business a more flexible operator

Marketing Strategy 3 – : Diversification Strategy:

Some evaluation criteria of why the company should choose this strategy has outlined below:

• Builds brand awareness – Through a more diversified product line, the company’s brand awareness will increase
• Aligns with vision – This strategy is complied with the vision of the company
• Exploits core competency – It has addressed areas that can add value for electronics and this strategy would create new dimension to compete with competitors
• Differentiates and helps to create unique experience – Innovative product line would mean new experience for customers
• Short and long- term Growth rate – It would be possible to expand market for sustainable period

Works Cited

Kim, Renee. Samsung’s Competitive Innovation and Strategic Intent for Global Expansion. 2007. Web.

Samsung Electronics. Events Schedule. 2011. Web.

Samsung Electronics. History of Semiconductor Business. 2011. Web.

Samsung Electronics. Marketing Strategy of Samsung. 2009. Web.

Samsung Electronics. Samsung Electronics Announces Fourth Quarter & FY 2010 Results. 2010. Web.

Samsung Electronics. Sustainability Report 2009-2010 of Samsung. 2010. Web.

Samsung Electronics. Sustainability Report 2011 of Samsung. 2011. Web.

Scribd. SWOT analysis of Samsung Electronics. 2011. Web.

Yoo-chul, Kim. Sony, Apple, Dell are Samsungs big buyers. 2010. Web.

Footnotes

¹ Consumer Electronics Show

² Solid State Drive

³ Through Silicon Via