Samsung: Market Expansion Towards Year 2025

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Table of Contents

Introduction
Conclusion
Reference List

Introduction

Globalization has resulted in an improved trade among different countries. There is movement of goods and services from one country to another. The policies of comparative and absolute advantage are economic tools which have facilitated the development in international trade. Electronic industry is drastically changing with many phone making industries on the increase.

This has resulted in making of different models of phones, laptops and other electronics. One of the world leading electronic makers is Samsung. It is located in Samsung Town, Seoul, South Korea, and forms the world’s largest conglomerate company by revenue. The main products by the company are Television sets, Radios, phones, Camera tape recorders, and recently it has diversified to a growing laptop market.

The idea to have such a company was coined in 1969 by Lee Byung-chull and started as a small electronic workshop. The company’s main mission is to inspire the world to create a better future for human species. The company aims to introduce its laptops to Australia. Australia is the world’s smallest continent but Samsung has not tapped the market with its new development.

This paper evaluates the decision to venture in Australian market, the focus on developing/forecasting options for 2025. It will also undertake this task by evaluating social, economic, political situation of Australia. In the last pages of the report, it will give recommendations on the leadership style to be adopted in the venture.

Brief background of Samsung

Samsung is an international South Korean company which was established in 1969 in Daegu, South Korea as a small electronic shop. The first venture of the company was to manufacture Television sets, radios, Calculators and other home electronic appliances like refrigerators.

This was in the era of black and white T.V. sets and in 1981, the company had made over 10million black and white T.V.s. as opportunities arose the company diversified to other electronic ventures and in 1988 merged with Samsung Semiconductor & Communications. This merger was the door to modern products of the company.

To remain competitive in the changing electronic world, the company has ventured in massive technological development where it has made products aimed at satisfying the end customer. One of the strongholds of the company is technological innovation and development of its products. It also enjoys a large market and thus it can sell its products at relatively low prices.

This move has enabled the company target all classes of population in its countries of operation. Internally the company has a strong working team which it ensures that they are given a good working condition to facilitate innovation and creativity among them. The company understands that the area that it is operating in should benefit from its operations and thus it has embarked on massive corporate social responsibilities.

These responsibilities include tree planting, scholarships, and health programs. In the international market, the company operates in terms of branches of the main company and it has also franchised its name to marketers and sales company but all products manufactured are centrally controlled (Samsung Official Website, 2010).

The following chart shows the core values held by the company;

Diagram 1

The core values held by the company

In 2009, the company made revenue of $117.4 billion. This was the highest in Conglomerate Company in the world. The major competitors of the company are other electronic companies like Sony, Nokia and LG.

The target market

The company aims to venture in Australian market where it aims to sell laptops. The company already has a branch in Australia; however the branch does not sell laptops. The reason where the venture has not been facilitated is the perceived competition in the country; however as trend in social, economical, and political environments change, by 2025, the company aims to have ventured and dominated the market.

One of the countries that it imports to is Asia. Despite that it has opened its borders for trade, there are supply logistics, which are procedural that must be undertaken when a company is importing into Australia. The move has been attracted by the following factors which exist in Australia.

Population and Economic Trends in Australia

Australian population and the world population are on the rise where the numbers of youths who are enlightened is growing considerably. Australia, the world’s smallest continent with a population of 22,431,468 (Australian bureau of Statistics, 2010), involves itself in international trade to ensure that there is a wide range of products for its population.

On the other side, office spaces are becoming limited and an existence of briefcase companies on the rise. These people however need to communicate with each other and do business. One of the ways of doing this is the use of laptops. On its side laptops will need to be charged, the technology of solar changing can be the solution to this. It is cheap to use and efficient clean technology.

The world is continuously facing an increased population. The numbers of youth and young families, who are continuously adopting modern lifestyle, are on the rise. As a result there is increased demand for laptops. With the rate of population growth, the number of people in the country is expected to double. The increase will offer Samsung adequate market to support its operations and remain afloat in the country.

On the other hand, the company has good relationship with other countries which makes it an international market destination. This will assist Samsung to tap more international customers as they trade in Australia.

The economic growth rate according to World Bank reports is expected to grow at a rate of an average of 4% in the next decade. On the other hand, the after world cup effect will oil to the machinery of economic growth and thus the future of the country can be predicted to be bright as the days go by. As the economy expands, the costs of carrying out business will highly be reduced.

The labor market is composed of both locals and international people living in the country. There are both private run jobs and those that the government has. According to the Australian bureau of statistics in April 2010, the rate of unemployment stood at 5.4% up from 4.4% in the year 2007 survey. There is a minimum wage rate that is determined by the grade that the employee is. This is provided by the labor laws in the country.

The federal minimum wage is of $14.31 per hour and $543 per week (before tax) since October 2008. The largest population of the working class is the youth and students. Each state is given the freedom to set some of the laws that govern them regarding labor. Some of the general rules are that for an immigrant to get a job, he or she must have a Job permit. The economy is a 24 hour economy and thus the workers work in shifts.

The country recognizes the trade unions that are under the bracket of Australian Council of trade Union. The labor unions are the ones that fight for the rights of the employees in areas like wages, weekend, and leave policies. The trade unions have reduced the incidences of strike in the country and of late there is no reported national wide strike.

The employment rate, technological development, and increased living standards that are continuously increasing in the country will create a demand for Samsung Laptops. When people are learned, they understand the need for information and will buy laptops.

By 2020, the country aims to have at least 95% of its population connected to the internet. This move will offer market to Samsung products. To ensure that the company is able to tap the market, it should use the existing branch to introduce the product. Already the company has a strong brand name in Australia

Proposed Expansion Project

The expansion will be to Australia. Samsung will introduce its new product (laptops) in the Australia market. The program will incorporate the following process;

Undertaking a research and market analysis to establish the best way to enter and remain competitive in the market
Expanding Australian Samsung Company; the expansion will be aimed at accommodating the new development
Training managers who will directly be involved in the implementation
Setting targets and strategies to attain them

Samsung have a strong brand name in Australia and it’s respected for its advancement in technology. The products will enter the market through Samsung branch in Australia. It will also work with Australian local telecommunication companies where it will offer laptops to these companies for sale at a discounted cost.

Information about development or advancing across cultures: A Comparison of Country cultural issues likely to influence the project

Different countries have different culture which can influence the implementation of Samsungs products. In Australia, there are different cultures which are influenced by the origins of various ethnic groups in the country.

Since late 17th century, the culture of Australians can be defined as Anglo-Celtic Western culture, however with globalization this culture has been eroded and only thin streams of it exist. Today, there is a move to the American culture and British culture.

Most of earlier visitors to Australia were Muslims from east Indonesian archipelago. In the 19th and 17th century, most visitors were fishermen and traders. They arrived through the islands of the Malay Archipelago and New Guinea (Caldwell, 1987). The main area that they inhabited was northern coasts of Western Australia, the Queensland and Northern Territory.

They were Muslims who traded with local Indigenous and fished for sea cucumber which was nicknamed, ‘trepang’. These early coastal interaction led to intermarriage of Makassar-ese and locals. In the late 17th century, Muslims from African countries which British had concurred came to Australia as sailors or convicts.

The early significant number of Muslim immigrants was in 1800s when Afghan camel drivers arrived from the Indian sub-continent. The different ethnic groups have different perceptions towards Samsung products. Those who originate from countries which have good trade relations with Korea are likely to embrace the move faster and easier than those who originate from countries which are not in good trade terms with Korea.

One of the major breakthrough that globalization has brought is enhancing movement of people from one region to another. Persons of different cultures interact. It is appreciated that human beings develop a certain mode of behavior from factors arising from socialization right from childhood to adulthood. Our values, beliefs and morals are largely influenced by the society we live in, culture, and hereditary factors.

Societies have different mechanisms that are geared to re-enforcing certain behavior deemed acceptable. However, as human beings interact with each other, change their lifestyle or are compelled to change their mode of belief whether consciously or not, a behavior modification, which in most cases conflicts with previously instilled values, occurs. Globalization has enabled people to interact with each other.

They have different culture and the emergence of a global culture is starting to be experienced. Such leads to acquisition of new ways of doing things and cultural exchanges; of the greatest it influence the information and technology’s role in enhancing cultural effects.

The consolidation of the media such as the television, the internet, radio, magazines and newspapers from one country find their way to another because of the opened interaction between nations, consequently influencing people’s way of life.

As Australians interact with other countries, they change their kind of lifestyle. The new culture which has been born by interaction as a result of globalization will offer a good trade platform to Samsung as it will reduce the effects of negative ethnicity (Moran, 2005).

Leadership styles needed

For a start, the company should be supported by the head office and the branch. There should be a number of employees who work directly in the local Australian Samsung Company and focus specifically on the promotion of laptop business.

The company will embrace two leadership styles; they are

Distant Leadership

This is a style of leadership where a leader is not with the team but operates by giving instructions from a distance. Samsung head office is the one which will use the approach. Top management of the company will be mandated to use the leadership structure. In this style the leader ensure that he has a well structured team which can be run alone without much control.

He may also operate via micro team leaders who are answerable to him. This kind of leadership has one advantage over other styles in that it offers team members a chance to undertake decisions without always consulting the leader.

They are trusted with programs and thus given a chance to exercise their talents and potentials. The success of this approach in Samsung Company will be dependent on the qualification of the managers of Australian branch.

The weakness of this kind of leadership is that the leader has no control over the actions of team members they may involve in unacceptable conduct with the ignorance of the leader. On the other hand, the style does not create close link between the leaders and the team this hinders loyalty to man the team. Finally, the leader lacks in-depth understanding of issues affecting a team and thus could make uninformed decisions.

Close leadership

The approach will be adopted by the managers on the ground in Australian Samsung Company. This is leadership where the leader is in close proximity with the subordinates. He is with them at all stages and goes through different experiences with them.

He understands problems that his team is undergoing through and participates in decision/solution finding not from a told point of view but an in depth understanding angle. Close relations lead to a team that fully understand each other’s strengths and devised means of creating efficiency (Williams, 2009).

Managers of Australian branch will be the one to advice and formulate policies to be used in Australia for marketing Samsung New products.

Business communication-development

Business communication is vital for success in all businesses. For an effective marketing and adverting, Samsung must ensure that it understands the most effective internal and external communication strategies to adopt in Australia. Success in this context means, being able to accomplish a particular task or to achieve a specific objective.

Good business communications in relationships either with fellow staffs or customers is needed in order to prosper. Business success can be measured in terms of the practicability of business relationships which is directly proportional to the quality of communication.

Four communication weaknesses or barriers at Samsung are overload of messages, failure to share information among major stakeholders, failure to include employees in decision making processes, and personal attributes. Organizational culture is complex with varied definitions. It includes custom, knowledge, belief, morals, and personal capabilities; it affects the communication efficiency in a company.

Examples of variable that can shape an organizational culture are value, gender, norms and morals which are held by the organization members. Values are the basic principles that make up an organizational culture. Scholars argue that, it is likely that, one can scrutinize the values that are apprehended in a particular organizational culture and make some modifications.

In most cases organizational values are stable and many people disagree with the fact that such values can be changed. Every organization holds different views when it comes to gender. Some view that, men should be given more responsibilities than women while others belief that men should be paid more than women.

Norms are the accepted social rules that guide the behavior of a certain group of people in a particular situation. It is the corporate responsibility of organization executives to posses as well as exercise the ability to shape organizational morals in order to make the organizational culture effective (Guffer & Almonte, 2009).

Conclusion

Samsung is an international South Korean company which was established in 1969 in Daegu, South Korea. It is located in Samsung Town, Seoul, South Korea, and forms the world’s largest conglomerate company by revenue. The company aims at developing an additional expansion which will be responsible for selling laptops in Australia. The move will target to make the company the leading laptop provider in Australia.

It attracts investments due to the following factors; high population growth rate, multicultural practices in the country, strong brand name of Samsung existing products in the country and strategic positioning of the country.

When the move has been implemented, the company needs to have a two stage management, this is where there will be distance leadership (this will be controlled from head office) and close leadership (this is control from local branch). They will aim at developing appropriate market entry and dominance strategy.

Reference List

Australian Bureau of Statistics.(2010). Australia’s Population. Retrieved from https://www.abs.gov.au/

Caldwell, J. C. (1987). “Chapter 2: Population”. In Wray Vamplew (ed.). Australians: Historical Statistics. Broadway, New South Wales, Australia: Fairfax, Syme & Weldon Associates. pp. 23 and 26. ISBN 0-949288-29-2.

Guffer, M. E. & Almonte, R. (2009). Essentials of Business Communication. New York: Cengage Learning.

Moran, A. (2005). Australia: nation, belonging, and globalization. London: Routledge.

Samsung Official Website.(2010). Samsung. Retrieved from https://www.samsung.com/africa_en/

Williams, H. (2009). Leadership Capacity — A Key To Sustaining Lasting Improvement. Education, 130(1), 30. Retrieved from MasterFILE Premier database.

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