Samsung Electronics Co. Ltd.
Samsung Electronics Co. Ltd. is a Korean multinational consumer electronics corporation based in Suwon, South Korea. The organization is the front-runner subordinate company of the Samsung Group and it is the world's most significant information technology organization by earnings (Quelch & Harrington, 2009). Samsung has established several amenities along with systems of product sales in more than 80 countries across the globe and additionally has more than 370,000 staff members. The company is an international business within almost all the continents throughout numerous nations. The corporation's parent business is Samsung Electronics Corporation (SEC) and it has several subsidiaries worldwide. For instance, its offices in North America are known as SECA for Canada and SEA for America. Furthermore, there are various other divisions within North America including the mobile application development and semiconductor enterprise subsidiary.
Organizational Structure
Although the company has an extremely sophisticated structure of ownership with some circular control, the style of the organizational framework in the corporation is a department organizational structure, where the CEO is the commanding officer for the entire firm spread internationally, and, with various leaders and administrators, heading the departments of development, research, marketing, technological innovations, as well as finance. Samsung's management changed from one CEO administration structure to a two-individual team, which has Gee Sung as the Chief Executive Officer and vice president, and Lee as the Chief Operating Officer and president of the organization. The organizational flow is from the COO streaming down to the team of secretaries, after which it filters to the chain of command with the leaders affiliated. Therefore, Samsung possesses an effective and powerful structure that is owner-centred and is dependent on the system to empower administration.
Strengths
Samsung has a mixture of different products that make it possible for the company to seize significant market share from different market segments, which allow them to not only generate income from a high return, but it additionally enables the firm to broaden their failures and risks. As outlined by Kim and Ko (2010), the corporation holds a huge percentage of the market share in the majority of its goods. Samsung has the capability as well as resources to utilize the most up-to-date technological innovations to present new features regularly. The company has won several accolades because of its capacity to develop inventive products. Additionally, Samsung has established several manufacturing facilities in low priced areas, hence saving significantly on the production cost. Furthermore, it has recently drawn ample positive media; therefore, its status keeps growing and has a positive influence on the company's operations.
Weaknesses
The company does not create a new design by itself; it usually waits for its rivals to come up with a new idea. Therefore, Samsung misses the first mover benefits. Moreover, the firm does not impose high costs on its items and, as a result, consumers often associate low expenses with low-quality goods. Most products of the corporation are not user-friendly and for that reason, customers are frequently reluctant to change to Samsung products, even though the cost as well as quality is excellent (Quelch & Harrington, 2009). Furthermore, Samsung does not concentrate on a particular market; it simply presents its items to the bulk market. The firm doesn't develop its own software hence it usually depends on other companies to finish the goods. Lastly, Samsung faces tremendous levels of competition from new organizations and online businesses, which leads to the high operation and sets up the high costs for the corporation.
Opportunities
Samsung ought to take part in product development to draw in more consumers. The firm needs to additionally consider engaging in numerous activities to attract attention by offering extra services to retain current consumers as well as bring in others.
Threats
A number of organizations have acknowledged the significance of marketing. For that reason, Samsung is going to be subjected to significant competition since advertising and marketing generates and attracts the attention of customers. Nations around the globe are going through a high costs because of high rates of inflation in the majority of the regions (Jung, 2004). Most governing administration regulations are currently active against the modern technological innovation on account of health as well as mental issues.
Product Analysis
Product Mix/Description
Samsung concentrates on four segments: LCD digital appliances, telecommunication network, semiconductor, and digital media. The business associated with digital-media consists of computer gadgets, including laptops and laser printers; digital displays comprise of televisions and computer monitors; and devices for customer entertainment, which include digital camcorders, MP3 players, and DVD players; while home appliances consist of vacuum cleaners, microwave ovens, washers, air purifiers, air conditioners, and refrigerators.
The semiconductor-segment consists of chips of semiconductors, including NAND flash memory, SRAM, mobile TV receivers, mobile application processors, smart cards, Smart Card IC, CMOS Image sensors, MP3 IC, RF transceivers, Blu-ray/DVD Disc Player SOC along with multi-chip package (MCP).
The business associated with telecommunication-network comprises of fax machines along with multi-service DSLAMs, mobile gadgets, which include cell phones, PDA phones, and satellite receivers along with hybrid products known as mobile intelligent terminals (MITs). The LCD segment specializes in creating TFT-LCD as well as organic light-emitting diode (OLED) panels for televisions, desktop monitors, and laptops. Samsung Print was founded in 2009 as an independent enterprise to concentrate on B2B sales and has produced an extensive selection of multipurpose printers and products. As of 2018, the corporation no longer develops printers since they sold that section of their business to Hewlett-Packard Co. (HP).
Sourcing and Distribution
Samsung employs channel marketing within its niche and from this approach, only service vendors are considered for corporate sales. Suppliers that provide the chain of technology are likely to incorporate Samsung in their listing since the organization is a world-renowned manufacturer and can additionally act as an option for the customers (Jung, 2004). Furthermore, Samsung possesses an existing network of products distribution from their current establishments, which is of significant value since, unlike its competitors, Samsung doesn't need a lot of methods of sourcing to deliver their tablets and phones to new market segments. These channels of distribution are going to be there for the future spread of other various products, which implies that if the company wants to, it can promote more than just consumer electronics.
Distribution is a powerful section of the Samsung marketing approach. In most urban centres, the company has an agreement with a single supply business, which circulates the merchandise all over the town. Mumbai is a good example of an urban center, in which the company distributes its products through one firm. Furthermore, the company concentrates exclusively on the technique associated with channel sales and constantly looks for methods to enhance its channel promotions through the identification of new resources, technical skills, and advertising and marketing techniques to aid its associates to increase their operation expertise. Furthermore, the company's aspiration to build out its and generate more indirect product sales puts Samsung on a course of collision with organizations such as Lenovo, HP, and Dell Inc., which are all depending on their avenues to generate growth. Nevertheless, Samsung's edge is its brand leadership in tablets and mobile phones, in addition to a formidable reputation in ultrabooks, and therefore, its future is optimistic.
Market Analysis
Macro Environment Factors
Macro-environmental factors derivative from the structural and economic circumstances of every country. Businesses are strongly influenced by economic conditions in which the company resides. Such situations are frequently mirrored as the key indicators for the economy.
Political Factor
Among the significant aspects of the macro environmental factors for many enterprises is primarily the stability of the organization and political systems. In essence, political factor involves stability and reliability of political institutions together with their roles in establishing economic operations. The enterprise is facing stiff rivalry from other competitors while being engaged with governments of other countries. The UK government has made the efforts in formulating numerous challenges for Samsung to enable them to join the marketplace and impact the European market.
Economic Factor
The economic growth and constancy in the region have a significant and direct effect on the profits. The region's economic stability normally offers better employment standard rates, along with living standards in relation to the surge of disposable income of their consumers. It was researched as an increasing trend, which resulted in establishing Samsung's target market. Subsequently, Samsung Company has broadened their business to more than 50 nations around the globe (Rugman & Hoon, 2008). Therefore, following the expansion, Samsung Company has significantly ventured through infrastructural buildings in every nation, where they are performing their business operations. The investments led to the increased production, leading to the expanded employment opportunities for the local population. This acts as a way of encouraging multinational firms to expand and operate their business functions within the new marketplace.
Social Factor
Demographic features promise enterprises to emphases on their products and service contributions, which eventually influence sales and, at the same time, make it harder to survive in the competitive market (Rugman & Hoon, 2008). The company has presently acknowledged their local R&D centers in diverse markets, for example, the Poland R&D center of Samsung, the R&D institute in India, and the Samsung Electronics in China. These aspects have enlightened the fact that businesses are functioning on the sturdy opinion of consumers' expectation and demand. The organization can benefit from the native know-how gained from the established R&D centers.
Legal Factor
Businesses, especially those that have primarily expanded their product line in the tablets and smartphones marketplace, are presently more likely to face aggressive fights in the retail industry. Therefore, it is of significance for the government to formulate such guidelines aimed at promoting their products to clients (Rugman & Hoon, 2008). Although the approach may lead to adverse influences on the business by having the customers dumping the products, established to have low qualities within developing nations, in order to gain profits. In such circumstances, the government should act efficiently and smartly. Presently, Samsung encounters other patent lawsuits from chipmakers (Nvidia) against the use of graphics, which are patented to Samsung and Nvidia in their products, such as mobile phones and TV devices.
Market Segmentation
Segmentation implies that the market is divided into groups that are demographic, behavioral, psychographic, and geographic. Samsung conducted the breakdown of its market based on the aforementioned categories. Accordingly, psychographic and behavioral study happens to the present segmentation of the Samsung strategy.
Geographic
The company sells its products (phones) in the global market in over 61 different nations by making minor changes in relation to the consumers' needs in different countries. The enterprise has been also divided into several regions in Asia, such as the Eastern, Southern, and Northern areas.
Demographic
Age - Young millennials, university students, and professional businesspersons are the main target of Samsung in the market.
Family Size - The product line is designed to fit every family size.
Income - The company yields products availed to all income classes according to their preferences and needs. The products are designed to fit the needs for upper, middle, upper middle, and lower middles classes. For example, Samsung Galaxy was designed to attract the youth because of its numerous features, like exceptional camera quality and its multitasking abilities.
Psychographic
Samsung products, particularly mobile phones, are availed for all lifestyles and personalities, regardless of the profession of a person or their way of life. The enterprise provides mobile phones that vary from other models from competitors.
Industry Trends
Samsung functions as an incredibly innovative market in the smartphone and ICT sector. It currently manufactures ultimate gadgets that combine instant messaging services, gaming systems, cameras, PDAs, music players, and TVs among others (Cecere, Corrocher & Battaglia, 2015). New product proliferations and technical modifications have made the industry a tremendously dynamic market, where the market shares are concentrated and evenly shared among the few competing companies (Wonglimpiyarat, 2012). The industry has also embraced technological improvements, which enhance usage behavior for customers. From the literature discussed, there is an imminent design, which is characterized by a sleek body, innovated selfies (e.g., beautifications), fast charging features, and cutting-edge software. For example, the selfie trend has turned out to be a driving force in the smartphone industry (Chen & Ann, 2016).
Market Growth
Samsung is assured to survive in the market for the next two decades, primarily because of its involvement in electronics and the mobile market demands. However, from another perspective, Samsung has to set its key drivers, which will allow the company to set the benchmark for growth in the future (Rundh, 2011). These key drivers should be founded on the business capabilities and achievements, which are experienced now, and should be reinforced with additional key drivers to guide the enterprise into realizing its vision. Samsung key marks, needed for future growth, can be considered the company's sustainability in the present towards the future. Considering the corporation's electronic sustainability, their performance regarding survival in the industry can be supported by the benchmark to survive on the market in the future.
Target Market
The market targets of Samsung are very wide with consumers ranging from industrial standard apparatus to typical day-to-day usage (Rundh, 2011). The common target market for the company are consumers between 20 to 50 years and older, provided the individual is able to purchase and use the device, which Samsung offers in the marketplace.
People aged between 14 to 25 years, i.e., teenagers and early adults, are the company's target audience, as this age group is believed to be well informed technologically. This target market is growing constantly, as people tend to spend more time using their smartphones in comparison to the previous generation. Samsung has already recognized and explored this matter.
On the other hand, adults aged between 26 to 50 years are a specific target market, which Samsung considers the largest one, as this group of consumers possess a great purchasing power of any of Samsung's product lines, offered in the market, e.g., smart televisions, cameras, smartphones, and household items such as washing machines and vacuum cleaners. This portion of consumers is believed to keep growing in the future.
Competitor Analysis
Competition strategies adopted by Samsung mainly emphasize on product differentiation to gain a competitive edge and brand advantage (Kang, Chang & Song, 2013). At first, Samsung used to provide consumers with high quality, high-tech products, which met their purposes. Competitive advantage could also be achieved with the support provided by the R&D team for the Samsung products. Samsung is a more than half-century brand, which was founded in the 20th century, when the company was functioning under monopoly grounds from almost 5 generations. During this period, Samsung products were considered synonymous with high enjoyment and high quality, which have undoubtedly played a significant role in gaining a competitive advantage for Samsung.
References
Cecere, G., Corrocher, N., & Battaglia, R. D. (2015). Innovation and competition in the smartphone industry: Is there a dominant design? Telecommunications Policy, 39(3-4), 162-175.
Chen, C. M., & Ann, B. Y. (2016). Efficiencies vs. importance-performance analysis for the leading smartphone brands of Apple, Samsung and HTC. Total Quality Management & Business Excellence, 27(3-4), 227-249.
Coe, N. M., & Lee, Y. S. (2006). The strategic localization of transnational retailers: The case of Samsung‐Tesco in South Korea. Economic Geography, 82(1), 61-88.
Jung, S. C. (2014). The analysis of the strategic management of Samsung electronics company through the generic value chain model. International Journal of Software Engineering and Its Applications, 8(12), 133-142.
Kang, H., Chang, S., & Song, J. (2013). Competition for Platform Leadership: The Smartphone War between Samsung Electronics and Apple. Korea Business Review, 17(1), 161-202.
Kim, E. Y., & Ko, E. (2010). Achieving brand power: Beanpole of Samsung. Journal of Global Fashion Marketing, 1(1), 61-70.
Quelch, J. A., & Harrington, A. (2009). Samsung Electronics Company: global marketing operations. Harvard Business School.
Rugman, A. M., & Hoon Oh, C. (2008). The international competitiveness of Asian firms. Journal of Strategy and Management, 1(1), 57-71.
Rundh, B. (2011). Development of customer value in a supply chain: managerial thinking about strategic marketing. Journal of Business & Industrial Marketing, 26(4), 260-272.
Wonglimpiyarat, J. (2012). Technology strategies and standard competition—Comparative innovation cases of Apple and Microsoft. The Journal of High Technology Management Research, 23(2), 90-102.
