Samsung Group - Research Paper Example

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Table of Contents 1. 0 Executive summary page 5 1.1 About Samsung Group page 5 1.2 Mission Statement page 5 1.3 Vision of the Company page 5 2.0 Company formation page 6 2.1 Year of Incorporation page 6 2.2 Expansion into other regions page 6 3.0 Product /services and Promotions page 7 4.0 Market Analysis page 7 4.1 Market Summary page 8 4.1.1 Marketing Trends page 8 4.1.2 Marketing Needs page 9 4.1.3 Market Growth page 9 4.1.4 Market Demographics page 10 5.0 Strategy Implementation page 13 5.1 Objectives page 13 5.2 Target Markets page 13 5.3 Positioning page 14 5.4 Strategy Pyramids page 14 5.5 Marketing Mix page 15 5.5.1 Price page 15 5.5.2 Product page 15 5.5.3 Promotion page 15 5.5.4 Place page 16 6.0 Management Team and Structure page 16 6.1 Board of Directors page 16 6.2 Head of Departments page 16 6.3 Other Employees page 17 7.0 Financial Plan page 17 7.1 Financial Growth page 17 7.2 Sales Forecast page 18 7.3 Expense Forecast page 18 8.0 Exit Strategy page 18 1.0 Executive Summary 1.1 About Samsung Group Samsung Group is a conglomerate company with its headquarters in Samsung Town, Seoul, South Korea. The company has numerous affiliations and subsidiary businesses that make up the whole group. Most of the companies associated with Samsung use their label and brand. The branches that are part of the Samsung Group include; Samsung Electronics, Samsung Heavy Industries, Samsung Engineering and Samsung C&T (SG, 2011). There are other subsidiaries that are not all over the world, including Samsung Life Insurance, Samsung Ever land and Cheil Worldwide. 1.2 Mission Statement Samsung Group follows a simple business philosophy of developing superior products from the team’s talent and technology (SG, 2011). The products and services should contribute to a better global society. 1.3 Vision of the Company The mission of the company is “Inspire the world, create the future”. The vision of the company is in line with where the corporation would like to be in 2020. The concept shows the company’s commitment to inspiring its communities using its three key strengths; new technology, innovative products, and creative solutions. The company hopes to give its contribution to getting the better world and a richer experience for every individual. 2.0 Company Formation 2.1 Year of Incorporation The company was founded in 1938 by Lee Byung-chull in Daegu City. The company’s first name of incorporation was Samsung Sanghoe. The company started off small with forty employees. It was initially a trading company whose dealings involved locally grown groceries and noodles. After the progress of the enterprise and its flourishing, the owner of the business decided to move Samsung Sanghoe to Seoul. Byung-chull had to move the company to Busan during the Korean War, and the company started trading in a woolen mill. The company then diversified to different regions in the world and begun to trade in various commodities. 2.2 Expansion into other regions The company became Samsung Group in 1947 after the two founders of Samsung Trading Corporation went into conflict. Samsung Group went into the electronics business in the 1960s. There were several electronic divisions’ formation from the company. The first product from Samsung Electronics was a black and white television. The company entered the telecommunications market in the 1980s (SG, 2011). The earliest products from the company were switchboards. The company rose to become an international company in the 1990s exporting their products to Europe and America. They were the world’s largest producers of memory chips in 1992. The company is notable in being able to survive the 1997 Asian market crisis. The company eventually moved to Digital television and Smartphones in the 2000s. It was possible for them as they opened a computer programming lab in Warsaw, Poland. It is the largest producer of smartphones in terms of unit sales. 3.0 Product/services and Promotions There are several avenues that Samsung uses to promote its different products. The most typical product from Samsung Group is the Samsung Electronics. The company comes up with new smartphones and tablets after a short period. Their strategy is coming up with a range of products where the consumers can comfortably choose the best product or the product that suits their needs. The company launches high-end technological devices all the time. The company promotes its product and services by attending various trade fairs that involve their goods and the services the company offers (SG, 2011). The company has several branches and offices all over the world where one can get the company’s brochures, posters, and specification sheets. Information about the product is on Samsung Group’s website where they have all their products on display. The company has several corporate sponsorships, including Chelsea Football Club. It is a great way for the company to promote its products especially electronics. 4.0 Market Analysis Samsung’s Group use of propriety technology and latest innovations is one of the ways of gaining new customers and maintaining their original clients. The company has a big market share as a result of new inventions from its team. The company has different Software Centers from different regions in the world that has enabled the customers to get hands on experience of the team. Each region has a center where they can buy Samsung products and launch complaints in case of any technical fault on their devices (Dhaka and Shibaloy, 2012). The company expectations in the next few years that it would grow its digital products. The target of the company on its market share is about 12% - 14% on its telecommunication devices. 4.1 Market Summary 4.1.1 Market Trends There has been a rise in consumers need for Electrical and Electronic devices. Smartphones are in a high demand, and Android smartphones are selling fast. The time it takes for completion of an Android device has significantly gone down as evident in the diagram below: Android’s Manufacturing Cycle   The demand for some new technology has led to Samsung being the first electronic company to produce a range of electronic products. The company provides a variety of mobile phones that get released in less than six months (Tchorek, 2011). There is an increase in the income of individuals, and their spending power is also on the rise. The trend has led to increasing the sale of the Samsung Product in Asia and other parts of the world (Dhaka and Shibaloy, 2012). Over the last few years in the economy, there has been a boom in the consumer electronic market. The company has a comprehensive geographical reach where they give every market the kind of products they want. The primary market for the products is Asia followed by the USA. The company has recently entered the African market with their range of LCD and LED TVs. There is also a range of low-cost smartphones that are appropriate for the African Market (Tchorek, 2011). The rise in technological advancement and knowledge and interest in technology has made Africa a great area for the company to sell its products. 4.1.2 Marketing Needs People have needs to connect and enjoy technological advancements. Samsung customers demand advanced technologies, hence the constant change in the products. Samsung provides the needs of their clients, especially in the smartphone business. The LED and LCD televisions are also changing faces often, and Samsung Group ensures they change with the trend. The customers go to Samsung for an affordable, quality range of products. The range of products caters for every customer’s need (Dhaka and Shibaloy, 2012). There is something for everyone in Samsung Group. There are other products such as kitchen equipment and washing equipment that are changing face every time. The change in technology and innovation ensures the equipment are up to date with the latest technology. 4.1.3 Market Growth The growth of in the market value of Samsung products is evident by the increase in revenue and the number of sales of their products. Their products are on the rise in terms of sales every year. There is an evident increase in revenue from the previous year with the company’s 2014 annual revenue standing at 305 billion US Dollars an increase from the previous year’s income (Tchorek, 2011). The greatest sales of Samsung Group come from Samsung Electronics that comprises of 70% aggregate revenue for the company (SG, 2011). The figure below shows the increase in annual sales of Samsung Electronics.   4.1.4 Market Demographics Samsung Group mainly uses market demographics and lifestyle to sell to its customers. The best demographic from the company should be dividing the market into rural clients and urban customers. The youth from urban areas has high demands with the ever changing technology. The youth target is in hip gadgets that have music and leisure. Samsung Electronics has been able to produce electronic devices to fit the youth’s need. The new Samsung Galaxy S6 has all the modern features that the youth, as well as tech-savvy, will enjoy (Tchorek, 2011). The following diagram shows Samsung target market and how it offers segmentation to meet its client’s objectives. The market has different divisions; geographical segmentation, demographic segmentation, psychographic and behavioral segmentation. The document will focus on the demographic segmentation. The diagram below explains in details what each segmentation involves and how Samsung Electronics sell their products to customers. Most of the Samsung Electronic users are adults with children only forming a small percentage of the users. The family size does not matter because the products are suitable for all family sizes. The gender is also not an issue as the products are appropriate for both male and female sex. Samsung has a broad range of products that cater to the needs of people with all sorts of income (Tchorek, 2011). The high-end products are for persons with comfortable incomes while people with less income have affordable quality products at their disposal. An individuals education is also an important factor in determining the kind of product the person will use (Dhaka and Shibaloy, 2012). Tech savvy group needs an advanced form of the products to suit their needs while businessmen need an entirely different product. The education level of its customers is also important when coming up with their products. The above demographics show Samsung Group takes care of each’s needs when it comes to their products. It I one of the reasons why the company has an increase in sale in their products every year. 5.0 Strategy Implementation 5.1 Objectives The company’s primary goal was to build a brand and image that would best serve its customer’s needs. The brand should suit a client’s taste and preference and also take care of their wants and needs. The company also aims at making world class technological advancements and innovations that would change people’s lives. Samsung Group wants to provide a premium look image and feel of all the products they produce. The objectives that the company needs to include maintaining market growth and development. The other goal also includes generating marketing programs that can penetrate other markets and maintaining their brand awareness through promotions (Tchorek, 2011). The company also aims at developing strategies that will make sure they get customer feedback on their products. 5.2 Target Markets Samsung’s target market takes into account product – market life cycle. The primary target market for Samsung products is the upper middle-class individuals. The individuals usually have busy schedules in their working lives, hence the need for them to communicate with their families and colleagues. The other target market for Samsung includes college students, high school students and graduates. These groups of people are in need of devices that are portable and multifunctional. There is another target group that includes medium sized companies and corporations (Tchorek, 2011). The products aim at helping the managers and their employees in getting and managing crucial data access on the go. The above analysis shows the different target market segments that the company aims at serving. 5.3 Positioning The positioning of the Samsung Group’s brand has its basis on the type of function from the product. There is also the fact that involves the experience the product offers and the kind of symbol it conveys. Positioning of the products as a strategy requires integrating all the marketing mix of the product. There should be a strategy in pricing and promotion of the product. Samsung’s positioning strategy matches their capability about the customer’s preference. New products get a strategic positioning by offering a delightful experience at a reduced price from their competitors (SG, 2011). The company makes sure that the products add value to the customers who are mostly professionals. The young market that comprises of professionals would like an experience of personal use of most of the electronics. The products for the youth as occupational and hip. The big range of their products from smartphones to TVs, to digital cameras and home appliances serves the needs of their customers. Overall positioning of Samsung products is to offer better design and quality, integration of family and innovative features that are value for money. The company statement on position says the whole idea is to provide affordable luxury. 5.4 Strategy Pyramids The company strategy is to focus on their area of expertise that is innovation. The company’s main competitors include Apple and Sony products. The strategy is to offer affordable quality experience for their customers. The competitors cannot match Samsung Group in terms of innovation and range of products (SG, 2011). The company’s tactic is to ensure a continuous variety of products where their customers can choose the best product that is suited to their needs and finances. 5.5 Marketing Mix 5.5.1 Price The company has an excellent functional strategy when it comes to pricing. The products are affordable for the upper-middle-class people who are the primary target market. 5.5.2 Product Samsung Group’s product is high-end quality products. The products move with the latest technology. Most of their products focus on the most recent innovation from their employees. The products have a high range where a customer can freely choose. 5.5.3 Promotion The company uses different strategies in the promotion of their products. There are advertisements of the products on TV and through sponsoring various avenues. There are also billboard advertisements, brochures about their products and selling their products is also part of the development (Dhaka and Shibaloy, 2012). 5.5.4 Place The strategy is to market the product depending on the area. The high-end products receive well recognition from first world countries. Rural areas prefer the affordable products compared to the high-end products based on their needs. 6.0 Management Team and Structure Samsung Group has a broad range of management team that serves the world. There are different regional heads of various areas. There are also heads of various subsidiaries of the group. The company has approximately 489,000 employees as of December 2014. 6.1 Board of Directors Samsung Group has two co-CEOs Boo-Keun Yoon and J.K. Shin B. The company has a total of three CEOs now with the lead C.E.O being Oh-Hyun Kwon, who is also the chairman of the group. The CEOs lead the different sectors of the company with Yoon overseeing the electronics division. The electronics sector is the most challenging section, hence needs the most concentration. The Board of Directors has ten members with all of them having at least nine relationships (SG, 2011). 6.2 Head of Departments The company has several divisions that have several departments. The Board of Directors has their departments, and they have the authority to choose their head of departments. Examples of the ministries in the company include; Visual Display Business, R & D Team, LSI Technology, ASIC Business among others. 6.3 Other Employees As of December 2014, Samsung Group had a total of 489,000employees all over the world. The employees fall under the different subsidiaries of the company. Samsung Electronics has the most number of workers of its Department. The employees are chosen according to the places they originate from for easy communications between the company and their customers (SG, 2011). 7.0 Financial Plan 7.1 Financial Growth There is evident financial growth for Samsung in terms of product sales. The revenue of the country increases every year, though the company has numerous competitions. The company plan for 2013 was to spend approximately four million dollars in converting half of its Austin chip manufacturing plant. The investment will ensure the business comes up with a more profitable chip. The company’s investment in the year 2014 was approximately 45billion US dollars which is for innovations which is an increase from the 41billion US Dollars in 2012 (Miyoung, 2012). The innovations ensure financial growth for the company. The company’s revenue as of December 2014 stands at 305 billion US Dollars. The profit for the year that ended stands at 22 billion US dollars. It is a growth rate of profits by 30 from 2010 where the net profit for the company was 14 billion US Dollars. 7.2 Sales Forecast The company has the world’s largest consumer electronics from their subsidiary company Samsung Electronics. The sales of the companies electronic are massive, and the sales were in excess of 140 billion dollars in the past year. The company surpassed the sales of its lead competitor Sony Electronics in terms of Sales. The company’s sales forecast at the moment is in selling their newest technology gadgets and electronics (SG, 2011). The high-end technological advancement is helpful in selling of their products to gain maximum profit. The sales of the products account for more than 20% of the total sales in Korean exports. 7.3 Expense Forecast The company has an excellent idea of its investments. The company is planning on investing 50 billion US Dollars on its newest technology of Smartphone. The Smartphone is the number one selling electronics from Samsung Group. The money will focus on the design of the new equipment in line with the latest technology (SG, 2011). Their devices always have an advancement and always have the latest technology to suit every client’s needs. The product design requires much investment to ensure maximum revenue from the products. Investment money also goes into innovation by their well-equipped team. 8.0 Exit Strategy The company at the moment does not need to exit any of its business ventures as they are all doing very well. However, the company must come up with an exit strategy in case it needs to leave any of its businesses or its current market. The exit strategy should be well designed so that they can leave the company at the right time. The products would be strategically priced so as to enable the customers be comfortable with letting go of the product. The company should monitor the movement of their products from the stores to know when to stop the production of the item. The products that get affected by the companys exit strategy include the Smartphone and the digital cameras (SG, 2011). The old models of these products get removed from the company’s stores and get replaced by new models. The best way to eliminate the products from the shelves is through a clearance sale. References Dhaka, M. and Shibaloy, M. (2012). "The path through the fields". The Economist Newspaper Limited. Miyoung, K. (2012). "Samsung Group plans record $41 billion investment in 2012". Reuters. Samsung Group, SG. (2011). "History – Corporate Profile – About Samsung – Samsung." Samsung Group. Samsung Group. Tchorek, K. (2011). "Samsung: Proud tradition of math proves a strong draw". The Financial Times (London).       Read More