Business Operation and Strategy of Samsung - Report Example

Company Analysis: Samsung Introduction Samsung Company provides various electronic products. The products include televisions, computer parts, mobile phones, and fiber optic products. The company has enjoyed success its markets in every financial year, especially 2003. It was in 2003 that the company was the world’s best mobile phone manufacturer. Furthermore, various media outlets had endorsed its products, attracting the attention of people globally. During the beginning years of its operation, Samsung had its primary focus on developing semiconductors and home appliances (Warner, 2013). However, the management saw it better to enter the mobile phone business. The management took risk in entering the new market, and it paid in the end. It is evident the company has enjoyed significant success in the global market. 2. History 1969 was the year that Samsung Electronics was established. It was an affiliate of Samsung Group that was established in 1938. Samsung group began as a food exporter in Korea. They conducted business with China’s food industries, mainly industries that deal with fish and flour. In the early 1950s and 1960s, the group began exploring opportunities in the insurance and textile sectors. By 1969, the group had accumulated much revenue that helped the management to establish the Samsung Electronics division. The division concentrated in manufacturing televisions (Sethi, 2013). By 1970, the company had gained the market of black and white television. Experts point at the visionary leadership of the company that enabled them achieve success early. In the 1970s, the Samsung group explored more opportunities. They decided to join the petrochemicals field, manufacturing of washing machines, microwaves, and refrigerators (Sethi, 2013). In the 1980’s, the company’s management decided to focus more on electronics products. It was during this period that the company begun developing colored televisions, computers and its products, video cassette recorders, and tape recorders. Additionally, the company opened its international business and begun operations in North America (Chang, 2011). In 1989, the company formed business collaboration with BP to introduce Samsung BP Chemicals. The group started selling chemical products in Korea. Furthermore, in the mid 1990’s the group started developing external memories. They include memory cards and hard drives for computers (Nishiguchi, 2000). It was in 1999 that the company begun manufacturing internet enabled phones. Business commentators say it was a good move because the backbone of the company’s success is mobile phone business. Additionally, the company had started producing digital televisions (Michell, 2010). In 2000, the company developed the HD televisions. Additionally, the company introduced Blu-Ray players and home theater equipment into the market. In 2010, the group developed its first Android phone, the Galaxy S. It also introduced the Galaxy Tab the same year. In 2013, the company exhibited its future televisions during the Consumer Electronics Show. Currently, the company leads in production of smartphones (Lee, 2006). 3. SFAS Weight (0-1) Scale (1-5) Score Strengths Integration of soft wares Best engineering Leaders in design and innovation 0.1 0.05 0.1 4 2 4 0.4 0.1 0.4 Weakness Patent infringement Low profit margin Tough competitors 0.05 0.1 0.05 4 3 3 0.2 0.3 0.15 Opportunities Growing smartphone markets in India Growth in advertisement industry High demand for application processors 0.1 0.1 0.15 3 3 4 0.3 0.3 0.6 Threats Decline in demand for smartphones in developed countries High technological change Decline in production of hardware products 0.1 0.05 0.05 4 3 3 0.4 0.15 0.15 Total 1 3.45 The above scores indicate how Samsung is operating on the right road. The report indicates how Samsung has to address in depth their strengths and opportunities. It will be a better way in solving the weakness and eradicating the threats. Though Samsung has the best technology and integration of soft wares, it has not matched the consumers’ tastes in developed countries. High technological changes and decline in production of hardware products are the challenges facing the company. Solving the above issues will see the company venturing into new and emerging markets such as India’s market. They will rely on the growing advertising industry to market their product in the emerging markets. In order to ensure the company survives in international markets, the company has to meet the required market demand. 3.1 TWOS Internal factors External factor Strengths(S) 1. Best Engineering 2. Integration of soft wares Weakness(W) 1. Patent infringement 2. Low profit margins Opportunities(O) Growing smartphone market in India Growth in Advertisement industry S-O Strategies Use of best technology to develop quality goods Use of the advanced marketing structures to expand markets. W-O Strategies Increase supply of goods adequately. Maximize on competitors’ weakness Threats(T) Decline in demand for smartphones in developed countries High technological change S-T strategies Emphasize on innovation Research on the latest hardware development. W-T Strategies Improve of soft ware standards in smartphones. Increase innovation and creativity. S-O Strategies Samsung’s top management is aware there is a growing demand for smart phones in India. To ensure they dominate the India’s market, the production team ensures they have developed quality goods. Additionally, they will rely on the various advertisement structures to market its products. W-O Strategies To increase its profit margin, Samsung has increased the supply of goods in areas where demand is high. The management wants to focus on maximizing its markets. Such case requires Samsung to take advantage of the competitor’s weakness and fulfill the customers’ tastes. S-T Strategies Samsung emphasizes on innovation. It is a tool that will enable them tackle the threats in the markets. Due to the decline in smartphone demand in developed countries, Samsung has to improve its quality. The improvement will improve the company’s name in the developed countries, thereby attracting more customers. W-T Strategies The company has a strategy of improving the software standards of its smartphones. To improve the standards of its software, Samsung has allocated funds to aid innovations. Innovations will bring in new ideas that would improve the quality of its products. 3. Proposed strategic actions Samsung’s top leadership has plans that would help them go forward. The strategies would help in tackling the market threats and minimizing the company’s weaknesses. 4.1 Sustaining healthy growth The company has a strategy of sustaining healthy growth. The strategy would help in surviving in tough markets globally. Samsung ensures its managers set realistic goals, which are attainable. The top management considers how fast their markets are growing. It will assist them in determining how much the company has to grab in the market share (SCOTT, 2014). The company understands the nature of their competitors. Understanding will be advantageous to the company in designing trade techniques to concur their competitors. Additionally, the management of Samsung estimates carefully the need of developing new products in the market (Kumar, 2012). In sustaining the top line growth, the company proposes to maximize their global growth. Opening up international markets will increase their customer base, raising revenue in the end. Furthermore, the company ensures they are specializing in emerging markets. Opportunities lay in these emerging markets, for example, the smartphone industry in India. By maintaining patience and discipline, it will be very easy for Samsung to sustain topline growth. Patience will apply in nurturing the emerging markets while discipline will be useful in uncovering new markets (Jurevicius, 2013). 4.2 Creating new markets Samsung has proposed strategies aiming at creating new markets. The management proposes to emphasize on disruptive innovations. The innovations will assist in identifying new markets. From the past, Samsung has tried to acquire an existing market from a competitor, by sustaining innovations. It is with this system that the management wants to create new markets. For example, the company advanced from black and white televisions, to colored televisions, to the current television. The work force currently is researching on new technologies to help improve their production. Such cases will see new markets opening, globally (Birkinshaw, 2014). Additionally, in creating new markets, the company proposes to rely on business planning process. The process will collect innovations present in the company and will ensure the end product is beneficial. With business plan in place, it will be very easy for the company to take advantage of ideas the employees possess, and use it to discover new markets (Dilger, 2014). The company considers customers first. The management wants toensure the customer experience is up to the highest standard. It is by the company’s principle not to change the customers, but their employees help them. By creating a good connection with the customers, the company is building its brand name. It would be easy for Samsung to create new markets as a result (Economist, 2014). 4.3 Maintaining stable profitability The company has strategies aimed at improving and maintains their profitability. Samsung aims at aligning with other technological manufacturers. It is a method of combining expertise knowledge of both companies, to boost their production. Additionally, it will maximize their customer base. Samsung’s top management proposes its employees to adopt business models that could match the future challenges. It is evident there are increased technological advancements in the world. Adapting a business model that could incorporate future changes, will see the company maintain their stable profitability. It will see the company grow to maximum heights (Nisen, 2014). 4.4 Improve of production of goods and services Samsung has variety of proposed strategies that will see improvement in production of goods and services. The management aims at accelerating product launches. They have proposed strengthening of the marketing and production team. The management intends to extent links with key technological centers across the world. The centers will assist in improving creativity and innovation in Samsung. The management has proposed to raise their additional venture capital. It will be a stepping stone in expending Samsung’s markets. The company wants to improve their quality of goods and services by ensuring its production team is well equipped. To ensure their team is equipped, Samsung’s top management has proposed to expand its senior management team, especially in sales and marketing. The company proposes to hire more non-executive directors. They will play a role in important decision making process and the management of the company. 4.5 Strengthening business operations The company has plans to strengthen its business operations. The management has proposed to strengthen the HR functions and bring in place share options for the staff. Furthermore, the company’s top management has proposed to appoint senior advisors for marketing and sales. They will assist in forecasting the trends in the markets. The company has proposed to locate its premises in developing cities. It will expand the market base. To ensure there is good operations within the overseas businesses, Samsung’s top management has proposed to develop overseas market entry plans, The company has proposed to seek strategic alliances with other market players in the technological sector. It will improve the company’s operations and improve the company’s competitive margin. 4. References Birkinshaw, J. (2014). How high-tech market rules have shaped Apple and Samsungs strategies. Marketing, 5. Chang, S.-J. (2011). Sony vs Samsung: The Inside Story of the Electronics Giants Battle For Global Supremacy. New York: John Wiley & Sons, . Cohn, R. (2012). samsung Electronics. New York: Book on Demand. Daft, R. L. (2008). The New Era of Management. 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