Mission, Vision and Current Objectives of Samsung - Case Study Example

Table of Contents 1.0 Introduction 2 2.0 Mission, Vision and Current Objectives of Samsung 2 2.1 Mission 3 2.2 Vision 3 2.3 Objectives 3 3.0 Organizational Strategies 4 3.1 Management Strategy 4 3.2 Marketing Strategy 5 3.3 Finance Strategy 5 3.4 Research and Development 6 3.5 Accounting and CIS 6 4.0Audit 7 4.1 External Audit 7 4.2 Internal Audit 8 4.3 Ethics Audit 9 5.0 References 10 1.0 Introduction This report has been drafted to highlight upon the strategic analysis of Samsung Company operating in the consumer electronic industry in UAE. Initially the report looks to address the current mission, vision and objectives of Samsung along with various organizational strategies deployed by the company in fields like management, marketing, finance, research and development, CIS and accounting. A thorough audit of the company is presented by conducting both external and internal audit of the firm by the help of external factors affecting the regular activities of Samsung and an internal analysis to identify the strengths and weaknesses through the use of a SWOT analysis. The report also looks to formulate an appropriate strategy based on both qualitative and quantitative analysis along with a detailed action plan for the implementation of the recommended strategy for Samsung in UAE to ensure coverage to all functional areas of the company. The strategy is further evaluated in terms of all future external and internal potential challenges that Samsung may encounter along with recommended solutions to the same. Finally a conclusion is provided to ensure that readers are equipped with both theoretical and practical understanding of the entire topic under study. 2.0 Mission, Vision and Current Objectives of Samsung Samsung Electronics Company is the global leader in digital media and digital convergence technologies with its operation all across the globe and having the highest brand value. The company is a South Korean company which was established in the year 1969 and is one of the most renowned name in electronic segment trusted and loved by millions of consumers. Let us have a look at the current mission and objectives along with long term vision of the company. 2.1 Mission Samsung Electronics Company is the world’s largest technology company in terms of its revenue generation and is regarded as the world’s largest mobile phone makers and television manufacturers with second largest in terms of semiconductor chip manufacturer. Samsung does not have an official mission however the same is expressed through its philosophy where the company looks to follow a simple business philosophy of devoting its best talent and world class technology to ensure the creation of superior products and services which directly contribute to a better global society. It mission is to ensure itself as the best digital-e company and become market leader in terms of mobile phone manufacturing with equal focus on other electronic goods particularly televisions. 2.2 Vision Samsung long term vision with regards to UAE and general global market is to lead the digital convergence movement. It looks towards more mobile devices with greater innovation quality to ensure long term feasibility of its business along with maximal customer satisfaction to all its users. 2.3 Objectives Samsung being one of the leaders in consumer electronic division industry across the globe looks to maintain and create more profits for the company including UAE. In context to UAE its objectives has shifted from the profit maximization to sales growth and survival depending upon time. Currently Samsung looks to ensure a leading position in the mobile industry of UAE along with a sharp rise and cover largest market of the television segment (Clegg & Walsh, 2004). Specifically it looks towards the following brief objectives in context to UAE. To ensure every alternative individual operating a mobile phone in UAE to be a Samsung mobile user. To build upon a large R&D department in UAE to cater the innovative needs of the Middles Eastern Region of the globe. To enhance its market share in electronic segment in UAE from 50-55% of the market share by 2020. To ensure a profit maximization theory in UAE with deeper market penetration with equal focus on consumer satisfaction both pre and post purchase situations. To strengthen upon its other electronic devices like washing machines, refrigerators etc apart from television and mobile phones where the company is already trusted and recommended on a global basis. 3.0 Organizational Strategies This report looks to endeavour an appropriate strategy for Samsung which could help the company to ensure better returns and combat against future potential threats. In order to develop upon the same let us first look at the various current strategies operated by Samsung with regards to UAE under various fields. 3.1 Management Strategy Management is the operation of managing products, services and relates processes which include distributive process. Samsung in UAE similar to its global organizational structure uses a dual matrix organizational structure characterizing the features of both horizontal and vertical integration. All the functioning of the organization has a managed operation management. The manager operation includes managing the quality control and volume of purchases, storage, logistics and evaluation. The Samsung electronics operation manager are responsible for managing the daily operations which includes supply chain, sales and marketing channel. They are basically individuals from both local and foreign counties who look upon the management plans, stocks and sell goods and services through the inventory of different accounts (Daniel, Charls & Joseph 2003). They also look upon the direct use of financing and procurement. 3.2 Marketing Strategy Specifically, success of marketing strategy in Samsung depends on the equal synergy created from strategies of vertical integration and innovation. Previously, Samsung had been a product driven company which focused more on manufacturing the existing product to gain in the cost benefit situation and thereby build its market share by gaining economies to scale. However, realizing the importance of brand equity the company looked towards adding high-value marketing strategies to succeed in the UAE market. The company in UAE for example, as a marketing strategy followed a campaign of “DigitAll- Everyone Invited” so as to gain the confidence of local people and build a strong brand which lacked emotions and human face. Its marketing strategy further includes partnering and localization to boost up sales and revenue in UAE and gain larger market share of the consumer electronic division in UAE. 3.3Finance Strategy Samsung being one of the leaders in consumer electronic industry has ample funds to support its R&D and equally invest upon its new business ventures and products. However, to gain the added advantage of leverage effect the company strategies is to use a combination of equity and debt funds. Debts are usually arranged by means of derivative instruments along with bank funding and equal subsidies and government grants. The funds are then distributed among various business ventures on basis of the correct ratio being calculated by experts and analysts. Further the company looks for partnering and localization joint ventures for financing activities. 3.4 Research and Development Samsung invests huge funds in R&D and believes in diffusion in innovation concept. The products are designed and produced as per market needs with the use of latest technology. For example, recently the company launched high definition mobile screen cell phones to gain an added advantage of first mover in the digital world. Samsung depends both on in-house and outsourcing its research and development and make a complete market and competitor analysis to ensure they come with latest use of technology in all its products and gain larger market share (Duncan, 2008). 3.5 Accounting and CIS Samsung uses SAP software to manage its global accounts, further the employees are trained to equip themselves with the use of such software. The individual accounts of each country are put on Hyperion software to prepare the consolidated financial statement of Samsung Electronics Co. Samsung and Sony compete fiercely in the mobile CMOS high sensor CIS market where Samsung looks to follow the strategy of supplying various products in quantity based on its high manufacturing capacity whereas Sony is more inclined towards maximizing revenues by means of high performance and high-pixel products (Doole and Lowe, 2001). Samsung further enjoys a market leader position in the mobile CIS market of UAE and is expected to enhance its market share to over 25% by supplying 232 million units of CIS in 2014. Furthermore the CIS units of Samsung are around 1.5 times cheaper than its near competitor Sony making its business more profitable and viable. 4.0 Audit To understand the current scenario of Samsung in UAE, let us conduct an external and internal audit along with ethics audit for better formulation and implementation of new detailed strategies. 4.1 External Audit The use of PEST analysis has been done to look upon the external factors affecting the current strategies of Samsung in UAE. Political: Samsung in UAE has been subjected to political action law. For example, it has been subjected to copyrights issues. Furthermore, the taxation structure, new policies and rules continuously affects Samsung (Chrisan, 2001). For instance, government law of not using cell phones while driving was tactfully used by Samsung to boost up the sales of hands free ear held devices. Politically, UAE is a stable country and it helps Samsung to increase its operations in the middle-eastern region of the globe. Economic: With global recession, UAE was no exception to the same. The disposable income of people is low which affects the sales and growth of Samsung in UAE. However, on the brighter side UAE has a strong economic growth which helps the company to launch expensive and new technology driven products in UAE. Furthermore the GDP growth rate of UAE is increasing and so does the exchange rate which shows more business opportunity for Samsung in UAE. Social: With growth in the current generation towards new innovative technology driven products the same provides an opportunity for Samsung to manufacture more newer and expensive products in the UAE market. Samsung has been able to create a trend in UAE that it produces the best smart phones which certainly helps the company to enhance its market share more in future years to come (Chen, 2003). Technological: Technology is the key factor which drives Samsung all across the globe. With UAE being a technological hub for the company the company spends huge funds in developing R&D in UAE which makes the supply of latest technology driven products at lower cost being available in consumer electronic industry of UAE and ensure a better and larger penetration of Samsung in the UAE market (Berkman & Gilson, 2001). 4.2 Internal Audit An internal audit is conducted by help of a SWOT matrix to identify the internal strengths and weakness of Samsung in UAE as well as potential threats and opportunities. Strengths The real internal strength of Samsung is its wide range of electronic devices product portfolio and its strong market hold and share in most of its product categories. Furthermore, its cell phones in UAE are the best available devices with latest technology and advanced features. It also enjoys the first mover advantage in terms of introducing new innovation in LED, refrigerators etc. Its products are much cheaper than Sony and Apple which makes deeper market penetration with best innovations and designs and environment friendly products. Weaknesses Compared to other local and international electronic companies operating in UAE, Samsung has lower profit margins. The company lacks its own OS and software. Its demand for LCD in UAE is declining along with large market being captured by cheaper Chinese products. Online marketing of Samsung in UAE is still lagging far behind when compared to its near competitors. Opportunities Samsung can look upon air-conditioners as a major product for brand awareness in UAE by installing the Triple Protection Proposition. With strong financial position it can look towards entering into unrelated diversification and capture larger consumer electronic segment in UAE. Furthermore demand for tablet is increasing along with rise in new innovative products with advanced features and eco friendly products. Threats Samsung operates a large range of products in UAE and the failure of one can certainly have a negative impact on its brand value. Furthermore it faces tough competition from different local and international brands in each of its product category (Brassington and Pettitt, 2001). Its products in retail chain lack shelf space in UAE and its lacks government funding in many of its researches and innovations carried out in UAE. 4.3 Ethics Audit Samsung in UAE integrity and ethical behaviour is ensure and focus on the behaviour of employee training and respect of code of conduct to ensure fair market and legal practices and avoid any litigation and discrimination. It embraces a corporate program to ensure ethical business practices. It policies includes audit committee, audit systems, integrity trainings and global code of conduct. It looks to comply with law and ethical standards along with clean maintenance of organizational culture with respect to shareholders, customers and employees. Samsung has further increased the number of outside directors in its BOD and restructured its audit committee in UAE with opened business results to public to maintain high ethical business practices. 5.0 References Berkman, H. & Gilson, C. (2001). Consumer Behavior Concepts and Strategies, Kent, Boston Brassington, J. and Pettitt, M. (2001). Principles of Marketing, 2nd Edition, Prentice Hall Chrisan, P. (2001). Marketing: A Behavioral Analysis, McGraw – Hill. New York Clegg, C. & Walsh, S. (2004). Change Management: Time for a change. European Journal of Work and Organizational Psychology, 13 (2), pp. 217-239 Chen, I. (2003). Understanding Customer relationship management: people, process and technology. Business Process Management Journal, 9 (5), 672-688 Doole, I., and Lowe, R. (2001). International Marketing Strategy. 3rd Edition, Bedford Row, London, Thomson Daniel, C., Charls, L. & Joseph H. (2003). Marketing, 5th edition, south-western. New York. Duncan, T. (2008). Principles of Advertising & IMC, 2nd ed. New York: McGraw-Hill/Irwin Read More