Classical and Systematic Approaches in Samsungs Strategy - Case Study Example

SAMSUNG CASE STUDY Name of the Class Professor Name of the School City and state Where it is Located Date Samsung Case Study Question 1 Samsung was founded in 1938 as a trading company and comprises of many subsidiaries. The company branched in to the electronics industry in the 1960’s and since then they have increased their global activities in electronics and have become one of the most popular electronics company in recent times. This paper discusses Samsung and the strategies they have employed to gain competitive advantage on a global scale. Samsung adopted design as a strategy in the early 1990’s after noticing that their products compared to others in stores looked unattractive. Too much attention was being given to quantity and cost of production without paying attention to design and the look of their products and what customers wanted to purchase. For them to gain a competitive advantage management realized that they needed to make high quality and exciting products putting more emphasis on quality and cutting edge technology rather than quantity. They wanted to create value through design. To make sure their designs were high quality they decided to set aside funds so as to educate their designers. Management sent the designers to the Art College of Design (ACCD) in Pasadena California so they could gain more knowledge and ideas about designing. They also took on the services of consultants from the same design institute who helped to set up a design school known as the Innovative Design Lab of Samsung (IDS) in Seoul near the Samsung headquarters so they could train their designers as an alternative to sending them abroad. The company’s design philosophy was based on balance of reason and feeling where they aimed to meet the emotional needs of their clients by way of technological solutions. In the philosophy balance of reason and feeling, reason stands for geometric, rational and sharp edged traits while feeling is seen to be more organic and soft which gives an emotional connection to the user. The two put together gave them the track they needed to come up with a design identity while also coming up with guiding principles that included harmony with the environment, balancing consistency with variety and also design for experience. For the design strategy to work, several initiatives were undertaken. To begin with they wanted to create a brand identity that could be used globally and this led to the development of global communication strategy. To maintain the high levels of creativity designers were shuffled abroad to other industries to help them think out of the box. They also opened up their labs for use in testing their gadgets and the findings were used by the designers to better enhance their products. Cultures were also changed in the organization to enhance more emphasis on design instead of the ordinary marketing tricks they always used where they kept the prices low enough to outsell the other competitors while producing goods in large quantities. Traveling was encouraged because most of their products were sold abroad and as such designers needed to understand their target groups and this meant travelling outside Seoul. The design processes were then changed to enhance the delivery process and the product creation processes were modified. Communication between designers marketers and engineers was enhanced to make way for better project development. The designs allowed the brand to command price premiums while also breeding customer loyalty (Whittington 2001). Question 2 Samsung’s strategy can be compared to two theories namely the classical and the systematic approaches as defined by Richard Whittington. In the classical theory the change is usually instituted by the CEO just like it was done in Samsung. In the approach long term planning is done and the use of resources is well managed to give the desired results. There is rational analysis and the separation of concepts from their execution and also the aim of profit maximization. In Samsung there was long term planning where designers were taken abroad to learn more on designing. A design institute was also build closer to their head offices to facilitate the learning of new and more diverse ways of creating their products. Research was done where designers were allowed to travel to other countries so they could understand their customer needs and what they preferred. Rational planning was done so that they could reach profit maximization. Funds were set aside for use in implementing the design strategy that helped them gain competitive advantage globally. The funds were used effectively to train designers, open new labs and even change the processes of product creation and the delivery systems they used to make them more efficient. Formulation of the strategy came from top management and was passed down to other managers on different hierarchical levels. Mintzberg 1978, p 47 described the formation of strategies as a process of analyzing, planning and commanding. The strategy is thought to be suited for companies that are stable and have matured in an industry. Although the strategy might seem a little old fashioned, many organizations still use it in the formulation and implementation of their strategies (Mintzberg 1978, p 934). The systematic approach is considered to be more like the classical approach since there is long term planning of goals followed by the formulation of strategies on how to achieve the goals. The difference is in the way outcomes of the strategies are perceived. In this approach the strategies are formed in complex systems and are also culturally defined. The objectives and the practices of the strategy are based on the social systems in which the strategy takes place. Looking at Samsung we find that they also made long term planning to change the look of their products so they could enhance their profits while increasing their clientele numbers and customer loyalty. The company had to change the culture of the organization and the way they managed it and take on new ways of arriving at their goals. They were too set in their old ways and had to be introduced to new strategies that focused more on design and quality instead of quantity and cost of production. According to Whittington the outcome and the processes depended on the nature of the local systems that the company was working within. Even though the systematic approach is almost much like what Samsung had, their outcomes did not depend on the local social systems alone but also on the systems of other places abroad where most of their clientele came from. They did not play by the local rules but rather opted to find out more about other places where they could sell their products and what their clients preferred in those places. It helped them to broaden their perspectives and also their ideas on design and what people liked to buy. Strategies sometimes reflect on the corporate culture of organizations while also being a process of trial and error especially during its implementation stages. Systematic approaches towards strategy are seen as the intended development to meet society’s needs and still maintain enough profits to run the business. They take on the preferences of the individuals while also considering the long term goals of the organization putting into considering factors such as cost of production, quality, and even quantity (Eden et al 2013). In most cases a single approach never does the trick but a mix of approaches is used over time to propel the company to where it wants to be in regards to their goals. The success of a strategy is always measured by the outcomes regardless of the actual theoretical approaches taken. References. Whittington, R., 2001. What is strategy-and does it matter?. Cengage Learning EMEA. Mintzberg, H., 1978. Patterns in strategy formation. Management science, 24(9), pp.934-948. Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management. Sage. Read More