Samsung Electronics Critique Analysis - Case Study Example

Case Analysis: Samsung Electronics

I. Company Overview

A. Brief History of Samsung Electronics

The Samsung Electronics was established in South Korea in the year 1969, in which it is a subsidiary company of Samsung Group that is responsible in creating and generating technological devices and electronic circuits. The Samsung Electronics is now becoming one of the principal electronics companies all over the world that has the preference of creating new and high quality products. Accordingly, the Samsung Electronics develops and sells electronic products such as semiconductors, flash memories, liquid crystal display monitors, digital phones, appliances, and other technological devices (“About Samsung,” n.d.). Consequently, the Samsung Electronics is known as the supersector leader in technological devices with a sustainable objective in creating devices with high designs and contents (Samsung Electronics, 2012a).

B. Stakeholders

The Samsung Electronics has endeavored to create an honest, trusting, and open relationship with their different stakeholders. Accordingly, the stakeholders of Samsung Electronics involve the customers, employees, non-government organizations, government, suppliers, and the company’s shareholders or investors. The stakeholders of Samsung have their own individual role with regard to attaining the corporate goals of the company. Particularly, the shareholders or investors are important for the company in creating company policies and keep in tract the present and future situations of the company through general meetings. Secondly, the suppliers are the industries that will furnish the Samsung Electronics with electronic parts in creating and innovating technological devices. Thirdly, the government and non government organizations will help the company in maintaining and sustaining the company’s ideality of following the state regulations and policies in order for the whole company to operate effectively and competently. Fourth, the employees are also important stakeholders of the company because they are the ones who will create the technological principles of the company. Lastly, the customers are the most important stakeholders of the company because of their preference in utilizing Samsung Electronics devices that will create an increasing market value for the company (Samsung Electronics, 2012b).

II. External Environment

A. General Environment

The Samsung Electronics endeavored to extend their company operation beyond their domestic market in South Korea and be able to provide skillful workers abroad in order to suffice the need for effective and competent operations. As a result, the Samsung Electronics has approximately 285 foreign operations within 67 countries around the world. Accordingly, the Samsung Electronics has supplied and operated in countries that belong to North America, Latin America, Middle East, Asia Pacific, Europe, and Africa (“Samsung Press Information,” n.d.; “Visit Your Country,” n.d.). With Samsung Electronics’ increasing international operations, the company held principles that will aid the management in sustaining the capability and efficiency in creating new technologies (“Samsung Value,” n.d.).

Accordingly, the Samsung Electronics uphold the principle that the company will conform and obey on rules and regulations of the country they are operating with respect, honor, and ethical standards. In relation to this, the Samsung Electronics has identified that their Chinese suppliers recognize the policy of not allowing underage workers. However, the company management found out that one of their suppliers in China has excessive overtimes and insufficient safety management which is in violation to the company policies and the government labor standards. Nevertheless, the company management exerted an effort to regularly inspect their suppliers for unjust and unequal work practices (J. Lee, 2012; “Samsung Value,” n.d.).

Moreover, aside from abiding the company policies, the Samsung Electronics also upholds the principle of setting aside political perspectives and will not partake in any political disputes in order to sustain their impartial viewpoints. However, an issue had recognized that the company was creating television commercial that represents the tension between Israel and Iran, in which the advertisement was favoring on the success of Israeli government in destroying the nuclear plants in Iran. Nevertheless, the Samsung Electronics management had ensured that the television advertisement was not approved or notified by the company management (Political Issues, 2012; “Samsung Value,” n.d.).

In addition, the Samsung Electronics also upholds the principle of being culturally, socially, and environmentally responsible as a corporate citizen. Accordingly, the company management had strived to augment their social contribution through launching educational programs for children in different parts of the world. However, the company was being alleged of child labor practices in China because of their suppliers who utilize child workers for Samsung operations. Nevertheless, the issues of child labor were recognized by the management and endeavored to cease those illegal practices (Arthur, 2012; “Samsung Value,” n.d.).

Despite the labor problems of Samsung Electronics in China, the company was able to redound a great amount of value on the economy in different parts of the world. The global recession was not also a hindering factor for the company to compete with other big technological companies in market shares. Furthermore, with the incremental value of technology, the Samsung Electronics Company was able to establish devices in accordance to their ideality of innovation and their existing resources of electronic materials. However, the Samsung Electronics Company is in a struggle of legal cases in terms of patent rights against their competitors, the Apple Incorporated (Yoo-Chul, 2012).

B. Competitive Environment

The Samsung Electronics is a subsidiary company of Samsung group that creates technological devices such as home appliances, smartphones, digital phones, computers, and also electronic circuits or chips. However, the market products of Samsung Electronics have many competitors because there are now many technological companies that have the resources and manpower that can create the products similar to Samsung Electronics. Nevertheless, the Samsung Electronics consumers have the preference to buy Samsung products such as their smartphones while waiting for the new smartphone model of Samsung’s competitor, the Apple Incorporated. Hence, the consumers have the main function for the Samsung Electronics to have increase market sales and be able to create new devices with an affordable price in order to be in a lead against their competitors (Jin, 2011).

In relation to this, Samsung Electronics has to consider the proficiency and efficiency of the suppliers in supplying the company with electronic parts for creating Samsung products. Accordingly, the operations of Samsung Electronics depend on the capacity of their suppliers in equipping the company with needed resources. The Samsung Electronics has a number of suppliers, and in turn, has authority over their suppliers with company policies. However, the suppliers have the total control on the operations of Samsung Electronics because the equipments that the suppliers are making are substantial for Samsung Electronics technology (“SWOT Analysis,” n.d.).

With the increasing new market products of Samsung Electronics specifically the smartphones (32.9% shares), the company had garnered a number of competitors that have the interest on creating technological devices, and these competitors are the Apple Incorporated (26.0% shares), Nokia (6.7% shares), and HTC (5.8% shares) (see Appendix A). Particularly, the Apple Incorporated is one of the biggest consumers of Samsung Electronics chips in creating Apple products, and also considered as one of the biggest competitors of Samsung Electronics in smartphones with an operating system of Android from Google (T. Lee, 2012; Unal et al., 2012). Secondly, the Nokia is one of pioneering developer of mobile phones and is already part in the smartphones competition with its new operating system from Microsoft Windows (Fried, 2012). Lastly, the HTC is also supplying smartphones that are operated with Android operating system which will be a factor for Samsung Electronics to have a competitive rivalry with HTC despite their loss of percent shares. Nevertheless, the Samsung Electronics is still in the lead of an increasing value in market shares (Versace, 2012).