Samsungs Innovative Policies and Products - Case Study Example

Sub Department Samsung’s Innovative policies and products Samsung is a global leader in the manufacture of electronics. It is a company that is focused not only continuous technological innovation, maximization of shareholder value but also becoming a global leader in corporate citizenship as well as strengthening interaction with their customers, stakeholders and local communities. Samsung is consistently pursuing sustainable together with positive growth which is a pathway to achieving the corporation’s “Vision 2020”.Samsung hopes to use innovative technologies, designs and products to inspire the world so as to enrich the lives of people while at the same time contributing a future that is socially responsible. Samsung considers creativity as the germ of innovation and in the process invests in a broad range of programs and initiatives that boost creative spirit as well as the autonomy of their employees across the corporation (Mahlich & Pascha, 2012). Business Divisions and Products Samsung Electronics is subdivided into 10 business divisions that comprise of 3 major subdivisions; Consumer Electronics (CE), IT and Mobile Communications (IM) and Device Solutions (DS).The Consumer Electronics (CE) business comprise of Visual Display Business made up of TVs, Home Theater, Monitor, Sound bar and Set-top box. Secondly, the Digital Appliance Business made up of Washing machine, Refrigerator, Air conditioner, Smart Oven and Air Purifier .Thirdly is the Printing Solution Business made up of Malfunction Printer (MFP) and Printer. The last segment of this business is the Health and Medical Equipment Business that comprise of Digital X-ray as well as in-Vitro diagnostics (Robbins, et al, 2014). The second business segment consists of IT and Mobile Communication (IM) made up of the Mobile Communications Business and include Mobile Communications Business that comprise of Smartphone, Tablet PC ,Wearable devices and Notebook PC. The second subdivision is that of Network Business which consists of WiMAX, W/CDMA solution and LTE solution. The last segment in this subdivision is Media Solution Center comprising of Samsung Apps, Group Play, ChatON and WatchOn. The final business subdivision is Device Solutions which comprises firstly of Memory Business made up of DRAM, SSD, eMCP and NAND Flash. Secondly is the System LSI Business comprising of Mobile Ap, CMOS image sensor and Foundry. The last segment in this subdivision is LED business which consists of LED packages for TV and IT products, LED lighting packages and LED packages for automotive lighting. Consumer Electronics Division The consumer electronics segment of Samsung has numerous innovative products that have satisfied consumers over the years. Samsung has offered products such as PDP, LCD, LED as well as UHD TV. Samsung has over the years retained the first position in overall TV LCD-TV and FP-TV sales for 8 consecutive years and therefore has been able to secure the “Triple Crown.” Because the company is a leader in innovation, it produced in 2009 the world’s first LED TV in the new product category, effectively cementing its position as leader in the market. The company in 2010 also introduced the 3D Total Solution which has become dominated the 3D TV market. The company has continued with its innovation streak and has launched “Samsung Apps,” the first TV apps store in the world in addition to introducing SMART Hub with different services, thus ascertaining a brand image that linked smart TV to Samsung. Additionally, Samsung Electronics improved its family-friendly services through development of contents that enabled users to learn or exercise while watching TV. In addition, the company also retained its leadership in the smart TV market by strengthening an “All Share” function that facilitates simple connections with other digital devices. Samsung in 2013 also launched new UHD TVs having superior image quality as well as high resolution than the models that had been in existence before. The company aspires to retain its market lead in future by concentrating on segments having high growth potential such as Curved UHD TV. The IM Division cements the company’s leadership in the global market. Thus, in 2013, large companies, Samsung Electronics included launched their entry smartphones and tablets models hence escalating market competition. The corporation thus diversified its line of products to mass market models from premium smartphones, innovating new products such as Note and LTE .Samsung’s strategic models such as Galaxy Note and Galaxy S4 Series solid sales assisted in solidifying the corporation’s influence globally and consequently in 2013, the IM sector’s profitability and sectors considerably improved with sales amounting to KRW 138.8172 trillion which basically is a 31.2% rise from the past year as well as operating profits of KRW 24.9577 trillion a 28.5% rise from the previous year. Samsung Electronics has continued strengthening its position in the premium market by concentrating its innovation on tablets and smartphones with new product classes such as Samsung Gear, flexible display as well as Samsung Fit, while maintaining its investment in growth in addition to capitalizing on the strongest Research and Development capabilities in the industry (Mahlich & Pascha, 2012). The DS division of the company is geared towards resurgent growth. With Samsung being a leader in semiconductor market it maximizes the advantages of cost reduction via leading-edge process production and development. For instance, in 2013 the company’s Memory Business enhanced operating profits and revenue due to increased output following growing demand in server and mobile products. Samsung is addressing market demand for DRAM by growing its 20nm product mix. The corporation has continued to increase offers of more lucrative products like server/mobile DRAMs thus generating more sustained profits than competitors. Samsung by use of its cutting edge technology succeeded in the development of the first vertical NAND in the world. Samsung is presently working to build up high-performing solutions (SSD, eMMC, etc) as well as 3 bit products so as to broaden the competitive gap further. The company plans in future plans to continue advancing its Memory Business by enhancing cost competitiveness together with providing products lines that are differentiated. On the other hand the Display Division reinforces the foundation for futuristic innovation as well as growth. Samsung electronics for its vast panel business, enhanced manufacturing by improving production across its complete TFT-LCD line of technologies. Samsung has provided a complete line of mega-sized TV products comprising the development of the world’s first curved TV. In addition, the company is continuing its endeavors of developing extremely transparent panels and localizing main manufacturing equipment to enhance cost efficiencies. The company also aims to reinforce its partnership with customers in product and technology development so as to sustain the highest rate of utilization in the industry and go on maximizing its profitability. Samsung plans to enhance its responsiveness to the Chinese market which is the largest TV consumer in the world by leveraging its China fab where mass producing started in 2013.Samsung continues to improve its competitiveness by effectively commercializing the first flexible panels by making use of AMOLED technologies together with enhancing its production capacity via a more effective production process for the small-to-mid sized panel business. Samsung has further continued solidifying its leadership in the industry in different areas, comprising TVs, semiconductors, monitors as well as digital appliances. Samsung’s worldwide market shares in its core products comprising mobile phones, TVs as well as DRAM chips in 2013 exceeded 20% for the 2nd consecutive year. The company commits to provide value to its consumers by use of cutting-edge technology as well as quality products. Since consumer electronics affect almost every aspect of people’s daily lives, Samsung’s basic consumer electronics products comprise refrigerators, TVs, vacuum cleaners, air conditioners and washing machines. Samsung’s TV business has gone on to launch innovative models annually and has developed the following strategies to maintain its innovation pursuit. Thus, the company will go on be a leader in the UHD-TV market by manufacturing the highest picture quality while at the same time providing the biggest screen size together with numerous form factors such as its curved TV-which is the first curved design in the world that offers the ultimate immersive viewing experience with unmatched picture quality. The company will also further strengthen its key competencies, going beyond each competitor’s reach through offering the best picture quality built by its own picture engine as well as making use of creative design to provide different product lines. In order to grow its Smart TV business, the company’s Smart TV will be equipped with an extra convenient User Interface in addition to different services and content to offer a new and improved user experience, hence advancing seamless connection between short-term together with mid-to-long term growth engines. Because the domestic preference for digital appliance products differs greatly and generally needs a more considerable investment in comparison to other digital products,the Digital appliance Business has remained stagnant and has not experienced a disruptive innovation in over century. Samsung believes that a time has come for the appliance industry to embrace revolutionary market changing innovation .Samsung believes it has what it takes to lead in such a change and is ready to build a new premium category of refrigerator introducing different innovative solutions for example a smarter technique of storing and preserving foods, offering consumers higher satisfaction and energy efficiency. Currently, new possibilities abound. Thus, for instance the tablets and smartphones market has rapidly grown from 2010 allowing mobile phones to eventually surpass PCs in the process. Emerging trends such as cloud computing, big data as well as UHD video together with premium data enterprise SSD and centers are all growth drivers for the future. Samsung electronics will continue with its journey of earning its place at the peak of the industry not only through ground-breaking innovation, but also through growing sustainable practices and solutions. The company aims to succeed in this through being “a step ahead” of their competitors in coming up with Green Memory solutions capable of building a more sustainable business environment by reinforcing the energy efficiency of IT firms. From 2009, Samsung has concentrated on developing the most efficient Green Memory solutions by capitalizing on advanced processes. Secondly, Samsung aims at exploiting technological breakthroughs and creating the net-generation IT market. The company has succeeded in this through mass producing 3D vertical NAND memory (V-NAND) which minimises consumption of power and capable of lasting 10 times longer when compared to existing Planar NAND memory. The company has consistently developed V-NAND-based SSD products that rise above the limitations of present nano-level semiconductor technology. Finally, Samsung is applying innovative technologies in their production process that comprises of a new idea known as “modified double patterning photo lithography technology” in addition to ultrathin dielectric layer formation technology, both of which surpass the limitations of the present manufacturing process and facilitates mass production of the next-generation 10-nano DRAM. Samsung has built uniform dielectric layers via ultrathin control of dielectric layer-developing materials of cell capacitors in Angstrom(a tenth of nanometer) going away from the present nanometer unit, thus, building next-generation products with far better cell aspects. This has facilitated Samsung to continue developing the highest-level ultra power-saving green IT solutions to word wide IT customers (Robbins, et al, 2014). Innovative policies Samsung unveiled “Vision 2020” in 2009 with a series of definite objectives using the slogan “Inspire the World, Create the Future.” Thus, Samsung under this vision pledged to become one of top global firms with $400 billion in sales, as well as transform into an unparalleled industry leader, positioning its entire brand value amongst the global top 5 thus becoming the top 10 most respected companies in the world. The company since then has continued in its endeavors to accomplish these objectives, while striving to develop core advantages on a continuous basis. Consequently, because of such endeavors, Samsung has accomplished a historic financial performance, providing record sales of KRW 229 trillion in addition to an operating profit of KRW 37 trillion that has grown by 15% and 52% respectively in comparison to 2009. Samsung, in 2013, was also recognized externally for non-financial excellence, when it was ranked by Interbrand as the 8th Most Valuable globally. Additionally, Samsung has been ranked by Fortune magazine as the 21st Most Admired Business globally. Enhancement of 6 core competencies So as to improve the customer experience, Samsung plans to grow its business portfolio as well as services to include healthcare and education by combining the needs of the customers with IT technology. Thus, as safety, wellness, convenience and security continue to dominate our lives over the next few years, Samsung is creating components and devices that are specifically based on them, while simultaneously concentrating on devices that facilitate a smarter life. The company is therefore positioned uniquely to offer these incorporated services by integrating the device, component together with system levels. The ability of the company to impact the current global trends as well as continued commitment to investing in research and development will guarantee the realization of this vision (Mahlich & Pascha, 2012). So as to achieve the Vision 2020 objectives of meeting $400 billion annual sales, thus becoming a leader in IT company as well as one of the top 10 global firms, Samsung has developed 6 key aspects-capital expenditure(Capex), patents, Research and Development, human resources ,marketing and M&A to develop new engines of growth. Samsung has over the years has continued large-scale investments of KRW 46.4 trillion, while at the same endeavoring to strengthen its competitive edge via differentiated profitability and technology. The Umyeon –dong R&D Center having a total floor size of 33,000 square metres is nearing completion this year. Samsung aims to hire 10,000 researchers in software and design sat the-state-of-the-art complex. Additionally, Samsung is building a Research and Development Center in Silicon Valley California which scheduled for completion this year so as to focus on development of key technologies. Samsung has also gone on investing in Research and Development so as to secure growth that is sustainable, growing from KRW 9.4 trillion in 2010 to KRW 14.8 trillion by the end of 2013.The Company’s number of worldwide Research and Development grow from 50,000 in 2010 to 63,000 in 2013 (Robbins, et al, 2014). Samsung has also been intensifying policy measures for compliance management. Thus, the company is making intensive efforts to meet its responsibilities and roles as a global citizen. Samsung’s core values as well as rigorous code of conduct are at the center of each decision it makes. Samsung’s decisions are directed by a moral compass coupled with ethical as well as lawful compliance with standards and regulations to guarantee transparency and fairness. As an aspect of these endeavors, Samsung has constantly grown the number of its staff so as to manage as well as support compliance management not only in its business divisions but also overseas subsidiaries (Kumar,et al,2013). Samsung has also continued to raise internal awareness of compliance and each year, the company provides training to all employees not only in Korea but also all over the world.-so as to assist them in better understanding the company’s objective for both compliance and law-abiding spirit.Samsung, 2013 for instance, conducted fundamental compliance training for all its employees while at the same time providing in-depth, customized training for various business positions and fields. In addition, the company is also involved in training of the employees regarding prevention of corruption. So as to establish a transparent, ethical corporate culture, the company carries out training on corruption prevention that is usually tailored for various job positions, levels, and business fields once per every year. Such kind of trainings provide workers with virtual experience in tackling various situations and scenarios and assists in deepening their understanding of the necessity of ensuring corporate integrity together with equipping them to develop suitable countermeasures. Samsung also provides a broad range of collective audiovisual and online training problems. The company also posts corruption prevention regulations for all staff as well as executives its intranet and guidelines for partners on its core portal sites, frequently visited by partner firms (Song & Lee, 2014).Lastly the company also runs a talent management program. For instance, 2013 saw the company hire 97.937 new workers outside of Korean headquarters –mostly in its global production branches in Asia so as to meet rising global demand for its mobile devices. The company further encourages policies that guarantee responsible recruitment and prevention of gender discrimination (Robbins, et al, 2014). List of references Kumar, N., Benedict, J.,Steenkamp, E.(2013) Brand Breakout:How Emerging Market Brands Will Go Global. New York: Palgrave Macmillan. Mahlich, J,& Pascha, W.(2012) Korean Science and Technology in an International Perspective. New York: Springer. Robbins, & S., Bergman, R.,Coulter, M.(2014)Management. Sidney: Perason Australia. Song, J., & Lee, K. The Samsung Way:Transformational Management Strategies from the World Leader in Innovation and Design. Seoul: McGraw Hill Professional. http://www.samsung.com/us/aboutsamsung/investor_relations/corporate_governance/corporatesocialresponsibility/downloads/2014sustainabilityreport.pdf http://www.samsung.com/uk/galaxys6/#none http://www.samsung.com/global/business/semiconductor/aboutus/business/open-innovation/overview Read More