Strategic Management on Samsung

Samsung Electronics Co., Ltd. is the largest world’s technology company in terms of revenues. It is the largest mobile phone maker and television manufacturer and second largest semiconductor chip producer.

Samsung History

Unlike other electronic companies Samsung origins were not involving electronics but other products. In 1938 the Samsung’s founder Byung- Chull Lee set up a trade export company in Korea, selling fish, vegetables, and fruit to China. Within a decade Samsung had flour mills and confectionary machines and became a co-operation in 1951.

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From 1958 onwards Samsung began to expand into other industries such as financial, media, chemicals and ship building throughout the 1970s. In 1969, Samsung Electronics was established producing what Samsung is most famous for, Televisions, Mobile Phones (throughout 90s), Radios, Computer components and other electronics devices.1987 founder and chairman, Byung-Chull Lee passed away and Kun-Hee Lee took over as chairman. In the1990s Samsung began to expand globally building factories in the US, Britain, Germany, Thailand, Mexico, Spain and China until 1997. In 1997 nearly all Korean businesses shrunk in size and Samsung was no exception. They sold businesses to relieve debt and cut employees down lowering personnel by 50,000. But thanks to the electronic industry they managed to curb this and continue to grow. The history of Samsung and mobile phones stretches back to over 10 years.

In 1993 Samsung developed the lightest mobile phone of its era. The SCH-800 and it was available on CDMA networks. Then they developed smart phones and a phone combined mp3 player towards the end of the 20th century. To this date Samsung are dedicated to the 3G industry. Making video, camera phones at a speed to keep up with consumer demand. Samsung has made steady growth in the mobile industry and are currently second but competitor Nokia is ahead with more than 100% increase in shares.

Samsung is known globally for its electronic products and it is one of the successful brands in the electronic industry. It is an established company almost all around the world. Samsung Electronics is a South Korean multinational electronics and information technology company headquartered in Samsung Town, Seoul. It is the flagship subsidiary of the Samsung Group. With assembly plants and sales networks in 61 countries across the world, Samsung has approximately 160,000 employees. In 2009, the company took the position of the world‘s biggest IT maker by surpassing the previous leader Hewlett-Packard. Its sales revenue in the areas of LCD and LED displays and memory chips is number one in the world.

In the TV segment, Samsung‘s market position is dominant. For the five years since 2006, the company has been in the top spot in terms of the number of TVs sold, which is expected to continue in 2010 and beyond. In the global LCD panel market, the company has kept the leading position for eight years in a row. With the Galaxy S model mobile phone, Samsung‘s Smartphone line-up has retained the second-best slot in the world market for some time. In Strategic Management competition to Apples iPad tablet, Samsung released the Android powered Samsung Galaxy Tablet.

The Samsung Philosophy

At Samsung, we follow a simple business philosophy: to devote our talent and technology to creating superior products and services that contribute to a better global society. Every day, our people bring this philosophy to life. Our leaders search for the brightest talent from around the world, and give them the resources they need to be the best at what they do. The result is that all of our products—from memory chips that help businesses store vital knowledge to mobile phones that connect people across continents— have the power to enrich lives. And that‘s what making a better global society all is about. Read also which helps enable an oligopoly to form within a market?

Company’s Values

We believe that living by strong values is the key to good business. At Samsung, a rigorous code of conduct and these core values are at the heart of every decision we make. A company is its people. At Samsung, we‘re dedicated to giving our people a wealth of opportunities to reach their full potential. Everything we do at Samsung is driven by an unyielding passion for excellence and an unfaltering commitment to develop the best products and services on the market.

In today‘s fast-paced global economy, change is constant and innovation is critical to a company‘s survival. As we have done for 70 years, we set our sights on the future, anticipating market needs and demands so we can steer
our company toward long-term success. Operating in an ethical way is the foundation of our business. Everything we do is guided by a moral compass that ensures fairness, respect for all stakeholders and complete transparency. Business cannot be successful unless it creates prosperity and opportunity for others. Samsung is dedicated to being a socially and environmentally responsible corporate citizen in every community where we operate around the globe.

Vision 2020

As stated in its new motto, Samsung Electronics vision for the new decade is, "Inspire the World, Create the Future. “This new vision reflects Samsung Electronics ‘commitment to inspiring its communities by leveraging Samsung’s three key strengths:

• New Technology
• Innovative Products,
• Creative Solutions.

To promoting new value for Samsung’s core networks - Industry, Partners, and Employees. Through these efforts, Samsung hopes to contribute to a better world and a richer experience for all.

As part of this vision, Samsung has mapped out a specific plan of reaching $400 billion in revenue and becoming one of the world‘s top five brands by 2020. To this end, Samsung has also established three strategic approaches in its management: Creativity,Partnership and Talent. Samsung is excited about the future. As we build on our previous accomplishments, we look forward to exploring new territories, including health, medicine, and biotechnology. Samsung is committed to being a creative leader in new markets and becoming a truly No. 1 business going forward.

Samsung SWOT Analysis 2013

Strengths

1. Hardware integration with many open source OS and software
2. Excellence in engineering and producing hardware parts and consumer electronics
3. Innovation and design
4. Focus on environment
5. Low production costs
6. Largest share in mobile phones and 2 place in smartphones sales
7.  Ability to market the brand

Opportunities

1. Growing India’s smartphone market
2. Growing mobile advertising industry
3. Growing demand for quality application processors
4. Growth of tablets market
5. Obtaining patents through acquisitions

Weaknesses

1. Patent infringement
2. Too low profit margin
3. Main competitors are also largest buyers
4. Lack its own OS and software
5. Focus on too many products

Threats

1. Saturated smartphone markets in developed countries
2. Rapid technological change
3. Declining margins on hardware production
4. Breached patents
5. Apple’s iTV launch
6.  Price wars

Profitability in the embattled sector, will come later. “We plan to make massive investments and try to expand our market share through implementation of aggressive investment plans and migration into advanced geometry," said Yeongho Kang, vice president ofthe semiconductor business at Samsung, in a presentation to the investment community following their lease of the company’s first quarter results."We will accelerate our efforts to strengthen our competitive edge and continue to widen the gap with ourcompetitors to achieve further growth and profitability," added Kang.

 Although its line of sparkling smart phones seems fresh and new, Samsung Mobile has been around since1983. Samsung Mobiles parent company, Samsung Electronics, was founded in 1969. Once known for its televisions and other home appliances, Samsung recently eclipsed heavyweights Sony Ericsson andMotorola as one of the biggest cell phone manufacturers in the world.

Mobiles first ever offering was a car phone it introduced in 1986. Because of poor reception andsales, manufacturing was halted. From this point until the early 1990s, Samsung Mobile would introducemobile phone models, but sales were low because demand was low. The designs of these early attemptswere bulky, and reception was poor. With Motorola holding a sizable advantage over the rest of a fledgling mobile phone field, Samsung nearly dropped its Mobile division.

Turning Point In 1993, Samsung Mobile released the SH-700 series, which boasted a smaller and sleeker design and bettersound quality. With a better product and a more aggressive marketing campaign, Samsung would reclaimmore than half the mobile phone market share in Korea from Motorola.  The Global Market Samsung cell phones found its way into American hands for the first time in 1996, when they partnered with Sprint on a line of sleek and compact phones. A few short years later, South America and Japan were enjoying the high-end design of Samsung Mobile phones. Samsung Mobile Today In early 2009, Samsung Mobiles global market share stood at more than 17 percent, second only to Nokia.In the 3rd quarter of 2008, for the first time in its history, Samsung Mobile shipped more than 50 millionhandsets in a quarter--despite a global recession.

Blue Ocean Strategy (BOS) – Samsung Electronics 2006-2010 -Value Innovation, first component of Blue Ocean Strategy is Samsung‘s primary tool for productdevelopment. Value Innovation Program center was started in 1998 and by 2004 the center was playing Avery key role in rapid growth of Samsung to become the world‘s top consumer electronics company. Many cross-functional Blue Ocean project teams were at work, and had ingrained the approach in the corporate culture with an annual conference presided over by their entire top management. One of the key successesof VIP center was, within five years of entering the mobile phone market, in 2003 Samsung has become theNo2 player in the mobile phones market.

Samsung BOS strategy has also helped it to maintain top position in TV market (since 20062010), Global;LCD panel market since 2002. BOS is still at the core of the Samsung product strategy and company hasbeen able to make the necessary adaptations according to the business environment and changing consumerpreferences. In 2006 Samsung launched Market Driven Change (MDC) where its focus was on theconsumer insights and how to develop better and new products using consumer insights. One of thesuccessful results of the MDC was Flat panel LCD TV Bordeaux. This TV has played a crucial role inSamsung overtaking Sony in the LCD market. In 2007 Samsung keeping focus of teenager customers haslaunched a store in the Second Life Site. The virtual space will be used to showcase range of mobilehandsets to teenagers the future consumer group, in a competition-less way. 12 2008 has been a tough year for Samsung as the Chairman of the group was indicted and forced to resign ontax evasion charges. Samsung also failed to acquire SanDisk, the flash memory giant. Fall in sales ofmicrochips and TVs has hit the company badly due to recession. Early 2009 Samsung merged its LCD (liquid crystal display) and semiconductor business into one business unit called Device Solution Business. It is also merged its digital media and its telecommunications business into one business unit, called DigitalMedia & Communications Business.

Samsung launched green management initiative that is intended tomake Samsung a leading eco-friendly company by 2013. The Eco-Management 2013 plan seeks to reducegreenhouse gas emissions from manufacturing facilities by 50 percent, and to reduce indirect greenhouse gas emissions from all products by 84 million tons over five years. 2009 also saw Samsung enter into Mobile OS market with launch of its own open mobile operating system,called "bada," which can be used to develop applications for Samsung phones. Samsung launched mobilephones Wave based on Bada platform along with its first smart phone on Google‘s Android platform –Samsung Galaxy. The company plans to bring down smart phone prices significantly. Samsung launched3D LED TVs and at a premium pricing and changing the home entertainment experience from 2-D to 3D. 2010 saw Samsung launching a new tablet PC named Galaxy Tab as the latest device meant to rival Apple Inc.’s popular iPad. Samsung is still innovating in a big way and it still relies on a basic assessment: product‘s competitiveness is everything, and it must be kept away from price wars. Samsung is making its push to enterprise market.

Timothy Wagner running the enterprise unit for Samsung states that “We’ve made the decision to be No. 1 in enterprise”. The enterprise market has been handed over to Apple by RIM recently and as IDC states Apple will remain in top position till at least 2016. Tim Cook stated that some 80 percent of enterprises are testing Apple products for their employees. Taking iPhones and iPads away from employees will be quite a task, but Samsung has a plan. Apple is very much a one-size-fitsall kind of a company. Their smartphone market share in China for example had slipped from 17.3 percent to 8 percent in half a year because they failed to offer variety. Samsung is determined to target specific industries and to offer unique solutions. Samsung had made a custom Galaxy S II phone to transmit data from a patient’s heart monitor to a doctor. This is the kind of untapped enterprise market that Samsung is after and the market is ready. RIM is struggling to regain some of its lost enterprise market with its new Blackberry 10 up for launch next month. Microsoft has its hands full trying to promote its Windows Phone 8 os. Android dominates the smartphone market with solid 72 percent market share and Samsung is the largest smartphone manufacturer.

The push to enterprise market comes at least partially by the fact that HTC has been struggling to regain its foothold in android smartphone market while steering away from windows phone 16 platform. Google is of course in a good position to attack this market itself. Especially, since recently acquired Motorola owned 3LM a mobile enterprise software maker that could offer customizations for enterprise clients. But Google’s focus is elsewhere. Samsung wants to offer desktop replacement to their enterprise clients, but not in tablets, or notebooks, but rather in smartphones with special docking stations allowing utilizing smartphone’s computing power.

“As soon as you walk in the room with your phone in your pocket, your monitor, keyboard, and mouse will light up,” Wagner predicts. The road to enterprise seems rough and with uphill slope. Some 60 million iPhones sold in 2012 run some sort of corporate applications, while only about 20 percent of Android phones can do that. Trouble for Samsung is that each android is just a bit different so to produce a customized solution for a corporate with numerous android devices does present some difficulties.

Samsung's smartphone business grew strongly, according to market research firm IDC, Samsung's single-season (fourth quarter) and within one year (2012) smartphone shipments both created industry record. For example, in May last year, Samsung launched the latest flagship smartphone Galaxy SIII, seven months before the listed sales reached 40 million. In contrast, from March 2012 to November, the BlackBerry sold only 22.1 million. However, in the enterprise market, Samsung and Blackberry and Apple compared still dwarfed. Blackberry With its outstanding security, long-term occupies a dominant position in this market, while Apple more and more attention by enterprises in recent years due to the iPad and iPhone. Clearly, Apple has found a tremendous opportunity to expand the enterprise market, recently, seeking to eliminate the concerns about corporate IT departments have been actively designing aids.

Samsung devices using the operating system Android are not very popular in the enterprise market because it is generally seen as a fragmented and insecure platform. The device can be equipped with various versions of Android, and any application basically can appear in the Google Play Store. Other Android handset makers such as Motorola mobile, in order to cater to the market of enterprise-class, paid a huge effort, but with limited success. Birth defect this market, Samsung is trying to catch up to competitors, and its goal is to become a business-oriented users Android device manufacturers. The market research firm Forrester analyst Charles Calvin the (Charles Golvin) said: "Samsung is trying to get business users to believe that Samsung Galaxy devices able to meet the security conditions, IT departments easily manage these devices, and then continue to push the Galaxy equipment sales." Samsung launched about 18 months ago the Samsung for Enterprise (SAFE) enterprise security products, to try to make its devices more friendly to business users. The SAFE service Key features include encryption, VPN connections, mobile device management (such as remote wipe). Currently, SAFE only Galaxy SIII, Galaxy Note II and Galaxy Note 10.1 three products certified, but this technology also supports on the market the twenty other a variety of Samsung devices.

Although the SAFE service has been launched for a period of time, but in popularity among corporate users, now remains to be seen. Wagner said Samsung devices in the enterprise market penetration speed quickly, but is still well-known problem facing many obstacles. In fact, the Samsung product does not first choice for corporate IT departments.

However, Samsung led its entry into the market has very few records. For example, to enter the smartphone market after only a few years’ time, Samsung accounted for the largest share of Triumph and also at the same time open up the Tablet PC and the PC market. While there is no guarantee to win the favor of business users, but Samsung believes that it’s growing smartphone and tablet PC sales, a strong brand, as well as efforts to connect all of its products, will increase the company's success in the enterprise market chance. American Airlines (hereinafter referred to as "American Airlines") had a different brand of equipment as long as several months of testing, while gathering employee feedback, decided to adopt after Samsung products. Currently, the company crew Galaxy Note Tablet PC, collecting passenger information; Some maintenance technicians aid of Galaxy Tabs, better handling of the aircraft failure. American Airlines is still some routes, to provide Galaxy Tabs to the Business Class passengers.

Maya, chief technology officer of American Airlines Laibu Man (Maya Leibman) in an interview, said: "We feel that Samsung Tablet PC is the most suitable for our business environment In addition, we also custom Samsung products according to actual needs," Wagner said Samsung plans to introduce more business-related products in the coming months, but he refused to disclose specific details.

Conclusion

All this proves that Samsung will have its breakthrough in the market with the new advance technology they have to offer to the world.

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