Table of Contents
1) EXECUTIVE SUMMARY 1
2) INTRODUCTION OF THE COMPANY 2
3) EXTERNAL ASSESSMENT 2
4) INTERNAL ASSESSMENT 3
5) STRATEGIC ANALYSIS AND FORMATION 4
6) STRATEGIC CHOICE 4
7) IMPLEMENTATION 5
1) Executive summary
2) Introduction of the company
Samsung Electronics is an international electronics company and is a flagship subsidiary of the Samsung Group. Samsung was founded by Lee Byung Chull in 1938 as a trading company then later in 1969 Samsung Electronics was established. They produced televisions, mobile phones, radios, computer components and other electronics. It has been globally recognized as an industry leader in technology. It is now ranked as a top 10 global brand. Although they are a leader in technology there are other companies that offer the same type of products and compete against each other. The biggest competitor for Samsung Electronics is Apple. Since 2011 they have been competing against each other with their smart phones. Samsung Electronics mission seems to be focused in building its brand and becoming a leader in new markets. Samsung Electronics vision for 2020 is, “Inspire the World, Create the Future.” The vision Samsung Electronics has is based on the idea that with technology innovation we can create solutions for issues that may occur in the future.
3) External assessment
• Samsung has sometimes been subjected to political action law suits.
• In 2007, America hit a recession that affected the sales of Samsung phone in the US negatively. The change in dollars and changes in market also affects the sale of Samsung phones.
• Consumers around the world believe that Samsung produces the best smart phone.
• Samsung is ranked as one of the most innovative companies.
• Samsung has started to contribute to the perseveration of the environment by doing business that puts Earth first.
• Samsung has been subjected to copyright law suits.
Five Forces Model:
1. Threat of Substitutes
• High because there are many similar products on the market.
2. Threat of Rivals
• Hugh because there is a fierce competition with Apple, HTC, etc.
3. Threat of New Entrants
• Low because it is hard to build a big brand.
4. Bargaining Power of Suppliers
• Low because Samsung is the market leader.
5. Bargaining Power of Customers
• High, low switching cost
4) Internal assessment
Valuable Rare Inimitable Organized
Yes Yes Yes Yes Technology Expertise
Yes Yes Yes Yes Brand Value
Value Chain Analysis:
1. Technology and Product Planning
2.Dasign and engineering
4. Inbound Logistics
7. Outbound Logistics
Financial Ratio Analysis:
• High Quality Products
• Production facilities are located in low cost countries which allows them to produce their products in low cost
• Strong market position
• High quality means high price
• Few differences between their products and competitors
• Patent infringement
• Low profit margin
• Lacks its ow OS
• Wide range of smartphones attract different markets
• Leader in different forms of technology
• Growing mobile industry
• Main manufacturers of application processors
• Apple is seen as the biggest threat Samsung has
• Rapid change in technology means companies are under pressure to create new products faster and better than competitors
• Availability of substitutes
• Price wars with competitors
Based on the SWOT, there are important strategic factors that could affect Samsung’s performance. The first would be access to funding. Samsung has a strong position in the market which gives them access to market power and to capital which allows them to grow and survive in the competitive market today. The second would be that even though it is a South Korean company it has expanded itself globally across the world. It has diverse products that target different demands each country has. The third would be that Samsung has a strong brand that is established and recognized around the world. It has been ranked among the top brands around the world.
5) Strategic analysis and formation
Samsung used many business level strategies to get where they are now. They used both cost leadership and differentiation strategy, combining both at one point. And they have used a focus strategy in a narrower market. Today the use cost-focused strategy so that they can offer a lower price to more people.
Samsung needs to continue being aggressive with their marketing so that they can continue to stay where they are today. They have developed many different types of technology not only cell phones. They have also developed Smart TVs, computers, etc. They have different ranges of products from the lowest cost to the most expensive, targeting different classes of people.
6) Strategic Choice
Samsung is a vertical integrated company because it has monopolized all aspects of the manufacturing process.