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Samsung Electronics Project

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SAMSUNG ELECTRONICS 
CLASS 1 – GROUP 8 
Vo Thi Le Huyen 295929 
Nguyen Doan Doan Hanh 295904 
Le Nhat Huy 295896
I. Executive Summary 
Samsung is the second biggest mobile phone producer in the world. In 2009, it paid more attention 
o...
and printers, to pursue innovation throughout all six main areas of the company's business 
operations, and reaching $400 ...
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Samsung Electronics Project

  1. 1. SAMSUNG ELECTRONICS CLASS 1 – GROUP 8 Vo Thi Le Huyen 295929 Nguyen Doan Doan Hanh 295904 Le Nhat Huy 295896
  2. 2. I. Executive Summary Samsung is the second biggest mobile phone producer in the world. In 2009, it paid more attention on the fashion style which attracted a great deal of young person and the shipments got to 235 million, the market share got to 19.5%. Compared with 2008, it has a big improvement, because the shipment and market share is only 199 million and 16.3% respectively. The successful of Samsung electronics is come from the swift and agility, but lack of innovativeness may lead to the loss of probability. Nowadays Samsung pay more attention on the Smartphone, the Bada system is a good example. Bada system is a platform of the new smart phone which developed by Samsung company, the interface of it is more fashion in color and style. So it can be looked as the cash cow product because the market growth rate is low but the market share is very high, the characteristic of which is the sale volume is high but the rate of liability is low, it can provide fund for the company and the product do not need improve the invests. Everything they do at Samsung is guided by mission: to be the best “digital-εCompany". Samsung grew into a global corporation by facing challenges directly. In the years ahead, Samsung dedicated people with continue to embrace many challenges and come up with creative ideas to develop products and services that lead in their markets. Their ingenuity will continue to chart Samsung's course as a profitable, responsible global corporation. Samsung is guided by a singular vision: to lead the digital convergence movement. They believe that through technology innovation today, and they will find the solutions that need to address the challenges of tomorrow. From technology comes opportunity-for businesses to grow, for citizens in emerging markets to prosper by tapping into the digital economy, and for people to invent new possibilities. It’s our aim to develop innovative technologies and efficient processes that create new markets, enrich people’s lives and continue to make Samsung a trusted market leader. 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. Samsung is committed to being a creative leader in new markets and becoming a truly No. 1 business going forward. The objectives of Samsung is lead the digital convergence movement, develop innovative technologies and efficient processes and continue to make Samsung a trusted market leader, look forward to exploring new territories, including health, medicine, and biotechnology, to identify eight growth engines for Samsung's business including their Digital Television (DTV) products
  3. 3. and printers, to pursue innovation throughout all six main areas of the company's business operations, and reaching $400 billion in revenue and becoming one of the world’s top five brands by 2020. In strategies of Samsung, they want to develop new product to understand new product development strategy overview in Samsung R&D. Through the interplay of creative, imaginative people; a global R&D network, an organization that encourages collaboration and cooperation among business partners all along the supply chain, and a strong commitment to ongoing investment, Samsung has put R&D at the heart of everything. On the other hand, Samsung Get feedback from customers based on new product to study effect of Consumer behavior on New Product Development of Samsung: Customers are seemed to move to those products which have good balance between style, technology and price of the product. Samsung is one of the leaders that have sensed the pulse of the mobile phone users. II. Introduction Company mission Everything they do at Samsung is guided by mission: to be the best “digital-εCompany". Digital To create technology products and services that lead the industry ε To put into place the most efficient management and production processes To be the best Digital-εCompany Company To maintain a steadfast focus on strengthening our organization, on continuing to be a global technology leader and trusted responsible company
  4. 4. Samsung grew into a global corporation by facing challenges directly. In the years ahead, Samsung dedicated people with continue to embrace many challenges and come up with creative ideas to develop products and services that lead in their markets. Their ingenuity will continue to chart Samsung's course as a profitable, responsible global corporation. Company vision Samsung is guided by a singular vision: to lead the digital convergence movement. They believe that through technology innovation today, and they will find the solutions that need to address the challenges of tomorrow. From technology comes opportunity-for businesses to grow, for citizens in emerging markets to prosper by tapping into the digital economy, and for people to invent new possibilities. It’s our aim to develop innovative technologies and efficient processes that create new markets, enrich people’s lives and continue to make Samsung a trusted market leader. 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,” and “Creative Solutions.” - And 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. Inspire the World, Create the Future New Technology Creative Solutions Innovative Products Partner Industry Employee
  5. 5. 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 they build on their previous accomplishments, they 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. Industry Vision Partner 2020 Vision Company objectives Vision o To lead the digital convergence movement. Employee Vision o To develop innovative technologies and efficient processes and continue to make Samsung a trusted market leader. o Look forward to exploring new territories, including health, medicine, and biotechnology. o To identify eight growth engines for Samsung's business including their Digital Television (DTV) products and printers. o To pursue innovation throughout all six main areas of the company's business operations. o To be one of the top three electronics companies in the world in quantity and in quality by 2010. o To more than double its 2004 sales revenue by the year 2010.
  6. 6. o To have 20 number one market share products in the world by 2010 (currently the company has eight number one market share products). o Reaching $400 billion in revenue and becoming one of the world’s top five brands by 2020. 1. Enter into the 3D video Gaming Market through a partnership with Microsoft. In order to capitalize on the growing video gaming market, we intend on entering into a partnership with Microsoft to develop a virtual gaming product. Short term, we would like to couple 3D TV technology with a dominant video gaming console like the XBOX 360. By the year 2020 we intend on launching a virtual gaming product. 2. Launch a comprehensive and campaign that focuses on Samsung Electronic competitive advantage in 3D technology. An ad campaign focusing on our competitive advantage in technology would be highly effective in selling more 3D TV’s to developing market. They want to make it known that Samsung was the first to pioneer this technology. Therefore, they are getting the most advanced product in the market. 3. Maintain market dominance throughout the “ Glasses “ and prepare the market for a 3D TV Samsung already established a firm hole on the 3D market, we would like to maintain our position as market leaders in 3D technology with the use of 3D glasses. As the market evolves closer to glasses free technology, they would like to prepare the market for our product release in 2014. They objective is to see them market share remain at 88% until the release of our glasses-free product in 2014. Company strategies Samsung is a company that markets and market share of companies manufacturing technology. Market Strategy of Samsung is flooding the market with a multitude of products in a short time, Samsung produces many product lines and launched continuously. In addition, Samsung appeal to more markets by providing more facilities on mobile phones, smartphones, tablets ... Samsung market research for market classification to low market and high levels are able to use their products. They were very good in the low end market, but Samsung only in recent years become a strong company with many achievements and increase their sales in the smartphone market and has gained a good amount. Specific example: "Last year saw Samsung achieved a lot of success, they gain more market share. Samsung's market share has doubled to more than 36% in Q2 2011 from approximately 18% in the same period last year. "Increase market share rapidly, Samsung
  7. 7. achieved great success because they are willing to spend large sums of money to invest in different devices than Apple. Samsung Galaxy SIII is considered the success of Samsung products with sales of over 10 million units in 2 months. Many people believe that SIII is Samsung's answer for Apple's iPhone products, as well as a reason for a huge growth in the market share of Samsung cave. Finally, Samsung succeed when choosing Google's Android operating system for the products they produce, in addition they also have smart phones using Windows Phone OS. While Apple only narrow them into IOS software and not much change in the product design, the Samsung is taking steps to develop more and gain more market share of the company Samsung. Strategic value of the Samsung case works very well because they cannot only diversify their hardware, but their software is better evaluate and use very clever. Develop new product To understand new product development strategy overview in Samsung R&D: As new technologies are being constantly introduced to the market, speed is essential for remaining competitive in today's digital era, and new markets have to be pioneered continuously. Through the interplay of creative, imaginative people; a global R&D network, an organization that encourages collaboration and cooperation among business partners all along the supply chain, and a strong commitment to ongoing investment, Samsung has put R&D at the heart of everything To understand methodology followed by Samsung R&D in New Product Development phase: The popularity graph of the Samsung mobile phones shows an ascending curve. The reason for such a rise obviously directs to the dedication of the makers in offering a state-of-the-art technology that is cost-effective, stylish, and most importantly user friendly. Being the owner of a wide range of service support centers throughout the globe, the popularity of the Samsung models of this make stems from the reason of cost-effectiveness of the phone models. Get feedback from customers based on new product To study effect of Consumer behavior on New Product Development of Samsung: Customers are seemed to move to those products which have good balance between style, technology and price of the product. Samsung is one of the leaders that have sensed the pulse of the mobile phone users. Mobile phones from this technological giant are a rare admixture of style and functionality. To challenges and problems faced by the organization in the process.
  8. 8. III. Performance Review & Strategic/Financial Goals A. SWOT MATRIX Samsung Group is one of the largest industrial groups in South Korea, operating through a network of subsidiaries world. The company interested in more than 20 affiliates, and focuses on electronics, finance and service activities. Samsung electronics is one of the world’s largest manufacturers of random-access memory chip. 1. Strengths Customers are loyal and appreciating the brand. Samsung is enjoying very good position against its competitors. The company is maintaining very good relationship with its suppliers. The company is also maintaining with laborers. Samsung is a financial strong and Stable. The production processes and procedures of inventory management are consistent with industrial standards.  Hardware integration with many open source OS and software. Samsung is focused on producing devices which can be integrated with most of the software and OS. This gives Samsung products an edge over Apple’s (its arch rival) devices, especially as Android and other OS are gaining market share when is and OS X are losing it.  Excellence in engineering and producing hardware parts and consumer electronics. Samsung is the number 1 by market share in televisions and mobile phones sales and some of the hardware parts (processors, memory chips, etc.). This was largely achieved due to excellence in engineering and both efficient and effective production.  Innovation and design. In 2011, Samsung ranked second on the list of US top patent assignees. More patents strengthen Samsung position among its competitors. The firm also won many awards for the design of its products, proving the superior advantage over the competitors.  Focus on environment. Samsung focuses on producing environment friendly products that are free from PVC and BFRs (currently only MP3 and mobile phones). It also develops
  9. 9. various recycling programs that are awarded for their success. Thus, Samsung’s focus on environment gives it an edge over its competitors in the eyes of its customers.  Low production costs. The company has set up its production facilities in low cost countries. This allows producing goods with low production cost and benefit Samsung as it can offer lower price and earn higher margins.  Largest share in mobile phones and 2 place in smartphones sales in the world. Samsung Electronics have achieved large market share in many products they sell, especially in mobile phones, smartphones, semiconductors and television sets. Large market share has its advantage, bargaining power that Samsung can use to further reduce costs and demand for better contract conditions.  Ability to market the brand. Samsung is named as top rising brand by Interbrains and is the 9th most valuable brand with value nearly $33 billion. It has risen by 40% from 2011 to 2012. This was mainly achieved due to company’s ability to market the brand in sporting events and social contributions. 2. Weaknesses Samsung is facing hard competition. South Korea’s labor unions are strategically linked for collective bargaining and negotiation. Samsung need improvements in defining the vision, mission and strategic corporate objectives. Marketing management needs improvement in all the facts of marketing. HRM also needs improvement in all the facts of human resources management.  Patent infringement. Samsung is infringing Apple’s and some other firms’ patents, thus, damaging its reputation and having to pay a huge amount of money in damages.  Too low profit margin. Samsung Electronics is the largest technology business in the world in terms of revenues but it has a low gross profit and net profit margins. Although its smartphones business is quite profitable, Samsung’s profit margin is low due to its semiconductors sales and aggressive price cuts.  Main competitors are also largest buyers. Apple, Sony, Dell, HP are the main buyers of Samsung Electronics products as well as the firm’s main competitors. Such situation would be favorable to Samsung (if competitors could not find complementary products and would form a relatively low share Samsung’s revenues) because it could use its bargaining power over competitors. Due to reverse conditions (competitors can find complements and they
  10. 10. form a relatively high share of firm’s revenues) Samsung cannot use its bargaining power over competitors as it can easily lose its customers and sales.  Lack its own OS and software. Software and OS production has a high profit margin, can increase integration of company’s products and brand loyalty. Without strong software and OS Samsung is at disadvantage over its competitors.  Focus on too many products. Samsung Electronics serves 4 different industries with many different products in them. Samsung is at disadvantage over its competitors because it loses a focus when competing in too many industries and too many products. 3. Opportunities The economic condition of South Korea seems favorable. Samsung is interiorizing the social shifts. It is having constant policy given by the government. Samsung is reasonable equipped to take care of technological changes. Samsung is maintaining good international relationship with other.  Growing India’s smartphone market. India’s smartphone market is one of the least penetrated among Asia/Pacific countries. Samsung has a strong presence in India’s market and could use this opportunity to expand its sales.  Growing mobile advertising industry. The company could develop advertising platform for its mobile devices and significantly benefit from this lucrative market.  Growing demand for quality application processors. Samsung is one of the key manufacturers of application processors for smartphones and tablets. The growing demand for these products requires best quality application processors that only Samsung provide.  Growth of tablets market. Tablets market is expected to grow in double digits over the next few years. Samsung business has a strong position in tablets market and could expand it by introducing newer, better quality tablet models, such as its current galaxy line.  Obtaining patents through acquisitions. The key to Samsung’s competitive advantage is the large portfolio of patents. Patents can be discovered by engaging in costly R&D or through acquisitions of other firms. Tries and the local. 4. Threats
  11. 11. The legislation has been passed frequently related to industry. Technological transformation takes place in the industry was very high. Regulatory issues and safeguarding of property rights was main threats in legislations.  Saturated smartphone markets in developed countries. Smartphones market in the developed economies is saturated and the sales will not be growing at a high rate.  Rapid technological change. The serious threat that Samsung and the other tech companies are facing is a rapid technological change. Companies are under the pressure to release the new products faster and faster. The one that cannot keep up with the competition soon fails. This is especially hard when the business wants to introduce something new, innovative and successful.  Declining margins on hardware production. Samsung is the second largest semiconductors producer where the profit margins are very thin, thus weakening the whole company's figures.  Breached patents. Samsung Electronics has many patents which are often used by its many competitors. Such situation makes it hard to find out which companies benefit from Samsung’s technology but do not pay for the rights to use it.  Price wars. Samsung has a very low gross margin on many of its products and is already selling some of them with significant price cuts. Competitors could follow price cutting strategy too and induce price wars, which would erode Samsung’s profit margin to 0%.
  12. 12. Samsung Apple Nokia Microsoft Critical Success factors Weight Rating Score Rating Score Rating Score Rating Score Store Locations 0.10 4 0.40 4 0.4 3 0.30 3 0.30 Market Share 0.12 4 0.48 2 0.24 2 0.24 4 0.48 Consumer loyalty 0.10 4 0.40 3 0.30 3 0.30 2 0.20 Market penetration 0.11 3 0.33 4 0.44 3 0.33 4 0.44 Advertising 0.07 3 0.21 3 0.21 3 0.21 4 0.28 Product variety 0.09 4 0.36 2 0.18 4 0.36 3 0.27 Brand reputation 0.11 4 0.44 4 0.44 3 0.33 4 0.44 Product quality 0.08 4 0.32 3 0.24 2 0.16 3 0.24 Price competitiveness 0.10 1 0.10 3 0.30 4 0.40 3 0.30 Successful product promotions 0.06 4 0.24 3 0.18 1 0.06 4 0.24 Employee dedication 0.06 4 0.24 4 0.24 3 0.18 3 0.18 Totals 1.00 3.52 3.17 2.87 3.33
  13. 13. B. Competitive Profile Matrix (CPM) C. External Factor Evaluation (EFE) Matrix Key External Factors Weight Rating Weighted Score Opportunities A lot of countries encourage technology innovation and high-tech industry is really important. 0.03 3 0.09 Countries value the protection of intellectual property 0.04 3 0.12 GDP and national income per capita increasing 0.12 3 0.36 Consumption pattern is changing from subsistence consumption to well spending pattern 0.07 3 0.21 Samsung’s mobile phones have high attention 0.09 4 0.36 Growing India’s smartphone market 0.05 2 0.10 People more care about brand and quality than price 0.14 3 0.42 Threats Legal issues with Apple 0.05 3 0.15
  14. 14. Price wars with Chinese phones 0.10 3 0.30 More and more new substitute and potential entrant 0.10 4 0.4 Strong competitors: Apple, Nokia, HTC… 0.12 4 0.48 The user experience is upgrading 0.09 3 0.27 Total 1.00 37 3.26 D. Internal Factor Evaluation (IFE) Matrix
  15. 15. Key Internal factors Weights Rating Weighted Score Strengths Brand Recognition and Loyalty 0.07 3 0.21 A large number of products and broad product line 0.05 4 0.20 Strong research and development ability 0.10 3 0.30 Hardware integration with many open source OS and 0.04 2 0.08 software Innovation and fashion design, especially popular among younger peoples 0.15 4 0.60 With extensive sales channels and propaganda 0.06 3 0.18 Low production costs 0.03 3 0.09 Largest share in Smartphone industry ( 30% market share worldwide, extending its lead over Apple and 0.15 4 0.60 Nokia) Weaknesses Not high lighting Price/Performance Ratio 0.10 4 0.40 Lack its own OS and Software 0.07 4 0.28 Patent infringement 0.04 3 0.12 Too low profit margin 0.04 2 0.08 Limited high-end products 0.03 2 0.06 Focus on too many products, with inaccurate 0.07 3 0.21 positioning Total 1.00 44 3.41
  16. 16. E. Strategic Position and Action Evaluation (SPACE) Matrix Internal Strategy Position External Strategy Position Y Financial Strength (FS) +1 to +6 Environmental Stability(ES) -6 to -1 +3 Earnings per share -2 Price of competitive product +5 Revenue increase -4 Competitive pressure +4 Return on Assets -4 Global economic +4 Leverage -2 Technology changes +3 Liquidity -2 Demand elasticity +3 Cash flows -2 Inflation rates Average 3.6 Average -2.6 Total Axis Y score: 1.07 X Competitive Advantage (CA) -6 to -1 Industry Strength (IS) +1 to +6 -1 Product quality +6 Barriers to entry -2 Market share +5 Growth potential -1 Brand & image +5 Access to financing
  17. 17. -3 Product life cycle +6 Consolidation -5 Customer service +6 Profits -2 Customer loyalty Average -2.3 Average 5.6 Total Axis X score: 3.26 There is SPACE Matrix below: Y X Conservative Aggressive (3.26; 1.07) Defensive Competitive
  18. 18. F. Grand Strategy Matrix RAPID MARKET GROWTH COMPETITIVE STRONG COMPETITIVE POSITION CHARATERISTICS OF FIRMS: Weak competitive position working in rapid growth market  Market development  Market penetration  Product development  Horizontal integration  Divestiture  Liquidation CHARATERISTICS OF FIRMS: Strong competitive position working in rapid  Market development  Market penetration  Product development  Forward integration  Backward integration  Horizontal integration  Related diversification CHARATERISTICS OF FIRMS: Weak competitive position working in slow growth market  Market development  Market penetration  Product development  Horizontal integration  Divestiture  Liquidation CHARATERISTICS OF FIRMS: Strong competitive position working in slow  Related diversification  Unrelated diversification  Joint ventures SLOW MARKET GROWTH growth market growth market According to the Grand Strategy Matrix, Samsung is the first quadrant with market WEAK POSITION penetration and market development as well as development of existing products have an appropriate strategy. Diversifying production Samsung products also help reduce the risk associated with narrower product lines. Samsung also has the resources to take advantage of external opportunities that expand in the different fields. Samsung staying the quadrant one of the Grand Strategy Matrix is meant for this firm which are in a strong competitive position and flourishing with rapid market growth. Samsung located in this quadrant are in excellent strategic
  19. 19. position and they need to concentrate on current markets and products. Concentration on current markets reveals the adoption of strategies such as market penetration and market development and likewise concentration on current products calls for adoption of product development strategy. G. Quantitative Strategic Planning Matrix (QSPM) Quantitative Strategic Planning Matrix for Samsung Electronic– Case Study 27 Combine all the analysis and matrix, we have the Quantitative Strategic Planning Matrix for Samsung Electronic: Key Factors Weight Market Penetration Market Development Product and Service Development Opportunities AS TAS AS TAS AS TAS A lot of countries encourage technology innovation and high-tech 0.03 3 0.09 4 0.12 3 0.09 industry is really important. Countries value the protection of intellectual property 0.04 3 0.12 4 0.16 2 0.08 GDP and national income per capita increasing 0.12 4 0.48 4 0.48 1 0.4 Consumption pattern is changing from subsistence consumption to well spending pattern 0.07 3 0.21 3 0.21 3 0.21 Samsung’s mobile phones have high attention 0.09 4 0.36 4 0.36 4 0.36 Growing India’s smartphone market 0.05 2 0.10 3 0.15 2 0.10 People more care about brand and quality than price 0.14 3 0.42 4 0.56 4 0.56 Threats Legal issues with Apple 0.05 2 0.10 3 0.15 4 0.20 Price wars with Chinese phones 0.10 3 0.30 3 0.30 3 0.30
  20. 20. More and more new substitute and potential entrant 0.10 3 0.30 4 0.40 3 0.30 Strong competitors: Apple, Nokia, HTC… 0.12 4 0.48 4 0.48 4 0.48 The user experience is upgrading 0.09 3 0.27 3 0.27 4 0.36 Total 1.00 3.23 3.64 3.44 Strengths Brand Recognition and Loyalty 0.07 3 0.21 4 0.28 4 0.28 A large number of products and 0.05 4 0.20 4 0.20 4 0.20 broad product line Strong research and development ability 0.10 3 0.30 4 0.40 4 0.40 Hardware integration with many open source OS and software 0.04 3 0.12 3 0.12 4 0.16 Innovation and fashion design, especially popular among younger peoples 0.15 4 0.60 4 0.60 4 0.60 With extensive sales channels and propaganda 0.06 3 0.18 3 0.18 3 0.18 Low production costs 0.03 2 0.06 3 0.09 4 0.12 Largest share in Smartphone industry ( 30% market share worldwide, extending its lead over Apple and Nokia) 0.15 3 0.45 4 0.60 4 0.60 Weaknesses Not high lighting Price/Performance Ratio 0.10 2 0.20 3 0.30 3 0.30 Lack its own OS and Software 0.07 2 0.14 3 0.21 4 0.28 Patent infringement 0.04 2 0.08 3 0.12 3 0.12 Too low profit margin 0.04 3 0.12 4 0.16 4 0.16 Limited high-end products 0.03 3 0.09 3 0.09 4 0.12
  21. 21. Focus on too many products, with inaccurate positioning 0.07 2 0.14 3 0.21 3 0.21 Total 1.00 2.89 3.56 3.73 Sum Total Attractive Score 6.12 7.2 7.17 (Attractiveness Score: 1 = not acceptable; 2 = possibly acceptable; 3 = probably acceptable; 4 = most acceptable; 0 = not relevant) H. An analysis of the results of each of the foregoing matrices Competitive Profile Matrix (CPM) Samsung Apple Nokia Microsoft Critical Success factors Weight Rating Score Rating Score Rating Score Rating Score Store Locations 0.10 4 0.40 4 0.4 3 0.30 3 0.30 Market Share 0.12 4 0.48 2 0.24 2 0.24 4 0.48 Consumer loyalty 0.10 4 0.40 3 0.30 3 0.30 2 0.20 Market penetration 0.11 3 0.33 4 0.44 3 0.33 4 0.44 Advertising 0.07 3 0.21 3 0.21 3 0.21 4 0.28 Product variety 0.09 4 0.36 2 0.18 4 0.36 3 0.27 Brand reputation 0.11 4 0.44 4 0.44 3 0.33 4 0.44 Product quality 0.08 4 0.32 3 0.24 2 0.16 3 0.24 Price competitiveness 0.10 1 0.10 3 0.30 4 0.40 3 0.30 Successful product promotions 0.06 4 0.24 3 0.18 1 0.06 4 0.24
  22. 22. Employee dedication 0.06 4 0.24 4 0.24 3 0.18 3 0.18 Totals 1.00 3.52 3.17 2.87 3.33 Since the rise of the smartphone in the past few years, there have been a major changes and shifting position between many organizations in the mobile phone industries and if we observe the result in the Competitive Profile Matrix, we can Cleary see that Samsung are now on the top of the industries. Samsung reputations has increase and build up since the release of their Galaxy smartphone product lines that are being considered having equal or even better qualities and features compare to Apple iPhone. This has been prove by the market share of Samsung when compare to other competitors such as Apple and Nokia when in 2013, Samsung has taken over 30% of the Worldwide market share. This result is higher almost three times compare with the market share of Apple in the same years. This positive outcome also is the direct result of Samsung marketing plan in the past years which create a very positive brand image and reputation in the market as well as build the customer loyalty with the high quality products and services before and after the purchase. Samsung using both the Android Operating System from Google and Microsoft Operating System which allow user have more freedom and also more user-friendly that make Samsung products suitable for the
  23. 23. vast majority of consumer not to mention the wide range of products that Samsung offer to the market. For the same generation phone, they can have at least two other type of phone with different configuration that also have lower price and allow customer can be able to afford Samsung products. External Factor Evaluation (EFE) Matrix Key External Factors Weight Rating Weighted Score Opportunities A lot of countries encourage technology innovation and high-tech industry is really important. 0.03 3 0.09 Countries value the protection of intellectual property 0.04 3 0.12 GDP and national income per capita increasing 0.12 3 0.36 Consumption pattern is changing from subsistence consumption to well spending pattern 0.07 3 0.21 Samsung’s mobile phones have high attention 0.09 4 0.36 Growing India’s smartphone market 0.05 2 0.10 People more care about brand and quality than price 0.14 3 0.42 Threats Legal issues with Apple 0.05 3 0.15 Price wars with Chinese phones 0.10 3 0.30 More and more new substitute and potential entrant 0.10 4 0.4 Strong competitors: Apple, Nokia, HTC… 0.12 4 0.48 The user experience is upgrading 0.09 3 0.27 Total 1.00 37 3.26
  24. 24. In the research and analysis of tall the External factors that influence and have effect on Samsung Electronic business, there are a lot of opportunities for Samsung to depend on and take advantages to increase their competitive position as well as acquire more competitive advantages that help Samsung to develop their business and compete with other strong competitors such as Apple or HTC and Nokia. The first thing that is really important and also very potential opportunities for Samsung that the advance and increase in the technology developing of all countries in the World. The benefits and positive application of the technology has pushed the development of technology in the next level and create a world full of possibilities for Samsung to exploit. Most of the countries that have strong economic strength also spend a lot of their GDP only for technology research and development. Take Japan for example, according to the 2013 Budget list they spend about 0.4% of their GDP just only for technology development and they also very close to South-Koran which Samsung can have access or acquire the technologies they need to develop their new products line. This is very important when Samsung can survive on the market or not depend on the technology level of their products when compare to their competitors. The increasing in the world economic also helps to expand the range and variety of Samsung customer.
  25. 25. South-Korea also is one of the fast economic growths which also create the strong financial resources for Samsung to extend and expand their market as well as their strength to penetrate and enter new market. The higher standard of living means the increase in spending and expectation of customer. Now they not care about the lowest price so much but the features and capabilities of the products they buying. This is the opportunities but also a threat for Samsung now when they have to develop the high-end product with better qualities and specification to meet and satisfied the need and demand of the customer. The threat from less – expensive products from the Chinese manufacturer that using the same configuration and technologies like Samsung products also leave another huge impact on Samsung revenue. The qualities of these products many not meet the standard of Samsung products but can attract a lot of attention with their low prices and wide range of distributor. Now not only Samsung have to deal with stronger and better competitors but they also have to solve their problem with counterfeit products and cheap substitute from Chinese manufacturer. If we observe the market share of these products, they are even higher than strong competitors such as Nokia or even Apple. The fact that these products still have the strand in the market mean the prices affect still play a major role in the success of an organization that engage in this industries.
  26. 26. Beside the expectation, the legal issues also create very difficult problems for Samsung, especially on the North America market. Under the accused of Apple that Samsung stealing intellectual properties from Apple to apply on their products line, this create the doubt of Samsung capabilities and damages the brand images and reputation that Samsung has built over the years in the North America market as well as other region in the world. The final result that Samsung cannot sales some of their products in the North America market has left a huge impact on Samsung market penetration and decrease Samsung percentage of market share in the North America market to only 9.6% in 2010 while Apple gain more and reach 16.1% in the same period of time. In conclusion, Samsung need to overcome and eliminate or minimize the damages and effect of these threats to protect their completive position in the market. However, to be able to complete these goals they need to concentrate on their internal strength which is something they can have total control and manipulated. Otherwise they will not stand a change with the threat from the competitors in the industries
  27. 27. Internal Factor Evaluation (IFE) Matrix Key Internal factors Weights Rating Weighted Score Strengths Brand Recognition and Loyalty 0.07 3 0.21 A large number of products and broad product line 0.05 4 0.20 Strong research and development ability 0.10 3 0.30 Hardware integration with many open source OS and 0.04 2 0.08 software Innovation and fashion design, especially popular among younger peoples 0.15 4 0.60 With extensive sales channels and propaganda 0.06 3 0.18 Low production costs 0.03 3 0.09 Largest share in Smartphone industry ( 30% market share worldwide, extending its lead over Apple and 0.15 4 0.60 Nokia) Weaknesses Not high lighting Price/Performance Ratio 0.10 4 0.40 Lack its own OS and Software 0.07 4 0.28 Patent infringement 0.04 3 0.12 Too low profit margin 0.04 2 0.08 Limited high-end products 0.03 2 0.06 Focus on too many products, with inaccurate 0.07 3 0.21 positioning Total 1.00 44 3.41 The problems with the sale volumes of Samsung fourth generation smartphones has indicated that Samsung have problems that is not related to complete to the external environment but is the result of poor quality management from the inside of Samsung Electronic structure.
  28. 28. The poor and lack of original technologies will be the most dangerous weakness of Samsung. In the industries that have the close relationship with the technologies and technologies development, this is very vital factors that can actually put Samsung out of the games and these also apply for their accused of Patent Infringement. The threat with all the lawsuit with Apple in the North America market has also make the consumer question about the abilities and technological capabilities of Samsung as well as the qualities of their products lines. The opportunities that have the wide ranges of Products line also the great weakness for Samsung. With too many products and lack of prioritization which one is the main products that need concentrate marketing and promotion, the consumer don’t know which model to choose from, especially the one who not have wide knowledge about. This also affects the Price/Performance Ratio of Samsung products. If the consumer don’t have the knowledge about the products and what is it capable of, they will hesitate to choose and spend a very large sum of money for that products and most likely to choose what they think they know better. Apple is very good at showing and demonstrate what their products can do under the usage of average customer, in fact Apple products is very difficult to handle and not user-friendly when compare to the Android OS based smartphone. However, Samsung is not utilized this factors as much as they allow and lose the advantages over their competitors. Although having many serious weakness, Samsung also very strong internally. Low cost productions also allow Samsung to increase the configuration of the phone without the threat that
  29. 29. their price will be higher than other competitors. While other companies such as Apple or Nokia have to outsourcing their manufacturing, Samsung have the geographic advantages that allow them to have low –cost but high productivities labors Their brand images and reputation are very highly recommended by many customers all over the world and even higher when compare with Apple or Nokia. This is the direct result of their wide range of products line and high qualities that leave the satisfaction in the customer. In 2013 only, Samsung are on the top of brand awareness compare with other smartphone manufacturer from big such as Apple or Nokia to cheap and low-qualities from China which occupied over 20% when Apple is only 12% in comparison. These create very strong advantages of Samsung on the market when the customer will recognize their brand anywhere and increase the sale volume of Samsung products. Besides the smartphones manufacturing, Samsung also engage in many other industries that allow them to have stronger and better resources in both
  30. 30. financial and technologies to support the development and competitive position of the smartphone manufacturing. Strategic Position and Action Evaluation (SPACE) Matrix Financial Strength (FS) Earnings per share Earnings per share also reduce from 67,916 in 2004 to 37,684 in 2008, so I give it +3 Revenue increase Samsung sales are up from 63 million in Q4 2012, Revenues rose 17% to 52.9tn won and operating profit was up 54%. I give it +5 Return on Assets Return on capital employed (ROCE) = Operating profit/ (Average shareholders' funds+ Loans) According to Profitability (Net Income/Sales) and Asset Turnover (Sales/Asset), we can get ROCE = Profitability*Asset Turnover. So from 2004 to 2008, the ROCE rates are 15.60%, 10.08%, 9.90%, 9.04% and 7.32% respectively. We can see a decline in Return on Assets, but it still has good performance. So I give it +4. Leverage The rates are 2.06, 1.84, 1.74, 1.68 and 1.67 respectively from 2004 to 2008, and Earnings per share also reduce from 67,916 in 2004 to 37,684 in 2008. Considering it's a great company, this is a good result, so I give it +4. Liquidity Current ratio = Current assets/ Current liabilities The ratios are 0.722:1.000, 0.709:1.000, 0.767:1.000, 0.826:1.000 and 0.532:1.000 from 2004 to 2008.
  31. 31. The company does not have very good liquidity especially in 2008. I give it +3. Cash flows We can see from “Consolidated Cash Flow Statement” that the cash flow from operating activities keep almost the same level from 2004 to 2008, but the net income decreases heavily in 2008. So I give it +3 Environmental Stability (ES) Price of competitive product Most of Samsung competitor such as HTC, Apple and Blackberry also have the products to compete directly with Samsung Galaxy S4 that have the same or similar specs and features. However, fortunate for Samsung that most of these products are having the same price level of Samsung or even higher such as Apple IPhone 5. Therefore Samsung although don’t have any threat from other but they don’t have so much advantages in price compare with other manufacture. So I give it -2 Competitive pressure Samsung not only faces competition from Apple, but also from Chinese phone manufacturers. I give it -4 Global economic The whole world is suffering from a recession from 2008, and has not recovered yet. So I give it - 4. Technology changes As for the electronic industry, the rates of obsolescence's are quicker than any other industry. We can feel that the functions of mobile phone will be out of date after one year. So I give it -2 Demand elasticity Refrigerator, washing-machine and TV should be necessary for a family, but a mobile phone and a laptop may not be so necessary. So we can say the overall demand elasticity is not so big. I give it -2.
  32. 32. Inflation rates Due to worldwide recession, inflation is not strong nowadays. So I give it -2. Competitive Advantage (CA) Analysis Product quality: According to the customers' comments, the products of Samsung is better than most of its competitors. So I give it -1. Market share: Market share of mobile phone As companies get larger, it becomes increasingly difficult to deliver organic growth that meets or exceeds the industry average. Samsung has managed to exceed the industry average growth by delivering competitively priced handsets with the design features of more expensive handsets. In the smartphone realm, Samsung has shown great success with its Android based Galaxy series and its Bada OS. Market share Second quarter 2012
  33. 33. We can see from the chart that Samsung mobile phones' market share is 21% in 2012, which is the second place after others. So I give it -2. Brand & image: As we all know, almost everybody knows Samsung. So I give it -1. Product life cycle: Electronics' technologies innovation speed is very fast, and it still develop and growth in last few years, so the life cycle score is -3. Customer service According to data of a survey website customer service is ranked number 457 out of the 728 companies that have a CustomerServiceScoreboard.com rating with an overall score of 30.07 out of a possible 200 based upon 1695 ratings. So I give it -5. Customer loyalty Follow to bgr.com website, Unsurprisingly Apple fans were the most loyal, as 76% said they planned to stick with the iPhone. Samsung came in second place, with 58% of Galaxy owners saying they planned to buy a Samsung phone with their next purchase. So I give it -2 Industry Strength (IS) Analysis
  34. 34. Barriers to entry: The electronic market is mainly shared between those big companies like Nokia, Apple, Motorola and Samsung, so it's very difficult for new entrants. I give it +6. Growth potential: Due to technology is the main factor in electronic industry, the market can grow as the development of new technology, so I give it +5. Access to financing: As a super company, Samsung has good credit which gives banks confidence to give loan to it, the same as the shareholders, etc. So I give it +5. Consolidation: From the Annual Report of Samsung Electronics, they have a large amount of consolidated subsidiaries, and value the performance of the subsidiaries every year in order to decide which ones should be eliminated and which ones can be kept. So I give it +6. Profits These are some awfully of Samsung. The company’s Q4 2012 revenue figure is 18.52 percent larger than it was in Q4 2011, and Samsung’s profit this quarter surged to an impressive 89.3 percent from what it reported last year. The company also released its fiscal 2012 figures — this past year, Samsung scored a net profit of 23.8 trillion won ($22.25 billion) on revenue of 201 trillion won ($187.9 billion). So I give it +6 Internal Strategy Position External Strategy Position Y Financial Strength (FS) +1 to +6 Environmental Stability(ES) -6 to -1 +3 Earnings per share -2 Price of competitive product +5 Revenue increase -4 Competitive pressure
  35. 35. +4 Return on Assets -4 Global economic +4 Leverage -2 Technology changes +3 Liquidity -2 Demand elasticity +3 Cash flows -2 Inflation rates Average 3.6 Average -2.6 Total Axis Y score: 1.07 X Competitive Advantage (CA) -6 to -1 Industry Strength (IS) +1 to +6 -1 Product quality +6 Barriers to entry -2 Market share +5 Growth potential -1 Brand & image +5 Access to financing -3 Product life cycle +6 Consolidation -5 Customer service +6 Profits -2 Customer loyalty Average -2.3 Average 5.6 Total Axis X score: 3.26
  36. 36. There is SPACE Matrix below: Y X Conservative Aggressive (3.26; 1.07) Defensive Competitive All in all, we suggest that Samsung can make aggressive strategy according to the situation now.
  37. 37. Grand Strategy Matrix RAPID MARKET GROWTH COMPETITIVE STRONG COMPETITIVE POSITION CHARATERISTICS OF FIRMS: Weak competitive position working in rapid growth market  Market development  Market penetration  Product development  Horizontal integration  Divestiture  Liquidation CHARATERISTICS OF FIRMS: Strong competitive position working in rapid  Market development  Market penetration  Product development  Forward integration  Backward integration  Horizontal integration  Related diversification CHARATERISTICS OF FIRMS: Weak competitive position working in slow growth market  Market development  Market penetration  Product development  Horizontal integration  Divestiture  Liquidation CHARATERISTICS OF FIRMS: Strong competitive position working in slow  Related diversification  Unrelated diversification  Joint ventures SLOW MARKET GROWTH growth market growth market According to the Grand Strategy Matrix, Samsung is the first quadrant with market WEAK POSITION penetration and market development as well as development of existing products have an appropriate strategy. Diversifying production Samsung products also help reduce the risk associated with narrower product lines. Samsung also has the resources to take advantage of external opportunities that expand in the different fields. Samsung staying the quadrant one of the Grand Strategy Matrix is meant for this firm which are in a strong competitive position and flourishing with rapid market growth. Samsung located in this quadrant are in excellent strategic
  38. 38. position and they need to concentrate on current markets and products. Concentration on current markets reveals the adoption of strategies such as market penetration and market development and likewise concentration on current products calls for adoption of product development strategy. Quantitative Strategic Planning Matrix (QSPM) Quantitative Strategic Planning Matrix for Samsung Electronic– Case Study 27 According to the situations, although the fourth generation smart phone of Samsung content many innovative and cutting-edge technology features, the sale volume and the market share of Samsung is still not in the level that can compare with other competitors and Apple is one of them. If we analyze and observe closely, we can see that many of Samsung technology are similar and very look-alike to Apple’s technology. We don’t have the evidence or authority to accuse Samsung stealing Apple technology to use on their products but the similarity make Samsung lose their Differentiation compare to Apple, especially in the US market. This issue is the result of the poor management of Samsung Electronic which effect on both their vision and strategies in the competition with Apple. This is very dangerous when this style of management make they cannot gain as many Competitive Advantages as they could to compete directly with Apple in general and to increase the sale as well as gain more market share with their fourth generation smartphone in particular. The best solution for Samsung Electronics is to increase their Market Growth as well as their Competitive Position as much as they can and according to the GRAND Strategy of Samsung, we can see that three strategies: Market Penetration, Market Development, Product and Service Development is the best strategies they can use to achieve both the objective they need in order to compete with Apple and other competitors in the market. Combine all the analysis and matrix, we have the Quantitative Strategic Planning Matrix for Samsung Electronic:
  39. 39. Key Factors Weight Market Penetration Market Development Product and Service Development Opportunities AS TAS AS TAS AS TAS A lot of countries encourage technology innovation and high-tech 0.03 3 0.09 4 0.12 3 0.09 industry is really important. Countries value the protection of intellectual property 0.04 3 0.12 4 0.16 2 0.08 GDP and national income per capita increasing 0.12 4 0.48 4 0.48 1 0.4 Consumption pattern is changing from subsistence consumption to well spending pattern 0.07 3 0.21 3 0.21 3 0.21 Samsung’s mobile phones have high attention 0.09 4 0.36 4 0.36 4 0.36 Growing India’s smartphone market 0.05 2 0.10 3 0.15 2 0.10 People more care about brand and quality than price 0.14 3 0.42 4 0.56 4 0.56 Threats Legal issues with Apple 0.05 2 0.10 3 0.15 4 0.20 Price wars with Chinese phones 0.10 3 0.30 3 0.30 3 0.30 More and more new substitute and potential entrant 0.10 3 0.30 4 0.40 3 0.30 Strong competitors: Apple, Nokia, HTC… 0.12 4 0.48 4 0.48 4 0.48 The user experience is upgrading 0.09 3 0.27 3 0.27 4 0.36 Total 1.00 3.23 3.64 3.44 Strengths Brand Recognition and Loyalty 0.07 3 0.21 4 0.28 4 0.28 A large number of products and 0.05 4 0.20 4 0.20 4 0.20 broad product line
  40. 40. Strong research and development ability 0.10 3 0.30 4 0.40 4 0.40 Hardware integration with many open source OS and software 0.04 3 0.12 3 0.12 4 0.16 Innovation and fashion design, especially popular among younger peoples 0.15 4 0.60 4 0.60 4 0.60 With extensive sales channels and propaganda 0.06 3 0.18 3 0.18 3 0.18 Low production costs 0.03 2 0.06 3 0.09 4 0.12 Largest share in Smartphone industry ( 30% market share worldwide, extending its lead over Apple and Nokia) 0.15 3 0.45 4 0.60 4 0.60 Weaknesses Not high lighting Price/Performance Ratio 0.10 2 0.20 3 0.30 3 0.30 Lack its own OS and Software 0.07 2 0.14 3 0.21 4 0.28 Patent infringement 0.04 2 0.08 3 0.12 3 0.12 Too low profit margin 0.04 3 0.12 4 0.16 4 0.16 Limited high-end products 0.03 3 0.09 3 0.09 4 0.12 Focus on too many products, with inaccurate positioning 0.07 2 0.14 3 0.21 3 0.21 Total 1.00 2.89 3.56 3.73 Sum Total Attractive Score 6.12 7.2 7.17 (Attractiveness Score: 1 = not acceptable; 2 = possibly acceptable; 3 = probably acceptable; 4 = most acceptable; 0 = not relevant) According to the Sum Total Attractive Score, we can clearly see that Market Development and Product and Service Development are the two alternatives strategies that Samsung Electronic needs to concentrate, especially Market Development. The facts that Apple has more influence in the US Market make market become too dangerous and difficult for Samsung to participate. It will
  41. 41. be easier and provide more opportunities for Samsung to expand their market to other region such as Asia and Europe, where Apple don’t have much market share as well as the influence will allow Samsung to have more chance to have more advantages and therefore gain more Market share as well as create opportunities for Samsung to have more resources in both financial and technology to support their second alternative strategies – Product and Service Development. Samsung Electronic needs to realize that they will have more Competitive Advantages if they invest and develop their own technology to apply on their line of products. This will make Samsung products and services be more Differentiation and be more unique and attract more customers. In the modern world where technology can become obsolete in the matter of days, it is very reasonable for customer to seek and choose the latest and unique technology and features, especially in their phone, the items they will carry almost 24/7 with them. If Samsung can have their own technology that provide and satisfied the need and demand of the customer, they will gain more Market Share than they can ever imagine. Although the Market Penetration is not as important as other strategies but is also play a very important role in the survival of Samsung Electronics. IV. Business Strategy A. Business Strategy recommendations –both long term objectives and specific strategies for the company Since the past 40 years, the development of technology has go with the speed faster than anyone can imagine they could and the rise and fall of each technology also being shorten significantly. A new cutting-edge technology can become obsolete in the matter of days. As one of the organization that have a very close dependence relationship with the development of technology like Samsung Electronics, it is very important for them to have a proper strategies that suitable with the unstable environment such as technology industries so that they can survive and have effective response with any obstacles and problems may occurs in the future. Based on the result of the analysis in this research, we have identified the problems and issued that hinder the development of Samsung Electronics in general and the sales of the fourth generations’ smartphone that Samsung just released in particular are the poor and unsuitable strategies and operation of Samsung management. According to the result of the QSPM matrix, there are two
  42. 42. main strategies that Samsung need to concentrate to overcome their weakness are: Market Development and Products & Service Development. The goals of Market Development are to seek and expand Samsung business over new market and regions such as the Asia market, South-America market and European market. These regions are content many new potential customer group and may support and increase the sales of the existed products line of Samsung Electronics. These regions also don't being under strong influence of Samsung's competitors and Apple is the best example. If in the United States market, Samsung are having trouble with the all the accused that Samsung steal Apple's ideas and intellectual properties. We don't confirm that Samsung actually steals those intellectual properties or not, but it have leave a huge affected on Samsung's reputation and images in the United States market and also hinder the development of Samsung products sales volumes. The strategies to expand the business over new market will provide Samsung as many opportunities as they need to build and develop their business in those markets before their competitors can achieve those goals and also is a very important and powerful Competitive Advantages that can support and maintain the Competitive Position of Samsung. These regions also have many potential organizations and firms that Samsung can create alliance with or take over if they can. These organizations can have the foundation or finished new technology that Samsung can acquire and apply to their new or existed product lines as the support Samsung to achieve the strategies of Products & Service Development. With many accused from Apple that Samsung actually don't have any original technology on their products line is a very dangerous accused that no matter they right or not, the images and the brand name of Samsung has already been damaged. The strategies that concentrate on Products & Service Development will create the foundation for Samsung's Research & Development department to have proper research and experience to have their own technology that is unique and can be apply on their product lines. This will immediately create a very strong Competitive Advantages for Samsung to compete with their competitors and minimize the influence of the dependence with the technology of any organizations that doing business in this industries. However, to completely have the most effective result from these strategies, Samsung need to wisely use all the potential resources and protect their technology at all cost. The fact that Samsung are being accused that steals other ideas has showed the important of the secrecy of technology in
  43. 43. this industry. Be able to protect their technology also mean they can protect their Competitive Advantages and maintain their market shares. These two strategies in general, not only can help Samsung overcome and solve their existed issued but also help develop in the matter of long-term. However, the strategies only work if they have proper and detailed plans to support and process to implement those plans accurate to have the best possible result. B. Proposed methods and timetable for the implementation of the long-term objectives and specific strategies The result of a strategies are based on the preparation and set up the plans as well as resource to be able to implement the plan to achieved desire result in the end. In this research we need to concentrate in two strategies are Market Development and Products & Service Development. Each of these two strategies needs different approach and preparation. For the Market Development strategies, Samsung need to sort out their priorities regions they want to expand their business over and the best method is using geographic factors. With most of the manufacturing facilities are located in South Korea, it will be easier for Samsung to step-by-step expand their business from near too far away. The Asia markets have the best environment for Samsung to expand their business. They will have the advantages of cultural and geographic as well as the resources and strategic partner they need to help Samsung set up the foundation for the expansion. These regions also have many countries that have the best technology advantages and development such as Japan or China. These countries still don’t have any organizations that are big enough to compete directly with Samsung Electronics. Therefore Samsung will have strong Competitive Advantages over those competitors and allow them to have the easiest path to acquire any firms or technology they need. However, the Asia market or South-America market still content many developing and undeveloped countries which make the customer group of this market is not very potential for Samsung. To increase the revenue they need to focus on the European market which have the strong economy status as well as have more potential customer group that are willing to pay for higher and more modern technologies and products of Samsung. Although this market already have some strong competitors that can compete with Samsung such as Nokia, Samsung still have better technologies and competitive advantages with their
  44. 44. diversification. Beside the phone manufacturing, Samsung Electronic also have many other companies that manufacturing home appliances, laptop or television and make Samsung have more stable financial resources to compete. However, to implement the Products & Services Development strategies, Samsung will need more time and resources than expand their market. The resources in this case is not just financial resources but also the technology and sciences that requires to do research and experience new technologies. Therefore, it will be easier and simpler to implement if Samsung acquire the technologies that already been developed from small but potential company from Japan or China. This will allow Samsung have install access with new technology that can help them to maintain the market share or even have more advantages over their competitors. Although this is easier to implement but this strategies is too easy to imitate by their competitors. To actually have the technology advantages over their competitors as well as ensure the competitive position of Samsung, they still need to develop and invest into their Research & Development department to actually invent and develop origin technology from Samsung that cannot be copy or take over by their competitors. These two strategies many have different goal but in general, they supporting each other to achieve the final goals that is increase the revenue and profit of Samsung Electronics in smartphone industries and not to mention about the time and the cost these strategies need to implement. Therefore it is very important that these two strategies have a proper and suitable timetable to implement that will guarantee the best possible result in the end otherwise this will be the end of the Samsung Electric. C. Recommendations for annual objectives and policies for the company With the strategies and plans that focus and concentrate in develop market and products. Samsung also need to have some modification about their objectives as well as policies of the company to suitable and adapt the new strategies that have been planned. However if the key to success in implement the plan and strategies is to complete step-by-step expansion in both market and products, Samsung need to choose what strategies need to be implement first to have the best outcome they desires. The recommendation from our research and analysis suggest that with the
  45. 45. current situations and combined all the external environment factors, it would be the best if Samsung Electronic choose to implement the Market Development strategies first. The expansion of market will also create opportunities for Samsung to seek and acquire more resources in both financial and technologies that will provide support the requirement to develop the products line of Samsung. The development of market also increase the variety and diversities of customer that will also create more opportunities and maximize the acceptant of customer with Samsung products. In summary, there will be three main annual objectives that Samsung need to complete include:  Enter and penetrate new market  Building brand images and reputation in new market  Seek and cooperate with potential organization. Despite of being the easier strategies to implement, Samsung also need more appropriate policies to support and guide all the strategic actions and tactical actions to achieve the goals of the selected strategies, especially for the management of Samsung Electronics. The current problems and issues of Samsung are the direct and indirect result of poor management and therefore the policies of Samsung need to be modified to change the behaviors as well as support the company strategies with guideline for employees and employers of Samsung Electronics in both strategic action and tactical actions to achieve the goals to develop market and products of Samsung in the designated period of times. These policies can be summary in two mains objectives:  Identified and orientated tasks, missions, strategies and goals of all departments to support and contribute to the expansion of Samsung’s markets.  Identified and orientated tasks, missions, strategies and goals of all departments to support and contribute to research, develop and experience new technology for the development of new products lines. It is very important that both the recommended objectives and policies of Samsung need to involved support each other to achieve the final goals without conflicting each other's interests and benefits. Otherwise the strategies will have reverse result and have negative affect on Samsung Electronics.
  46. 46. D. Recommendations on procedures for strategy review and evaluation All the plan and strategies will only work if they being supervise and observe to make sure that no mistakes are occurred that can affect and hinder the development of the strategies in the futures. It is very essential for Samsung to have a procedures to review and evaluation each steps of the strategies so they can be able to identify the problems to have proper response as fast as they can to prevent undesired result can happens, or at least minimize the effect when something goes wrong. To ensure to have the desire result in the end, it is recommended to apply and follow the three-step valuation to analyses and check if the strategies and plans are going the desired way or something already gone wrong to have the response for all the strategic action and tactical action of Samsung Electronics. The three-step valuations include:  Analyze: observe, collect and analyze all the necessary factors form internal to external to identified potential threats and problem may occurs of the plans or strategies  Modification: adjust and modify the plans or strategies to eliminate or minimize the effect of the threats and problem may occurs  Implementation: begin to apply and implement the plans or strategies after modified under supervision to ensure the result. Repeat the whole procedures if necessary The evaluation procedures are very important, especially when Samsung Electronic or any organization in the industries can control or predicts the external environment. The procedures will allow Samsung to have proper reaction with unexpected situation to minimize all the damages and affect can happen if something goes wrong during the implementation of the plans or strategies. E. Conclusion In conclusion, the recommended strategies for Samsung are based on the current external and internal factors of Samsung and the industries at the moment. If assume all the factors are unchanged, it is possible to ensure the positive outcome of Samsung Electronic if they can adopt and follow the recommendations. The first outcome will be the large market expansion of Samsung in three important regions: Asia, South-America and European. These regions will not only provide the new market and customer
  47. 47. for all existed Samsung products but also help and support to build up the Samsung brand and images which already been damages due to the competition with Apple in the United States market in the past several years. These regions also the “gold-mine” of technologies for Samsung to exploit and apply to create new and improve the existed products lines of Samsung to add more value and create more Competitive Advantages. These new technologies also help Samsung to develop and create their competitive technologies that they will have absolute control and monitoring. The second outcome that Samsung can have is the development of the differentiation of their Products line. With all the technologies they acquires during the market expansion, they will have access and foundation to create new technologies to make their products become more advance and unique thus will increase the advantages of their products in the market in compare with other competitors.

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