Provides a comprehensive strategic analysis from the perspective of international business management in regards with Samsung. The outline is written below: Overview: Current Global Performance of Samsung and Business Models Comprehensive Strategy Formulation (Input Stage) Comprehensive Strategy Formulation (Matching Stage) Comprehensive Strategy Formulation (Decision Stage) Analysis of Business Strategy: Organizational Culture Politics of Strategy Choice & Governance Issues; Current Challenges Conclusion

1. INTERNATIONAL BUSINESS MANAGEMENT(CSEB3102)
FINAL PRESENTATION PROJECT
Prepared for En.Mohammad Said Bin Othman

2. Aziza Zaldarriaga Z(CEA100708)- Phillipines
Cian W’O Brien (NEE130235)- Denmark
Chaymae Samir (NEC130215)-Morocco
Dominik Wagner (NEC130217)-Germany
Firmansyah Shidiq W(CEB110723)-Indonesia
Haya Shadab Ali (CEB110702)-India

3. Overview, The Current
Global Performance of
Samsung & The Business
Models
Comprehensive Strategy
Formulation Stage 1 (Input
Stage)
Comprehensive Strategy
Formulation Stage 2
(Matching Stage)
Comprehensive Strategy
Formulation Stage 3
(Decision Stage)
Analysis of Business
Strategy, Cultural Aspects of
Strategy & Organization
Culture
Politics of Strategy Choice &
Governance Issues, Current
Challenges & Conclusion

5. 1.1 OVERVIEW OF SAMSUNG
Understanding Tomorrow's Market and Consumers
- Robust Market and Consumer focused market sensing capabilities
- E.g. vibration reduction tech, French door refrigerators
Collaborating For Greater Synergy
- Close collaboration between each department: from manufacturing and
development to Marketing and Purchasing
Thinking out of the box
R&D
Arriving first with speed and delivery
Consistently developing technology and shipping products ahead of the rest
Connecting with consumer Lifestyle
Develop products which fit the consumer lifestyle
Making Smart Choices that Grow Market
Taking Risks in investing in new technology

6. SAMSUNG’S UNIQUENESS
Business Innovation & Brand Value
Research and Development & Pricing
-R&D: 7% of total revenues
Overseas Partners : Joint
R&D Projects, Technology
Transfer Agreements, Joint
Investments
-Deliver Product at
Cheapest Rate & Target
Mass Market
Tie Up with Start Ups
- One of the top 4
conglomerators of the
World
Invested $ 1,2 Billion in
Startups , takes of up to
29.9 % in 80+ startups
Recently invested $5
million in Startup named
stoke (4G company)
SCM and Six Sigma: two pillars in business
innovation
Wide Range of Products: new Product
launch every year,

8. • Hardware Products
• Employees
• Management
KEY
RESOURCES
• Supply Chain
• - Brand
• - Innovation
• -SCM and SIX SIGMA
VALUE
CREATION
• Manufacturing
• Research and
Development
• Investing in Start-up
KEY ACTIVITIES
• Cutting Edge
Technology
• - GREAT DESIGN
• - Cheap Prices
• - Green Products
VALUE
PROPOSITION
• Manufacturing Cost
• - Research and
Development cost
• - Distribution cost
• - Marketing and
Advertisement cost
COST STRUCTURE
• Selling Products
• Information and
communication
services
• - Financial Services
REVENUE STREAM
• Customer Channel
• - Distributer
• Customer Segment
• - MASS MARKET
• - Corporate Buyers
CUSTOMER
CHANNEL &
SEGMENTATION
• Shining Koreans
through by
expanding
Chaebols &
Entertainment
sectors
Land of
Opportunities,
Trading & Business

10. 2.1 INTERNAL FACTORS EVALUATION MATRIX
Strengths Weight AS TAS
1 Diversified Portfolio 0.14 4 0.56
2 Global Enterprise 0.10 4 0.40
3 Largest technology-based firm in terms of revenues 0.18 4 0.72
4 Ability to market its brand 0.10 3 0.30
5 Low production costs 0.07 3 0.21
Weaknesses Weight AS TAS
1 No leads in new category (loss of first mover advantage) 0.07 3 0.21
2 Main competitors are also largest buyers 0.13 2 0.26
3 Low profit margins compared to industry 0.05 3 0.15
4 Too many new products 0.03 1 0.03
5 Declining margins on hardware production 0.06 3 0.18
6 Saturation of smart phone in developed nations 0.07 2 0.14
TOTAL 1 3.16

11. 2.2 EXTERNAL FACTORS EVALUATION MATRIX
Opportunities Weight AS TAS
1 Increase in trend of personal gadgets 0.10 3 0.30
2 Increase in global market share 0.12 4 0.48
3 Value creation through social contribution 0.08 3 0.24
4 Plants in low cost countries 0.13 2 0.26
5 Ease of import/export 0.05 2 0.10
Threats Weight AS TAS
1 Litigations 0.12 3 0.36
2 Safety issues 0.20 4 0.80
3 Viral marketing through attacking competitors 0,07 2 0.14
4 Price wars 0.10 4 0.40
5 Failure of one product impacting others dues to linked
product lines
0.03 3 0.09
TOTAL 1 3.17

12. 2.3 COMPETITIVE PERFORMANCE MATRIX
Samsung Apple Dell Inc.
Critical Success Factors Weight Rate
Weighted
Score
Rate
Weighted
Score
Rate
Weighted
Score
Advertising 0.23 4 0.92 4 0.92 3 0.69
Product Quality 0.16 3 0.48 4 0.64 4 0.64
Management 0.07 4 0.28 2 0.14 3 0.21
Financial Position 0.09 4 0.36 4 0.36 4 0.36
Customer Loyalty 0.14 3 0.42 4 0.56 2 0.28
Global Expansion 0.10 3 0.30 3 0.30 3 0.30
Market Share 0.13 4 0.52 3 0.39 2 0.26
Product Capacity 0.08 3 0.24 3 0.24 3 0.24
TOTAL 1.00 3.52 3.55 2.98

15. Strengths
1. Strong brand image and reputation in the
society
2. Product Diversification
3. Innovative Product Design
4. Affordable Price accepted by consumers
5. Controlling and Creating Big Global Market in
the society especially technological sectors
6. Strategic Partnership with Well-established
companies (Google)
Weaknesses
1. The Products Supply which can not
meet the over amount of demand
2. A Lack of Customer Service
Management
3. Limited Coverage of Products
Distribution (only in several partner
and strategic countries)
4. Limited Operating System Product
Update and Package which makes
people become reluctant to purchase
Opportunities
1. The Strong Purchasing Power of
Middle Class People with regards of
market change
2. Provision of cutting edge technology
3. Widespread Branches which are
located in their strategic countries
4. A Powerful Capability of Making its
Own Hardware
SO Strategies
1. Adding as The (S4, O1)
2. Conducting The Creativities of Online Event by
using the Samsung Application itself (S6,O5)
WO Strategies
1. Product Demand Expansion & Related
Diversification (W1, O3)
2. Management Training (W2, O4)
3. Market Development (W3, O1)
Threats
1. The People’s Brand Loyalty and
Dependence about other
competitors’ products
2. Water Shortage Crisis
3. A Strong and Competitive
Competition in Market
ST Strategies
1. Designing New Innovative Products (S3, T2)
2. Providing Products Diversification which are
distinguished from competitors and affordable by
customers. (S2, T3, T4)
WT Strategies
1. Forward Integration (W4, T4)
2. Strengthening and Empowering
Competent Human Resources Pools
(W2,, T3) 15
3.1 SWOT MATRIX

16. 3.2 SPACE MATRIX
Internal Strategic Position External Strategic Position
FINANCIAL POSITION, FP STABILITY POSITION, SP
Cash Flow +4 Technological Changes -4
Revenue Stream +3.5 Competitive Pressures -3
ROI +4 Pricing Challenges from Competitors -3
EPS +3.5
AVERAGE 3.8 SP AVERAGE -3.3
COMPETITIVE POSITION, CP INDUSTRY POSITION, IP
Service Quality -3 Profit potential +2
Customer Loyalty -2 Market Penetration +4
Quality of Product -3 Emergence and Growth of Gadget Industry +3
Technology Utilization for New
-3
Innovation of Product
AVERAGE -2.75 SP AVERAGE 3.0
SP Average is -3.3 IP Average is 9/3=3.0 x-axis: 0.5
CP Average is -2.75 FP Average is 3.8 y-axis: 0.3
16

17. (0.5 ; 0.3)
aggressive
• Backward, forward,
horizontal integration
• Market penetration
• Market development
• Product development
SPACE Matrix (cont’d)
Best Recommendation:
• Product Diversification
• Market Development for both its
software and hardware.
• Strengthening The Market
Penetration
• Pull Strategy by Samsung
17
Directional Vectors:
x-axis : (IS, CA) = (3.8) + (-3.3) = (0.5)
y-axis : (FS, ES) = (-2.7) + (3.0) = (0.3)

18. 3.3 INTERNAL-EXTERNAL (IE) MATRIX
Internal Factor Matrix Weighted Score (X-Axis) = 3.16
External Factor Matrix Weighted Score (Y-Axis) =3.17
S

19. 3.4 MATERIALITY MATRIX

21. 3.5 GRAND STRATEGY MATRIX
Rapid Market Growth
Quadrant 1
Market Development
Market Penetration
Product Development
Product Diversification
Slow Market Growth
Weak
Competitive
Position
Strong
Competitive
Position

23. 4.1 QSPM-INTERNAL MATRIX
STRATEGIC ALTERNATIVES
KEY FACTORS
Creating new and unique
products
Creating supply and
catering to demand
Strength Weight AS TAS AS TAS
1 Strong brand image 0.08 0 - 0 -
2 Quality diversification 0.10 4 0.40 0 -
3 Innovative product design 0.06 4 0.24 0 -
4 Biggest market share 0.04 0 - 1 0.04
5 Partnership with other co. 0.09 2 0.18 0 -
Weakness
1 Not enough ready stock 0.07 0 - 4 0.28
2 Availability of products 0.08 0 - 2 0.16
3 Limited OS updates 0.06 0 - 0 -

24. 4.2 QSPM-EXTERNAL MATRIX
STRATEGIC ALTERNATIVES
KEY FACTORS
Creating new and unique
products
Creating supply and
catering to demand
Opportunities Weight AS TAS AS TAS
1 Buying ability and high public
response on market changes
0.09 3 0.27 4 0.36
2 More advanced technology
and hardware
0.08 4 0.32 0 -
3 Many ways for easier access 0.07 0 - 4 0.28
Threats
1 Litigation 0.06 3 0.18 0 -
2 Competitor’s goods are
0.04 4 0.16 2 0.08
cheaper
3 Competitive market 0.09 3 0.27 3 0.27
TOTAL 1.00 2.02 1.47

25. 4.3 SUGGESTION TOWARD QSPM OF SAMSUNG
Create more new and innovative products
increase budget
on R&D
to avoid further
litigations
to help retain
customer loyalty

27. 5.1 SAMSUNG’S CORPORATE CULTURE (1993-
now)
1. A Western Culture in Asia: The “Frankfurt Declaration
1993”“Change everything besides your wife and kids” – Lee Kun
Hee, Frankfurt, 1993
2. The “I&I-way”

28. 5.2 HOFSTEDIAN ANALYSIS OF SAMSUNGS’S
CORPORATE CULTURE
1. Korea scores high (world ranking) on Power Distance (28),
Collectivism (43), Masculinity (41), and Uncertainty
Avoidance (16)
2. Western Countries as US and Germany scores low on Power
Distance (40/35), Collectivism (91/67), and Uncertainty
Avoidance (46/86), but high on Masculinity (62/65)
3. In Samsung these values have been merged: Asian-Western
Western: Low Power Distance, and Uncertainty Avoidance
Asian: High Collectivism, and Masculinity

29. 5.3 SAMSUNG’S CULTURAL STRATEGY
1. Focus on People
2. GWP (Great Work Place)

31. 6.1 POLITICS OF STRATEGY CHOICE & GOVERNANCE ISSUES
1. Revenue and market value
• Strategies are always ambitious
• Samsung hopes to double its revenue between now and
2020 and grow to a market value of $400 billion
2. Products
• More choices are better than less choices
3. Stakeholder orientation
• Expanding the market leadership of core businesses
• Securing competitiveness by consistently recruiting experts
in software and R&D
• Corporate citizenship that’s committed to social
improvement

32. 6.1 POLITICS OF STRATEGY CHOICE & GOVERNANCE ISSUES
Governance issues:
1. Abuse of market power
2. Authoritarian and reckless
leadership

33. 6.2 CURRENT CHALLENGES OF SAMSUNG
1. Innovation driven company
• Risk of losing edge during downtime
2. Ongoing series of lawsuits against
Apple
• More than 30 patent and design lawsuits globally
3. Conflict of interest
• Supplier/competitor relationships

34. 6.3 CONCLUSION
1. General:
• South Korea’s most important Chaebol
• Wide range of products with annual updates
2. Strategy recommendation:
• SPACE Matrix: Market development, product
diversification, pull strategy
• Grand Strategy Matrix: Strong competitive position and
rapid market growth
• QSPM Matrix: R&D, avoid litigations, customer loyalty
3. Culture:
• Collectivistic and masculine
• Great Workplace (GWP) program

35. REFERENCES
1. Hofstede’s Cultural Values by Nation found in:
Robbins, S.P., and Judge, T. A., Organizational Behaviour, Fifteenth Edition,
Pearson Education Ldt, 2013, p. 186
2. Description of Hofstede’s Cultural Values found in:
Hill, C. W. L., Wee C., Udayasankar K., International Business – An Asian
Perspective, McGraw-Hill, 2012, p. 109
3. Cultural Strategy from 1993-now found on:
http://www.businessinsider.com/how-samsung-became-the-biggest-electronics-company-
in-the-world-2013-3
http://hbr.org/2011/07/the-globe-the-paradox-of-samsungs-rise/
4. Present cultural strategy found on:
http://www.samsung.com/us/aboutsamsung/sustainability/integritymanageme
nt/download/building_a_creative_corporate_culture.pdf
5. The I&I-way http://www.scp.samsung.com/company/comCulture.asp

37. Group 2B
Class Presentation
Week 13 (9th December 2013)