Growth Strategy Analysis Of Samsung Essay

INTRODUCTIONThe Samsung Group is a multinational hoard corporation headquartered in Samsung Town, Seoul, sulphur Korea. It is the worlds largest conglomerate by revenue with annual revenue of US$173.4 billion in 2008 and is South Koreas largest chaebol. The meaning of the Korean word Samsung is TriStar or three stars. As stated in its in the raw motto, Samsung Electronics vision for the new decade is, root on the World, Create the Future. This new vision reflects Samsung Electronics commitment to inspiring its communities by supplement Samsungs three key strengths New engineering science, ripe Products, and Creative Solutions. and to promoting new value for Samsungs core networks Industry, Partners, and Employees. by means of these efforts, Samsung hopes to contribute to a weaken world and a richer experience for all.Samsung Group counterfeited several electronics-related divisions, such(prenominal) as Samsung Electronics Devices Co., Samsung Electro-Mechanics Co., Samsun g Corning Co., and Samsung Semiconductor & Telecommunications Co., and grouped them to get ather under Samsung Electronics Co., Ltd. in 1980s. SAMSUNGs aim is to develop innovative technologies and businesslike processes that create new grocery stores, better peoples lives and continue to make Samsung a trusted mart leader. Today, Samsung Electronics global presence includes a total of 111 subsidiaries in the form of fruit subsidiaries, gross sales subsidiaries, distribution subsidiaries, research laboratories and eight overseas business divisions representing northern America, Europe, China, Southeast Asia, Southwest Asia, Central and South America, CIS, the Middle East and Africa. hall porters Diamond Analysis for Korea/SamsungProduct Dimension To build a unique competitive advantage, Samsung fol lower-rankinged a well laid out ingathering growth system. These strategies can be examined under (a) ingathering life motorcycle (b) product price level and (c) product divers ification. Samsung followed a purloin erect if we look from the product life cycle purview. It started its operation in 1971 with manufacturing coloured televisions which were in the declining stage inthe advanced merchandise. It then went on to settle colored televisions in 1977 which had already reached the mature stage in the PLC in other markets. It tapped the videocassette rec point (VCR) and microwave ovens (MWO) in its growth stage in the market by bridging the technology gap and reaped revenues. In early 1990s moment manufactured niche products such as DRAMs and digital videodisk (DVD) and entered this market in its introductory stage through agility, innovativeness and creativity.In 1992, Samsung became the market firm to many companies by being the largest producer of memory chips and guerrilla largest chip maker in the world however after Intel. Through innovation Samsung manufactured its number one liquid screen pageantry in 1995 and within ten years became t he worlds largest liquid-crystal display panel. Tapping the knowing recall market in the growth stage, Samsung became the worlds largest phone maker by unit sales in the 2012. From the price perspective Samsung started manufacturing products that were low final stage of the price range and then gradually travel up to the niche end products using innovation and high end technology.Starting from low end products was a strategical natural selection as there was low national income and the market had limited purchasing power, the JV partners were unwilling to treat their technology and the availability of a niche market in US for the low end models. Samsung product path choice has moved from commodity product to high end niche product market as it now captures the global market. Samsung has strategically limited its diversification in the electronics-related area only. It follows a related product diversification dodging.It started with consumer electronics and property applianc es, and then moved to personal computers and peripherals, communication equipment, semi-conductor and then expeditiouss. With the aim of capturing the strategic fit by sharing technology and management, in 1998, SEC merge with Samsung Semiconductor & Communications. In 2006, Sony & Samsung formed a JV S-LCD Corporation to co-operate and turn in a stable LCD supply to both the manufacturers. These diversifications discombobulate helped Samsung get a balanced revenue structure from its products.Phase 5 Attaining scientific competence whereby product and process innovation start to appear end-to-end the company.During this process Samsung made serious efforts to develop its own product approach pattern competence. It started to increase in-house R&D budgets and stepped up its efforts to assimilate advanced outside(prenominal) technologies and to develop new product. Having successfully caught up with extraneous technologies for most accomplished consumer-electronics products, SECs management accelerated its technological capability from reverse engineering to innovations in advanced consumer electronics, PCs and peripherals, semiconductors and communications equipment. To support this scheme, Samsung increased its R&D budgets. There was an accelerated gap reduction from the other major(ip) competitors of the world.The accelerated gap reduction may be attributed to the synergy found of three factors In-house R&D capability with a critical hole of more than 7,300 researchers. Availability of multiple technology sources, such as licensing. Technology alliances with advanced companies, overseas research centers in advanced countries, and foreign high-tech companies owned by Samsung.Intensity of effort by management and force play in research and product development. Samsung is one of the leaders in OLED display research and the clear leader in AMOLED yield. OLED Displays are thinner, more efficient and offer better picture quality than LCD or blood pla sma displays. A lot of research is being done on Innovative WLAN technology from Samsung Electronics for the wireless business environment to remove the issues with have with the existing WLAN.Manufacturing Dimension Manufacturing system was the third dimension that the Samsung controlled. Samsung always wanted to benefit from the economies of outmatch and scope. They had two strategies that is to either get vertically incorporate to support the mass production of television or alternatively, depend on CKDs from joint partnership and other suppliers from Japan. The main reason for this strategy was because of the lack of capability to produce the parts locally.However, Samsung soon realized that the foreign tie ups involved huge risk and transaction costs and therefore decided to go with the minimally integrated manufacturing system locally. Hence Samsung create a cathode ray plant, a parts and components plant and CRT nut plant. In 1980s, a large number of independent small an d culture medium sizes businesses mushroomed due to technology assimilation in Korea. Now, Samsung was so life-threatening in technology and quality that they could start outsourcing anywhere and any cadence. The Samsung started its overseas production base. The firstlocation was the Portugal and by 1995 they had twenty bases globally which accounted to a huge economies of scale and scope. The Samsung was sensitive to the changing needs of customers and hence moved from mass production to flexible manufacturing system to accommodate a new product strategy by late 1980s. Samsung introduced in multiple product models to meet the straightaway changing demand of the people thereby managing shorter product life cycles and competition.In early 1990th Samsung was still perceived as a conservative manufacturer and always associated with bargains. Samsung realized that with its lowpricing strategy it can only compete in the lower market segment whereas in upscale market technology and bra nd are competitive means. Samsung then in front decided to penetrate the upscale market and gave up lower-market in order to exalt its brand image. It re postureed all series of its products such as mobile phone, consumer electronics and memory flash to upscale market. Corresponding to Samsungs new position in the market it has relatively higher price in its category. high pricing would bring more profit and at the same time improves the brand image. Samsung is now developing products for the Indian market and tailored to their needs. Samsung has clung to its bounteousness positioning, with products that emphasized design, aesthetics and cutting-edge technology and prices that were commensurately higher. In 2005, Samsung introduced over carbon new products such as flat panel, LCD and plasma TVs, top-end refrigerators, mansion theatre systems, digital cameras and camcorders, MP3 players, notebook computers and mobile phones which were sold in lifestyle category. It is the market leader in LCD televisions and super-premium, side-by-side refrigerators and claims respectable market share figures in other product categories as well.Themost important strategy for competitive advantage has been the principle of survival inequality, which states that cost should always be lower than price, and price should always be smaller than product value. apart from price, another important factor which was strategically played by SEC was the concept of speed management by emphasizing on good purposes and fast accomplishation. The company exploited the opportunities arising in the world market by making timely decisions on product development and technology learnedness ahead of its competitors, as well as shortening the time to implement for example VCRs, MWOs, and memory chips In 1970s, the most important factor for Samsungs strategy design was to create a relevant product choice.This decision was important as it would have affected 1. Technology acquisition 2. Market ability 3. address competitiveness To reduce its threatening profile to the technology supplier, SEC took products in the declining stage of the product life cycle. Further, to give an incentive to the technology supplier, the word venture form was used, whereby parts and components would be imported in the form of CKDs from the joint venture partner. To gain market experience and overseas sales network, OEM was used. To build up its brand image, SEC chose commodity type products in the low-end price range. SEC chose massproduction as its strategy to exploit low-end commodity products in declining stage and Koreas high quality and low wage labor. This lead to a higher learning rate and steepish decrease in costs which helped reduce the prices further.