Samsung Electronics Research Assignment Paper (Coursework Sample)

Samsung Electronics
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Institution
Samsung Electronics
Introduction
Samsung Electronics (Samsung) is the largest producer of mobile phones, LCD panels, semiconductors, and televisions in the world. Owned by the Chinese global business conglomerate Samsung Group and with its headquarters in Suwon, South Korea, Samsung has manufacturing facilities and sales operations in more than 80 countries across the globe. This paper discusses a number of strategic aspects relating to Samsung. The paper specifically determines the impact of the company’s mission, vision, and primary stakeholders on its overall success, analyses the company’s competitive environment (five forces force analysis) as well as its internal and external environment (SWOT analysis, and discusses the various levels and types of strategies the firm may use to maximise its competitiveness and profitability. Also, the paper outlines a communications plan the company could use to communicate its strategies to its key stakeholders, evaluates two corporate governance mechanisms used by the firm, and assesses the firm’s leadership and corporate social responsibility (CSR) efforts.
Mission, Vision, and Primary Stakeholders
The mission and vision of a firm as well as its primary stakeholders have important implications on the overall success of the firm. Mission and vision identify a firm’s strategic direction, while stakeholders are involved in executing the mission and vision (Hill & Jones, 2012). Samsung’s mission is “to inspire the world with innovative technologies, products and designs that enrich people’s lives and contribute to a socially responsible, sustainable future” (Samsung, 2017). The company’s mission is driven by a vision to “inspire the world” and ‘create the future” (Samsung, 2017). For the close to five decades it has been in existence, the company has lived to its mission and vision. From smartphones to home appliances, the company has consistently introduced innovate products that have immensely transformed how people communicate and meet everyday household needs such as laundry, air conditioning, and entertainment. This explains why the company is the most prominent electronics company in the world today.
Achieving the company’s mission and vision would not have been possible without the input, contribution, and commitment of its primary stakeholders. Indeed, the significance of primary stakeholders to the success of a company cannot be overemphasised. Primary stakeholders are individuals or entities without which a company would not operate or would cease to be in existence (Hill & Jones, 2012). For Samsung, these include the board, the management, and employees. The phenomenal success of the company in the rigorously competitive global electronics industry is a without a doubt a reflection of the company’s able and competent leadership and workforce.
Five Forces Analysis
The five forces model provides an ideal framework for analyzing the industry environment in which a firm operates. According to the model, there are five forces of competition in any given industry: threat of rivalry, threat of new entrants, threat of substitutes, bargaining power of suppliers, and bargaining power of buyers (Hill & Jones, 2012). Samsung operates in one of the most fiercely competitive industries. Indeed, with other equally powerful players in the industry such as Apple, Huawei, Sony, LG, Nokia, Motorola, and BlackBerry, the threat of rivalry is strong. The threat of substitutes in the consumer electronics industry is also strong due to the availability of numerous products that can fulfil the same need, such as tablets and laptops.
Though the threats of rivalry and new entrants are strong, the threat of new entrants is not strong since operating in the electronics industry requires huge amounts capital, robust research and development (R&D) capabilities, and extensive distribution networks. Even so, Samsung cannot ignore the threat of new entrants altogether, particularly given that recent entrants into the market (such as Tecno and Infinix) have increased competitive pressure in the industry, especially in developing markets. Samsung also does not face significant pressure from suppliers due to the vertically integrated nature of its operations. Dissimilar to majority of its rivals, Samsung produces its own memory chips, touchscreen displays, batteries, and other crucial components. This helps minimise the bargaining power suppliers may have over the firm. Finally, the threat of buyers is quite weak as the company targets the mass market. Nevertheless, customers can readily switch to Apple and other alternatives with no additional cost, meaning that the company must constantly fulfil the needs and preferences of its customers.
SWOT Analysis
With revenues in excess of $174 billion as of 2016, Samsung is the largest electronics company worldwide (Samsung, 2016a). Having the leading market share gives the company immense economic power in the global electronics market. The company designs, manufactures, and markets a wide range of electronics products, including smartphones, tablets, laptops, home appliances, LCD panels, cameras, semiconductors, printers, and storage devices. The company’s extensively diversified product portfolio is one of its major strengths. The products embody quality, elegant designs, and innovation, a result of the company’s commitment to research and development (R&D). Indeed, Samsung is the top technology company in the world in terms of R&D spending. Another major strength of the company is its relatively low pricing strategy, which enables it to attract consumers from developing markets. Other major strengths include vertical integration, effective branding and advertising, and government protection.
In spite of its strengths, Samsung faces a number of weaknesses. First, the company has in recent times been subject to product safety concerns due to the occurrence of explosions on its devices, especially Galaxy Note 7. This could harm the reputation and competitive position of the company. Another weakness is that Samsung has been unable to beat Apple in North America and most developed markets. Majority of consumers in these markets perceive Samsung’s products as inferior to Apple’s. Additionally, unlike Apple, Samsung is predominantly dependent on Google and other suppliers for software. Samsung’s pricing strategy can also be viewed as a weakness as it reduces the company’s profit margin.
There are a number of opportunities Samsung can capitalize on to improve its competitive position. First, the smartphone market has been experiencing tremendous growth in recent years, particularly in developing markets in Asia, Africa, and Latin America. These markets present significant growth opportunities for Samsung. Additionally, the demand for smartphone-based solutions has been on the rise, with smartphones now supporting a broad range of apps. Other opportunities include wearable technologies, online shopping, mobile marketing, and cloud computing. Nonetheless, the extent to which Samsung may take advantage of these opportunities may be hindered by threats such as unfavourable economic events (e.g. middle class stagnation in developed markets and increases in the prices of raw materials), competition, government regulations, and intellectual property infringement.
With its strengths, Samsung can take advantage of the opportunities available to it to minimise its weaknesses and overcome its threats. Samsung boasts immense financial power and high brand value across the globe. The company can exploit this power to increase its presence and strength in both developed and developing markets. With its financial resources and R&D capabilities, the company is best suited to pursue opportunities in the technology arena such as online shopping, wearable technologies, mobile marketing, and cloud computing. The company can also focus more on software as it has historically paid attention to hardware. Taking advantage of these opportunities would increase the firm’s competitive advantage in the global marketplace and help the firm minimise the threat of competition and reduce dependence on external suppliers for software.
Levels and Types of Strategies
Strategic management theory groups strategies into two broad categories: business-level strategies and corporate-level strategies. Business-level strategies are strategies intended to add value to the customer and enhance the firm’s competitive advantage (Hill & Jones, 2012). A firm may achieve this by offering its products at a lower price relative to competitors (cost leadership), offering unique products (differentiation), or combining both cost leadership and differentiation. Samsung’s pricing strategy makes the company a cost leader. Compared to its major rival Apple, the company offers its products at a relatively lower price. This is why the firm is able to appeal to consumers in developing markets. Samsung not only offers products at relatively low prices, but also delivers quality and innovative products. Though Samsung is yet to beat Apple in terms of product quality and innovativeness, its products feature unparalleled features and functionalities. In essence, Samsung employs both cost leadership and differentiation. Nonetheless, if Samsung is to win consumers in developed markets it must make its products more unique.
Corporate-level strategies are strategies that affect the strategic direction of a firm or its long term success (Johnson, Scholes & Whittington, 2010). These include strategies such as mergers, acquisitions, strategic partnerships, diversification, product discontinuation, market exit, as well as vertical and horizontal integrat...