Strategic Management case study Samsung, Study Guides, Projects, Research of Strategic Management

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Prepared for En.Mohammad Said Bin Othman INTERNATIONAL BUSINESS MANAGEMENT(CSEB3102) FINAL PRESENTATION PROJECT AMSUN(!ÿ COMPREHENSIVE STRATEGIC ANALYSIS IN THE PERSPECTIVE OF INTERNATIONAL BUSINESS MANAGEMENT 9 9 PREPARED BY: GROUP 2-B (TUTORIAL 4-5 PM) INTERNATIONAL BUSINESS MANAGEMENT CLASS UNIVERSITY OF MALAYA, 2013/2014 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 GROUP MEMBERS - 2B ft 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 SAMSUNG’S UNIQUENESS 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) Business Innovation & Brand Value SCM and Six Sigma: two pillars in business innovation Wide Range of Products: new Product launch every year, One Company Fueled by Global Diversity Samsung Electronics began doing business in Korea in 1969. Forty-three years l*er,Samsung has expanded into 200 countries. Samsung attributes mudi of is success to lb global networic of em¬ ployees. whose creativity and innovation are engines for growth. The diversity of perspective and expertise present at each of Samsung's nineregional headquarters ensures independent strategic development andsolutions that can be appliedboth locally and around the world. Efficient ResourceAllocationand localizationStrategies Sÿmcrg'sbusies nctjde?l7 batonsrvamdmeworldmctifcngcentersof productioA sdes.devgn rdroeecfi <n order to effnctrvely TBnjge <ts ttvwse gkxxi porttcio,Somxng rtectxmo nwmtjen fi reqorW hwdgusrtrnanjirdIN> wo’tJ(vvludP'gits mrpcxat*neodqurtwsinKorea1..i«d<*s>»*>at Serrwng takescare to equip eac* regwvt (U-TSS vgner-t w.m tcrsdmable •mou*ps -rdautonomy.Ttus o-imtrnent ro eachmgnn n vUvch me czntxry operates provide eppertunty to devdbpumai* tocezaton strateges <rdc-wt v*> gSr-v erecvAw. 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 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 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 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 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 Innovation of Product -3 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 3.2 SPACE MATRIX 16 (0.5 ; 0.3) aggressive • Backward, forward, horizontal integration • Market penetration • Market development • Product development Best Recommendation: • Product Diversification • Market Development for both its software and hardware. • Strengthening The Market Penetration • Pull Strategy by Samsung SPACE Matrix (cont’d) 17 Directional Vectors: x-axis : (IS, CA) = (3.8) + (-3.3) = (0.5) y-axis : (FS, ES) = (-2.7) + (3.0) = (0.3) +f> +5 +4 +3 +2 -Hi CP _I_I_I_l i o o -1 _2 -3 -7 SP Accomplishments Samsung Enters Interbrand’s Top 10 List 2010 2011 2012 2020 Fortune names Samsung as 34th most admired companies in the world 34. FORTUNE 2010 2011 2012 2020 Samsung ranks 20th among top 500 global companies 2010 2011 2012 2020 Other Achievements 3. 2kM years 4. The Boston ConsultingGroup On Thomson Reuters’ top 100 Consulting firm Booz&co. ranked ranked Samsung as its 3rd most global i nnovator 1ist for the Samsung as4th most innovative i nnovativecompany in the worid -8-place jump fromilthin 2011. second straight year. company, a 3-place jump from 2011 list. BOG HitBurn*GVOCMWC. GKKJT tv T: THOMSON REUTERS booz&co. years Samsung has been included as a component in the D/SI World Indexfor fiveconsecutive years, 3.5 GRAND STRATEGY MATRIX Quadrant 1 Market Development Market Penetration Product Development Product Diversification Rapid Market Growth Slow Market Growth Weak Competitive Position Strong Competitive Position PART 4 COMPREHENSIVE STRATEGY FORMULATION STAGE 3 (DECISION STAGE) QUANTITATIVE STRATEGIC PERFORAAANCE AAATRIX & AAAIN SUGGESTOON Presented by Azizah Zaldarriaga Sadain (CEA100708) increase budget on R&D to avoid further litigations to help retain customer loyalty 4.3 SUGGESTION TOWARD QSPM OF SAMSUNG Create more new and innovative products PART 5 ANALYSIS OF BUSINESS STRATEGY, CULTURAL ASPECTS OF STRATEGY & ORGANDZATION CULTURE Presented by Cian W'O Brien (NEE130235) 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” Imagination Nev.1ideaD. new approaches Innovation constant practice Iset up tasks and measure progressl Way PART 6 POLITICS OF STRATEGY CHOICE ft GOVERNANCE DSSUES, CURRENT CHALLENGES & CONCLUSDON Presented by Dominik Wagner (NEC130217) 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 6.1 POLITICS OF STRATEGY CHOICE & GOVERNANCE ISSUES Governance issues: 1. Abuse of market power 2. Authoritarian and reckless leadership 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 THANK YOU | Group 2B Class Presentation Week 13 (9th December 2013) [Tvffindor