Lesson 8, Samsung Analisys
Igor Zapozdaev
International American University
BUS 590 Business StrategyIncredible Instructor
December 17, 2014

I. Introduction and History……………………………….. 3
II. Samsung as the highest handset seller currently……. 4-6
III. Strengths, Weaknesses, Opportunities and Threats… 6-7
IV. Samsung Strategies……………………………………… 8
V. Conclusion & Recommendations..……………….……… 9
VII. Reference…………………………………………….. 9

I. Introduction and History. Samsung electronics is a company with its capital in Samsung Town Soul, South Korea. Samsung. Electronics unlike other electronic companies started it business operations on other products and not electronics. It started off as fish exporter vegetables and fruits exporter in China which was the business activity of the founder Byung-Chull Lee in 1938. Samsung expanded its activities again for the second time and also not in the electronics arena. It expanded to ship building, financial industry, chemicals and the media industries. This was in the years 1958 throughout to the 1970’s. In 1969, Samsung officially kicked off its business venture in the electronics industry. It called itself SAMSUNG Electronics. It first started off with its most famous product the Samsung TV, the mobile phones arena, computer components, radios, and other electronic devices like the Samsung fridges. This was their core business all through the 90’s to date. They have expanded their electronic base opening branches in other countries outside South Korea its founding country. It has also improved its technology keeping up with the industry dynamics.
Samsung expanded its operations building more factories in the US, Thailand, Mexico, Britain, China, Germany and Spain until 1997. This was after the founder passed on and the chairman ship taken over by Kun-Hee Lee in 1987. Samsung continued with its quest to be the leading electronic company with its development of the lightest phone back in 1993 during the time the SCH-800. It has proceeded to develop smartphones which are some of the global’ most prestigious phones like the Samsung Galaxy S3, S4 and the new Samsung Galaxy Note 3 starring some of the new features missing from the best phones of their competitors. Towards the end of 20th century Samsung Electronics in the phones arena incorporated mp3 player capability into some of their phones making it an innovator in the technology industry. Samsung has ventured into approximately 56 countries to date. It has employed a whopping 138,000 employees in all of their 124 offices that are globally available. Despite Africa missing out in the Samsung’s 1990’s expansion to the global market, the company has moved its business operations to Africa. Of all the smartphones bought in Africa, Samsung a larger percentage than its competitors. In
Africa and Middle East it leads with a 36.4% up from 24.4% in 2012. A survey conducted by Q3 places

II. Samsung as the highest handset seller currently.

Samsung in 1993 designed their new logo in a bid to globalize. It changed the writings in the logo to the English language to reach the global market and for easy readability. Samsung engraved the logo inside a blue oval elliptical shape that was meant to symbolize the global change and the advancement. The blue background represents the reliability, stability and warmth that the company in itself offers. The Samsung Company enjoys some internal strength and it too has a share of internal weaknesses. The internal strengths and weaknesses mostly emanate from the Pricing, Product, and Promotion and Place issues. These are mainly the 4Ps. Samsung boasts a wide range of products unlike any other electronic company in the industry. It has an assorted array of products ranging from its first products the TV sets, radios, cameras, laptops, printers, microwave ovens, washing machines air conditioners, refrigerators and DVD Players. This gives them a head competitive advantage over their competitors who have a short list of variety. In the array competition, LG comes close with relatively close number of different products as Samsung does. Samsung has a weakness of production of relatively expensive products; this is an internal pricing problem. In the phones production sector, Samsung produces relatively expensive phones which have no market in the developing countries. Unlike its competitors like Nokia who have cheaper phones, Samsung produces expensive phones that lead to a smaller market. In India as an example, the largest market share is owned by Nokia Corporation which commands a 58% while Samsung has one of the least market shares with fewer than 10%. This is an internal weakness that has to be dealt with by Samsung if they are to take a commanding share percentage. Samsung products are mainly strategically placed which serves as an internal strength. Since the company has established more than 124 offices in 56 countries, this gives them an advantage in the global market. These offices bring users the products and also provide services equally to the users and customers close to the area. Users are more likely to buy products that are readily available and near to them as well as a product that its services can easily be available. The company’s market share has been greatly attributed by this factor. Promotion is an internal factor that has seen the Samsung Electronics brand sell. An example is in the 2008 Beijing Olympics where Samsung spent a lot in advertisements and product promotion. After that promotion in China, the overall market share rose to 22.4% in the first half of the year up from 17% of the preceding year the same time. This was according to a research done by a German researcher GfK Group. This also saw its market in Africa rise to 17% in the same year up from 6% of the preceding year. The nature of the external environment surrounding the Samsung Electronics Company may be characterized by the technological change, socio-cultural changes, macroeconomic matters, the legislation and the prevailing market conditions in terms of competition. The technological changes in the electronics industry are an external factor that affects the performance of Samsung Electronics. Overtime Samsung has very well coped with the tide of technological improvements very well. It has manufactured high end electronic products like the phones it has the best so far being the Samsung Note 3. In the other electronic sectors, it has improved its washing machine to the new bubble technology which saves on time, water and detergents used. This is strength to wards gaining the market share. Companies like LG, Apple, Motorola and Sony Ericsson improve on their products technology which greatly affects the operations of the Samsung Electronics to keep up the pace. Samsung over the years has refrained from selling their applications created by their developers in order to prevent friction and tussles with the mobile operators unlike apple that has an apple store selling its applications. Samsung is in a move to create an app store to sell its applications in a bid to move with the technology. This is according to J.K Shin the company’s new handset business chief to the Bloomberg Business magazine. Samsung’s operating system, the android system too keeps up with the technology even though it’s shared by other phone makers like Alcatel, LG and Techno. Just like the apples iOS and the Nokia’s Symbian they keep up with the new technology. The prevailing market offers a tough competition to the Samsung Electronics. The market has business electronic giants that have specialization in different products posing a challenge to Samsung. An example is the Apple and Nokia companies that have their specializations on the phones. This offers a challenge to the company as they have to solicit other ways of remaining relevant in the market. In the production of other electronic products, it faces a stiff competition from LG in washing machine, HP Dell and Apple in Laptop production and Sony in the camera production.
Legislation poses a greater challenge to the Samsung Electronics Company. Samsung has undergone previous court battles with their arch rivals’ apple and losing the cases miserably. The most recent case on a patent that Samsung lost and ordered to pay a sum of one billion US dollars to apple was the bounce-back patent which they copied from apple. Samsung too faces some legislation that derail their quest to conquer huge markets like the ban of some older Samsung devices in the US market, some of the products include the phones that infringed on the apple patent. Socio-cultural changes have an effect on the Samsung market strategy and sales. In 1993 the company logo was designed and changed to have its initials written in English which was to be used in other markets and cultures. It has greatly publicized the Samsung electronics company in all the cultures that are English speaking. Through venturing into the Spanish, American and even the African markets, these socio-cultural changes have greatly contributed to the success of the Samsung brand. It has helped raised their market share too.

III. Samsung has its strengths, weaknesses, opportunities and threats:

* Some of the strengths that Samsung bear include: Samsung holds some of the largest market shares in the product categories like the TVs’ and phones. Samsung is financially stable and strong, by taking advantage of the growing Asian market; it established some of its industries in the Asian countries like India and reduced logistical costs and transportation costs. Samsung has strength of their customer loyalty and also holds a huge advantage of a wide range of product arrays over which its competitors lack.

* Samsung electronics has weaknesses too which will affect their strategic management activities. Some of the things that greatly affect the performance of the company include; Samsung has in the past launched mobile phones that have been easily counterfeited by other firms. An example is the Techno Phantom that has all the similarities of Samsung galaxy s3. There is stiffer competition with regard to electronic devices in the market, new companies are emerging with even better technology and the existing companies improve on their technology and the sleekness of their products posing a greater challenge. Nokia overshadows Samsung as surveys indicate that it is still the most preferred with ease of use. Samsung has its major on hardware devices and has to source its software’s from third parties which is a weakness.

* Opportunities that Samsung have are enormous given their time period in the market and relations with their customers. The world’s population is rising with time and there is an opportunity for Samsung to increase sales on their products. Samsung has reasonably equipped itself to care for it regarding technological improvements and changes. Samsung’s continued maintenance of good international relationship and local relationships provides a good opportunity to improve more. The economic conditions prevailing in its mother country Korea is good and favorable which provides an opportunity for stability.

* Samsung faces some threats which need be addressed. Samsung offering a variety of product lines may be a threat if one of its products fails since it will have an impact on the rest of the products. Legislations in the industry too in the resent have been regularly passed which poses a threat to the industry regarding regulations and property safeguarding. Competitors like Nokia pose a threat since they are always focused on just a single segment. Chinese’s products pose a threat since they are enormous in number cheaper and are sometimes counterfeits of the original products.

IV. Samsung Strategies
1. The corporate level strategy is the activities undertake by a corporate body to gain a competitive advantage over its competitors in the field they are in through selecting an appropriate business mx competing in the product market. Samsung has several corporate strategies it has employed. Samsung uses the product model where it bears the most diverse products in the electronics industry. In this strategy, it becomes hard for the entire electronics of an individual to miss a Samsung product. This has helped Samsung to sell and gain popularity since in all the assorted products; it is hard to miss to like one of their products. One may like their phones while another may like their TVs’ while others may like all their products.

2. Samsung uses a pricing strategy too. They cut down on the prices of their commodities to make it affordable for their esteemed customers. Samsung has adopted a Market Operating price where goods are sold at fixed price to the distributors and customers. This strategy always prevents hiking of prices by traders and also cubs the effects of products overstaying in the stores due to high prices. The Samsung brand too as adopted a pricing strategy that is “value for money”. In this way, they have started producing not only high-end technological products but also started producing products that can be afforded by middle income groups.

3. Samsung uses advertising and promotion as a strategy to get to the market, dominate and remain relevant. In the promotion aspect, Samsung opted to endorse celebrities, conduct corporate advertisements too in a bid to highlight how superior their technology was in their goods and in addition to it conducted several promotional schemes. Samsung advertised its products in the social media in TV commercials and newspapers which displayed its global dominance. This greatly sold the Samsung brand especially in the celebrity endorsement where some individuals would like to be associated with them and hence buying those products.

4. Samsung adopted a sponsorship model strategy to sell its brand. It was a sponsor partner in the Athens Olympic which it used to market itself. Through these sponsorships, the Samsung brand associates itself with the global values that theses competitions represent like peace, excellence, class and a fair competition. This strategy gives it a step notch ahead of their competitors who fail to globally publicize their brands.
V. Conclusion & Recommendations
One of the important recommendations is technology innovation. Samsung Electronics is a high-tech company, which provided support for innovation in the areas of technology. Product lines involved with other companies regarding the patent lawsuits. Lawsuits have negatively impacts on company’s growth. In order for company to maintain sustainability and remain competitive in the industry, we recommend that the Samsung Electronics should focus on unique technology designs. In that way, it will protect the company from getting sued and attract more customers. Samsung should also increase semiconductors productions by finding opportunities to cooperate and be a supplier to other smaller electronic companies. Again, the company should invest more in R&D projects, so it can built new technologies and new products in order to compete against its competitors.

VII. Reference http://en.wikipedia.org/wiki/Samsung http://www.samsung.com/us/aboutsamsung/corporateprofile/

http://www.samsung.com/us/aboutsamsung/ir/

http://www.samsung.com/us/aboutsamsung/corporateprofile/history04.html

http://www.samsung.com/us/aboutsamsung/ir/newsMain.do

www.samsung.com/global/business/telecommunication/productInfo.do?ctgrygroup=11&ctgrytype=18&b2bprdid=146

http://www.samsung.com/aboutsamsung/sustainability/

http://www.nytimes.com/2012/08/25/technology/jury-reaches-decision-in-apple-samsung-patent-trial.html?_r=0

http://www.wtec.org/loyola/kei/welcome.htm

http://tbs2015microeconomics.blogspot.com/2012/10/the-chang-in-market-structure-in-mobile.html