Samsung Case Study and Business Strategy Analysis

For over 70 years, Samsung has been dedicated to making a better world

through diverse businesses that today span advanced technology,

semiconductors, skyscraper and plant construction, petrochemicals, fashion,

medicine, finance, hotels and more.

The unprecedented growth in the Information and Technology sector hasn't

just changed the behaviors of human beings; it has also changed the

methodology and business strategies of the companies. Despite the recent

debacle in the global economy, there has been a steady growth in the market

for / of higher class products and while it might seem like the biggest revenue

generating sector, the bulk still comes from the mid-low range products. It is

interesting to learn how the companies manage, operate and execute the

daily business with effective objectives of a concern like Samsung Electronics.

This paper is focused on the importance and relevance of the firm, what their

customer values are and how they manage their goals (which business

models and strategies they have).

Company Profile

Samsung Group is one of the biggest international conglomerate company of

the world founded by Lee Byung-chul in 1938 in South Korea. The company

started their development in the electronics business in the late 1960s.

According to Forbes Media, Samsung Group is the 18th largest company of

the world largest tech company of the world.

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The principle subsidiary of the company is Samsung Electronics, which is the

world’s largest information technology company measured by revenues. With

more than 326.000 employees in 84 countries around the world and a

revenue of 167.42 billion euros, it has become the largest television and

smartphone manufacturer in the world

This is beyond exciting to appraise the company’s performance and how it

has developed to an innovative and high quality brand, which is widely

recognized, especially by the target group (private and business customers).

Although Samsung has great competitors in the business market they

extraordinarily utilize their strong business models and strategies.

Samsung is a technology conglomerate whose corporate mission and vision

statements focus on innovation for global societal improvement through

technological products. The company’s mission statement indicates

superiority, which implies excellence and leadership in the semiconductors,

electronics, and other markets. On the other hand, Samsung’s vision

statement promotes an inspiration-focused strategic objective that makes the

business an influencer among people and societies around the world. Thus,

the combination of the corporate vision and mission statements creates the

idea of a technological conglomerate that aims for industry leadership and

global influence. In order to follow Samsung’s corporate mission and

corporate vision, the business organization must ensure competitive

advantages against major technology companies, including Apple, Sony, Intel,

Microsoft, and LG. This competitive landscape imposes strong forces and
strategic challenges that require high rates of innovation and high quality

standards in Samsung’s operations and technological product development

and design, as well as the utilization of advanced technologies to support

operations.

Mission of the Company

“We will devote our human resources and technology to create superior

products and services, thereby contributing to a better global society.”

Samsung identifies human resources and technology as the two main assets

that it uses to pursue its purpose and strategic objectives in its global

industries. This component of the corporate mission requires that the

company maintain highly competitive compensation packages and related

human resource administration and development programs to attract sufficient

talent while competing against technology giants like Apple Inc. and Google

LLC. Considering the significance of human resources, Samsung’s corporate

culture is a determining factor in fulfilling its corporate mission. On the other

hand, superiority of products and services is at the core of fulfilling the

consumer electronics company’s corporate mission. Such superiority

emphasizes the importance of strategic management that directs decisions at

Samsung’s headquarters toward operational effectiveness for high quality

organizational outputs in various technology markets. In a way, this

component of the mission statement pushes the corporation to ensure an

effective value chain and achieve its value proposition, such as effective and

high quality consumer electronics. Furthermore, the corporate mission targets

positive contributions to improve the global society, leading to Samsung’s

generic strategy, intensive growth strategies, and strategic objectives that

and home appliances. In relation, to achieve a positive global impact, the

company has embarked on various multinational acquisitions, such as the

purchase of Harman International Industries, which now operates as a

subsidiary of Samsung Electronics. Global scope and societal improvement

are factors that link the mission statement with the technology corporation’s

vision statement.

Vision of the Company

“Inspire the world with our innovative technologies, products and design that

enrich people’s lives and contribute to social prosperity by creating a new

future.” Samsung’s strategic objectives include the development of products

that inspire. This inspirational aspect requires the company to consider local

and regional market conditions to ensure that its technological products

actually inspire people despite differences in their societal situations.

Samsung’s corporate vision also pushes for a high degree of innovation.

Technological innovation is especially notable in the company’s products,

such as smartphones and laptops. Moreover, the vision statement indicates

strategic efforts that include Samsung’s corporate social responsibility

strategy for improving people’s lives and contributing to social prosperity. This

corporate vision means that the company sees itself as a mover and major

contributor to the world’s improvement through consumer electronics,

semiconductors, and other products that add value to people’s lives and

society. In a way related to the mission statement, Samsung’s corporate

vision includes a global scope of application and the aim of contributing to

societal improvement.
Organizational Chart

Business Rules

Samsung respects and protects the fundamental human rights taking into

account international human rights principles and standards set forth in the

Universal Declaration of Human Rights, the UN Guiding Principles on

Business and Human Rights, the Organization for Economic Co-operation

and Development’s guidelines for multinational enterprises, the UN

Convention on the Rights of the Child, the ILO Declaration on Fundamental

Principles and Rights at Work, and the laws of the countries in which we

operate. Samsung is a member of the Electronic Industry Citizenship Coalition

(EICC) and we conform to the EICC Code of Conduct and its implementation

methods across the company and our suppliers. The EICC Code draws upon

internationally recognized standards, in order to advance social and

environmental responsibility and business ethics.

1. Managing Risks

The societal and environmental challenges our world is facing bring about an

uncertain business environment and the risks in our business often pertain to

consequences in business performance or corporate reputation as well.

Samsung approaches these risks in an effort to effectively minimize any harm

assesses the various factors that may become a risk to the company in an

uncertain business environment and establishes countermeasures to manage

risks effectively.

2. Using the Guidelines

When making business decisions for Samsung, all employees are expected to

conduct a self-diagnosis via the ‘Business conduct Guidelines’ to review

whether the problems and outcomes involved in the decision have been

adequately considered.

3. Reporting Violations

If and when an employee detects instances of non-compliance, or possible

non-compliance of 'Business Conduct Guidelines' the employee is responsible

for reporting his or her respective concerns to the ‘Reporting Wrongful

Practices’ tab on the Ethical Management website, the audit team

(audit.sec@samsung.com), the tip-off section within the compliance support

system, or the compliance team (cp.wb.sec@samsung.com). If an employee

becomes subject to illegal, immoral and/or prohibited actions, the employee is

required to report the situation.

4. Work Environment

Samsung strives to foster a creative, culturally diverse and collaborative work

environment in which rights of all employees are always respected. Samsung

does not and will not tolerate discrimination based on race, culture, religion,

age and any other grounds pursuant to local law, or any harassment or

offensive behaviors of employees that may disrupt the workplace or interfere

with works of other employees.

Working hours are decided according to the characteristics of each work area

and the related regulations in each country. Wages are determined

reasonably and fairly in accordance with relevant laws and standards.

6. Privacy of the Employees

Samsung respects the privacy of current and former employees and treats all

information with confidentiality and integrity. With the exception of the

following three occasions, employee consent shall always be required prior to

disclosure of personal information:

- When required due to a particular legal regulation or obligation.

- When required in performing tasks decided upon by a public authority.

- When a legal representative cannot express intention or give prior consent,

and when the information is deemed necessary for the imminent benefit of

one’s life and property

7. Equality and Diversity

To respect each individual’s human rights, Samsung provides equal

opportunities to all qualified employees and applicants per the ‘Anti-

Discrimination Policy.’ We do not discriminate on the basis of gender, skin

color, race, ethnicity, nationality, religion, age, marital status, sexual

preference, sexual identity, social status, disability, pregnancy, military status,

protected genetic information, or political affiliation in all processes such as

work, promotion, compensation and disciplinary measures.

8. Prevention of Child Labor

Accordingly, all of our subsidiaries and suppliers must comply with the strict

employment process and age verification. Our policy against child labor
operates under the “zero tolerance” principle, meaning that child labor at any

stage of our business is unacceptable and intolerable. Our policy against child

labor supports the best interest of children.

9. Prevention of Forced Labor

Samsung strongly supports the right of voluntary labor and is committed to

banning participation in, or imposition of, forced labor by means of mental or

physical bondage in accordance with the California Transparency in Supply

Chains Act and the UK Modern Slavery Act. Samsung ensures that its

suppliers do not in any way support the illegal activity of slave labor and

human trafficking.

10. Product Quality Management

All employees are encouraged to gain an in-depth understanding of the

needs, lifestyle and behavioral changes of our customers. Therefore, we

embrace the requests and suggestions made by our customers and partners

by reflecting them to improve product design, distribution and services.

Business Process Diagram (flowchart)

Problems Encountered

According to Bradley and McDonald (117), the biggest marketing challenge

that is currently facing the firm is how to sell its Smartphone to organizational

buyers. This is considered the main problem facing Samsung Inc because

organizational buyers no longer trust its products. In order to succeed in the

current market, Samsung cannot afford to ignore this market segment. Chang

(32) says that organizational buyers are becoming important to firms because

of their purchasing power.

Many firms are now using Smartphone and other related electronic gadgets to

address various activities. Multinational corporations rely heavily on these

devices to monitor the operations at various branches across the world. Firms

such as Blackberry and Apple have remained very successful in marketing to

the organizational buyers. However, many firms have rejected Samsung

devices citing a number of reasons.

The major reason why Samsung smartphones and other communication

gadgets are less popular among organizational buyers is because of the issue

of security. Samsung’s Smartphone runs on Google’s open-source Android

OS. This operating system is more vulnerable to viruses and can easily be

hacked as opposed to that which is used by Apple Inc and Blackberry.

According to Butow and Watson (29), the chief executive officer of Samsung

admitted that the operating system used by the firm’s Smartphone has a

number of security problems. This confession came after complaints from

communication gadgets. These customers complained that their data was

easily breached because of poor security system. They also complained that

they were slowed in their work because of the constant malware interference

every time they went online.

The complaints have earned Samsung a negative image in the market.

Organizational buyers no longer trust their communication gadgets. As Doole

and Lowe (78) say, firms highly value the security of their data. In order to

have a competitive edge over market rivals, it is necessary to have superior

marketing and production strategies. Such strategies should not be accessible

to rival firms. To do this, these organizations need communication gadgets

that can protect their internal database even when it goes online. However, it

has been proven that Samsung gadgets cannot offer this security.

The breach of private data by third parties can cause serious consequences

depending on the database that has been compromised. Sometimes hackers

may destroy important files that are needed for normal operations. When this

happens, such a firm will be grounded until such a time that the mess can be

addressed. In order to win the trust of the organizational buyers, Samsung will

have to address the weaknesses that have been identified in its

communication gadgets. It may take longer to win back this trust, but it is the

only way of addressing this marketing problem.

Proposed Solution
The Samsung Group of Companies hires employees that excel in the field of

ITC. To minimize the problem of being hacked or getting viruses.

Functional Requirements

Non-Functional Requirements

Scope and Delimitation

I chose to focus on the marketing strategy implemented by Samsung for its

smartphone products, because the purpose of marketing is to act in a way

that a company delivers products in the market that they correspond to

demand. That it satisfy its customers’ needs and wants with significant and

sustainable competitive advantage and profit as noted with Samsung.

marketing strategy; these will be discussed briefly but are not included in the

analysis of this thesis. This research will consider only the marketing strategy

factors, affecting Samsung’s performance in the European market and global

market at large. This paper will discuss mainly the marketing decisions of the

company in the smartphone market not considering much the mobile market,

as the mobile products is sidelined due to changing customers’ needs. The

study will concentrate on the consumer perception regarding Samsung

marketing strategy to structure the conclusion of the studies.

Feasibility Analysis

The CE Division satisfies customers’ needs and leads the global digital era by

continuously offering new products featuring innovative technology, unique

designs, and enhanced value propositions.

TV is the core product of CE. The Company has maintained its position as the

market leader for 15 consecutive years by leveraging competitive advantages

in hardware such as LCD/LED TVs as well as software driven product

features within our Smart TV product portfolio. We will continue to expand our

market leadership based on our competitive edge in the premium segment

through our 8K QLED and ultra-large products to name a few.

The IM Division operates the Mobile Communication Business, which

produces and sells smart mobile devices such as smartphones, tablets, and

wearables. For smartphones, a key product of the business, we have

developed a lineup ranging from low-end right through to premium models,

Galaxy series.

We will lead growth of the smartphone market and deliver exceptional user

experiences by: 1) offering innovative hardware features such as new form

factors (based on flexible OLED technology), high-definition cameras,

biometric sensors, and battery charger technologies; 2) improving software

capabilities of mobile payment service Samsung Pay and AI platform Bixby;

and 3) investing in future growth drivers such as Cloud, IoT, healthcare, AR,

and VR. At the same time, we will lead the global 5G market based on our

end-to-end solutions, which encompass handsets, chipsets, as well as our

commercialization experience in initial 5G markets.

The Memory Business, System LSI Business, Foundry Business, and Display

Panel (“DP”) Business make up the DS Division. The Memory Business

manufactures and sells DRAM and NAND products; the System LSI Business

designs and sells mobile application processors (“mobile APs” or “APs”) and

camera sensor chips; the Foundry Business is in charge of consignment

production of semiconductors; and the DP Business manufactures and sells

display panels.

The Company constantly works to increase its influence on end-product

manufacturers and create new demand through technological breakthroughs

and the development of high quality components as it has done with APs—
which serve as the brains of mobile products—and with memory components

like DRAM via enhanced capacity and density.

The Memory Business has maintained its position at the top of the global

memory market by sustaining cost competitiveness and applying the latest

advanced process technology in each technological iteration. The System LSI

Business has not been complacent, expanding its focus from mobile to

include automotive chips, and it will stay at the forefront of the market by

offering differentiated products such as APs and CISs and strengthening

competitiveness via its advanced manufacturing process technology. The

Foundry Business is expanding by securing technology competitiveness via

adopting enabling technologies and new structures, strengthening its

manufacturing capacity in a timely manner to address demand, enhancing its

IP and infrastructure for customer support, and diversifying its product

portfolio using legacy processes, which include CISs, DDIs, and PMICs.

In the Display division, the mobile panel business’s differentiated technology

is a main factor behind the increased adoption of OLED panels, while its

release of products in new applications—such as foldable devices, rollable

devices, and automotives—has expanded the overall market. Meanwhile, the

large panel business is focusing on premium products such as high-definition,

ultra-large, QD TVs and is enhancing its competitiveness through continuous

improvements in technology and productivity.

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