1. INTRODUCTION
In the 21st century, Asia will be the leader of the international economics growth in the world we are living. In fact, the shifting of global power has happened since a few years before and this was clearly significant through many contributions of Asian countries to the global economic downturn of 2008 and the economic crisis of Europe of 2011 as well. In deed, the growth of most important Asian countries, such as China, India, Korea, Asean-5, Australia, in the last four years is also exceptional. As a result, many people ask themselves a question: Why could Asian countries be strong and successful. The answer for this question comes from many reasons and the success of many companies, however, is one of the key roles that is constructing the wealth and success of many Asian countries.
Generally, to become a successful organization requires many different factors and has to face enormous challenges. In this paper work, we are trying to analyze and evaluate Samsung’s electronics company in order to get a more clear understanding how Samsung’s electronics company is facing and overcoming its challenges so that it can exploit opportunities in the near future. Meanwhile, the key roles of the organization’s stakeholders and the organization’s adoption of corporate responsibility measures will be included in this paper work.
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In the following sections, we will apply the Principles of Management and use Samsung Electronic’s company as a figure to explain and clarify the requirements of this assignment. We surely know that Samsung is a good case to drive us toward to the achievement of this assignment.
Once again, keep in mind that we use Samsung to imply the phrase Samsung Electronics company for convenience.
2. CHALLENGES AND OPPORTUNITIES OF SAMSUNG
2.1 SAMSUNG OVERVIEW
In this section we briefly give an overview what businesses it is now operating and providing to us:
According to Wikipedia, we have the following information about Samsung as follows:
Samsung Group (Hangul: 삼성그룹; Hanja: 三星그룹; Korean pronunciation: [sam.sʌŋ ɡɯ’ɾup̚], informally Samsung) is a South Korean multinational conglomerate company headquartered in Samsung Town, Seoul. It comprises numerous subsidiaries and affiliated businesses, most of them united under the Samsung brand, and is the largest South Korean chaebol.
Samsung comprises about 80 companies. It is highly diversified, with activities in several areas including constructions, electronics, financial services, shipbuilding and medical services.
As of April 2011 the Samsung Group comprised 59 unlisted companies and 19 listed companies, all of which had their primary listing on the Korea Exchange stock-exchange.
Samsung Electronics belonged to and is a flagship of Samsung Group because it not only contributes significantly to the total revenue of Samsung Group but also is running in the market segments that have many opportunities. Samsung Electronics is now consisting of four major core markets:
• Electronics & Telecommunications products (LCD panel, Memory, Semiconductor and System LSI and etc.)
• Mobile Products and Services (Cell phone, Smartphone, Communication Solution and etc.)
• Personal Devices and Services (Computer, Laptop, LCD, IT Solution and etc.)
• Home Entertainment ( Home Theatre system, DVD player, Bluray player, Camcorder, Camera and Television)
2.2 CHALLENGES and OPPORTUNITIES
Wikipedia (cited in Jung 2012, p.160) expressed that Samsung becomes the largest leader of IT makers and its sale revenue of Led displays, LCD and memory chips is the top of the world. Meanwhile, it keeps a dominant position in TV market. The given information also shows that the number of TVs and LCD panel sold is always at top level in the last five years in a row.
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Before we go into the main part of the critical analyze and evaluation on the organization in terms of the challenges and opportunities facing it in the next decade. We first describe and summarize what achievements which Samsung has obtained during the last twenty years. Specifically, when knowing these great achievements will allow Samsung to approach further grow and maintain the Digital leading position.
According to Harvard business review (2011), Samsung is considered as the world leader in design, marketing and R&D. It successfully transformed itself from the low cost original equipment manufacturer to become one of the giant of Electronics and Digital manufacturers. Samsung now is a valuable and premium brand image in global digital industry.
Meanwhile, Samsung managers definitely emphasized the purpose that Samsung operation will ‘be guided by a blueprint that comprises organization creativity, technological innovation, highly ethical conduct, superior products, intellectual capital and employee empowerment’ (Samsung Press Information 2011).
All of these commitments have been implemented correctly and it is still an ongoing process inside Samsung.
Samsung continually invested large amount of money into research (ex: Samsung Electronics Research Institute, Dallas Telecom laboratory and etc.) and develop innovative technologies (ex: LCD television, cell phone, semiconductors).
It also made diversification by various new products, such as LCD, memory chips, displays and CDMA phones, smart phones and computing tablets. Furthermore, Samsung did globalization with 285 operations in 67 countries (Samsung Press Information 2011).
The promises of Samsung are represented by many technological awards, top ranking, big revenue and large sales across the world.
Even though Samsung currently is a digital leader, it is still facing the formidable challenges as well as opportunities resulted from three main categories:
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1. The vision, mission and objectives arise inside Samsung’s organization.
2. The fast-paced digital market and high demand from electronics consumers
3. The competition among electronics companies.
Part 1: Challenges and opportunities will arise from inside of its organization
According to Samsung organization, the management themselves defines the vision of the company by 2020 as follows:
This new vision reflects Samsung Electronics’ commitment to inspiring its communities by leveraging Samsung’s three key strengths: “New Technology,” “Innovative Products,” and “Creative Solutions.” and to promoting new value for Samsung’s core networks — Industry, Partners, and Employees. Through these efforts, Samsung hopes to contribute to a better world and a richer experience for all (Samsung’s website, 2011).
To accomplish the long-range mission, Samsung must use and develop a strategic planning if it wants to achieve goals defines in the present. We are analyzing Samsung in terms of a Porter’s five forces and SWOT model to find out what is the challenges and opportunities of Samsung in the next decade.
Certo & Certo. S (2012, p.226) divides the strategic management into five different steps including Environment Analysis, establishing Organizational direction, Strategy formulation, Strategy implementation and Strategic control.
• Porter’s five forces
Porter (cited in Certo & Certo. S, 2012, p.230) claims that there are five forces in the industry environment influencing the attractiveness of the market.
The threat of new entrant: This threat somewhat is just a medium problem with Samsung, because it is always making products with innovation, high technological applications and supply a wide range of products at different prices. Besides, its capital and fund is really big so it can beat any new entrant at the beginning stage of the new entrant. Unfortunately, Apple has been a phenomenon that offered smart phones and Tablet that attacked critically the market share of Samsung in a few years ago. Frankly, this is only an exceptional case because Steve Jobs is a genius.
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Buyer power: Samsung’s well-known products (such as mobile phone, consumer electronics, TV), competitive price and high quality are special advantages of Samsung in protecting it from prissy customers (i.e., electronics supermarkets, retail stores) because consumers do not want to change or adjust their usual habits and faiths from using products of good and familiar manufacturers. From my standpoint, Samsung takes power over buyer or customer. Instead, they really need Samsung’s products to be sold in their stores. This threat is at low level compared to other factors.
Supply power: with several products being offered to the digital markets, Samsung depends on a wide variety of suppliers. As a result, Samsung must care these suppliers very much because any late delivery and disruption of core parts and components can cause a bad situation for Samsung business. This factor is a high level for Samsung.
Threat of substitute products: Samsung must consider this element seriously because many products of Samsung are competing with products from other electronics manufacturers. If Samsung just neglects its pace in a short period of time, other manufactures will replace Samsung position immediately. Even though, present customers are always influenced by Samsung’s products, but the next generation of new consumers may alter their choices to other brands, it causes Samsung to lose its customer equity. This factor is a high concern for Samsung.
Intensity of rivalry: the impact of this element is much extremely high because more and more companies are joining in this Digital and electronics market segment. However, I think Samsung has prepared this competition through its business philosophy ‘we devote our talent and technology to creating superior products and services that contribute to a better global society’ (Samsung website).
• SWOT model
Certo & Certo. S (2012, p.226) Kumar (2012) Annual Sustainability Report of Samsung (2011) gives us knowledge and information to analyze SWOT of Samsung
Strength: Strong Marketing, R&D, design.
Large market share.
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Good leadership with high ambition.
High creative products and technology.
Wide range of business and product portfolio.
Completely globalized achievement gives Samsung a advantage to distribute its products easily and finds out many low-cost suppliers.
Weakness: Available softwares and applications are not abundant for its cell phone and tablet.
Samsung profit faces a different set of issues in new markets.
Samsung is a hardware leader but they still depend on software from other parties.
Samsung’s distribution network is not convenient and flexible.
Oppurtunity: strong diversification gives Samsung many chances to get benefits.
Samsung is focusing on many new businesses, such as: solar system and biotechnology.
The rapid change in digital industry gives Samsung a chance to reaching the top level for many years.
Samsung is the official partner of London Olympic in 2012 and this helps them improve the awareness of all of its products.
Threat: With only narrow concentrated markets, Samsung’s competitors do not have to spend too much resources and time like Samsung to get objectives.
The risen new entrants from china are now the force that strongly influences the revenue and future of Samsung.
The government policies from new promising markets may vary overtime and may hinder the objectives of Samsung.
A good strategic planning is just a part of Samsung’s success. It must have a combination of strategies (for example as marketing strategy, innovation strategy, branding strategy, tactical strategy and etc.) and plans (for instance: human resource planning, environment planning, process planning) to fully obtain the vision as it wishes from now on.
http://en.wikipedia.org/wiki/Samsung_Electronics
http://www.ojcmt.net/articles/22/229.pdf
