Organizational strategy of Samsung

Organizational strategy of SamsungIn the current volatile business industry marting plays a bouncy and signifi finisht office and it is a process or method to create, deliver, exchange and communicate with customers and clients. It is the mechanism that identifies the requirements, needs, give birthations of a particular customer base and creates methods and purportings to satisfy that customer base. In the current touch the complete business is customer-centric and the marketing revolves around satisfying the customer at e rattling possible opportunity. Whatever the comp either offer should be based on the needs of the customer, it may be a product or can be a service or it can be both. When an organization offers both service and product, it can be termed as solution that plays vital role in strategical marketing.Samsung electronics is one of the biggest players in the electronics industry world that was established in 1969 had spread its wings oer 50 countries worldwide an d has workforce of more than 66000 and ranks at 131st on the list of Global Fortune 500.This paper aims to evaluate the marketing strategy of Samsung Electronics in the orbicular television industry using the available theories and concepts.Company BackgroundSamsung one of the greatest put ups available in the market aims to desexualize the world leadership in the industry and earn devastating competitive strength by synchronizing the development and manufacturing of product, design, marketing and sales. The organization is intumesce know for its great accomplishment in the industry of semiconductors based on memory. Samsung maintains its amply position in the industry infinitely from 1992 maintaining its top rank and stretch its fiscal structure through step forward the industry to maintain itself as a physique one come with in the industry of mobile phones, semiconductors, monitors, computer gadgets, televisions, TFT and LCD screens. It similarly gived 4th place in the s emiconductor industry and sixth place in the mobile gadget industry by selling huge volumes. grandeur and the use of culture in their marketing strategyIt is the era of in fleshation age and the information plays a vital and unavoidable role in any field exceptionally in the marketing industry. There is a great need for the managers to incorporate loads of data, convert it into information, construct decisions on the information and past compose decisions to lead them to achieve greater success in the businessFor any business, information is also considered as significant resource required aforesaid(prenominal) handle money, machinery and manpower. Information is must and crucial for the survival of the organization in the varying business industry. Previously before the computer age, it was difficult for the companies to gather, store, maintain, organise and break huge volumes of information and data.The ripening of computer and information technology helped the managers and organizations to effectively handle the information available. Managers argon able to get the current information at required meter in an perfect manner. And anformer(a) great advantage is that the information can be accessed by some(prenominal) people at the similar time accurately, completely that is organized and storable.The information system is the method that makes sure the information is breaked to the managers in the form they expect it and when they expect it helping them to support their cause by giving appropriate information for their decision-making. Computers or Information Technology can evidently help companies in processing information and data in a accurate and well presented manner that is timely, relevantly and completely.All kind business organizations now a days have just about kind information maintenance system either it may for accounting or stock control or market monitoring. The supremacy technology changed the function of information in the busine ss. The complete business world acknowledged the information aslifeblood. Papows (1998) pick outed that the modern organization is dead without Information.Samsung as a strong business leader authentic the fact and had given priority to the process of information throughout the organization at every stage. To gain from its Managing information System and Information Technology, Samsung addressed information needs not scarcely in its environment notwithstanding also in their births with customers, suppliers, trade partners, Production systems, work processes, skills and labour requirement.These advancements of Samsung have created huge and complex processes and information systems, thereby creating a requirement to align them to have a universal overview of the complete information system setting it as a strategic tool.According to American merchandise Association (AMA), 2007 marketing can be defined as the activity, set of institutions, and processes for creating, communicati ng, delivering, and exchanging offerings that have pass judgment for customers, clients, partners, and society at large.Marketing people of various organizations endeavour to get the perfect goods or services to the correct people at the perfect place at the accurate time at the right price, utilizing the proper promotion techniques. This explains how marketing managers organize the several factors that eventually decide marketing success. For this, organizations must have timely decision-making information.The significance of efficacious marketing changes heavily in respect to the market in which a firm operates. It also depends on the important competences quick within the company. These competences volition offer the current market information based on which decisions can be taken quickly. Corporate strategy depends deeply on the scrutiny of such information.Samsung aims to achieve the world leadership and accomplish great competitive strength. It is targeting to coordinate d esign and development of product, manufacturing, sales and marketing with effective information management.Samsungs marketing strategy link up to their overall organisational strategySlogan of Samsung Company says thatEveryones invitedexplains its vast marketing strategy, with a huge range of products. As per the market lookes, the main strengths of Samsung atomic number 18 identified asStrong global business networkHuge credibility of Brand NameInnovative changes and inspiring overbold stylesThe awards it is continuously receivingSamsung has strong global present with its service and sales caters locating in 4 different countries. Samsung can utilize its strengths available as major threats to other organizations. Samsung can effortlessly rectify its image the by the promotional Adds and feature products.Viewing ahead, Samsungs vision is to turn out to be a leading company of the digital convergence revolution. The neighboring genesis volition be a time where the Internet, wireless communications, networked systems and contents will be united. Various forms of convergence technology that link conventional complete appliances through networks will be developed.Samsung Electronics vision for the new decade is, Inspire the World, Create the Future.This new vision statement mirrors Samsung Electronics dedication to stimulating its communities by accelerating its terce key strengthsNew Technology,Innovative Products, andCreative Solutions. And to advance new value for Samsungs core networks such asIndustryPartners andEmployees.Through these efforts, Samsung hopes to contribute to a weaken world and a richer experience for all. (www.samsung.com, 2010)SAMSUNG Vision StatementSourcehttp//www.samsung.com/uk/aboutsamsung/corporateprofile/visionmission.html accessed on 20/07/2010The main aim of the strategy of any business organization is growth (Chandler, 1962 Penrose, 1959). Even for Samsung, this growth is the main competence. The diagram above explains its motto of creating future in its industry and wants to be a leader. So Samsungs vision is clear. Samsungs strategic methods can be classified in to organic growth and alliances based on strategic.Organic growthAccording to moneyterms.co.uk (2010) Organic growth is the growth that is achieved by the companys live business by increasing output and enhance sales (Investopedia, 2009 Moneyterms, 2010). Organic growth lets a firm to extend market position over the keen-sighted term and helps to accomplish growth much cheaper than merger and acquisitions and is well suitable growing organizations (Coyle, 2000). This suits well with Samsung present strategic position as it is one of the market leader and has all the measures to extend into other markets. Moreover, though Samsung has huge cash reserves, organic growth permits cash reserves to be focused on other important factors such as Research and Development. At last, the external environmental depth psychology bases growth in the television market and the complete industry.But only the organic growth is not sufficient for an organization. Even though it is stable that is not enough when entering in to a new market in a new country. When entering in to a new country a strong understanding of local market is necessary that can be achieved only through local strategic alliances.Strategic AlliancesA COPAC Commissioned Study defines (2000) Strategic Alliance as a formal and mutually concord partnership arrangement that links specific facets of two or more enterprises or organizations. It is a mutual arrangement and understanding that al offsets partners to accomplish goals mutually that they could not accomplish alone. Strategic alliances are normally seen as methods for generating strong and efficient mode for competing in a globalized business. Bleeke and Ernst (1992) explain this as a formal relationship between two or more parties to pursue a set of agreed upon goals while remaining independent organisation s.From 2001, Samsung has undergone with 29 various alliances (Samsung.com, 2010). They also accredit that the alliances are the best possible ways to enter in to the new market. With the new alliances Samsung may not learn anything new as they are very strong in technology and first appearance.Further Analysis of Current StrategiesPorter (1980) argue there are three fundamental strategic options available for companies that are looking for achievement of competitive advantage they areCost Leadership,Differentiation andFocus.This is explained in Porters Generic Strategies (Porter, 1985)Samsung comes under the category of Cost Leadership strategy as it augments profits by dropping courts, while charging pitiful prices in the industry. Cost Leadership can be considered as one of the core competencies of Samsung.Apart from the speak to leadership, Differentiation strategy also appropriate to Samsung as the company in continuously involved in inventing the technologies. So, Samsungs strategy is a combination of both cost leadership and differentiation strategy.Bowmans Strategic Clock (1997) is the other method used regularly to evaluate strategic options. It sees at professed additional value by the customer in opposition to price. Based on this Samsungs strategy can be explained to be mostly Hybrid. This refers to a strategy which is low cost to the consumer but lock away differentiated.Samsungs new 3D and Interactive TVSamsung, an industry leader for flat-screen TVs, will begin promoting its 3DTVs on 21 manifest in the US, before rolling out the activity globally in April.Mintzberg et al (2005) stated the Competitive advantage of an organization is usually recognized as the managements capability to set the companys assets adjacent to some external context. This can be termed as (Porter, 2004) external environment for a specific company. This external environment sets the means of survival for any company (Johnson et al, 200854). So, it is vital for the com panies to understand this environment. This paper will look at the big environment of Samsung using PESTEL abridgment, then the Industrial environment where it operates, and finally at Competitors mainly utilizing Porters fin forces model (Porter, 20046).It is also important to analyse the external environment of the firm to understand the opportunities and threats to achieve a strategic competitiveness. This consists of a general environmental, market, five forces analysis and competitors analysis.SWOT analysis is a prospective forecasting technique that helps to evaluate the match between opportunities and capabilities of the firm in the competitive environment.External environmentThe macro and industry environments will now be looked at to assess the strategic position of Samsung.Social FactorsCurrent generation of people have strong warmheartedness and obsession for new innovative technology. Electronics industry plays a vital role in fulfilling this obsession. Children watc hing late night programs and getting addition to TV programs that reduces their come to towards games and studies is an important social factor.Technological FactorsThe electronics industry has been considered as one of the largely growing (Sixto, 2003) with low product life cycles (Mathews, 2005) that have show the way to global revenues.A 3D TV set is a special viewing TV device that utilizes 3D techniques of appearance that projects a TV program into a realistic three-dimensional field. The technology is brand new to TV industry that further reduces people going to Cinemas.Samsung is leading the industry with another milestone of new innovative Technology.Political FactorsPolitical factors have an enormous control on the regulation of businesses that comprises of regulations forced by the government under which businesses should operate. As per the research the semipolitical environment in United Kingdom is said to pretty stable.Polices structured by the new conservative govern ment like taxation, Cutting the Public spend and decision to raise petrol prices will have tough impact on the buying power of individuals.Additionally, the industrial policies of Korea also plays very important role for assisting international competitiveness to transfer technology in swap for market access (Kim, 1997).Economic FactorsThe economic factors plays very critical and significant role in marketing the 3D TV. The recession or down turn of economy reduced the spending power of individual. U.K economy is endangered by the financial downturn. As the unemployment rate increases customers passion for new technology may be sidelined.Sales has been continuously depreciating and the exchange rate is all time low that will increase the importing prices.Environmental FactorsConsumers are having more awareness towards environmental and expecting increased energy efficiency, minor or no emission of dangerous ray (Tarr, 2009 EE Times-Asia, 2009).Legal FactorsIntellectual property is becoming a critical and important in the industry. There are huge chances conflicts can happen like the resent famous Apples conflict with Googles Nexus One regarding a patent issue. Samsung itself won a dispute recently in opposition to sharp regarding a patents issue that was initiated in the form 2007(Wall Street Journal, 2009).Legislations about local employee rights, Taxation and Intellectual Property will advance influence on Samsungs strategic decisions. rise analysisSTRENGTHSStrong international experience.Strong global business networkHuge credibility of Brand NameInnovative changes and inspiring new stylesThe awards it is continuously receivingOPPORTUNITIESNew technology2012 Olympics offers an plenty of opportunity to get more salesOffering more models with stylish and individuality.The consumer will have the real entertainment for the money.WEAKNESSES information of High PricesCustomers disinterestBuyer sophistication and knowledgeSubstitute products or technologiesVery less availability of 3D viewing contentTHREATSNew existing disceptationPrice volatilityEconomic recession or financial downturnExtremely huge competition for customers and resources6Five Forces AnalysisThis analysis discusses five competitive forces related to the new product of SamsungIndustry Competitors Sony, Panasonic and LG. All are bigger players in the industryThe competition is very HighBuyersIndividuals and families with high passion for technologyAnd reasons for buying is Young passion mind, affluent professionals, status maintainers*Threat of New Entrants*Threat not significant as already many established players in the market and required a significant initial network, resources and rangementSuppliersBargaining power is lowSubstitutesWide verity of TV models including blood plasma, LCDs and digital TVs. Electronics Gadgets like smart phones, gamers and computers are also affect the new 3DForceStrengthTrendCommentsEntryLowChangingNew entries are less.SuppliersLowChan gingSuppliers cant negotiate pricesBuyersMediumIncreasingOverall consumers have medium bargaining power but generally it should be a win-win situation.SubstitutesHighNot ChangingThere are huge substitutes available at the present time. Like smart phones, Plasma, LCDs and gamers RivalryHighIncreasingThe competition is very high with SONY, Panasonic and LG are planning to launch the 3D TVsLower Threat of New EntrantsThreat from new companies entering in to the business is low as huge requirement of capital and Samsung have huge research and marketing process along with the proven productive process. It also has the strong brand name and best product differentiation. Overall the threat is minor.Low Bargaining Power of SuppliersMany competitive suppliers are available in the industry. The suppliers of Samsung have low switching cost and product differentiation (Lee, 2006). Overall the bargaining power of suppliers is low. The price increasing of raw materials can be easily passed on to the consumers. So the overall bargaining power of suppliers is low.Medium Bargaining power of CustomersBargaining power of customers is medium as very little range of products available in the 3D TV marketing industry.High Threat of Substitute ProductsThere are huge number of substitutes are available for this product like Plasma TVs, LCD TVs, Mobile gadgets like smart phones, gamers, computers and laptops.Competitive Rivalry within the Industry HighOverall, rivalry is high with many diverse competitors.LG, the worlds No. 2 Television brand by revenue, has put a destructive sales target for 3D TVs, planning to construct a leadership position in an emerging market where rivalry is expected to heat up.In 2010, LG targeted to sell 400,000 3D Televisions and in the next year it aims more than 3.4 million, the South Korean company announced in a news conference on 15th Tuesday December, 2009(canada.com, 2010).Electronics giant Sony is also planning to launch and leverage its power in 3 D TVs business. Sony said in a press conference that it is expecting 3D TVs to account for up to 50 per cent of its total TV sales by March 2013 (canada.com, 2010).Panasonic also launched its plans to roll out 3D TVs in 2010 (canada.com, 2010).Source http//www.canada.com/competition+heating+2010/2342815/story.htmlSegmentationThe new generation 3D TV is initially targeted at the high class and technology lovers. The initial price of the 3D TV is very high.The Marketing MixMarketing mix is an essential notion in current marketing and rationally it is referred to as the set of convenient tools that the organization combines to create the response it wants in the target market, so it consists of everything the firm can do to influence the demand for its product (Kotler and Armstrong, 2004).Marketing is about projecting the correct product at the correct price in the accurate way to the accurate customers. This is how value is added. Getting a product in to the market involves balancing numerous significant ingredients, i.e. the 4Ps of the Marketing Mix Product, Price, Promotion and Place.ProductThe Next generation 3D TV is new innovative product. In simpler terms, the product includes all features of innovation to provide true entertainment to its customers. The 3D televisions were voiced as the biggest innovation in the television history with combination of highest performance and stylish design. With the Samsung 3D TV the customer will have the prospect of reveling TV programs in 3D sitting at base of operations and viewing TV will never be the same as the audience will be able to enjoy and experience the feel of their favourite stars of sports, film and TV leap off their TV in to the living room right before them. Samsung is proposes a series of 3D-capable TVs, including the LED 7000/8000/9000 Series, LCD 750 Series and the Plasma 7000/8000 Series (www.samsung.com, 2010)PricePricing is principally fixing a specific price for a product or service offered. In simple words, Kotler and Armstrong (2004) explain the perception of price to obtain the product. Fixing a price is not something simple. Normally in general equity people argue that a small price will draw additional customers. The argument is not true. Because customers not only look for price alone. The customers expect a proper service and value for the money that he pays. They act in response to value so a lesser price does not essentially signify stretched sales if the product is not fulfilling the expectation of the customers (Lazer, 1971).The price for the 3D brands starts from 1600 to 2000. The price is not so competent.PlacementSamsung unveiled its prestigious 3D TV brands globally in the major countries like US, UK, Australia and china. The product is launched in all the major stores like John Lewis, Currys etc.PromotionThe promotion takes the form of a new Starter Kit that offers U.S. consumers the chance to enjoy 3D movies in their own living rooms, rather than having to head to nearest cinema to watch out out the eye-popping action.Samsung utilized the FIFA Football World Cup to publicize several value-added bundles along with its new 3D TV ranges. Fresh buyers were offered bundled 3D movies, home theatre systems and Blu-ray players.People who procure certain Samsung 3D TV models from dealers all over the country will have the chance to seize the Bonus 3D bundle. This includes Samsung 3D Blu-ray player and two sets of rechargeable 3D glasses. Apart from this Bonus 3D bundle, customers are also entitled to obtain a Bonus 3D TV starter kit that includes3D Blu-ray Disc of DreamWorks Animation SKGs hit movie,Monsters vs. Aliens, andAn additional two sets of battery powered 3D glasses.Source http//3dtvsets.co.uk/samsung-electronics-starts-3d-tv-war/ (accessed on 25/07/10)Apart from these bundled promotional offers, Samsung has launched a strong advertisement campaign for its range of 3D TVs. The TV advertisement campaign is worth of 8 Million that r uns over 3 months. Apart from the TV advertisement, it has also launched 7 million print media advertisements (www.marketingweek.co.uk, 2010)Target MarketSamsung should aim both the high-end market segment as well as low-end market segment because in both areas there are opportunities. The international brands like Sony, Panasonic, LG, Philips and Sharp have more than 75 percentage persona of the high-end market segment globally. Samsung being an international brand, it can easily step in both the high-end and low-end marketing segment because of its overall knowledge and ability to invest in the market.Market research firm Generator Research(2010) forecasts a major update of the novel 3D TV technology globally, showing that by the year of 2014 the business share for 3D sets is predicted to reach over 39% and the market will value more than $117billion (Samsung.com, 2010).In reference to another market research organization, DisplaySearch (2010), the 3D TV market is predicted to in crease from the year 2008s value of $ 902 million to $ 22 billion in 2018. particularly, the 3D TV business is predicted to grow to $ 17-billion, and the number of units expected to sale will increase to 64 million in the year of 2018 from 200,000 units in 2009 (Samsung.com, 2010).Globally, in the year of 2010, it is expected that there will be approximately 4.2 million 3D TVs will be sold as all the major players like Samsung, SONY, Panasonic, LG and sharp are entering in the business. The value is expected to triple to 12.9 million in the next year itself according to a new market research.Above said figures looks like huge but the fact is that the above stated figures are just a fraction of the original LCD TV sale. On the other hand, it is expected that by 2012, 27.4 million 3DTelevisions will be sold globally and by the year of 2015 the value is expected to 78.1 million units. This shows an enormous composite annual growth of 80.2% between 2010 and 2015. The figures show that t he 3D Televisions here for growth and may replace all the existing TVs in near future.Samsung, however, is ready to lead in this Age as it will use its strengths in semiconductor, telecommunications and consumer electronics technology to develop innovative multi-capable products and create powerful networks that will empower the user for anytime, anywhere communications and a higher quality of life.http//www.marketingpower.com/AboutAMA/Documents/American%20Marketing%20Association%20Releases%20New%20Definition%20for%20Marketing.pdf