Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Page 1 of 38
I. Introduction
In January 2015, officials from Samsung Electronics, the South Korean electronics giant,
announced that they were making a major wager on the supposed Internet of things. This spoke to
an arrival to the firm’s idea of a computerized home, where all the firm’s gadgets and appliances
would be associated with the Internet. Samsung was only one of the players competing to shape
the associated home of things to come, and it was a long way from clear whose vision would win
The wager appeared to be vital for Samsung in light of the fact that it faced profit
pressures and strong competition from price cutting Chinese new businesses, for example, Xiaomi
and Huawei in the mobile phone industry. Samsung had been a pioneer in offers of smartphones,
yet its position was being challenged in a developing number of business sectors by lower-valued
cell phones. Simultaneously, Samsung was facing stiffer competitor from Apple, which had been
coordinating Galaxy telephones, tablets, phablets by presenting bigger and less expensive
adaptations of its own exceptionally well known iPhones. Hence, when Yun Jong Yong was
appointed as the CEO and President of Samsung Electronics in 1996, the firm was facing serious
financial problems that threatened its survival. The company was left with huge debt as an
economic crisis engulfed most of Asia in 1997, leading to a drop in demand and a crash in the
prices of many electronic goods. Yun also stated that they are already losing millions of dollars
each month, and if it continues their firm would fall into bankruptcy in just three to four years.
That was the starting point of Yun together with the nine senior managers of Samsung Electronics
to discard their falling strategy risking their positions in the firm if things go wrong.
Administrators at Samsung asserted that the firm’s strength lay in the assorted line of its
items, which included televisions, cameras, PCs, and also washing machine. In spite of the fact
Page 2 of 38
that cell phones represented as much as 66% or 2/3 of its profits, Samsung could have expanded
their incomes from its different contributions. Moreover, in contrast to the entirety of its opponents,
Samsung made the greater part of its own segments, which could have enabled it to offer better
items with lower costs. This would have empowered the firm to create benefits regardless of
Regardless of its accentuation on hardware, Samsung knew about the gather move in
gadgets up from hardware to software. In 2014, the firm presented its first cell phone that ran on
Tizen, an operating system that it had created with Intel and different accomplices. In spite of the
fact that the system was not liable to challenge existing mobile operating system, for example,
Google's Android, Samsung was hoping that it would provide it with a platform on which to bring
Tizen to the mass market by introducing the product on TVs, cameras and watches. In the end, it
may likewise turn into the system that Samsung could use to associate all gadgets and appliances
The company wants to achieve its vision with a strategic plan that will make the firm the
number one Electronics leading company and maintain the sustainability in the market. Samsung
Electronics try to push out of its precarious financial position where the firm began to develop its
own products than to copy those that other firm had developed. The firm started to develop of
products that would impress the consumers with their attractive designs and their advance
technology.
Page 3 of 38
II. Research Design and Methodologies
This paper was created by research from reliable sources by using the company’s data
based on the case study. As secondary sources, the strategists used internet sources to gather some
information.
Strategists used the different methodologies or tools to determine the significant factors
that directly affect the company. First, is the PESTEL Analysis, which also used to identify the
external forces that may affect an organization positively and negatively. Second is the Porter's
Five Forces as a framework to assess and evaluate the competitive strength and position of a
business organization. These forces help to understand new products that are potentially profitable.
This theory is also used to identify the areas of strength to improve the weakness and to avoid the
mistake. The internal and external environment factors that has a big impact is the SWOT Matrix
it is used to start the strategic planning exercise to determine the advantage and disadvantage that
affect the entire operation. The framework is considered a powerful tool to support the decision-
making because it is enabling an entity to uncover opportunities for success that were previously
unarticulated or to highlight threats before they become overly burdensome. Therefore, SWOT
Matrix is a process for integrating data and analyzing its big impact in the organization. This is an
excellent tool for facilitating strategic thinking and planning. Strengths and Weaknesses are
derived from the analysis of the organization’s internal situation. While the opportunities and
threats are derived from the analysis of the external situation. It has been adopted by organizations
of all types as an aid to making decisions. Additionally, the TOWS analysis is a variant of a SWOT
analysis and is an acronym for Threats, Opportunities, Weaknesses and Strengths. A TOWS is a
commonly used strategic planning tool can add real value to an organizational operation, helping
to take the strategic planning one step further. Moreover, the strategists used Boston Consulting
Page 4 of 38
Group Matrix to analyze the different business units or product lines. It also helps the companies
to allocate resources where they are most appropriate as well as to use the results in brand
marketing, portfolio analysis product management, and strategic management. The y-axis is the
graph that represents rate of market growth while, the x-axis represents market share. It is also
helping necessarily to add input for the decision-making process but does not probably consider
all possible factors that a company may face. Another tool that is being used by the strategist is
the Space Matrix, whereas it is a strategic management tool that focuses on strategy formulation
especially as related to the competitive position of an organization because they have a positive
advantage that will exactly help for the operation. Furthermore, the Competitive Performance
Measure Matrix is a competitive profile matrix that compares a company and its rivals. It reveals
the strengths and weaknesses for each company, and critical success factors show areas of success
Page 5 of 38
III. Strategy Planning
Company on January 13, 1969 and held an initial public offering on June 11, 1975. The company
changed its name from Samsung Electronics Industry to Samsung Electronics following a
resolution passed at the Annual General Meeting of Shareholders on February 28, 1984. The
Company separately oversees three independent self-determining divisions such as: Consumer
Electronics Information Technology & Mobile Communications and Device Solutions. Due to
some circular ownership, it is the flagship company of the Samsung chaebol, accounting for 70%
of the group's revenue in 2012. Samsung Electronics has assembly plants and sales networks in 80
countries and employs around 308,745 people. It is the world's largest manufacturer of consumer
batteries, semiconductors, chips and flash memory devices for clients such
as Apple, Sony, HTC and Nokia. It is the world's largest manufacturer of mobile phones
and smartphones, started with the original Samsung Solstice and later, the popularity of
its Samsung Galaxy line of devices. The company is also a major vendor of tablet computers,
particularly its Android-powered Samsung Galaxy Tab collection, and regarded for developing
the phablet market through the Samsung Galaxy Note family of devices. It has also developed 5G
capable smartphones through the Galaxy S10 and Galaxy Note 10 and foldable phones through
the Galaxy Fold. Samsung has been the world's largest television manufacturer since 2006, and
the world's largest manufacturer of mobile phones since 2011. It is also the world's largest memory
Page 6 of 38
chips manufacturer. In July 2017, Samsung Electronics overtook Intel as the largest
semiconductor chip maker in the world. Samsung Electronics is the world's second largest
Brief History
Town, Seoul. It comprises numerous affiliated businesses, most of them united under
the Samsung brand, and is the largest South Korean chaebol (business conglomerate).
Samsung was founded by Lee Byung-chul in 1938 as a trading company. Over the next
three decades, the group diversified into areas including food processing, textiles, insurance,
securities, and retail. Samsung entered the electronics industry in the late 1960s and the
construction and shipbuilding industries in the mid-1970s; these areas would drive its subsequent
growth. Following Lee's death in 1987, Samsung was separated into four business groups –
Samsung Group, Shinsegae Group, CJ Group and Hansol Group. Since 1990, Samsung has
increasingly globalized its activities and electronics; in particular, its mobile phones and
largest information technology company, consumer electronics maker and chipmaker measured
by 2017 revenues), Samsung Heavy Industries (the world's 2nd largest shipbuilder measured by
2010 revenues), and Samsung Engineering and Samsung C&T (respectively the world's 13th and
36th largest construction companies). Other notable subsidiaries include Samsung Life
Insurance (the world's 14th largest life insurance company), Samsung Everland (operator
Page 7 of 38
of Everland Resort, the oldest theme park in South Korea) and Cheil Worldwide (the world's 15th
Page 8 of 38
SAMSUNG
Founder: Lee Byung-chul
Chairman: Lee Kun-hee
Vice Chairman: Lee Jae-yong
Subsidiaries:
Samsung Electronics Co., Ltd.
Samsung Electronics Chairman: Lee Kun-hee
CEO and President: Yun Jong
Yong (1996)
Samsung Engineering
Samsung SDS
Cheil Worldwide
Page 9 of 38
Vision
Mission
“Inspire the world with our innovative technologies, products and design that enrich
Core Values
People
We value our people with a strong belief in "A company is its people" philosophy and
Change
We rapidly take the initiative in executing change and innovation with a risk awareness:
Co-prosperity
Excellence
We give our best efforts with endless passion and a challenge spirit to become world best
in every way.
Page 10 of 38
Integrity
We act in a right and ethical way in all manners, ensuring fairness with honor and grace
The digital-media business area covers computer devices such as laptop computers
and laser printers; digital displays such as televisions and computer monitors; and consumer
entertainment devices such as DVD players, MP3 players and digital camcorders; and home
appliances such as refrigerators, air conditioners, air purifiers, washers, microwave ovens,
SDRAM, SRAM, NAND flash memory; Smart cards; mobile application processors; mobile
TV receivers; RF transceivers; CMOS Image sensors, Smart Card IC, MP3 IC, DVD/Blu-ray
machines; cellular devices such as mobile phones, PDA phones, and hybrid devices called mobile
intelligent terminals (MITs); and satellite receivers. The LCD business area focuses on
producing TFT-LCD and organic light-emitting diode (OLED) panels for laptops, desktop
monitors, and televisions. Samsung Print was established in 2009 as a separate entity to focus
on B2B sales and has released a broad range of multifunctional devices and printers and more. As
of 2018 Samsung does not make printers any more. They sold that part of their business to HP.
Page 11 of 38
Market Served
Samsung’s targets a very wide range of consumers ranging from normal day to day usage
devices to industrial standard equipment. The usual target age group of customers range from the
20s to 50s or even older, as long as the person has the ability to purchase and use the products that
Teenagers to early adults (age 14 ‘25). This age group of Samsung product consumers is
usually Samsung’s smartphone target customers as they are mostly technology savvy. This group
of customers is growing as Samsung saw that this group has more spending power in recent years
Adults (age 26 ‘ 50) ‘ This specific group of targets the largest portion of Samsung’s target
market as this is the group of consumers that have the most ability to purchase any of the product
Samsung has to offer in the market be it smartphones, smart television, cameras or any other
household products like vacuum cleaners or washing machines. This portion of customers will
Location
Korea
Samsung has various service stores throughout all of South Korea, which have showcases
of various Samsung products available for purchase, and also have repair centers for those
Page 12 of 38
items. It also has stores dedicated to the installation of large household appliances such as TVs,
dishwashers, and refrigerators. It also has stores just for the sale and repair of its memory
Canada
Located in Toronto in the Toronto Eaton Centre, the Samsung Experience Store has two
levels.
Others:
CF Richmond Centre
CF Sherway Gardens
Metropolis at Metrotown
United States
In addition to these locations, Samsung runs a Samsung Experience Shop located inside
Page 13 of 38
Current Stage in its Life Cycle
Samsung launched a 10-year Vision 2020 corporate goal for the firm to join the ranks of
the top 10 global companies by achieving $400 billion in sales. Although it already ranked as the
largest technology company in the world by revenue, Samsung was determined to continue to grab
market share from competitor across a wide range of product categories. To reach its targeted sales
goal, Samsung was recognizing to focus more strongly on each of its businesses, encompassing
several different businesses that were allocated to three major divisions: Consumer Electronics, IT
Samsung had been a leader in sales of mobile phones and it had been seen to their net
income for the past 6 years of their operation. From 2009 to 2013, Samsung increased its net
income from 9,571,598 (KRW) to 29, 821,215. Below are the summarized income statement and
Page 14 of 38
Samsung had been a leader in sales of mobile phones worldwide and it was facing stiffer
Executives at Samsung claimed that the firm’s strength lay in the diverse line of its
product. Table below shows the global market ranking of its product.
Page 15 of 38
Relationship with Key Stakeholders
Despite recent litigation activity, Samsung and Apple have been described
as frenemies who share a love-hate relationship. Samsung is a major supplier for Apple – first
providing memory for the early iPod devices in 2005, and Apple is a key customer for Samsung –
in 2012 its component sales were thought to be worth in the region of $8 billion revenue to
Samsung – to the point where Apple CEO Tim Cook originally opposed litigation against
Samsung wary of the company's critical component supply chain for Apple.
Page 16 of 38
In April 2011, Apple Inc. announced that it was suing Samsung over the design of its
Galaxy range of mobile phones. The lawsuit was filed on 15 April 2011 and alleges that Samsung
infringed on Apple's trademarks and patents of the iPhone and iPad Samsung issued
a counterclaim against Apple of patent infringement In August 2011, at The Regional Court of
Düsseldorf, Apple was granted a preliminary injunction against the sale and marketing of
the Samsung Galaxy Tab 10.1 across the whole of Europe excluding the Netherlands The ban has
been temporarily lifted in the European Union, with the exclusion of Germany, whilst it is
On 31 August 2012, the Tokyo District Court ruled Samsung Electronics' mobile devices
did not violate an Apple patent. The case only addressed Apple's patent that allows mobile devices
and personal computers to synchronize or share data with each other and is not comparable with
the U.S. court case ruled on 24 August. On 18 October 2012, the U.K. High Court ruled that
Samsung did not infringe Apple's design patents. Apple was forced to issue ‘a court-ordered
Best Buy and Samsung joined together to create the Samsung Experience Shop, a store-in-
a-store which allows customers to test the company's newest products, as well as get training in
mobile products they already own. In summer 2013, more than 1,400 Best Buy and Best Buy
Mobile stores have established the Samsung Experience Shop. About 460 square feet of space are
dedicated for the SES, with the company's placement at Best Buy's entrance, as well as its sign
visible in any part of the store. The purpose of the Samsung Experience Shop is to make Samsung's
Page 17 of 38
The first Samsung Experience Shops began rolling out across Best Buy locations in the
United States in May 2013. In May 2014, Best Buy announced its plans to add 500 new Samsung
Entertainment Experience Shops. While the previous Samsung Experience locations focus
primarily on showcasing and providing support for Samsung's Galaxy smartphones, cameras, and
tablets, these new locations will showcase and support the company's home theater products.
Unlike the Samsung Experience Shop, the Samsung Entertainment Experience will be run
by Samsung trained Best Buy associates. The new centers are expected to finish rolling out across
Page 18 of 38
Environmental Analysis
PESTEL Analysis
Environmental, and Legal) in external environment of Samsung that may affect the organization
positively and negatively. This will determine the impact of the forces to the organization.
P olitical The political instability wherein there’s a war between South and North
Korea laid direct impact in the company.
E conomic Growing middle class in developing world will increase market for
consumer electronics.
T echnological The birth of Internet of Things signifies that every gadgets and appliances
would be connected to the internet.
E nvironmental Rise of the ethical consumer who wants his brands to source and make the
products in an environmentally responsible manner.
Page 19 of 38
Porter’s Five (5) Forces
Samsung. It is important for the firm to know what factors has a strong and weak impact in
BARGAINING BARGAINING
POWER OF POWER OF
SUPPLIERS: BUYERS:
Rivalry among Existing
(STRONG) (STRONG)
Competitors:
(STRONG) (-) Commodity
(-) Critical
Materials products
(-) High Competition
(-) A few of (-) More provider
(-) Market Moving Fast in the market
suppliers
(-) Price is Competitive Factor (-) Low
(-) The most
supplier is larger switching cost
company for buyers
THREATS OF SUBSTITUTE
PRODUCTS:
(WEAK)
Page 20 of 38
Threat of New Entrants: WEAK
The threat of new entrants for the company of Samsung is weak. Due to high investment
required, high production technology, and high switching cost, it would be difficult for the starting
business to enter to the electronic industry. This means that Samsung has high barriers to enter to
The low substitute availability of technology for Samsung products make the threat of
substitution a weak force. This also means that the threat of substitution products in the market
The buyers in the case has a strong bargaining power. This is because Samsung offers
commodity products, it has a low switching cost for buyers, and there are many companies that
provide the same product as Samsung offers. This means that the buyers can easily influence price
decreases.
The bargaining power of supplier in the case of Samsung is strong based on the small
number of suppliers in the market, the materials are critical and most of the suppliers are big
companies. This means that the supplier can easily influence price increases.
Competitive Rivalry
Rivalry among existing competitors is strong. Samsung faces tough competition because
the price is a competitive factor, there is a high competition, and the market is moving fast.
Page 21 of 38
SWOT Matrix
for Samsung to assess internal, external, current and future potential factors that may affect its
market position.
Strengths Weaknesses
SWOT
Opportunities Threats
Page 22 of 38
IV. Strategy Formulation
Time Context
View Point
The Chief Executive Officer of Samsung Electronics is the one who will decide in the
How will Samsung Electronics integrate all its product lines through the Internet of
Things?
Statement of Objectives
To be able to achieve its corporate goal for the firm to join the ranks of the top 10 global
companies
To achieve the $400 billion dollars sales for the next 5 years.
Areas of Consideration
Internal Environment
Strengths:
Page 23 of 38
Strong and competitive manpower
Merit based system
Strong Research and Development
Leading position in Memory Chips
Weaknesses:
External Environment
Opportunities:
Threats:
Strong competition
Threat of new entrants
War between North and South Korea
Bureaucracy Process
Rise of Ethical Consumer
technology. The firm should be able to adapt with the disruptive changes of the technology to be
Page 24 of 38
ACA#2: Create Stronger Competitive Advantage
Tizen is one of the most important asset of Samsung Electronics, hence developing it
more would create stronger competitive advantage for the firm to make its competitor unable to
Research and development must be continuously enhanced to able to come up with new
innovative products with better quality at a speed with which none of its competitors can keep up
with hence increasing its market share and keeping its position as the leading Tech Giant safe.
Page 25 of 38
Analysis of ACA
ACA#2 Create Stronger Creating a product that has Since this is still new and
Tizen as its operating needs more development, it
Competitive Advantage system will create many doesn’t quite match up to
features of other Samsung the Android run Galaxy line
premium devices like ultra- when it comes to specs.
power saving mode and
download booster.
Page 26 of 38
Conclusion
Decision Matrix
TOWS MATRIX
The tows matrix is relatively simple tool for generating strategic options. By using it,
Samsung can look intelligently at how it can best take advantage of the opportunities open to the
firm, at the same time they can minimize the impact of weaknesses and protect their company
against threats.
Weaknesses: Strengths:
Page 27 of 38
Opportunities: OW Strategies OS Strategies
(1) Growing demand for O1, W1: Intensive development O1, S1: Venture in the areas more
technologically advanced of Tizen to replace the Android as and aim to produce the
electronics an operating system used by commodities that satisfy the needs
(2) Growing middle class in Samsung Electronics. of all classes of customers.
developing world will increase
market for consumer electronics. O1, W2: Continuous adaption
(3) Birth of Internet of Things and development with the specs O1, S8: Use the available fund to
and features offered in the support the continuous
software. development of a premium brand.
O3, W2: Further development of O2, S2: Create the brand that will
Tizen and make it a way a through make the product standout in the
the internet of things. middle class market.
(1) Strong competition T1, W2: Venture a fund for the T1, S9: Continuous product
(2) Threat of new entrants R&D Development for the innovation.
(3) War between North and South development of software.
Korea T2, S1: Raise structural barriers
(4) Bureaucracy Process T2, W1: Must develop and furnish through offering a full line of
(5) Rise of Ethical Consumer the newly invented operating products.
system of Samsung Electronics
which is the Tizen.
Page 28 of 38
BCG Matrix
The BCG Growth-Share Matrix is a tool related to the product life cycle. It is important for
the company to allocate their resources for pursuing its market share goals. Samsung has a basis
for allocating their resources across it product line, based upon competitive position and market
SAMSUNG GEAR VR
SMART PHONES
INNOVATOR EDITION
Market Growth Rate
MEMORY CHIPS
(Cash Usage)
COW DOG
LOW
CAMCORDERS
HOME APPLIANCES
DIGITAL CAMERA
HIGH LOW
Relative Market Share
(Cash Generation)
Page 29 of 38
Question Mark:
Some of Samsung products are still in that phase of development which it has a low market
share but high demand for product hence, Samsung Gear VR Innovator Edition has the potential
Star:
The product of Samsung that has a high market growth and high market share is the smart
phones and the memory chip hence, Samsung must maintain its stronger position in the market.
Cash Cow:
This product in low growth market with high market share is also called mature stage of
business. Return on investment is high but slow expansion indicate the lower market share.
Samsung sells home appliances in different region and reach in global market, but due to low
creativity and the firm doesn’t offer the latest technology, it result in low market share which is in
Dog:
This is the declining stage of the life of a product. Camcorders and Digital Cameras of
Samsung has less cash usage and less cash generation which means both the market share and
Conclusion:
Milk the Samsung Appliances, don’t waste money on the Camcorders and Digital Camera,
invest in the Mobile phones and Memory Chips and give Samsung Gear VR Innovator Edition
Page 30 of 38
Competitive Performance Measure (CPM)
The CPM Matrix is a powerful strategic analysis tool. It is important, for Samsung’s
business owners, stockholders and other interested parties to see the strengths and weaknesses of
Among all the two (2) identified major competitor of Samsung, the CPM Matrix clearly
shows that Samsung has the highest weighted average in terms of the given key success
factor/Strength measures.
Page 31 of 38
Space Matrix
Space Matrix is a strategic management tool and it is important for Samsung to use for the
purpose of determining the type of a strategy a company should undertake. It would be easy also
for the management of Samsung to identify the most appropriate strategy for them.
Profitability Ratio +4
Total +15 Total -4
Average +5 Average -2
Quality/Product
Performance -2 Growth Potential +6
Reputation/Image -1 Investment Required +6
Production Capacity -2 Capacity utilization +5
New Product
Innovation
Capability -3 Switching cost +2
X Axis
Page 32 of 38
LEGEND:
+1 being the worst, +6 being the best (Financial Strength and Industry Strength)
-1 being the best, -6 being the worst (Competitive Advantage and Environmental
Stability)
Page 33 of 38
The diagram shows that the firm is in a favorable position and is able to take an
aggressive growth strategy. It is operating in an attractive and stable industry and has a major
competitive advantages backed up by significant financial strength. It need to use its internal
Among the three (3) alternative courses of action mentioned, the strategists selected the
first ACA, which is, the Continuous Innovation of Products. Under this Alternative Course of
Action, the strategists would like to specify the non-stop innovations and continuous adaption of
the disruptive changes of the technology. The firm should be able to adapt with the disruptive
changes of the technology to be able to keep up with the trend in the market. Hence, continuous
innovation of products will be a great contribution to reach Samsung Electronics’ goal to join the
ranks of the top 10 global companies through the Internet of Things. The Research and
information to identify the market trends, and the buying behavior, and to satisfy the wants and
needs of consumers in the market that is in line with the technological changes. Thus, creating
products that are significantly different from the competition and those products must have a
Page 34 of 38
Target
Performance Performance Person/ Unit
Area Measure Responsible
Output Time Frame
Page 35 of 38
V. Strategic Implementation
Recommendation
Upon studying the case of Samsung Electronics, the Strategists are recommending some
strategies to help the firm achieve its goal; to join the Rank 10 Global Companies Worldwide by
targeting the $400 billion in sales. Under the Business Strategy, the Strategists are recommending
that the firm should adapt the Differentiation wherein they will create products that are
significantly different from the competition. In addition, the product must have a greater value to
the public. The Strategist has also recommendation for the Marketing Department under the
Functional Strategy. The firm should adapt Product development wherein they can develop new
products for existing markets or develop new products for new markets. Lastly, under the
Corporate strategy, Strategists are recommending that Samsung may use the Horizontal growth,
whereas they will expand their operation into other geographic locations and/or by increasing the
Objectives:
To achieve the goal to join the rank 10 of global companies worldwide by targeting the
To develop a new product for the existing market and the new market that is connected
To adapt the differentiation wherein to create products that significantly different from the
competition
To use the Horizontal Growth to expand the operation into other geographic location
Page 36 of 38
Action Plan
Expand Samsung’s
operation into middle
Corporate class countries and Research and
Strategy Expanding Development
Geographic increase the range of 4 Billion KRW
products and services Department
Horizontal Growth Locations
offered to current
markets.
Page 37 of 38
VI. Strategy Evaluation
To ensure that the strategic implementation will be successful, strategists have come up
with three strategic evaluation that will monitor the current progress of the strategic
implementation.
STRATEGY EVALUATION
People
Action Plan Responsible Time Frame Procedure
Page 38 of 38