Samsung Group established Samsung Electric Industries in 1969 in South Korea. It commenced with electrical appliances like refrigerators, televisions, washing machines, calculators and air conditioners, it soon joined hands with Japanese NEC Corporation to enter into the home appliances market and audiovisual devices.
The vision of Samsung is dedicated to developing innovative technologies and efficient processes that create new markets enrich people’s lives and continue to make Samsung a digital leader. Mission is “Everything we do at Samsung is guided by the mission: to-be digital-e company, the best” with devotion of talent and technology to the creation of superior products and services that contribute to a better global society.
Managerial Highlights at Samsung are that it always looks for collaborative and creative visionaries for running the company. In 2010, Samsung shifted from a single CEO system to a dual management team and reorganized its Board of Directors to facilitate strengthening of synergies of the network division and digital imaging divisions. Innovative ideas leading to better technology utilization is always encouraged at Samsung. Thus by attracting talented managers and by fostering an environment to support the organization culture in a positive way, Samsung has contributed largely towards the improvement of everyday lives of millions of consumers (Samsung, 2016).
Products focused – Though Samsung initially commenced with just four to five products, it has today diversified into a lot of products and functions ranging from mobile phones, televisions, semi conductors, digital cameras and other such appliances. The Mobile division includes phones, tablets, virtual reality, wearables, and accessories. The Television segment includes home theatres, wireless speakers, headphones, and stereo shelf systems to name a few. The Computing division includes printers, monitors, tablets, chrome books, memory, storage, laptops, and accessories (Samsung, 2016). Last but not the least is the home appliances section with Samsung Smart home things and security as the latest in this segment.
Line function and staff function – Line functions includes production, marketing, and sales that are directly helping in advancing towards the goal of the company; whereas Staff functions are those that are considered to be for support and advisory reasons. At Samsung, both line functions are staff functions given equal importance and the appropriate recruitments are made to hire the best talent available in the market. Samsung follows GSG (Global Strategy Group) for which it develops a pool of managers for a global performance and has the atmosphere set up for development of global minded managers for future. Thus, the required training and incubation centers established to keep pace with the changing and dynamic demands of the industry.
Value Chain typically refers to the identification of the primary and support activities that help the company in the creation of competitive advantage. At Samsung, the primary activities are inbound logistics, Operations, Outbound Logistics, Marketing and Sales and Service. The support activities are human resources management, technology development, procurement, and infrastructure (Dudovskiy, 2015).
Inbound Logistics – As majorities of the suppliers of Samsung are located in Asia and around, almost 80% of the supply chain expenses are incur in this area. For this reason, Samsung holds a number of logistic companies as its subsidiaries. It has a huge network and excellent logistic accessibility around the world (Samsung, 2016).
Operations – As Samsung has been continuously evolving and growing, the acquisition of AuthenTec is seen as a strategic step. It has more than 200 global operation hubs in the form of subsidiaries, design and research centers, and sales subsidiaries. The company highly relies on six sigma for operation in a successful manner (Dudovskiy, 2015). The primary manufacturing processes include general manufacturing, systems manufacturing and device assembly packaging. Thus, the apt acquisitions at the apt time have taken Samsung to the top.
Outbound Logistics – Though Apple is consider the pioneer for the introduction of smart phones, Samsung has been quick in delivering an equally competitive product in the market due to its strong outbound logistics network and channels. The distributors in all areas are well place to deal with the negotiations relating to payments and insurance claims (Katkyama, 2010). Samsung’s effective and efficient outbound logistics systems ensure that the customers are provided with the updated products in a timely manner (Kamis, 2016).
Marketing & Sales – The competitive advantages of Samsung like high quality and advanced functions and capabilities of the products are well advertised to attract customer attention and enhance the sales. Usually Samsung has a relatively higher marketing budget than most of its competitors. The marketing budget is usually spent on print and media, advertising, public relations programs, events and initiatives (Kamis, 2016). For all these reasons, sales promotion is consider the vital element of its marketing strategy. As long as the full market is untapped, the marketing team introduces newer ways and means to maximize the value of products offered by them.
Services – Samsung strives to provide the best possible services to its customers and conducts frequent and routine customer surveys hosted by external parties to get the honest review and feedback and improve their products and services accordingly (Katkyama, 2010).
Support Services – The value of the primary activities is enhancing by these support activities. The first in this segment is human resource management that aims at developing public relations and volunteers to encourage employees in every aspect. With reference to technology development, the world has realized the importance of Samsung’s innovations and the results of the same can be seen in forms of increased market share and increased revenues earned by the company. At procurement, Samsung builds ties in such a way to create a win-win situation on both sides.
Thus, the critical review of value chain reveals that Samsung tries to cover most of the areas and goes ahead with its innovations at all times.
Business Strategy – For successful global strategies, Samsung gives a lot of significance to economies of scale. It builds up manufacturing centers and R & D facilities n every continent and possibly countries also depending upon the size of the market. This provides quick access and ensures continuous supply to meet the demands (Christoph, 2013). This also helps Samsung gain access to local employees and the taxation benefits in the respective areas of operations. Apart from this, the experience curve is utilized efficiently to deal with the difficulties faced in one area by adopting strategies used in another area.
Position among competitors and rivals – Samsung is able to price the products according to the markets. Thus, there are standardized products with minimum local differentiations, modifications, and costing. It has seen a very rapid growth and has almost thrown Nokia out of the market. It still stands second after Apple. Samsung has the cost advantage over its competitors as raw materials and labor are locally procured (Christensen, 2012). This gives Samsung superiority in average costs in comparison to its peers.
Information Required – With reference to manufacturing, Samsung never compromises on quality and ensures that the best raw materials are used. The most efficient systems are in place for the Economic Order Quantity and manufacturing process that includes budgeting also (Baker & Powell, 2005). The market research is done to estimate the demand in various regions and the sales are carried out systematically as per the planning.
Decision-making takes place at all aspects of the manufacturing process starting from the procurement of raw materials until the final sales and delivery and collection of outstanding dues. The fast changing technologies have made it mandatory to adapt fast decision making to keep pace with the changing customer trends and markets. During any transition process, for instance the transition from typewriters to computers or the transition from pagers to cell phones, strategic decision making is involved whether the company should go ahead with the transition and the way ahead (Jeanny, 2010). This is considered as a major business decision that brings about drastic changes in the manufacturing processes and might require recruitment of new skilled employees and lying off a few of the existing employees.
Another example of decision-making can be quote from the fact when some kind of error has occurred in the manufacturing, the question involved is about the ethics where on one side consumer welfare is on stake, and on the other hand, the profits of the company are involved (Simonin, 2016). This is yet another strategic decision involving shareholder benefit and at the same time to ensure, the company complies with the various quality and regulatory standards (Fraser, 2011).
Thus, decision-making is an ongoing process and numerous examples of the same can be given in the daily life of the company’s operations.
Aggressive Management Strategies – The growth that Samsung has made in the last decade, perhaps its competitors might have taken much longer. This is due to the aggressive decisions at Samsung that reveal that when Samsung wants something, it drives for the same with considerable focus and weight (Nisen, 2016). Again, Samsung’s spending on R & D is more than that of Apple, as Samsung believes that if cash is available then it has to be utilized or the risk of falling behind will remain. The advertising of Galaxy phones has proved to be fruitful which is due to the management strategy to push products to the market (Goodstein, 2011).
Supply Chain & Product differentiation – Samsung is not just a cell phone manufacturer or a television and washing machine producer. Its product range is much more than this to include wireless, user interfaces and sensors, mechanical, electro-mechanical, processors, touch screens, so on and so forth (Robert et. al, 2010). This continuous innovation of the company helps it in adding newer products to its list of offerings that also indicates the strength of the company to sustain the quality output and market variations.
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