Samsung Corporate Strategy
This assignment will explore on the corporate strategy of Samsung Computers. It will also identify the corporation stage of Samsung according to the corporation cycle. There are five common changes in the corporate life cycle; new venture development, start-up activities, growth, business stabilization, and innovation or decline. The marketing slogan of Samsung regarding its organizational strategy is “Everyone’s invited” where it provides wide-ranging products to reach its target market. The company’s strength in attaining the corporate strategy are inspiring styles and innovative changes, high credible brand name, strong business network (globally), and receives several rewards. The success of the company is based on its strong global presence where its sales and service caters are located in four different countries.
One of the corporate strategies of Samsung is acquiring foreign companies to eliminate technological barriers. Park and Lee (2015) explain that Samsung Electronics in the 1970s produced black and white television due to technological challenges that inhibited it to produce colored television. This led Samsung to approach Matsushita Electronics, a Japanese company to supply it with TV picture but by the late 1970s, Samsung was in a positing to produce their colored tubes. This was during the growth phase where Samsung lacked quality control of its products and they relied on external support for quality control. However, to counter this, Samsung acquired Apherex a company in the US which produced magnetron (Chang 2008).
Currently, Samsung is in its innovative phase where it can produce wide range products including microwaves, monitors, computers, phones, smart TVs, washing machines and refrigerators. This was successful following the application of a vertically integrated structure where they manufacture affiliates like Samsung Corning that supplies Samsung Electromechanics, manufacturing TV tubes, Samsung SDI, and glass for picture tubes.
The next corporate strategy followed by Samsung was that it followed government industrial policy that provides benefits like providing technological standards, financial subsidy, and R & D fund. Park and Lee (2015) explain that in 1985, at early corporate stages, Samsung was able to expand its domestic share in Korea easily. This was through the use of Code Division Multiple Access CDMA which has assisted Samsung Company to be a first mover and become a ‘national champion. The second element that led the company o lead is the strong entrepreneurship founder which led the company to venture into semiconductor business. This enabled the company to secure a stable supply of semiconductor marking the turning point of the company.
The third corporate strategy for Samsung is the strong entrepreneurship of founders and owners who highly invested in the business and took high risks. For example, in 1974, the Samsung founders decided to acquire the Korea Semiconductor but this was inhibited by a lack of skills. Before the business stabilized, it faced challenges where it made improper timing on semi-conductor production. However, the selection of Kun Hee Lee as the founder-led to the importation of know-how from a Japanese company which stabilized the semiconductor business. Ballhaus, Pagella, and Vogel (2009) explain that the success of the business was driven by the application of all-purpose technologies like DRAMs which was promoted by economies of scale.
As earlier noted, Samsung is on the innovate stage of corporate strategy where the company is continually identifying a new business to foster its economies of scale. For example, Shin and Jang (2006) provide that the Samsung Company applies a combined production process to improve its production and quality. However, Samsung faces a dilemma regarding cost leadership and differentiation. Salavou (2015) explains that the two basic drives for competitive advantage are differentiation and low cost.
According to Glowik (2009), Samsung successfully operates in unrelated business which is beneficial as the company can predict any future potential. For example, between 2014 and 2016, Samsung faced a great decline in revenues both in Europe and China and lost its market share in TVs and smartphones. However, the strategies did not change the Company’s corporate strategy where Samsung increased manufacturing by increasing its product ranges and in particular manufactured consumer products for the US market.
Chang (2016) explains that sustainable strategic options require to be controllable, measurable, and profitable while maintaining a ‘strategic fit’ the company’s mission and vision. The mission of Samsung is guided by three pillars internationalization, synergies, and quality. One implementation strategy is acquiring a retail chain of stores which will increase product value maximization and increase impact. The second strategic implementation for Samsung is to increase consumer loyalty and in particular, in industrialized countries.
Allen (2019) defines six-sigma as an approach that provides organizations, the strategies to improve their ability to conduct business. The tool is used to measure the extent to which a product deviates from being perfect. Applying six-sigma is of benefit as it allows a company to harness employee motivation by treating its workforce right thus generating an environment for employee motivation. The second benefit is that six sigma methodologies in Samsung have developed inclusive organizational learning like benchmarking prospects. Besides, such methodologies are likely is that it prompts the development of internal assets and in particular employees who prioritize innovation in their production and operational processes.
Allen, T. T. (2019). Design for Six Sigma. An Introduction to Engineering Statistics and Lean Six Sigma (pp. 543-550). Springer, London.
Ballhaus, W., Pagella, A. and Vogel, C. (2009). A Change of Pace for the Semiconductor Industry? Hechingen: Kohlhammer und Wallishauser.
Chang, J. F. (2016). Business process management systems: strategy and implementation. Auerbach Publications.
Chang, S.-J. (2008). Sony vs. Samsung, The inside story of the electronics giant’s battle for global supremacy, Singapore: John Wiley & Sons (Asia)
Glowik, M. (2009) Market Entry Strategies: Internationalization Theories, Network Concepts and Cases of Asian firms: LG Electronics, Panasonic, Samsung, Sharp, Sony and TCL China. Munich: De Gruyter Oldenbourg
Park, C., & Lee, H. (2015). Value co-creation processes—Early stages of value chains involving high-tech business markets: Samsung–Qualcomm semiconductor foundry businesses. Journal of Business-to-Business Marketing, 22(3), 229-252.
Salavou, H. E. (2015). Competitive strategies and their shift to the future. European Business Review, 27(1), 80-99.
Shin, J. and Jang, S. (2006). Dissecting the Secrets of How Samsung Semiconductors became No. 1 in the World [in Korean], Seoul: Samsung Economic Research Institute
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