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Case Study About Samsung

In: Business and Management

Submitted By ap1991
Words 844
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[Case study presentation summary]
[Case study presentation summary] Strategy for Business
1) The case study analyses the Samsung Corporation, and how it has evolved during the past decade in one of the largest conglomerates in the world. The first part of the case study is an analysis of the corporation written in 1994 and the second one provides an outlook of the company performance after 1994 and until today. The paper brings about the overall picture of the South Korean business landscape in the early 60s, with military governments in power, and tight regulations for the companies and how did Samsung survived those periods. The text brings about how Samsung during its early history revolutionized the South Korean business by being the first to adopt western practices in the company. It also mentions how the corporation decided to actually focus on the core industries but not to play a minor part in more than 52 businesses it owned in the late 60’s. The case study than emphasize on the appearance of Samsung electronics and the rapid growth of it from 70’s onwards, in 90’s the globalization and the changes that came with that. 2) External environment analyzed through the PEST framework. In the early years of the company, the South Korean government was heavily controlling the business. There were tight regulations with concern of the leading companies, as they were obliged to meet conditions imposed by the government if they wanted to receive government support. In addition, the local companies were protected from any form of foreign investment at that time, which could slowdown the growth process. From the economic point of view, as the government eased its control over the companies, fast economic growth was known in South Korea during the 1980’s, which allowed Samsung to expand rapidly into different industries. In terms of social environment, the style of management present in the company was a similar one to the government’s one, authoritarian. Lastly, in terms of technology, Samsung was heavily depended on the foreign developments, as still in 1993 it did not posses technological know-hows in many of its industries it is operating.

3) Speaking of differentiation and cost effectiveness of Samsung, it is essential to look at these factors in a generic competitive strategy context. Due to unique ecosystem, Samsung successfully spread its product line across both of these dimensions. In terms of cost efficiency, the main factors that helped Samsung to minimize them are, the lowest possible price for raw materials, low cost labour in developing countries and centralization of the R&D facilities. In addition, Samsung has proven to be able to react quickly in preference changes of the market and implement new designs to their production line faster than any of its competitors. According to the case, Samsung use the smallest process technology of 0.11µm, while their competitors use 0.13µm. This factor allows the company to be the leader in the industry in terms of the yield rate. The company has put together the R&D engineers and product engineers in order to minimize the time it takes to solve any problems and maximize the efficiency of communication and thus decrease the time for a product to be launched on the market.

4) Internal environment is analysed by appraising the company’s resources and capabilities and determining its competitive advantage. Samsung has great financial resources: company’s assets was worth won10 billion in 1974 and has increased to won155,631 billion in 2011, profits increased from won0.6 billion in 1974 to won16,250 billion in 2011 and keep on growing. The company continuously invests heavily in its plant and equipment to improve the efficiency and quality of production, hoping to build the world’s most advanced factory. The company also has spent a huge amount of money to significantly improve its marketing and sales as well as brand management capabilities to get over its old images and win customers awareness as a high quality company and increase its sales. The success factor of Samsung during the 1970-2012 periods is the strategic management and management development capabilities, which have helped the company, overcome many difficulties and crises and reach the successful stage today.

5). Many large-scale industries tend to evolve towards global structures where levels for both trade and direct investments are high. As mentioned earlier, internal factors for Samsung have been to continuously develop and improve its current resources, capabilities and quality, also to build and acquire productive assets in different countries.

This shows high levels of direct investment, but global industries usually have a large rate of international trade as well. The beginning of greater liberalization of South Korea as the government eased its control over the companies opened up for attempts to become a global player and Samsung could require presence in all the triad markets, (USA, Europe, Asia). The core internal changes were made into the management structure, from a family owned model to a bureaucratic western model, in order to be able to suit the expansion program.…...

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