Bussiness Strategy About Samsung free essay sample

Samsung Electronics Company (Samsung Electronics or â€Å"the company†), a part of the Samsung group, is one of the leading consumer electronics brands in the world. The company primarily operates in Asia, Europe and Americas. It is headquartered in Seoul, South Korea and employs about 157,701 people. Samsung Electronics Company (Samsung Electronics or â€Å"the company†) is engaged in the manufacture and distribution of consumer electronics, communication products, semiconductor products and home appliances. The company, a part of the Samsung group, operates through a number of subsidiaries. Samsung Electronics operates through three business segments: digital media and communications, device solutions, and others. By that reason, it is very important for Samsung to identify its position in retail market and prepare a strategic plan which the organization can apply to sustain its competitive advantage and overcome competition in future. [pic] 1. 1 Explain Samsung Electronics strategic contexts and terminology – missions, visions, objectives, goals, core competencies. Mission : statement defines the function and the main purpose of the organization, and it requires the organization to answer the question â€Å"Why do we exist? There are two kind of environment which can be analyzed, the macro and micro environment. The PESTEL model can be useful when analyzing the macro environment, and discussing about Porter’s five forces model is the good way to identify the micro environment of Electronics. The PESTEL model and Porter’s five forces model in case of Samsung Electronics. + The PESTEL model: It can be devided into six factors. †¢ Political †¢ Economic †¢ Socio-cultural †¢ Technological †¢ Environmental/ecological †¢ Legal The economic environment. After â€Å"Doi Moi† in 1986, Vietnamese economy has been developing dramatically. It can be seen in the increase of the average annual growth rate every year, and Vietnam has been categorized into the group of the fastest growth countries in the world. The minimum salary of Vietnamese has also increased stably during years. Beside that, being the member of ASIAN and WTO brings many benefit for the trade relationship of Vietnam. It is very significant for the import and export factor in Vietnam. The socio-cultural environment. With the big population of 86 million, Vietnam can be one of the most potential consuming goods market in the world. Moreover, over half of the 86 million people is under 30 years old, and 94% under 65 years old, so the population is very young. It means that the labour force of Vietnam is strong enough and can adapt for any kind of business, and it is also very important due to the preference of shopping of the young people. The technological environment. Following the increase of the economy, the technology in every part of Vietnam industry is aslo change positively. Many producers in Vietnam are now using the machines instead of human because there is no more barrier for them to import the technology from the developed countries. Additionally, the IT in Vietnam is also having a good developing period. Vietnamese enterprises understand that using IT in managing and producing is a very important ways for them to reduce the risk in doing business. Beside that, the IT infrastructure is not a weakness of Vietnamese any more. The people can now communicate with everywhere on the earth by using the internet or phones. The physical environment. Vietnam is a tropical country, and most of the developing parts of Vietnam has a good weather condition for any kind of business. By analysis the external environment of Samsung Electronics, we can identify the important factors that will make an influence to planning decision and can also review the resources of company in order to apply a right strategy. The external environment audit is conducted based on PESTEL analysis. The PESTEL analysis is for Vietnam market. ? Political environment: Political can affect strongly to the operating of Samsung Electronics. In a country has a bad government, the potential for Samsung sells their products in here is very low. That is why having a good political environment help companies can concentrate to develop and expand their business through the public policy on competition and consumer protection. Besides, a good political system also helps Samsung Electronics maintain and improve the physical, social and market infrastructure. ? Economic environment: Vietnam is a member of the WTO, the business environment of Vietnam is more and more improved. Compared to other countries in the region and the world about the level of development, Viet Nam is lagging quite far distance so has a lot of disadvantage in competition on the market. Competition will take place more cutthroat. in this factor, it features some elements that can make a huge impact to Samsung Electronics. These elements will include the rate of inflation, the exchange rate or the rate of growth in the economy in a nation. If a country have a high rate of inflation and the low rate in gross domestic product, it can be difficult for Samsung Electronics to sell in there. So Samsung chooses Vietnam for expand their business because the quality of life and people tend to buy more Samsung’s product so company should make a good business strategy to apply in this country. Social and cultural environment: Each country has different cultural values. Thus, the organization must understand the unique culture of the place and select target market for one’s own business. For a foreign organization, there are bound to be language barriers (most obvious factor). Ensure that the labels on the packaging is in Vietnamese if youre selling a product, It features long-term social trends and people‘s beliefs and attitudes. For example, before Samsung Electronics want to sell their goods in a new market, they need to research about the habit of customer to know what they expect from the product. Besides, they also need to research the population structure in order to know the age that frequently purchases their product. Therefore, they can create available business strategy to meet the demand of customer and help company can be easy to approach a new market. ? The technological environment: The new technologies significantly change the production and marketing of LG Electronics in Vietnam. For example, Samsung Electronics used more machines in production, thus; it needs less workers. In addition, the modern technologies lead to the improvement of product quality. Furthermore, according to BPP (2010), technology has also changed the ways people work. People nowadays can work and communicate through email and video conference. Regarding to marketing, in addition to traditional methods of advertising such as television, radio, email, etc, Samsung Electronics nowadays can advertise products on social network, including Facebook, Twitter, and Google plus, etc. ? Physical environment: It consists of factors such as weather, geography which relate to natural condition. The natural environment can effect on organization’s operations. For example, Vietnam is a country has a lot of plentiful resources. That is why Samsung Electronics can come and exploit the raw material in there and use it to make product. However, the natural environment also brings a bad condition for Samsung Electronics too. Vietnam is a country with the hot weather so it can be effect to the maintenance’s ability of Samsung Electronics product. ? Legal environment: All operation of the Samsung Electronics must follow the law and regulation. There are some laws that Samsung Electronics should consider carefully when they enter to a market. For example, when they hire employee, they also have to follow the law of taking care of the health and safety for their employee. For government, Samsung Electronics also need to pay the corporation tax on time and when they make revenue reporting, they have to be honest in listing their revenues to government. Porter fives forces ? The threat of new entrants: It is noted that â€Å"new entrants could change major determinants of the market environment (e. g. market shares, prices, customer loyalty) at any time. There is always a latent pressure for reaction and adjustment for existing players in this industry† (The manager. org, 2010). The new entrants of Vietnam market is mostly local companies. It is noted that those local companies use cost-leadership strategy, manufacturing and selling low price product to capture market share. Therefore, it is threat for Samsung Electronics market share. ? The threat from substitute products: According to Themanager (2010), a threat from substitutes exists if there are alternative products with lower prices of better performance parameters for the same purpose. They could potentially attract a significant proportion of market volume and hence reduce the potential sales volume for existing company in the market. Samsung has a lot of competitors in the world such as Toshiba, Sony, Nokia, LG, AB Electrolux, etc. they also provide same products and services which will make the customers are confused when they buy a new products. To compete with other competitors, Samsung Electronics must develop its technology; make the differences about characteristics, design, quality and prices. We will apply Samsung Electronics to SWOT Matrix for understand more strategy of Samsung Electronics in the market [pic] (http://www. zanthus. com) – S-O: focus on Vietnam market and make product conforming to living patterns. Increase marketing capabilities to the upscale market. – S-T: Samsung Electronics constantly creative and development to create the best product and difficult to fake or replaced. Leverage use of RD and marketing to compete on market. – W-O: Samsung will try to protection of environment and human health and safety. Not to images of Samsung Electronics is negatively affected by product recall instances and lawsuit. – W-T: new building management system business and the cost to improve management capacity and competitiveness of Samsung Elecronics. 2. 3 Explain the significance of stakeholder analysis. For any organization on over the world, the role of stakeholders are very important for their activities, and the power of stakeholders might affect the management’s choice of strategy. It is also true for Samsung, so the stakeholders analysis is very significant for the organization. For any organization on over the world, the role of stakeholders are very important for their activities, and the power of stakeholders might affect the management’s choice of strategy. It is also true for Coop Mart, so the stakeholders analysis is very significant for the organization. The effect of Sangsung’s key Stakeholders. Managers and employees: They are the people who directly work for the company, and are responsible for making business decision of Samsung. The business strategies usually are set by the managers, so if they make wrong decision, it may cause many negative effects for Samsung. Moreover, the employees can be considered as the face of the business. Therefore, their bad attitude would destroy the image of Samsung on the customers. Suppliers: Suppliers’s role are very important for Samsung. They supply the products for the business activities of the company due to the retailer position of Samsung, so the most reliable and quality suppliers can bring biggest benefit. In fact, if there is anything wrong with the products of the suppliers whether inside or outside the chain, it will also harm Samsung. Customers: Vietnamses people who directly bring the profit to Samsung. The more customers come to Samsung the more profit Samsung can get. By that reason, the good overestimate of the customers is very effective for the increase of Samsung. Competitors: The competitors are also considered as key stakeholders of Samsung. They are doing the same business as Samsung, retailing, and are sharing the retail market with Samsung. Any activities of them can affect negatively or positively Samsung’s business. Internal stakeholders: employee and manager. Connected stakeholder: shareholder, customer, and suppliers. External stakeholder: government, Interest groups. According, stakeholder analysis enables Samsung Electronics to indentify ? Stakeholders interests ? Mechanisms to influence other stakeholders ? Potential risks ? Key people to be informed about the strategyt during the execution phase ? Negative stakeholders as well as their adverse effects on the strategy Furthermore, Samsung Electronics can evaluate the power of different stakeholder. In this case of conflicting between stakeholder’s objectives, company can satisfy the objectives of prioritized stakeholders rather than the ones of less important stakeholders. Thus, it might enable Samsung Electronics to have better performance. Conclusion This report is an overview of the factors that may affect the development of strategies in the future of Samsung Electronics. By using several techniques, Samsung can have a feedback of its difficulties. Based on more data in this report, Samsung Electronics can have enough knowledge to have the good strategy in running business in Vietnam. It is mentioned in the methods by which companies can apply when they are analyzed to show the strengths and weaknesses of Samsung Electronics .