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Samsung Operations

IT & Mobile Communications (IM)

Consumer Electronics (CE)

Device Solutions (DS)

Samsung Outbound logistics

Samsung Electronics Logitec mentioned above facilitates the major part of outbound logistics operations. Moreover, Samsung Electronics Logitec conducts the comprehensive range of logistics operations including negotiation of payment collections on behalf of Samsung and dealing with insurance claims. It can be argued that effective integration of information and communication technologies into outbound logistics practices is one of the major sources of value creation for Samsung Electronics.

Samsung Marketing and Sales

Marketing and sales as primary activities aim to channel the attention of the target customer segment to the perceived competitive advantage of the brand associated with high quality and advanced functions and capabilities of products.

An effective appeal to customer needs and wants in an emotional level is one of the main sources for value creation for Samsung in marketing and sales aspects of the business.

Samsung Service

Samsung strives to deliver the customer services of the highest standards. The company conducts customer satisfaction surveys managed by external parties in a regular manner in order to achieve and sustain high levels of customer satisfaction.

4. Three Levels of Corporate Strategy

- Corporate-Level Strategies

Samsung Electronics developed a global strategy. It can be described, on the one hand, as a high

rate of global integration and cost efficiencies and on the other hand as quite a low responsiveness

and differentiation. These attributes are accompanied by benefits and challenges.

Indeed, the company builds manufactures and R&D centers in ideal places of each continent depending on local costs. China and Vietnam are used as cheap labor cost suppliers for the Asian market. In 2013, Samsung started the construction of the world's largest mobile phone plant in the Thai Nguyen, Vietnam. For the European market SE manufactures its electronic products in Poland where there is a good compromise between labor costs and sufficient knowhow. For R&D centers SE uses the high competencies of local employees but also economies of tax. When the company opened a center in the Silicon Valley, the Californian government granted a tax discount to attract the SE.

- Business-Level Strategies

Samsung Group (Samsung, 2016) is the largest group or the giant in Korea. Samsung Electronics is the biggest subsidiary of it, which initiated in 2011. A Korean consolidated company generates an average income of $ 150 billion every year. Samsung Electronics has 144 consolidated subsidiaries which 28 were recently combined at the end of 2014.

Best cost leadership strategy provide a more valuable and also high quality product in most affordable cost compared to rivals. In this technique is concentrated even more focus regarding item top quality enhancement than rivals with considering most affordable cost to acquire competitive benefit compared to rivals along with firm needs for environmental changes makes learn new abilities and modern technologies much better than competitors.

Better sourcing: Raw materials cost 37% less than its competitors probably due to volume discounts and better bargaining power

Lower depreciation costs: By collocating and scaling its fab investments, Samsung saved an average of 12% of the fab construction costs

Price advantage

Samsung was able to command a higher average selling price as compared to its competitors.

- Department-Level Strategies

Samsung Group has a leading international market position in large scale business. It is composed of more than 30 affiliated companies with various activities. It is acting as supplier, manufacturer, engineering and also offering various services.

However, Samsung also faces big challenges due to its international presence. Firstly, SE must be able to be global and standardized to reach benefits of economies of scales but also to be local to reach local needs. Secondly, since SE hired foreign employees, a paradox of cultures emerged. We can argue that liability of foreignness is not related to end customers but to local internal management.

SAMSUNG

1. Number of competitors in each market (domestic and international)

Samsung has 21 competitors

Samsung is a leader in smartphones. Samsung took advantage of the Google Android operating system and released some beautiful phones that have conquered the world. Part of the best-selling series of smartphones belongs to Samsung. These are the Samsung Note series, the Samsung Galaxy series, and the Galaxy Edge series.

I would suggest that Samsung is Google’s biggest competitor. Google is not a major manufacturer of smartphones and does not compete in many consumer electronics markets with Samsung. However, they compete in the technology world as a whole to be considered the most progressive, innovative company. Google has its own cars for self-driving, Samsung makes a huge engine to be the first company to truly accept virtual reality. It is this more abstract competition that is most important - the company, which is generally considered the newest, will be the most successful in their chosen markets, even if these markets are different.

In this image competition, Samsung has a long way to go.

2. Market share 

Доля Samsung на рынке смартфонов значительно увеличилась за три года: с трех процентов во втором квартале 2009 года до 32,2 процента во втором квартале 2012 года. Ни один из ее конкурентов не наблюдал столь значительного роста в последние несколько лет. По мере роста общего рынка смартфонов Samsung смогла сохранить свои позиции лидера мирового рынка. Только в 2015 году корейский гигант электроники поставил более 320 миллионов смартфонов по всему миру, что составляет 21,6% всех поставок смартфонов по всему миру. Samsung поставила больше смартфонов, чем Lenovo, Huawei и Xiaomi вместе взятые.

3. Whether each competitor’s product appeals to a small market segment or has mass appeal

Commercial infrastructureanalyzes channels of distribution and communication. Economic freedomestimates the prevalence of free-market principles. Market receptivityestimates market “openness”. Country riskestimates the political, economic, and financial risksof doing business in a market. The most important issues include: labor and management, cost of training local managers, the efficiency of local infrastructures.

4. Whether each competitor focuses on high quality or low price

If you’ve seen last year’s Galaxy S8 from Samsung, you’ve seen this year’s Galaxy S9. Content with the design and appearance of the S8, Samsung focused its efforts on small, mostly unseen changes that result in a better overall experience, but not a dramatically different one. Of course, Samsung being Samsung, there are a bunch of new gimmicky features crammed into it so there’s something to show on commercials.

But three years on from Samsung’s big shift in design, we know what a premium Samsung phone is already. It’s predictable — both the good things (display, design) and the bad things (software). The Galaxy S9 is the most predictable Samsung phone yet.

5. Whether competitors tightly control channels of distribution

Samsung is a large company in Korea, and Samsung is involved in almost all areas of business, including shipbuilding, aviation, heavy machinery, retail, clothing, finance, chemicals, food, electronics, and more. They also have a non-profit medical division called Samsung Medical Center, which is one of the largest cancer centers in Asia.

Distribution channels

Distribution channels come in three different forms;

1. manufacturers sell directly to consumers

2. production sells to retailers and then to retailers to consumers.

3. manufacturing to sell to a wholesaler who sells to retailers, who then sell to consumers.

SAMSUNG vs. Apple Distribution Channel

Apple sells its products through Telcos, Apple Stores, the Apple website and their retail sales channels. Samsung sells its product wherever it wants, while retailers are ready to take stock. Therefore, Samsung may sell directly or indirectly to consumers.

In addition, compared with Apple, Samsung has the ability to quickly expand and saturate the market with its products anywhere in the world, with the exception of America - because relationships between US telecom companies require Samsung to create different versions of their phones. In addition, Samsung also has an existing distribution network from its existing businesses. This is of utmost importance because, unlike Apple, Samsung does not need a lot of resources to bring their phones and tablets to new markets, and, more importantly, unlike Apple. These distribution channels will also be available for further distribution of other Samsung products. This means that if they want, it will be easier for them to sell more than just electronics.

6. Customer loyalty commanded by competitors

While electronics brand Samsung has a devoted audience, product shortages may lead some consumers to look elsewhere this holiday season, new data shows.

If they can't provide inventory as the holiday draws closer, the companies could blow an opportunity with some customers: Seventeen percent of consumers said they would immediately seek out alternatives during a shortage of their favorite electronics brand, according to a survey of more than 2,000 consumers from supply chain start-up Elementum.

7. Potential threat from substitute products

Threat of new entrants:

The threat of new entrants for brands like Samsung is low. The reason is that while there is a major investment in building such brands, there is also enough investment in attracting talent and building a brand through marketing. The regulatory pressure has increased which has also become a barrier for the new entrants. Any new brand trying to enter the market, can start business on a smaller scale but to grow into a large and global brand it will need to invest in so many things including marketing, human capital and operations. So, overall the barriers are quite large for new brands trying to enter the market.

Threat of substitutes:

The threat of substitutes for Samsung is moderately high. There are several competitors like LG, Sony and more international and local brands that offer competing products and services. The switching costs for the customers are low. The factors that moderate the threat from the substitutes are a great brand image, technological innovation and similar more factors like customer convenience.

8. Potential entry of new competitors into the market

The possibility of new entrants had a significant part to play in developing and changing the competitive dynamics of any industry. This threat as substantial and influential. This threat changes the competitive environment and directly impacts the profitability of an existing firm. If there is a higher threat of new entrants, this means that there are low barriers to entry and there is high possibility that the industry profit potential will decrease as a whole. This is because more competitors will fight for the same amount of business. Sales and market shares will be redistributed and there may be an effect on price and product quality.

9. Competitors’ control of key production inputs (such as labor, capital, and raw materials)

Factors of production are inputs used to produce an output, or goods and services. They are resources a company requires to attempt to generate a profit by producing goods and services. Factors of production are divided into four categories: land, labor, capital and entrepreneurship.

Factors of Production

Land is the natural resource that an enterprise uses to produce goods and services to generate a profit. The resources are natural materials that are included in the production of goods and services.

Labor is the amount of work laborers and workers perform that contributes to the production process.

Capital is any tool, building or machine used to produce goods or services. Capital varies throughout each industry.

Entrepreneurship combines these factors of production to earn a profit.