Fourth Mini-Case: Samsung Electronics: Burned by Success?

Samsung Electronics: Burned by Success

The success of the company not only depend upon the quality product but also the reliability & benchmark it has had set. It play the unsurpassable role for promoting the name of South Korea by enhancing the economic status by creating the job opportunity. At the same time, Samsung play the cardinal role in order to promote the different kind of Social Media like Facebook, Twitter by providing the enchanting & relevant tools. The most exciting business policy of Samsung mobile is manufacturing feasible product considering factor like price and circumstance which critically assisted to impact people having different economical status. The journey started with the ordinary mobile phone now proudly come into the position of skyrocketing. In fact, one would never have thought about one day it would have mobile product having dual sim, 835 powerful Snapdragen processor, 6 GB of RAM, 6.3 infinity display, 64 GB internal storage, 13 megapixel camera, 3300mAh non removable battery, 4G (mobile compatibility). Neglecting some tiny fault it has improbable feedback throughout the world. Hence, we can confidently say that Samsung set the imperative methodology in order to get succeed in any business by setting inspiring success story.

In 2012 Samsung is one of the top ten most valuable brand in the world. Since the start in 1938 with the production of noodles, Samsung has developed into one of the biggest smartphone manufactures in the world. Till date it has produced 800 million mobile phone by considering all the category.

Challenges that Samsung had encountered:

Because of rapidly changing technology and market conditions, and very fast pursuit by other companies Samsung felt a sense of crisis.

Technological: The use of smart phones and other devices has resulted in the development of a technological environment that strongly supports the use of these types of mobile devices. Within the United States and many other countries, for example, there is a well-developed cellular network infrastructure. This infrastructure is critical for ensuring that data and voice transfers occur efficiently and that there are not any delays. However, there are limitations to this infrastructure. The first is that the quality of the infrastructure is not consistent across regions or countries. For example, in rural areas of the United States, it can be difficult to get a signal or to transfer data. Likewise, in less developed countries where Samsung Electronics sells its products, the infrastructure may be much lower, resulting in limited services. A second limitation is that the infrastructure is subject to environmental influences, so extreme weather, such as a hurricane or a storm can limit or disable the network.

Economic: In recent years, the world has been experiencing a global economic crisis, which has had many impacts on countries, including decreases in job availability and in the amount of available money that consumers have available to spend. For example, in 2011, consumer spending in the United States dropped. This was the first time that this had occurred within two years, and is thought to be related to the economic crisis, the limited number of jobs available, stagnant wages and a decrease in household confidence. A decrease in consumer spending can harm companies like Samsung Electronics, as it can lead to a decrease in sales. Many businesses and consumers are also experiencing increased costs, due to increases in the cost of fuel. This has resulted in a large number of businesses reducing their forecasts for profits and sales.

Political: Samsung Electronics sells its products throughout the world, and because of this, it faces many political risks in some of the countries in which it operates. In some countries, such as Africa and South East Asia the political environment is turbulent and hostile, which makes it difficult for Samsung Electronics to operate. Likewise, the South Korean political environment is frequently unstable. In contrast, within India and China, the political environment is more predictable and conductive to Samsung.

Environmental: The manufacture of Samsung Electronics’ products, like the products of most industries, has the potential to significantly impact the environment. Samsung Electronics places a strong focus on managing its processes so that they have the lost impact on the environment possible. This includes a significant reduction in the amount of greenhouse gas emissions that are produced by the company. This focus allows Samsung Electronics to improve its performance in this area. This is also a positive aspect in terms of obtaining consumer support, as many consumers are concerned about the environment and are more likely to purchase from a company that appears to care for the environment.

Legal: The legal environment for Samsung Electronics has been complex due to varying viewpoints surrounding the patents used by Samsung Electronics, and one of its main competitors, Apple Inc. Both Apple and Samsung Electronics develop a range of products, including smart phones and other electronic devices. Patent litigation has been going on in many countries throughout the world between these two companies, with Apple claiming that Samsung Electronics has infringed its patents in the development of their smart phones, and seeking to have many of Samsung Electronics’ devices blocked from the market. This represents a significant challenge for Samsung Electronics, and the outcome of most of these cases is not yet known.

Socio-Cultural: As technology has continued to develop and improve, telecommunication has become an essential component of business and recreation for people throughout the world. This has created a society that is highly receptive to advances in technology, and has a high level of demand for electronics devices and gadgets. In the United States, the proportion of people that own a smart phone was 16.8% at the end of 2009 and 27% one year later. There has also been a steady growth in subscribers of data plans. As such, the socio-cultural environment is strongly aligned with Samsung Electronics’ aims and technology.

Possible Strategy to Regain Competitive Advantage.

Same Product, Lower Price:

Cost leadership is the first competitive advantage businesses often attempt to gain. Cost leadership as an advantage occurs when a business is able to offer the same quality product as its competitors, but at a lower price. To use this strategy, a company must find ways to produce goods at a lower cost through the perfection of production methods or by the utilization of resources in a more efficient manner than competitors.

Other factors, such as proprietary technology, can also factor into this type of advantage. Cost leadership may be classified as an offensive strategy, whereby businesses attempt to drive competitors out of the market by consistently using price strategies designed to win over consumers.