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Course BUSI1593: Intl Business Strategy Course School/Level B/UG

Coursework Case study 1 Assessment Weight 0.00%
Tutor Dr. Hasintha Premarathna Submission Deadline 18/06/2018

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Case Study One – Strategic Identification

International Firm – Samsung

Background of the company

Samsung is a multinational conglomerate headquartered in Seoul, South Korea. Lee Byung Chul,
a businessperson, founded Samsung in first of March in 1938 as a trading company. Initially the
company diversified into different areas such as textiles, insurance, food processing etc. and in late
1960s, Samsung entered into the electronic industry. In 1980, Samsung started exporting electronic
items under their own name ‘Samsung’. In 1998, Samsung develops the flat screen television and
launches the first large production of digital televisions. Also 2005 was the turning point of
Samsung as they produced the first speech recognition mobile phone to the world. Samsung
electronics became the largest mobile phone producer by its unit sales in 2012. (Wikipedia, 2018)

Samsung has a wide range of production line, which includes mobile phones, tablets, televisions,
monitors, home appliances such as air conditioners, refrigerators, washing machines, microwave
ovens etc. also memory and storage items and accessories such as chargers, cases and covers, tablet
accessories etc. Samsung has a worldwide coverage of market locations and it includes 489,000
number of employees. Samsung has established a powerful impact on economic development,
culture, media and politics in South Korea.

Talking about the most significant Samsung mobile phone evolution, in 2013 Samsung launches
the Galaxy S4 to the global market. In 2014, Samsung introduced the Galaxy Note series by
launching Note 4 & Galaxy Note edge. Samsung launched the Galaxy S5 in 2014. In 2015,
Samsung launches the world’s first ever curved display on the both sides of the mobile phone by
introducing the Galaxy S6 edge. Meanwhile it launches a stylish smartwatch with a flexible
circular design and rotating bezel, the Gear S2. In 2017 Samsung unveiled Galaxy S8 and in 2018
Galaxy S9.

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BCG Matrix of Samsung

BCG matrix is an analysis that helps to determine the position of products of the company in future
profit margin. It contains with four items such as stars, cash cows, question marks and dogs.
Samsung is one of the largest companies in the world that has operations in electronic industry.
The analysis for BCG Matrix for Samsung is as bellows.

Stars –The products category which generates massive sales and has a future assured higher growth
rate. As a result, organizations are more curious to invest in these units to develop further to acquire
larger market share. The products that can be recognized as stars in Samsung are mobile phones
and tablets. In order to compete with other mobile manufacturing companies Samsung has
developed their resources to enlarge its market share. The management of Samsung has been able
to become one of the major mobile phones manufacturer in the global market. With the use of
latest technological effects, Samsung has established a remarkable growth in the industry.
Samsung produces mobile phones by adding latest features to make it more attractive and

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interesting to the global market. From all these star products Samsung has earned trillions of
Korean won for the last 9 years and following is the Samsung’s operating profits for quarters from
2009-2018.

(Statista, 2018)

Cash cow – cash cows are the products which have reached the maximum growth in the market.
People already aware of the products and no further promotions. The return on the cash cow
products’ investments are high. Cash cow products are not likely to acquire major market position.
However, the existing market position is substantial to acquire higher sales to the company. For
Samsung, home appliances such as refrigerators, televisions, microwave ovens can be introduced
as cash cow products. These products from Samsung have already introduced advanced
technological features. These products do not offer new technology frequently.

Dogs – products or units which do not offer any notable growth to the company in terms of unit
sales can be introduced as dogs. Samsung galaxy smart watch can be identified as a dog product
as it couldn’t attract the target market by gaining an adequate attention. The galaxy smart watch

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needs to be charged on a daily basis and it is a disturbing aspect which generates lower sales to the
organization. It is a failure for the Samsung as a growing industry.

Question marks – products which are still in the developing stage. As a result, the company has
failed to create an important position in the industry. For example, Samsung products such as
printers and Samsung Galaxy Note 7 can be identified as question marks for the organization.
Galaxy note 7 reflected a negative reputation to the company due to overheated battery within it.

As result Samsung recalled their galaxy note 7 phones to replace them with an alternative phone
(Divine, 2016). Even though this problem creates a challenge to the company, by using appropriate
remedies Galaxy 7 can bring back to the industry as a star product.

Vision, mission and corporate values of the company

Samsung follows a mission of inspiring the world with innovative products and technologies that
enrich human lives by creating a brand-new future. Also contribute to the social prosperity. It’s a
combination of becoming the beloved brand, innovative and admired company. The mission of
Samsung leads to the ultimate vision of creating the future better by inspiring the world. Samsung
introduced its vision 2020 to explore new business opportunities and continue the journey through
an innovation history.
Talking about the values of the organization Samsung has created its corporate values as a fusion
of economic and social values. Economic values would be maximizing the profits & shareholder
values. Social values would be contribution of sustainable society. Further Samsung has core
values such as integrity, people, excellence and change etc. when comparing the vision, mission
and values of the Samsung there is a significant relationship which express the innovation and
sustainability.

Environmental analysis of Samsung (Porter’s five forces analysis)

Porter’s five forces theory is a tool, which analyses and identifies five competitive individual
forces that influence in every industry. The five forces are customer bargaining power, power of

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supplier bargaining, threat from substitute, threat from new entrants and rivalry among existing
firms (Porter, 2008). This impacts for Samsung as well and five forces analysis for Samsung as
bellows,
Supplier bargaining power – Suppliers are the part of the organization where the raw materials are
obtained from in order to produce products. Suppliers have a significant bargaining power over
the organization and suppliers generate huge income from Samsung. Because of that, suppliers
cannot easily move into another brand. Knowing that Samsung has enacted different rules and
regulations to the suppliers. It keeps the supplier bargaining power minimized.
Customer bargaining power – increased access for internet, social media has led to an increased
customer bargaining power. Customers can easily compare information such as prices, feedbacks,
models with other customers and they can switch to another brand. Higher customer bargaining
power will influence to Samsung and it causes the market competition as well.
Threat from new entrants – To establish a larger brand like Samsung, it takes a lot of financial
investments and human skills. Because of that for Samsung, threat of new entrants is low.
Threat from substitute – Samsung has several competitors such as Apple, LG, Sony etc. in addition
there are more local and international brands too, which influence as a threat to the Samsung
products.
Rivalry among existing firms – Electronic industry has been arising for the last decade and has
created a huge competition in the global market. Samsung is in a competition with brands like
Lenovo, apple, OPPO etc. overall in the electronic industry competitive rivalry remains high.

Strategic identification of Samsung

Since Samsung is one of a leading mobile phone companies in the world it has a modest
competition with other companies who produces the same, mobile phones and electric items. To
face the market competition and global influences Samsung follows three strategic approaches
under its vision 2020.

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 Creativity - New market creations, new technological development and new lifestyles.

Partnership - Partner collaborations, value for customers and increased external capabilities.

Great people - Passion and challenge, talent incubator.

When an organization facing for a modest competition in the global market it should come up with
an innovative and growth focused strategy. In that perspective currently, Samsung is following an
ideal strategy. With the creativity strategy they try to introduce new technologies and new lifestyles
to the market where people haven’t experienced so far. For example, from Samsung galaxy S9
they introduced an ultra slow-motion camera effect for the customers which they have never
experienced before. Another example would be fast charging wireless compatible with PMA &
WPC. From innovative technologies and products Samsung generates profits and make sure about
new growth drivers. From partnership and great people strategy Samsung make sure about the
company growth. From robust partnerships and collaborations Samsung try to strengthen their
resources as well as financial aspects. Healthy connections between stakeholders would put the
company in a higher growing position as the company growth would affect for the growth of the
interested parties as well. Having multiple products can benefit a company but if it is not wisely
used by following a powerful strategy then the whole company would collapse. Therefore,
Samsung is a perfect example for other organizations to grow and progress their activities.

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Mintzburg Strategy

Application of Mintzburg strategy on Samsung latest Android version is as bellows,

Samsung Android Version update Android 8.0 (OREO) Android 9.0 (POPSICLE)
(Original strategy) (Emerging strategy) (Realized strategy)

Android 7.0 (NOUGAT)

(Unrealized strategy)

Samsung updates their android versions time to time and their latest version is Android 9.0 named
as Popsicle. When the latest versions coming up past versions would be outdating. Above chart
would show the out dated android version Nougat and updated version Oreo and combination of
Oreo the latest version has been introduced ‘Popsicle’.

References

Divine, J., 2016. US News. [Online]

Available at: https://money.usnews.com/investing/slideshows/7-of-the-worst-product-flops-ever-besides-the-
samsung-galaxy-note-7
[Accessed 12 06 2018].

Porter, M.E., 2008. The five competitive forces that shape strategy. Harvard business review, 86(1), pp.25-40.

Statista, 2018. The Statistics Portal. [Online]

Available at: https://www.statista.com/statistics/237093/samsungs-operating-profit-quarterly-figures/
[Accessed 17 06 2018].

Wikipedia, 2018. Wikipedia. [Online]

Available at: https://en.wikipedia.org/wiki/Samsung
[Accessed 14 06 2018].

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