Mobile Phone Manufacturers - Samsung Company - Case Study Example

Mobile phone manufacturers Introduction Strategic analysis of associated factors determines the evolution of one telecommunications enterprise and the demise of another. The global market has experienced reduced trade barriers, short product life cycle, intensified competition and industrial segmentation. Due to this, there has been a fierce competition in the high technology sectors like electronics and communication. This work therefore seek to analyse the practical approach to the real issues that occurs within the telecommunication industries in relation to the advantages, disadvantages, area of effectiveness and the mitigation of any identified problem in the Samsung telecommunication enterprises . The strategies used to analyse these work are the Yip’s Driver of internationalisation, Porter’s Generic Strategies and the Mckinsey 7-S Framework (Dhaka et al 47). Some issues facing most of the telecommunication enterprises are Enhancing effectiveness and efficiency of communications between stakeholders, employees and customers. Samsung Company has monitored channels of communications with its stakeholders and customers. This has curbed the problem of misinterpretations and misconceptions within the company. Proper use of emerging technologies to improve the enterprise productivity: The Company has strategies that facilitate implementations of the emerging technologies. They include among others strategies for long-term as well as short-term technologies. Maximum profit making while offering increasingly complex and consistent higher-level customer service over wide geographical area: Through collaboration with other companies both, locally and internationally, Samsung Company has made it easy for its commodities to reach wide geographical areas. At the same time, its engagement in other business ventures has enabled it maximise its profit making. Creation and implementation of centralized administration of satellite site provided services. Samsung puts its products at a centralized store. It makes it easy for customers to receive services closely (Park et al 55). Ensuring that data network, cell phone and internet platforms and services security are available, reliable and survivable. This is the best way to keep your customers around and near you. This has proved Samsung Company as the best among other companies in taking care of the customers’ needs and wants (Park et al 71) On the other hand, these enterprises have various opportunities to improve their efficiency and effectiveness of their operations. The opportunities include: Analysis of preliminary cost of necessary pressing and immediate charges: It enables the Company to utilize and use profits appropriately. Planning and issuing of RFP’S for speech recognition systems, Wide Area Networks, Internet services, IP telephone systems and Interactive Voice Response Systems. Assessing current levels of applications of customer service and communication systems to predict problems and solutions, it explains why most consumers compared to products from other companies prefer Samsung products. Establishing current and future network requirements, opportunities, and strategies applied in emerging technologies. This has enabled this company to fulfil the needs of both its long term and short-term investments opportunities. Identification of other areas of investment from the re engineering operations and rationalization of voice and network services facilities. Actually, this company has the highest number of other business ventures as compared to other companies. Even though it started as a small company, the Samsungs’ initial strategies, plans and the commitments its members put in place has made it achieve its goals. The creation of its awareness in a large and wide geographical area through its collaboration and business subsidiaries facilitates the worldwide growth. It has provided good planning and implementation. Above all, it has a comprehensive telecommunication infrastructure and applications environment (Park et al 56). Advantages Operations With almost eighty companies, Samsung continues to create increased awareness. It offers services such as medical and financial, construction and shipbuilding, electronic among other. This subsidiary business has enabled it to make more profit that it uses to expand its wings and create more awareness worldwide. It enables the company to put enough funds in place to curb future problems and emergency issues. Customer Selection The selection of its major costumers has also played a very important role in the success of Samsung over other enterprises. Most of the customers are worlds’ biggest business companies like the Royal Dutch shell, Ontario government and the United Emirate government. Through the same, they manage other areas. By placing its satellite centre at Seoul, most of its satellite site activities carried out at a centralised place. This has made it possible for it to offer its services with a lot of ease. It ensures the availability of the network, its reliability, and survivable over a wide geographical area. Its involvement in the effective management of Asian financial crisis added to its advantage in the advancement to the top. From this experience, he became even stronger than earlier. From this, it drew a crafted strategy from learning from simple to more complex technology. Acquisition Through acquisitions and attempted acquisition, the company has embraced the medium value strategy of the Bowman. It has acquired this through other companies like the Dutch aircraft maker, Fubu clothing and apparel, AST Research among others. These acquisitions have enabled Samsung Company to create outrageous links all over the world (Dhaka et al 99). Disadvantages Even though Samsung has made a great step in its business, challenges come from various controversies. The controversies have played a major role in its draw back hence its disadvantages. The company faces many financial scandals. Bribery, misuse of funds and money frauds has made the company to have several drawbacks. Kim Yong Chul, the company lawyer highlighted the challenges. He accepted involvement in bribe on behalf of the company. Most of its executives had illegal and parallel bank accounts for fraudulent money. Another disadvantage facing the company is viral marketing. People continue to accuse the company of false advertisement. Fair Trade Commission of Taiwan has investigated this problem. Other telecommunication enterprises accused the company of online attack. This made the commission to stop Samsungs’ online marketing campaigns. Samsung faces antitrust concern. Its bureaucratic nature appears by having the government on its hand according to one of the articles headline in South Korea (Dhaka et al 49). The society believes that it controls almost all the activities of the government. They fix prices that favour themselves without considering other enterprises. This has portrayed it as a bully to the other enterprises. These matters have really affected the production of the company. A further challenge from two internal shocks became an obstacle to this company. The first shock was the newly emerging world economic order. The other one was the trigger of the economic turmoil by the Asian financial crisis. This forced the company to carry out a drastic move. The Human resource management was reformed. This was a big challenge since most of the employees’ effectiveness and performance were to be reformed. This was a major challenge since the updating of the HRM according to the international standard was difficult for most the Korean companies. Because of these issues, other telecommunication enterprises like the Apple and Nokia moved to the top hence competing fiercely with Samsung. Samsung as a company, its stakeholders and management tried as much as possible to clear all these mess so as to maintain its position at the top. To achieve these, Samsung has put in place strategies to outweigh their competitors (Dhaka et al 49). Strategies For the success of any organisation, proper strategies must be put in place. To achieve these, the company has carried out the following approaches using the three strategies including others mentioned above. Searching for loose bricks Competing through collaboration Building layers of advantages Changing the terms of engagement Yip’s Driver international. The Yip Drivers of international strategies has really played an important role in helping Samsung to gain its objectives through their strategies. The Samsung Company has applied all the four Yips drivers. The drivers include cost drivers, government drivers, market drivers and competitive drivers. Market drivers. Market drivers ensure that the needs of the customers are well taken care of. For an organisation to succeed, it must ensure that it has more customers’ world wide and from different countries. Samsung organisation has ensured that the best products are served to the customers. They have created markets in different parts of the globe. Its affiliate businesses have also added to its advantage in acquiring its customers. It ensures that its services and commodities are survivable, reliable and lustrous (Barney et al 110). Competitive Drivers. It applied competitive drivers by getting into partnership with the Toshiba, Sanyo and Philips. These enabled it to have a firm ground to stand and move towards its aim. It took this advantage to study the rivals’ conventional wisdom to find loose bricks. As a result, it decided to become the low product supplier and commodity marketing. This enabled it to have a low profile but a technological expertise. Its main objective being to be a dominant leader in the IT and the consumer electronic, it decided to work towards having a competence in its own product design. Having entered into this collaboration with less knows how, Samsung has managed to acquire the weaknesses and the strength of these companies. It has then intern used it to expand itself. It has increased the speed of technology development and improvement through acquiring high tech companies in advanced countries and aliasing strategically with the competitors. The narrowing of the gap was brought by the partnership with the foreign industries leaders. They have done this through effective knowledge management, heavy investment and in-house activities and finally the multiple technology sources leveraging. In addition to that, it uses efficiency and speed, patent quantity and quality and R&D contribution to business performance as its major metrics for its performance. This collaboration has made the Samsung Company to make a great advancement and achievement in the attainment of its goals (Caves 96). Cost Drivers. Samsung has enabled to reach the dominant companies by getting the needed technology knowledge, investing in production system and being competitive in the worlds markets. Following this it joined market segments to compete with the technological capabilities. He later narrowed the technology gap through the production of microwave and VCRs and finally accomplished a strategic plan by entering DVD and DRAMs segment. For it to achieve all these, its pricing strategies selected carefully to match marketing positions hence, the implementation of the cost drivers. It ensured that the cost it incurred in marketing and production is achieved after sale. It made a proper budget before engaging in any production. It only participated in the production of commodity after ensuring it can afford the cost (Barney et al 110). Government Drivers Samsung changed the term of engagement by refusing to accept segment boundaries. Most of the companies were reluctant to make bigger LCDs. These companies feared the losses they would face when they got involved in such bigger entities. It gave it a second thought, worked out its plans and strategies properly. It considered price and size, implemented it and become the first company in the business in total sales revenue. It attained the leadership through the launching of innovative products e.g. flash memories, digital coverage and wireless communication generation. It also displayed new commodities e.g. cell phones with inbuilt audio players. By reinventing the rules using these converged devices, Samsung has beaten his competitors. It achieved this by assimilation of the advanced technologies from foreign countries and using them to develop new products. Because of this, it went ahead of some categories competitions. Above all, it has tremendously narrowed the gap between it and the super powers (Barney et al 110). Bowman’s Strategies On the other hand, the Bowman’s Clock Strategies was not left behind. As an elaboration of the three porter’s generis strategies, Samsung has used Bowman Clock strategies to maintain its position at the competitive market. The combinations of these two strategies enabled the company to start from a humble ground, moving gradually from the lowest level to the highest level. Even though at times they seemed risky, they kept the same spirit of victory from the beginning to the end. Low price/ High added value. The most approach to use to attain global competition is the advantage layer building. It is in the first level of the Bowman’s strategy clock. Even though many fear it, it is the best method to use. It involves the continuous expansion of the competitive advantage. It ranges from low cost wage to adding global brands. It used this level by accepting to attain a low income at the beginning that gradually increased as its products quality and design improved. It became a low product supplier and commodity marketer. This added value to the achievement of their goals since this attracted many customers. Samsung searched for loose bricks by uncovering lowly defended territories of the more powerful competitors Collaboration with other companies especially market leaders played a major role in his success In fact, Samsung started from a low and humble beginning and low quality producer (Bowman et al 97). Medium price/Low added value. After attaining their first goal in the above level, the organisation decided to put into trial the second level. They introduced new commodities and products to the market. The prices where now medium. The change in the price as compared to the first prices led to a slight decrease in the number of customers. They lost market share but this did not deterred them. They managed to put into trial the third level (Bowman et al 97). High price/ Mediocre added value. Samsung ones more put into practise the bowman’s strategy of the high price and low benefit. Emerging technology all over the world has led to the development of complex products. Because of their complexity and the high cost incurred while making them, the prices must definitely move up. It risked loosing the market shares and broadening the margin between it and other organizations. Since it had created trust in its customers, the commodities where accepted in the market regardless of their high prices (Bowman et al 97). Mckinsey 7s Framework. This is the best and the oldest strategy to be developed. It consists of seven models that ensure the involvement of all the bodies in an organisation for its betterment. The seven models are style, strategy, system, structure, skills, staff which all combines and work together to acquire the seventh model which is the goals. Samsung has put this strategy in place since its formation. For it to advance to the top, it has put good strategies on the ground. It has ensured that it has full staff to cover all the posts and areas. This has enabled its activities to run smoothly without any interference or complains since all the sectors are fully staffed. These employees are fully trained to acquire the needed knowledge and skills to meet their various fields of operations. Its style and structure is more organised than other companies. This has enabled it to gain much attention from customers. The structure is orderly with a despicable hierarchy of power. This has enable delegation of duties to be efficient in the company. The use system of from simple to complex has enabled it to emerge at the top of its rivals. This has enabled its products to be accepted in the markets regardless of their prices. This is because of their advancement in technology systematically. As a matter of fact, the putting together of this models has enabled Samsung company to have more strength and power in the competition market which has finally led them to success (Tom peters 1980). Effectiveness The success of the Samsung Company in the creation of the competitive advantages was brought by the engagement of all the members involved. It has succeeded in involving all the members by: 1. Ensuring all the employees has the appropriate skills needed for their work. The new employees undergo a four weeks in house training. This takes place to ensure that all employees acquire the necessary knowledge about the company history, background, vision, and objectives Trained employees then undergo an assessment by the human resource management team who then assess whether they are qualified or not. Further training takes place to cover areas without proper capture. Employees go to workshops and seminars on the emerging issues and technologies (Kearney 121). 2. The company has created a sense of urgency by being more innovative and costumers oriented. Poor quality products changed for the betterment of the company. The poor product and commodities destroyed in the presence of the employees and the customers. This has enabled its customers to have full trust in their products. 3. It has further established clear milestone and review mechanism to track progress. It ensures the gaining of more profit. The new investments are put in place within four years. The upgrade investments on the other hand are to be put in place within two years. This enables their strategic plans for the investments not to fail. Be it long term or short-term investment (Deng 82). Conclusion The Bowman’s strategy Clock combined with the Porter’s Generic Strategy enables a company to analyse its competitive position in comparison to other competitors. Any company using the three discussed strategies as a guide can easily compare its services and products to other companies in the same industry. Having no proper technological knowledge at the beginning, low wage level and less support from the economic planning and policies from the Korean government, Samsung has used the above named strategies to attain its goals. After acquiring technological competence and competitive, this company moved from one-step to another, from low to high calibre. It starts from commodity product supplier to the supplier of brand name advanced products. It took advantage of synergy effects and made use of the variables of different dimensions to carry out its performance effectively. As much as competition is so high in the market, Samsung has proved its competition capabilities in more ways that are elaborate. Actually, beating all the competitors in the market is not an easy task. The mobile firms and companies all have done their best to fit in the competition market and manage it but most of them have been capable of doing so due to poor plans and strategies. Above all, most of them have tried to utilize some of the strategies discussed in this work to no avail. The Samsung Company therefore should receive more congratulations for the good work. Bibliography Arensman R. 2001, More than a memory maker. Electronic business. Barney, J.B. 2001, ‘Resource-based theories of competitive advantage: A ten-year retrospective on the resource-based view. Bowman & Faulkner 1997, “Competitive and Corporate Strategy”, Irwin, London. 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The Economist Newspaper Limited Retrieved 2 October 2014 Tom peters 1980. “A brief History of the 7-S (Mckinsey 7-S) model.” Blog post. Read More