Strategic Management at Samsung Electronics and General Motors - Case Study Example

Strategic Management: A Case of Samsung Electronics and General Motors Student’s Name Institutional Affiliation Course Name Date of Submission Strategic Management: A Case of Samsung Electronics and General Motors Samsung Electronics Company Background Samsung Electronics is a South Korean multinational company that deals with the manufacture, design and sale of electronics. The company was founded in 1969 in Suwon, South Korea, where its headquarters is based. Since then, the company has grown to become a global brand (Chang 2011, p. 12). Today, Samsung products are found in almost all corners of the world. Some of the electric products that Samsung manufactures include phones, tablets, televisions, cameras and home appliances, such as refrigerators, washing machines, air conditioners and washing machines. Despite the stiff competition that the firm faces from rivals, such as Apple, Microsoft, LG and Chinese companies, Samsung has maintained a lead in the industry. Marketing Mix Product Product is the strongest point of Samsung’s portfolio. To maintain the lead in the electronic industry, Samsung has always ensured that it provides its customers with very high quality products and services (Michell 2011, p. 35). To achieve this, Samsung has invested heavily on R&D that ensures that high quality products are manufactured and sold to customers (Team 2014). In fact, Samsung has maintained a lead in terms of innovation, something that has ensured that products manufactured are trendy and meets the changing customer needs. Additionally, Samsung always ensure that customers are served in the minimal time possible. Price Because Samsung provide different products, the company uses different pricing strategies for each product category. Samsung uses skimming pricing strategy for its smart phones during launch but drops the prices as competitors introduce similar smart phones (Michell 2011, p. 37). For other products other than smart phones, Samsung uses competitive pricing strategy. Place To make the products available to customers, Samsung has ensured that it has at least a single distributor in every city around the world. Samsung also partner with large supermarkets in various cities, where customers can get its products (Chang 2011, p. 23). Additionally, the firm recently introduced online sales that allow customers to buy Samsung products online and get distributed at their nearest distribution station. Promotion Samsung adopts different promotional strategies. Although Samsung relies heavily on advertising as a means of promoting its products, it also adopts sales promotion strategies to create product awareness and persuade customers to but its products (Michell 2010, p. 43). For instance, Samsung usually organizes road shows to create product awareness. Additionally, the company usually promotes its products by giving offers and discounts to customers. SWOT Analysis SWOT Analysis highlights the internal and external factors that have an impact on company operation. Strengths Strong brand reputation Low design and manufacturing cost High investment in R&D Wide product range Many distribution channels Many awards and recognition Huge market share Weaknesses Poor pricing strategy as low prices are associated with poor quality Overdependence on external software for products Lack of focus on niche Over involvement in patent struggle with Apple Opportunities Growing economies, such as India and China provide increased demand for products Increasing demand for innovative products Increasing disposable income due to recovery of most economies Growing tablet market Growing market for Smartphone Threats High competition Falling demand for TVs Aging population Political instability in Target Market Samsung targets different groups of customers. Firstly, Samsung targets customers within the age group of 20 to 50 years (Kolomvatsos 2013, p. 7). However, customers above 50 years are also targeted as long as they have the money and ability to use Samsung products. In the Smartphone category, the targeted customers consist of teenagers and early adults between the age of 14 and 25 years because they are technology savvy. PESTEL Analysis Political Samsung’s operations are affected by various political factors. In particular, Samsung has been sued many times over patent issues in the Smartphone industry. Similarly, in a bid to protect its patent rights, Samsung has been suing its rivals for any infringement caused on patent design and ideas (Michell 2011, p. 42). Additionally, Samsung is affected greatly by high taxes charged by governments in which the products are manufactured and sold. Economic The state of economic growth in different countries affects the operation of Samsung. The current growth in economies of most countries, such as the U.S., the U.K. and South Korea has resulted in increased demand for Samsung products (Michell 2010, p. 53). However, the performance of Samsung in countries like China has been affected in the recent time due to a decline in China’s economic growth. Social The performance of Samsung in different regions is affected greatly by the increasing aging population, lifestyle changes and the growth of population. Technology The advancement in technologies has affected Samsung by forcing it to invest adequately in R&D so as to ensure that the products manufactured by the company meets the changing tastes and preferences in terms of technology and features (Kolomvatsos 2013, p. 14). Additionally, because the population of technology savvy customers is on the rise, Samsung has had to respond by ensuring that it becomes as innovative as possible. Environment As the world increasingly becomes concerned about climate change, different countries have set emission limits allowed for companies that affect Samsung operation. Therefore, to ensure compliance, Samsung has had to invest in sustainable production to minimize environmental population. Legal Because Samsung operates in different countries, the electronic giant has been facing labor issues (Michell 2010, p. 59). In particularly, Samsung operations are affected by the minimum wage rates that are allowed by different governments. General Motors Company Background General Motors (GM) is American multinational automobile manufacturer. The company was founded in 1908 and has grown to become a global brand (Davis 1999, p. 4). GM’s headquarters is based in Detroit, MI. Although GM initially started only with the design and manufacture of automobiles, the company has since diversified its product portfolio to include financing services. GM operates through four main segments, including GM North America, GM Europe, GM South Africa and GM International Operations. Some of the popular GM brands include Isuzu, Chevrolet, Cadillac, Hummer, Holden, Pontiac, Opel and FlexFuel just to name but a few. GM’s major competitors include Ford, Toyota and Honda among others Marketing Mix Product General Motors design and manufacture a variety of automobiles that comes with different brand names, such as Chevrolet, Hummer, Opel, and Cadillac among others. GM’s success is largely attributed to the quality of its products and services (Viardot 2004, p. 27). The company ensures that quality is given priority right from the design stage to the time the product and services are delivered to customers. For instance, most customers like GM vehicles because they are strong and durable and can operate for long period on rough terrains. Price Because GM sells different car models, the prices of each car vary depending on the model. However, to maintain a competitive edge over rivals in the industry, GM usually charges competitive prices. For instance, the price of Chevrolet sparks begin at $13,000 while that of Buick Regal varies from $29,000 to $30,000 depending on whether the model is FWD or AWD (Gall 2011, p. 32). Charging affordable prices for quality cars has help attract many customers to the company. Place GM, just like other automobile manufacturers does sell its cars directly to the end-users. Instead, GM sells its cars to dealers that sell the cars to the end-users (Davis 1999, p. 12). These dealers are found in most major cities around the world to ensure that customers can easily get the car models of their choice easily. For instance, Cadillac sell is vehicles at Cadillac dealership and the same applies to other car brands. Promotion GM adopts various promotional strategies to create brand awareness and attract customers to purchase it products and services. The strategies include advertising on magazines, TV, sport events and Radio (Viardot 2004, p. 24). Lately, GM started promoting its products on social media. Target Market General Motors target different markets. Firstly, GM targets mainly the medium and high income earners. For instance, the Hummer and Cadillac vehicles target mainly the high income earners because these cars are relatively expensive and cannot be afforded by low-income earners. Chevrolet, on the other hand, targets mainly the middle income earners (Dunne 2011, p. 99). Geographically, GM targets customers from all geographical regions with the ability to purchase its cars and financial services. SWOT Analysis Strengths Huge market share Strong brand image and reputation Global experience Variety of car brands Adoption of on-star satellite technology Engagement in CSR initiatives Weaknesses Failure to adopt alternative energy Stagnant profitability Adoption of poor organization structure Poor credit rating Liquidity problems Overreliance on U.S. market Insensitive corporate culture Over investment in truck and SUVs Fuzzy product line High health care costs and pension Opportunities Movement towards alternative energy Decline in interest rates Rising middle income earners in emerging economies, such as China Growing demand for fuel efficient cars Growing demand for electric/solar cars Relocate production overseas Threats Increasing competition High cost of fuel High government regulation Weak consumer confidence Rising cost of health Rising cost of raw materials PESTEL Analysis Political The operations of GM in various countries is affected by laws governing environment as most governments are introducing laws that require automobile manufactures to adhere to certain emission limit. As such, GM has to invest in additional R&D to ensure adherence to the laws. Operations of GM are also affected by government laws on transport system. In some countries, the number of small cars controlled in cities in favor of public transport to minimize traffic jams and this affects the sale of GM small cars in such countries (Gall 2011, p. 41). Economic Although the recovery of most economies, including the U.S. favor GMs, the persistent increase in the cost of fuel is impacting negatively on the GM’s sales. The tough economic times has seen most consumers demanding economical cars (Doole and Lowe 2005, p. 128). This forces automakers, such as GM to invest in R&D on hybrid engines. The hard economic times also impacts GM negatively as it results in increased cost of raw materials, such as steel. Social GM’s performance is affected by changing tastes and preferences of customers in different markets. For instance, the growing demand for trendy cars has seen GM register declining sales of old models (Dunne 2011, p. 101). Additionally, the increased aging population is also affecting the performance of GM as the older generation is demanding cars that fit their status. As such, GM has top respond to the generation changes appropriately to remain relevant. Technological The performance of GM is greatly affected by technological changes. In particular, the car industry has been experiencing a movement towards alternative energy (Gall 2011, p. 44). Therefore, to remain relevant, GM has to invest in technology that enables it to adopt alternative energy. Additionally, as customers are increasingly demanding electric cars, GM has had to invest in R&D to enable it develop electric cars that meets the needs of consumers. Environmental GM is affected by the changes in environmental laws that sets emission limits for cars. Legal GM being a global company, its operation is affected by laws on minimum wages and minimum age that it can hire as employees. Conclusion and Recommendations Samsung and GM are some of the best perfuming companies in the world. Samsung, for example, has succeeded in a competitive electronic market because of effective marketing strategies that the South Korean firm has adopted over the years. However, as can be seen in the SWOT framework, Samsung performance is affected negatively by poor pricing strategy. IN particular, Samsung has been charging lower prices than its competitors in the market. As much as this strategy can attract price conscious customers, it makes customers perceive Samsung products as being of low quality. Therefore, Samsung needs to change its pricing strategy to ensure its future success. The same applies to GM that needs to adapt to the alternative energy movement to ensure its future success. Additionally, because there has been an increasing demand for electric and solar-powered cars in emerging markets like China, GM should take advantage of this opportunity by manufacturing electric and solar cars. References Davis, M. W. R 1999, General Motors: A photographic history. Arcadia Publishing, New York, NY. Doole, I., & Lowe, R 2005, Strategic marketing decisions in global markets. Cengage Learning EMEA, Mason, OH. Dunne, M. J 2011, American wheels, Chinese roads: The story of General Motors in China. John Wiley & Sons, Hoboken, NJ. Chang, S 2011, Sony vs Samsung: The inside story of the electronics giants' battle for global supremacy. John Wiley & Sons, Upper Saddle River, NJ. Gall, R. T 2011, General Motors: Life inside the factory: One blue-collar worker’s journey. AuthorHouse, New York, NY. Kolomvatsos, K 2013, Intelligent technologies and techniques for pervasive computing. IGI Global, New York, NY. Michell, A 2011, Samsung Electronics and the struggle for leadership of the electronics industry. John Wiley & Sons, Hoboken, NJ. Michell, T 2010, Samsung Electronics: And the struggle for leadership of the electronics industry. John Wiley & Sons, Hoboken, NJ. Team, T 2014, Samsung's Smartphone business faces challenges despite strong sales growth. Forbes 29 May, viewed 15 September 2015 http://www.forbes.com/sites/greatspeculations/2014/05/29/samsungs-smartphone-business-faces-challenges-despite-strong-sales-growth/ Viardot, E 2004, Successful marketing strategy for high-tech firms. Artech House, London. Read More