INTERNATIONAL BUSINESS

Samsung Smartphones
Contents
Abstract ......................................................................................................................................................... 2
1. International business Environment ..................................................................................................... 3
a) Social ................................................................................................................................................. 3
b) Threats & Opportunities for Samsung .............................................................................................. 5
Recommendation...................................................................................................................................... 6
2. Global Supply Chain Management (SCM) ............................................................................................. 6
1) Supply chain management of Samsung ............................................................................................ 6
2) Weaknesses in SCM of Samsung ....................................................................................................... 8
3) Role of SCM in competitive advantage of Samsung ......................................................................... 9
3. Corporate Social Responsibility (CSR) ................................................................................................. 10
a) CSR plans and practices of Samsung CSR ........................................................................................ 10
3.1. Communities ............................................................................................................................... 10
3.2. Staff treatment............................................................................................................................ 10
3.1. Waste management .................................................................................................................... 11
b) Impact of Samsung CSR policies on stakeholders of Samsung ....................................................... 11
Conclusion ................................................................................................................................................... 13
References .................................................................................................................................................. 14

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Abstract
This report has discussed the role of Social factors on international business strategy of
Samsung. Samsung has to deal with different social factors in order to offer quality solutions for
demand of customers. These factors include cultural aspects, demographics, technological
demands etc. The report has also discussed the Global supply chain management of Samsung.
The report has discussed in detail how GSCM of the company has been playing a major role in
its competitive advantage in global industry. Samsung corporate social responsibility framework
has put a significant impact on its stakeholders. The report has discussed the CSR initiatives
taken by the company.

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 1. International business Environment
Samsung is a global leader in mobile phone industry. The company has gained a huge market
share due to latest technological advancements and innovative ideas used by the company. It was
founded in 1938 in Korea as a conglomerate (Janrain , 2017). Due to effective strategies and
operational policies of Samsung, the company is currently enjoying status of multinational
company. The company is not only enjoying high competitive advantage in market but also
facing crucial challenges due to major rivals like Apple Inc. Apple Inc. is an American
smartphone and gadget production company which has captivated users of smartphone
worldwide.

Not only Apple Inc. Chinese Company Huawei is also giving tough time to Samsung due to its
cost leadership and flagship smartphones. Samsung is dealing with intense competition in
international market. For smooth functioning, the social, technological and other PESTLE factors
should be satisfied properly to keep customers engaged.

a) Social
The future international and national business strategy of Samsung should be flawless in terms of
its technology. Customers in smartphone industry require new and innovative ideas to keep them
updated and connected in different forums. For this purpose, it is necessary that Samsung should
keep on introducing new and novel features in its smartphones to keep customers satisfied
(MSG, 2017). The factors which play a major role in technological advancement of Samsung
include technology used by rivals, customer demands, budget allocated to research and
development etc. The international business strategy of Samsung should take into account social
analysis to address demands of customers. The social regime of PESTLE analysis is impacted by
following factors:

Life style

Samsung should take into account standard maintenance requirements of customers. People
choose smartphone brands owing to their living standards besides prices and features. Samsung
should improve its brand awareness in community in order to make it a sign of prestige for
customers (Nyakang, 2017).

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Beliefs

Customer base their smartphone purchase decisions based on their beliefs and behaviors.
Samsung should understand about belief and concepts followed by customers in each niche to
target wide range of customers worldwide.

Changing technology

Customers change their purchase decisions based on latest technology available in market. Not
only this, they need status fulfilment by choosing latest technological brand of smartphones in
market. Samsung should offer latest and innovative features to fulfill their status needs
(Dennison, 2015).

Cultural aspects

Cultural aspects have the biggest social impact on customers. They choose a brand which fulfill
their cultural beliefs and assumptions. Besides communication and connection purpose, a smart
phone is representative of cultural values a customer follows (Nyakang, 2017). Samsung should
address cultural needs of customers to attract them towards the brand. It also help the company
to tailor their cultural needs and keep them satisfied in long term.

Brand consciousness

Customers are brand conscious these days. They choose a product by seeing the brand name.
They feel valued when they use a valued brand. For this purpose, Samsung should address
goodwill issues on timely basis to ensure customers that it is one of the leading smartphone
brand in global industry (MSG, 2017). Samsung should add value to its goodwill and promote it
properly to endorse its novel features and specifications.

Demographic factors

Samsung is operating in global smartphone industry. Different age groups have different
requirements and demands from a smartphone. In order to meet demand of all age groups,
customers should be targeted on segmentation basis (Nyakang, 2017). It is not possible to offer
all demanded features in a single phone. Samsung should launch multiple models owing to needs
and requirements of different age groups in different market segments.

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 b) Threats & Opportunities for Samsung
Samsung has been facing several threats and opportunities due to intense competition in global
smartphone industry. The major threats and opportunities faced by Samsung have discussed as
follows:

Threats

 Samsung has been losing its leadership in smartphone industry due to cost leadership
tactics of Huawei (Nyakang, 2017).
 Due to different demands from different demographic groups in a single market, the
company is facing saturation in smartphone markets in developed countries.
 Due to constant changes in technology demands the company is facing decline in margin
in hardware production leading to low profits.
 Due to weak copy right grounds, it is possible that it may be sued for breach of patent
rights.
 The intense competition in global market and significant efforts done by its rivals, the
company is facing intense price war

Opportunities

 The company has launched a massive development and research center which aids it to
launch and latest models time to time
 The research budget of research and development of Samsung has allocated $12.7 billion,
even more than Apple Inc (Nyakang, 2017).
 The company can focus on niche markets by offering different models for different kind
of customers and age groups at reasonable prices
 The market and promotion strategies of the company have added value in its goodwill.
 The company is also obtaining patent rights through major acquisitions all over the world
which may help it to overcome threat of being sued on breach of patent rights.

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Recommendation
For effective functioning to avail opportunities and avoid threats, Samsung should take into
account standard maintenance requirements of customers. Samsung should understand about
belief and concepts followed by customers in each niche to target wide range of customers
worldwide. Samsung should offer latest and innovative features to fulfill their status needs.
Samsung should address cultural needs of customers to attract them towards the brand. It also
help the company to tailor their cultural needs and keep them satisfied in long term (Janrain ,
2017). Samsung should add value to its goodwill and promote it properly to endorse its novel
features and specifications. Samsung should launch multiple models owing to needs and
requirements of different age groups in different market segments.

2. Global Supply Chain Management (SCM)

The supply chain network is essential for effective functioning of any company. The supply
chain management deals with distribution of goods and services from suppliers to company and
company to its customers. The supply chain of different companies and industries rely on
different levels. Some companies involve multiple layers such as distributors, retailers and sub-
retailers. Whereas some companies maintain direct distribution chain involving suppliers,
manufacturer and customer. Global supply chain management (GSCM) of Samsung involved
distribution of its products and services in cross-nationals around the globe.

1) Supply chain management of Samsung

The global supply chain management of Samsung has been playing an essential role in
maintenance of its leadership in smartphone industry. The GSCM of Samsung has shown as
follows:

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Source: (Benjabutr, 2017)

The factors which have played a major role in improve the functioning of its GSCM involves

Cost competitiveness

Samsung has been offering different leadership to customers to keep them engaged in long term.
Due to economies of scale and effective strategic practices employed by Samsung distribution
segment, the company has been manufacturing on low costs (BSBM, 2017). Due to low costs of
production, the cost competitive supply chain has enabled the company to offer its smartphones
on low prices. It has led in strength of competitive advantage of the company in its respective
market.

Human resource capacity

The experts and experienced staff hired for distribution of smartphones have been playing a
major role in its effective functioning (Saleeth, 2010). The human resource capacity of Samsung
is the major strength of its GSCM. The workers hired for supply chain network, the suppliers
hired and staff of distribution center is highly competitive.

On time delivery

Samsung management has always ensure that customers are offered their orders on timely basis.
The delivery system of the company is efficient and flawless. It is possible due to timely delivery

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from its suppliers. Samsung has hired a competitive and reliable chain of suppliers which has
enabled the company to meet its order deadlines properly (Janrain , 2017).

Response to Risk

Different business deals face different kind of risks. The supply chain management of Samsung
is highly responsive to different kind of business risks (The Importance of Supply Chain
Management in Competitive Business: A Case Study on Woolworths, 2015). The risk
management approach of Samsung has been playing a major role in its effective contribution
towards competitive advantage of the company.

Supplier competitiveness

The foremost factor which has been contributing as a core factor in success of supply chain
management of Samsung is supplier competitiveness (Kelly & McAllister, 2016). It is possible
due to timely delivery from its suppliers. Samsung has hired a competitive and reliable chain of
suppliers which has enabled the company to meet its order deadlines properly.

Six sigma model

Samsung has created a synergy between its supply chain management and six sigma to offer a
fast and efficient supply chain for its customers. The core constraints of six sigma model include
project discipline, sustaining results, well established HR framework and quantitative strength.
These all factors have cumulatively contributed in effective functioning of its supply chain
(Kiger, 2016). The systemization and automation of supply chain has also contributed in its
effective performance.

2) Weaknesses in SCM of Samsung

There are several weaknesses and room for improvement in Samsung supply chain has also been
identified which needs to be addressed for its effective performance. The major weaknesses of
Samsung supply chain management include:

 The supply chain management has been majorly relying on its suppliers worldwide. The
company has established an efficient network of suppliers. Still over reliance suppliers
may lead to major disaster (MSG, 2017). The company should employ a safe backup
plan.

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  The high automation of supply chain is an alarming factor. The systemization of supply
chain should make up room for manual operations to ensure close monitoring of whole
chain.
 Outsourcing spare parts from suppliers may lead to a major drawback. Samsung should
invest in subsidiaries to manufacture its spare parts as well (Benjabutr, 2017).

3) Role of SCM in competitive advantage of Samsung

The supply chain management of Samsung has been playing a major role in its effective
functioning. The company has gained competitive advantage and market leadership due to its
effective chain of supply. The role of SCM in competitive advantage of Samsung has discussed
as follows:

Cost reduction

Samsung GSCM has been playing a major role in cost reduction. The company has employed
effective supply chain strategies which have led to reduction in costs involved in production and
distribution (Kelly & McAllister, 2016). Due to low production and distribution costs, the
company is offering low prices to customers leading to its cost leadership in global market.

Logistics

Smooth and effective supply chain network of Samsung has reduced transportation costs. It has
also reduced the time involved in supply chain processes. The safe and reliable delivery practices
have enabled functioning of logistic center of the company (The Importance of Supply Chain
Management in Competitive Business: A Case Study on Woolworths, 2015). The effective
communication between distribution team worldwide is also playing a primary role in its smooth
operations.

Production benefits

Samsung has hired reliable suppliers who ensure timely delivery for manufacturing processes.
Due to timely delivery from suppliers, the production lines of company are working effectively.
These all factors adjacent to SCM of Samsung have played a major role in competitive
advantage of the company in market (Benjabutr, 2017).

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 3. Corporate Social Responsibility (CSR)
Companies in an industry are bound to follow environment friendly practices. Corporate social
responsibility framework establishes necessary rules and regulations to be followed by
companies to ensure safe environmental and legally compatible practices. Samsung has been
playing a progressive role by adopting and implementing corporate social responsibility (CSR)
framework worldwide (Ellett, 2013). The company has taken initiative to facilitate its
stakeholders by choosing legal and safe operations.

a) CSR plans and practices of Samsung CSR

Samsung has addressed all areas of CSR framework establishment including staff treatment with
healthy practices, safe environmental practices and legally safe actions. The company has
recently won a competition termed as “Solve for Tomorrow Contest” to contribute in STEM
education of people all over the world. The company has ensure strict measures for
implementation of CSR framework all over the world (Ellett, 2013). The company has taken into
account greenhouse emission issues, child labour issue and other legal and environmental
problems. Some of the major areas of CSR framework establishment include:

3.1. Communities
Samsung management has taken major steps to facilitate communities by launching several
health care, education and infrastructure development programs. The company has introduced
health care facilities in several countries in third world including Asian and African regions.
Besides this for education development, the SMART school program aimed at introducing
modern educational cultural among children all over the world (Noked, 2013). The beneficiaries
of these programs are facilitated without any kind of gender, ethnic or any other type of
discrimination. Currently 30 health care programs are continued under supervision of Samsung.
It aims at improving life standard in third world countries. Samsung CSR activities for
eradication of poverty have been working to overcome basic necessities gap worldwide.

3.2. Staff treatment

Samsung success is a based on its cautious policies for the security and benefit of its workers and
staff members. The company has implemented health and safety standards to ensure safe
environment for its workers. For the purpose of keeping workers satisfied, the gender

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discrimination act is implemented to ensure workers don’t feel demotivated. In China the
company has conducted inspections to ensure that workers are not below permissible age to
avoid Child labour issues (Messenger, 2017).

Samsung has initiated employee benefit programs for motivation and high morale of workers.
For personal development of workers, they are offer training sessions. The health and safety
standards adopted by the company ensure a safe and racism free place for workers. The company
has started 120 total courses for handling of chemical usage in construction processes. For this
purpose Samsung has started certified chemical training, material safety data sheets (MSDS)
training etc.

3.1. Waste management

Samsung is a manufacturing company which has to handle several waste products as a result of
manufacturing processes. The company has taken strict measures to dispose off waste
management worldwide. The company has signed a Veolia circular economy partnership with
French company for E-Waste recycling. The company has recycled 2.26 million waste in 6 years
to ensure safe environmental practices (Messenger, 2017). The company uses chemicals and
plastics in several production process. Safe recycling processes have been established to reduce
greenhouse carbon emission and safe disposal and recycling of plastic materials. For this purpose
Samsung has established plant first program. Currently after disaster of Galaxy Note 7, the
company has invested 4.3 billion for safe disposal of defected phones for safety of users.

b) Impact of Samsung CSR policies on stakeholders of Samsung

Stakeholders are directly concerned with policies and practices of a company. Each decision
taken by management has a primary impact on interests of its stakeholders. The stakeholders of a
company include its suppliers, investors, directors, customers, employees and government in
which state it operates. Corporate social responsibility is a framework which directly impacts the
concerns of stakeholders because it aims at safety of customers, employees and community
(Noked, 2013).

Implementation of CSR framework on stakeholders of a company fulfill their concerns and keep
them committed with the objectives of the company. The major impact on the stakeholders of
Samsung due to implementation of CSR framework include

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Economic considerations

The CSR activities undertaken by Samsung have contributing in increasing GDP of Korea. The
company has been playing a major role in earning revenue for the state due to its giant operations
(Ellett, 2013). Korean government rely on sales and profits for the company. For its safe and
smooth operations it is given several tax exemptions due to its active role in community and
economic development.

Environmental benefits

The CSR framework adopted by Samsung has contributed in major environmental benefits. The
reduction in carbon emission programs has benefited the environment and recycling processes
have resulted in decline in pollution issues. It has directly impacted all stakeholders of the
company.

Ethnic benefits

The employee safety, sex discrimination and equality acts implemented by Samsung have
resulted in ethnic benefits for all employees and suppliers (Noked, 2013). The company works
on global level, ethnic equality has resulted in high morale among employees, suppliers and
investors.

Social impact

CSR framework has resulted in safe social practices including health practices and safety
standards. The social impact like environmental benefits have directly impacted all stakeholders
of the company. Due to positive social impact, the company has been enjoying a positive
goodwill in global market.

Stakeholder engagement

Due to CSR activities undertaken by Samsung, the stakeholders of the company have shown
high level of loyalty and commitment. Stakeholders of the company have gone concerned about
the functionality of the company (Janrain , 2017).

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Conclusion
Samsung is a global leader in mobile phone industry. The company has gained a huge market
share due to latest technological advancements and innovative ideas used by the company. This
report has discussed the role of Social factors on international business strategy of Samsung.
Samsung has to deal with different social factors in order to offer quality solutions for demand of
customers. These factors include cultural aspects, demographics, technological demands etc.

The report has also discussed the Global supply chain management of Samsung. The report has
discussed in detail how GSCM of the company has been playing a major role in its competitive
advantage in global industry. The global supply chain management of Samsung has been playing
an essential role in maintenance of its leadership in smartphone industry.

Samsung has addressed all areas of CSR framework establishment including staff treatment with
healthy practices, safe environmental practices and legally safe actions. Samsung corporate
social responsibility framework has put a significant impact on its stakeholders. Samsung
management has taken major steps to facilitate communities by launching several health care,
education and infrastructure development programs. The report has discussed the CSR initiatives
taken by the company.

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References
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[Accessed 8 Dec 2017].

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Available at: https://www.managementstudyguide.com/pestle-analysis-of-samsung.htm
[Accessed 9 Dec 2017].

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Nyakang, E., 2017. SWOT and PEST analysis of Samsung. [Online]
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