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Samsung: Communications and Device Solutions. Samsung Is The World's Largest Mobile Phone and

This document examines the main changes at Samsung from 2013 to today, including increased focus on contract manufacturing and retailing, and continuous new product introductions. It discusses how Samsung's strengths in R&D, marketing, and design have evolved, and weaknesses like focusing on too many products. Opportunities around application processors and tablets are covered, along with the threat of rapid technological change.

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Opeyemi Oyewole
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74 views5 pages

Samsung: Communications and Device Solutions. Samsung Is The World's Largest Mobile Phone and

This document examines the main changes at Samsung from 2013 to today, including increased focus on contract manufacturing and retailing, and continuous new product introductions. It discusses how Samsung's strengths in R&D, marketing, and design have evolved, and weaknesses like focusing on too many products. Opportunities around application processors and tablets are covered, along with the threat of rapid technological change.

Uploaded by

Opeyemi Oyewole
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Samsung

Introduction

Samsung Electronics Co., Ltd. (further Samsung), a sub-unit of Samsung group is the world’s
second largest technology company by revenue. The company produces consumer
electronics, telecommunications equipment, semiconductors and home appliances. The
company operates in three business divisions which are Consumer electronics, IT and Mobile
communications  and Device solutions. Samsung is the world’s largest mobile phone and
smartphone vendor and it operates in 79 countries, where it sells a range of more than 100
products (Samsung, 2017). Today, Samsung is establishing itself as one of the most
successful companies in the world with an extensive product line that serves many people
through innovative, reliable services, talented persons and an alliance with their customers
and partners.

The paper seeks to examine main changes occurred in Samsung from 2013 up to today along
with the how the strength and opportunities has evolved and the weaknesses and threat during
the period.

What are the main changes occurred in Samsung from 2013 up to today?

i.) Increased focus on ‘contract manufacturing


There has been an increased focus on ‘contract manufacturing’ by Samsung which has
resulted in increased revenues in its Semicon (semiconductors) business segment (2014 to
2019). The Increased focus on manufacturing was driven by sharp decrease in 2014 revenues
in China (-17.75%) and EU (-18.40%), and made Vietnam its global production base for
display panels, with plans to add another plant with a US$2.5 billion investment (Reuters,
2017). This change enabled Samsung to compensate for the downtrend in sales revenues from
Consumer Electronics and IT and Mobile (IM) divisions

ii.) Increased focus on retailing of TVs and Mobile products


There has been an increased focus on retailing of TVs and mobile product. Samsung also
launched the experience stores in key global markets such as the UK, USA, Korea and
Malaysia. ‘Samsung Experience Stores’ were launched in 2014 to augment for the downtrend
in main smartphone which was driven IM business division, that accounts for more than 50%
of the sales revenues (Razdan, 2017). The Experience Stores also helped to capitalise on the
impulse buying behaviour of mobile phone shoppers.

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iii.) Continuous New product introductions in IM business
The new product introductions of smartphones such as Galaxy 7 Edge in 2015, Galaxy S8 in
2017 and Galaxy S20 in 2020 helped Samsung to capitalise on interest of consumers in
technological savvy products. Samsung was able to stabilise the sales revenues in its IM
division since year-on-year revenues decreased by only 3.13% in 2016 (Razdan, 2017).

How have the strength of the company evolved in this period?

i.) Strong Focus on Research and development


The strength of Samsung over the period has evolved into being a very highly research and
development (R&D) focused company. Over the years Samsung continues to strengthen its
R&D activities and has today grown into a global R&D network which operates 34 R&D
centers across the world. In 2017, Samsung’s invested US$14.857 billion in R&D which was
the 2nd largest amount spent in the world only behind Amazon.com
(Strategicmanagementinsight, 2020). In addition, there is a direct relationship with
company’s R&D spending and revenue growth and expansion into the new product markets.
This is visible over the period as the revenue increases as the investment in R&D spending.
Increase in R&D spending to 6.9% in 2016 as compared to 6.25% in 2013 (Razdan, 2017).
The impact of the increase in R&D also resulted in more innovation for Samsung and making
it one of the strongest patent portfolios among technology companies.

ii.) Strong Marketing and Design


Samsung has built it strength in area of Marketing and design which has also played a vital
role in the company’s success over the period Strategicmanagementinsight, 2020). Samsung
has developed a strong capability focusing on it customers. By building it strength in
Marketing and branding, it has moved to seeking in understanding and delivering the needs
and wants of customers both in the present and future. Samsung has the transformed it
marketing function by building a customer-oriented program that is focused on productivity
and process improvement. It has continued to invest in technology and thus develop unique
and rare products that pave way for Samsung to enter new markets (Razdan, 2017). In
addition, Samsung has evolved to be a company that with a well-designed range of product. It
now has a solid design philosophy, that is simple, modest and instinctive, efficient and

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adaptive. It has grown to make sophisticated designs that reflect lifestyles of users and
interact with them.

What do you consider to be the weaknesses of the company during this period?

i.) Focus on too many products.


Over this period Samsung has focus on too many products such as digital TVs, color
monitors, DVD players, computers, printer’s LCD panels, display drivers, flash memory,
wireless handsets and smart phones mobile phones, notebooks, semiconductors, household
devices etc (Samsung, 2016). Samsung serves 4 different industries with many different
products in them, thus resulting in a weakness over its competitors for the reason that it loses
focus when competing in many industries and too many products .

How have the opportunities of the company evolved in this period?

i.) Increasing demand for quality application processors and growth of tablets
market
Samsung has evolved to be among the key manufacturers of application processors for
smartphones and tablets (Samsung, 2017). Over the years, there has been growing demand
for these products and which requires better quality application processors that only Samsung
has the competences and capacity to provide. Moreover, the tablets market has grown in
double digits over the years. It evolved and position itself in the tablets market and
continuously expanded by introducing newer, better quality tablet models, such as its current
Samsung galaxy line (Strategicmanagementinsight, 2020).

What do you consider to be the threats of the company during this period?

i.) Rapid Technological change.


The has continuously been a strong threat to Samsung and other tech companies as well.
Rapid technological change has put companies to be under pressure to release the new
products faster and faster (Strategicmanagementinsight, 2020). Companies that couldn’t keep
up with the competition went under and lost their market share as customers sought for
products with the latest features and design (Reuters, 2017). This is especially was difficult
for Samsung as it has to introduce something new and innovative in order to keep up with
technological change.

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References

Razdan., V., (2017) Analysis of Samsung Electronics’ Strategy for the period 2014-2017, and
development of strategic options for growth and sustainability. [Online]. Available at:
https://www.researchgate.net/publication/317648203 (Accessed: 08 September 2020)

Reuters (2017) Samsung Display plans to invest another US$ 2.5 billion in Vietnam: onhap
[online]. Available at: http://uk.reuters.com/article/us-samsung-elec-vietnam-
idUKKBN14U0SR (Accessed: 08 September 2020)

Samsung (2015) 2014 Samsung Electronics Annual Report (pdf). [Online]. Available at:
http://www.samsung.com/common/aboutsamsung/download/companyreports/2014_E.pdf
(Accessed: 07 September 2020)

Samsung (2016) Annual Sustainability Report 2016. [Online]. Available at:


http://images.samsung.com/is/content/samsung/p5/sg/ir/docs/2016-samsung-sustainability-
report.pdf (Accessed: 07 September 2020)

Samsung (2017) Research and Development [online]. Available at:


http://www.samsung.com/us/aboutsamsung/samsung_electronics/business_area/rd_page/
(Accessed: 07 September 2020)

Strategicmanagementinsight (2020) SWOT Analysis of Samsung [online]. Available at:


https://strategicmanagementinsight.com/swot-analyses/samsung-swot-
analysis.html#:~:text=This%20Samsung%20SWOT%20analysis%20reveals,affect%20the
%20company%20the%20most. (Accessed: 07 September 2020)

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