Samsung Electronics Company is a multinational electronic firm having a South Korean origin and being headquartered in Suwon. In the past three years, the company has been a leader in the field of technology as it is evident from the tremendous increase in the company’s revenues, as explained by Barrett (2012). Samsung Electronics Company employs many people since it has plants, market and sales networks globally. According to Choe (2010, p. 31), the company deals in four principle areas, including telecommunication network, semiconductor, LCD digital, and digital media appliances. Last year, it became the greatest smartphones vendor; during that year, the company created a prominent opportunity in the tablet computer market. Since 1969, the company has prevailed among the growing and developing business firms globally. Samsung Electronics Company has been growing and becoming more successful every passing year.
The success and global recognition of the company are attributed to the establishment of a new management initiative by the SEC Chairman, known as Kun Hee Lee. Quelch and Harrington (2008, p. 501) asserts that the initiative came along with numerous changes that enabled the company to survive the global financial crisis that saw most businesses fall. The company became profitable and economically stable. The application of fundamental corporate strategies helped immensely in the development of SEC. A serious long-term commitment to the creation of premium products, brand values, and innovative products saw the company succeed throughout the years. SEC has managed to stay at the top of businesses through strategic planning of its activities. By extensive research and analysis of the potential market, calculated and accurate marketing strategies, and excellent risk taking steps, SEC climbs the economic ladder all the time, as shown by Sun et al. (2010, p. 71).
Samsung Website (2012) shows that Samsung Electronics Company is known to engage in the manufacture of lower cost products than its competitors. Its market shares were, hence, built through scale economy. The new management initiative transformed SEC from a cheap OEM to a provider of high valuable products. Samsung, therefore, developed a strong brand power that enabled it to enter the market under its own brand name. Samsung has dominated the South Korean local market for the longest period. It was the leading provider of electronic appliances in the country with over fifty per cent shares in its products’ markets. This was possible because of the great number of South Koreans living in urban areas, as explained by Rusch (2003, p. 105). The company thereafter emphasized the importance of its marketing strategies in almost 200 country markets. The markets are attracted to the company in numerous ways.
Chang (2011, p. 105) suggests that, with the evolving technology, many people tend to buy improved hi-tech appliances like smart phones. Increased demands for the appliances encourage the company continue manufacturing since customers keep purchasing. Most consumers trust the SEC services since their appliances seem to be durable and affordable. These characteristics attract customers to the company, giving it the chance to grow economically and in popularity. Samsung products are always accessible, available, and ubiquitous, enabling its easy use by the consumers. The designs are also visually clear and are focused on functional performance of the electronic appliances. This helps to attract customers.
The market is full of Samsung’s competitors, for instance, LG, Nokia, and Sony, and so on. Staying on top of the electronics market, therefore, requires commitment and unique marketing strategies and organization. SEC has a dedicated marketing organization that mainly coordinates the marketing efforts of Samsung Company, as it is shown by Lee (2003, p. 53). It also helped in the development of a corporate marketing program outside Korea. With these changes, the company managed to improve the marketing education and organization within its premises. This, in turn, attracted more customers to utilize Samsung products in the global markets.
The new marketing organization includes a marketing strategy team, which aims at developing a marketing strategy that is effective worldwide. The team also controls the Samsung brand campaigns and its marketing budget, which saw the SEC grow incredibly. Besides, the marketing team establishes the global relationship between potential consumers and the management. The regional strategic team helps the Samsung Company to plan and obtain a strategic direction in regional markets. Market research and analysis, particularly of competitors’ information, are made possible by the product strategy team, as stated by Fried (2012). Being aware of its competitors’ strengths and weaknesses gives Samsung company the spirit to engage in further innovative business ideas. The team also engages in market exhibitions during trade shows and makes sure that the Samsung products are unique and exemplary. The use of a single marketing and advertising agency is also a method enabling SEC to stay on top of this business. It used more than 55 agencies and different slogans initially.
However, with the new management initiative, the company opted for a single advertising agency with a unique logo. This marketing strategy has enabled the company enjoy the unique essence of its brand, which differentiates Samsung from other brands in the market. The Samsung marketing budget is a significant contributor to the company’s survival in the competitive market. Originally, setting of marketing budgets at Samsung was based on the percentages of current sales and not the relationship to potential growth, as explained in the Samsung Case Study (2012). Budget reallocations enhanced marketing budgets at Samsung, where more funds were deployed in areas where high returns were reaped rather than equal deployment. This was enabled by the utilization of a computer program called M- Net. The program’s function was to analyse the previous marketing plans and to recommend where marketing money should be invested by category and country.
Samsung Company, therefore, has a competitive advantage over its competitors in the market. There is a close relationship between the competitive advantage and technology, which is utilized by entirely all companies today. However, technological innovations relating to resources and capabilities can shape the success of business firms dynamically. Kotler and Keller (2008, p. 121) states that SEC employs inventive and dynamic resources in its business operations and these have enabled its improvement throughout the years. The company concentrates on what is of importance to the potential market. Consideration of many ideas from different perspectives and not just the first innovative idea is their strong point.
The company also takes risks like other businesses and the best innovative idea is not always seen as best until concrete results are established. SEC aims at utilizing the existing technologies to impress its customers. This is principally because essential innovations do not need unique or scientific steps. Combination of the existing technologies can be more successful than the new, unique inventions. SEC involves its workers in all technological innovative processes to enable the company’s survival in the market. Incremental innovation, entailing step by step accumulation of innovative solutions, greatly helped the company in different markets. Radical innovation, on the other hand, has enhanced the technological improvement of Samsung Company from the small enterprise it was to a technologically diverse firm. SEC employs creative and innovative workers and designers, giving it an advantage in the competitive market, as noted by Chang (2011, p. 96). Human factors contribute substantially to the successful innovations as compared to scientific factors. Maintaining a competitive advantage in the market also involves the application of dynamic strategies and hypercompetitive methods. Samsung focuses on the centrality and ubiquity of dealing with change and dynamism. This is essential in enhancing maintenance of competitive advantage as suggested by Quelch and Harrington (2008, p. 507). Through consideration of the roots of dynamism, SEC utilizes strategic actions in the creation of change, defence against change, and exploitation of opportunities that the change might present.
Brammer (2012, p. 83) suggests that, for a business firm to be successful, it needs to have certain distinctive capabilities and resources to enhance its growth and survival in the market. Samsung has unique capabilities and resources, around which it builds its strategy to drive the firm forward. From the internal environment, SEC has put in place values and goals, structure and systems, resources and capabilities to enhance its operation through strategic methods. Externally, the company engages with the customers, competitors, and suppliers to accomplish its internal goals. Samsung concentrates on the way it does activities and not the activities it does. Most companies do the same thing; for instance, electronics production is familiar to many companies. However, what distinguishes the companies is how they produce and design their electronics. Samsung is capable of designing and producing unique appliances, making it distinct from other companies.
Resources are the assets of the SEC firm. The firm possesses resources that enable it produce products that are accessible, available and ubiquitous to all markets and customers. The company has both financial and physical resources, giving it the opportunity to establish its plants in different countries. Technological resources are also available, and this is mainly the reason as to why Samsung is known worldwide as one of the innovative electronics company of all times. The company also has a formidable reputation among its customers, as asserted by Choe (2010, p. 106). Due to its products’ availability and affordability, the company has gained the customers’ loyalty. Its reputation gives the company the advantages of suppliers’ loyalty, brand equity, and customer retention. Human resources, for example, employee training, experience, commitment, and adaptability give Samsung a step forward in the market. Experienced employees are often bound to drive the business operations to success. SEC has numerous forms of capabilities, for instance, financial and acquisition management, strategy control, and research and development capabilities. These are vital during the initial stages of business projects. Manufacturing, designing, marketing, sales, and distribution of products are the vital capabilities of the Samsung Company. The resources and capabilities possessed by Samsung are valuable and rare among other companies. The resources are also durable, hence capable of enduring market competition. Transferability and replicability are characteristics of Samsung resources that enhance its survival in the competitive market, as shown by Barrett (2012, p. 119). With these capabilities and resources, SEC can conquer most global markets, and with time, it might be the number one electronics provider.
Samsung Company is successful as portrayed in most of its premises. However, for years, the company has been faced with challenges, some of which it was able to control through strategic planning, but others seemed persistent. The major challenge of SEC was an external problem of brand recognition. Originally, the company sold its products to the OEMs since it had little interest on considering any work on the Samsung brand. However, as technological evolution began to crop in, the brand became an attractive idea for the company. During this time, getting the final consumers to purchase the Samsung products became hard since the brand was unknown to many. The concept of marketing was also a crucial challenge for the Samsung Company. To the marketing managers, marketing was considered an absolute selling, which reduced the returns of the company’s investments tremendously, as explained by Sun et al. (2010, p. 109). The problems were, however, overcome through proper management initiative and the introduction of new marketing and management strategies. The principle problem faced by the Samsung Company was the weak brand issue. It was considered weak since the potential customers were not aware of its presence.
The only solution to the weak brand was outsourcing the development of the brand to a professional advertising agency. The outsourcing initiative is aimed at creation of a logo that is recognized and accepted globally. The outsourcing strategy also helps in regional, local, and global research of markets. The strategy spreads the knowledge about the brand among current and future potential customers. Education of the managers on matters relating to marketing also served as a solution for the Samsung marketing and brand problem. Training the Samsung employees on the best ways of operation is the key way of dealing with challenges, as asserted by Lee (2003, p. 89). Knowledge about brand equity is essential, and this is made possible through an effective marketing team. An effective marketing team is, therefore, composed of three basic teams: the marketing strategy, regional strategy, and product strategy team.
The survival of a business company depends entirely on the market characteristics and attractiveness. The demand of the market drives the production and design process of a company. Samsung is among the most fast growing electronics companies in the world. The market is, however, full of competition. Having a competitive advantage is, therefore, essential for Samsung as a company. Through the use and implementation of a new management and marketing initiative, SEC has managed to form strategic teams that help in strategic planning and running of the business. Besdides, the company has distinctive resources and capabilities that make it a unique manufacturer and provider of electronic appliances. However, the company still faces challenges, which require resolution if the company wants to remain successful.
About the Author: Jimmy Ruiz is an editor at https://best-essays-sites.com . He has a master’s degree in psychology and more than seven years’ experience as a writer and editor. Jimmy is primarily focused on writing about self-improvement.