Chapter One: Introduction

In the era of modern technology and innovation, for over 70 years, Samsung has been dedicated
to making a better world through diverse business that today span advanced technology,
semiconductors, skyscraper and plant construction, petrochemicals, fashion, medicine, finance,
hotels and more. Samsung Electronics leads the global market in high-tech electronics
manufacturing and digital media. Samsung Electronics is one of the world's largest
semiconductor manufacturers; Samsung Electronics is also South Korea's top electronics
company. It makes many kinds of consumer devices, including DVD players, digital TVs, and
computers, color monitors, LCD panels, and printers; semiconductors such as DRAMs, static
RAMs, flash memory, and display drivers; and communications devices ranging from wireless
handsets and smart phones to networking gear. The company, which is the flagship member of
Samsung Group, also makes microwave ovens, refrigerators, air conditioners, and washing
machines. Nearly half of sales come from the Asia/Pacific region. Top industries for Samsung
Electronics Co. are memory chip and module manufacturing, communications chip
manufacturing, wireless telephone handset manufacturing. Samsung is no longer the company
that it used to be, it is a company that has put in a lot effort and money for changing its
reputation. Today, Samsung is striving and growing into one of the most successful companies
ever. It has an extensive product line that caters to many different people. It no longer operates
on low profits; it‘s striving on the highest. Though innovative, reliable products and services,
talented people, a responsible approach to business and global citizenship, and a collaboration
with their partners and customers, Samsung is taking the world in imaginative new directions.

However, not all of them have the potential and proper strategy to successfully sustain an
entrepreneurial business endeavor of their own. The researcher wished to capture the essential
strategy to align the arrow towards targeting the highest level of competitive business
performance. To support this study on the strategic management system for competitive business
performance, the researcher had consulted most of the textbooks written by famous authors in
business strategy made available on the Internet. Therefore, this paper discussed and
demonstrated those literature reviews that have given strong support on the subject.

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 Chapter Two: Company overview
2.1 Company Background

Samsung Company is a South Korean international corporation whose headquarters are located
at Samsung Town in Seoul. The organization comprises multiple affiliate businesses that run on
the Samsung trademark. Lee Byung-Chul established the organization in 1938. Initially,
Samsung was a trading company. The corporation specialized in grocery farming and the
production of noodles. It also sold dried food locally. Between 1938 and 1958, it used the
Samsung Byeolpyo noodles logo, which represented its primary line of business. In 1947, the
Korean War led to Lee fleeing Samsung Town, which resulted in the closure of the business . He
opened a sugar refinery business in Busan. Later, Lee and Cho Hong-Jai, founder of Hyosung
Group established a new business that became known as Samsung Moolsan. In 1951, the
corporation split, and Samsung Moolsan transitioned to Samsung Group. The Corporation
embarked on an aggressive diversification strategy resulting in it venturing into the electronic
industry and shipbuilding business.

In 1968, Lee invested in the electronics business, culminating in the establishment of Samsung
Electronics, which is a subsidiary of Samsung Group. In 1970, the company manufactured the
first 12-inch black-and-white television set (TV). It continued to look for ways to enhance the
manufacture of TVs, and three years later, Samsung Electronics made a 19-inch TV popularly
known as Maha 506. In 1978, the business became the global leader in the manufacture of
television sets. The increased diversification of product lines led to Samsung manufacturing its
first personal computer in 1983. The company’s objective was to become the leader in the
electronics industry. In 1991, Samsung ventured into the mobile phone business. Investment in
modern technology enabled the organization to produce the first liquid crystal display (LCD)
screen in 1995. After a ten-year period, Samsung became a leader in the production of LCD
screens globally. The organization’s logo has evolved. Today, Samsung has a blue logo that
depicts consistency, steadiness, and corporate social responsibility. The corporation also has an
audio logo. Samsung Company uses a unique font dubbed Samsung one, which enables the
organization to realize the steady and widespread visual distinctiveness of its products. The font
was devised to be applied across Samsung’s different device portfolio. It made it easy for

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customers to read all Samsung products ranging from the smallest gadgets such as smartphones
to the most massive electronics like refrigerators and TVs.

In 2004, the organization surprised the world by developing the first-ever 46-inch LCD
television. In 2007, Samsung realized the dream of becoming the global leader in the electronic
industry. In 2012, Samsung Electronics became the largest manufacturer of mobile phones
worldwide. In 2017, the business continued to internationalize its electronics and activities. At
this time, semiconductors and mobile phones are the significant sources of revenue for the
corporation. Presently, Samsung’s brand value is ranked sixth globally.

2.2 Mission statement of Samsung Company

Samsung’s mission statement is “We will devote our human resources and technology to create
superior products and services, thereby contributing to a better global society.” The statement
puts all its emphasis on the superiority associated with the products it brings to its customers. In
fact, it exhibits confidence in their potential to change the overall society.

2.3 Vision statement of Samsung Company

Samsung’s vision statement is “to inspire the world with our innovative technologies, products,
and design that enrich people’s lives and contribute to social prosperity by creating a new
future.” The statement calls attention to its leadership position and how it directs the market and
upgrades life itself with its products and services.

2.4 Core Values of Samsung Company

Samsung core values include “people, excellence, change, integrity, and co-prosperity.”
Samsung has a very rich culture in all its facilities across the globe, and all of them display
similar and comparable practices. This element is because they all operate under the same values
as discussed.

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At the heart of this company is everyone who directly and indirectly relates to Samsung, and the
company highly respects them and calls for everyone to do so too. One of the ways to do so is by
maintaining top-quality performance at all levels and in all activities while looking to stimulate a
positive change all the time. Samsung states that, while delivering is important, honor must
precede everything else. Most importantly, Samsung promotes settings and practices that evenly
distributes benefits such that no single entity benefits on its own. Instead, everyone gets a piece
of the cake, ensuring prosperity across the board, including its employees, clients, and other
bodies.

 People: At Samsung, it‘s dedicated to giving people a wealth of opportunities to reach

their full potential.
 Excellence: Everything done at Samsung is driven by an unyielding passion for
excellence to develop the best products and services on the market.
 Change: In today‘s fast-paced global economy, change is constant and innovation is
critical to a company‘s survival. They set their sights on the future, anticipating market
needs and demands.
 Co-prosperity: Samsung is dedicated to being a socially and environmentally
responsible corporate citizen in every community.

2.5 SWOT Analysis

Samsung is the biggest company in the world in the electronic device market. Samsung SWOT
analysis reveals how the second largest technology company used its competitive advantages to
become a leader in consumer electronics, home appliances and semiconductors industries.

It identifies all the key strengths, weaknesses, opportunities and threats that affect the company
the most.

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 Strength Weakness
SWOT
Analysis
Opportunitie Threats
s

Fig 2.1: SWOT Analysis

Strength:

 Wide Product Portfolio

 It is the world’s largest manufacturer of television sets, LCD panels, mobile phones and
smartphones
 Innovative organization at the forefront of new technologies and ideas.

 Strong brand loyalty

 Strong brand name

Weakness:

 Competitors are catching up in the smart phone market. 

 Smart phone sales declining, consumers are less reluctant to update their phones on a
yearly basis because of the cost of the phone, the lack of excitement from upgrading
and the little technological difference in updating their phones.
 Samsung is constantly making efforts to diversify the markets from which the sales are
derived, but they are still very dependable on the US Market. As a result they are
vulnerable in a possible downturn of the US economy.

 Curved TV range and 3d range turned out to be a flop

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Opportunity:

 To take advantage of developing markets such as Africa and India.

 The middle class market is growing around the world this could result in an increased
opportunity for Samsung to further sell their products.
 The E-commerce market is on the tremendous rise and Samsung is already benefiting
from it.
 Samsung can make impressive transformational accomplishments if it invest in its HR
management.

Threats

 Apple is still the dominant player within the market

 Technology has reached a stage where consumers do not feel they have to upgrade every
year
 Competition from opponents especially from those within the consumer electronics,
smartphone products, and computing industries has reached a record high.

 As the middle class are becoming more financially squeezed and stretched in some
markets they are more likely to opt for alternative brands such as Xiaomi and Huawei

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 Chapter Three: Practices of strategic management
Samsung is a huge conglomerate that is well-known and respected globally. Its iconic brand is
considered leader in its respective field in the industry. As a huge multi-national conglomerate, it
consists of many business units or products with worldwide following and in the assignment
excerpt, it mentioned some like first and foremost their flagship galaxy s4 and its previous series,
the note, chips, displays and other technology. Aside from what is mentioned in the excerpt,
Samsung had a variety of technological product advancement like their own version of tablet,
phablet, other phone models, laptops, appliances and a lot more products. The company also
involves in manufacturing, most especially in smartphone components as detailed in the table
and therefore not heavily dependent on outside source of supplies from other companies which
one of the competitive advantages of Samsung.

Samsung follows various types of strategies. Some of strategics are given bellow-

 Diversification Strategy:
Samsung's product development strategy has played a vital role in making Samsung a
diversified global brand. Samsung develops new products which target its existing market
segments and regions. Samsung uses a combination of enhancing its existing products to
completely launching a new product under its brand name. The extensive product
portfolio of Samsung which includes apparels, automotive, solid state drives,
telecommunications equipment, chemicals, consumer electronics, electronic equipment,
medical equipment, home appliances, semiconductors and electronic components speaks
volumes about Samsung’s diversification strategy.

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  Competitive and intensive strategy:
Samsung's generic competitive strategy (Porter's framework) and intensive strategies
for growth (Ansoff Matrix) focus on utilizing technological innovation to support the
company's competitive advantage in the consumer electronics, semiconductors, and home
appliances markets.
Samsung applies the broad differentiation generic competitive strategy. Based on
Michael E. Porter’s competitive strategy model, the strategic objective of broad
differentiation is to maintain competitive advantage by providing unique products
targeting a wide market, which in this case is industry wide, involving practically every
person or group that buys smartphones, laptops, and other equipment. To achieve
Samsung’s strategic plans for growth and expansion in the global market, this generic
strategy requires the application of product development as a main intensive growth
strategy to compete against technology firms like Apple, Google, Sony, and LG.
 Limited Growth Strategy:
It is the type of strategy in which an organization focuses on its current products that are
being produced and the potential market. Ways of growing are considered to make the
product more innovative. Growth strategy is an organization's plan for overcoming
current and future challenges to realize its goals for expansion.

Samsung basically relies on four different growth strategies that is, Market Penetration,
Market Development, Product development and Innovation.

 Product Development: Samsung targets same old customers with a new product. By
launching a new product, they will attract more customers towards their product and can
increase their market share by doing so. For the awareness of the product, they advertise
in TV, newspaper, and pamphlets and on billboards. A strategic objective of product
development in this case is to grow the business through new products, such as new
electronic gadgets. Also, this intensive strategy grows Samsung's operations through
iterative innovation, which leads to improved versions or variants of existing products.
Samsung's product development strategy has played a vital role in making Samsung a
diversified global brand. Samsung develops new products which target its existing market

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 segments and regions. Samsung uses a combination of enhancing its existing products to
completely launching a new product under its brand name.
Example: Samsung launching Galaxy S5 mobile phone
 Market Development: Samsung entering a new market will cause an increase in market
growth and its market shares. By adopting this strategy, they enter a new market by
targeting new customers in other areas. New market for Samsung could be a new Country
or a new City within the same country it is operating in before. Samsung opts for market
penetration to increase its market share. In growing markets, Samsung launches its
market penetration strategy to increase its existing market share. The company can adopt
aggressive marketing and promotions, offer competitive pricing etc. to eat into its
competitors market share.
Example: Samsung introducing its product in a village or a new country.

 Market Penetration: Samsung maintains its market shares. the organization innovates
its product so that their potential customers doesn’t get bored with the product and they
can attract new customers. In this way their customers will be satisfied with the product
and this can lead to greater market share for Samsung. Samsung opts for market
penetration to increase its market share. In growing markets, Samsung launches its
market penetration strategy to increase its existing market share. The company can adopt
aggressive marketing and promotions, offer competitive pricing etc.

 Innovation: Samsung is a company that is very technology oriented and it continuously

improves its technology infrastructure and acquisition. The company uses the most
advanced technologies available to come up with new and innovative offerings for
customers to attract them away from its competitors such as Apple and Lenovo.

The future strategy Samsung, will adopt is substantive growth strategies. In substantive growth
includes vertical integration.

 Vertical Integration:
There are three types of vertical integration, vertical forward integration and vertical
backward integration and horizontal integration.

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 Vertical forward integration: Vertical forward integration in a business is when a
manufacturer decides to controls distribution or retail store. Samsung will cut themselves
off from the wholesalers to sell directly to retailers and then the retailers directly to the
customers. Samsung focuses on the Mid-to-High Powered LED Market. With welcoming
the era of lighting, LED industries are slowly switching from horizontal labor division to
vertical integration development. Switching to vertical integration is Samsung's main
development strategy.
Example: Samsung owning retail shop or franchise and sells their product directly.
 Vertical backward integration: It is a form of integration in which companies controls
its suppliers directly. There will be efficiency and cost will be saved. This might cut
transportation cost, improve profit margins and make Samsung more competitive.

 Horizontal integration: Horizontal integration is the acquisition of a business operating

at the same level of the value chain in the same industry. This is in contrast to vertical
integration, where firms expand into upstream or downstream activities, which are at
different stages of production. So Samsung do not follow horizontal integration.

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 Chapter Four: Findings and discussion

4.1 Strategy Samsung mostly follow

Growth is crucial to the long-term survival of a business. It makes it easier to acquire assets,
attract new talent and fund investments. It also drives business performance and profit.
Developing and then managing a business growth strategy can start by assessing company’s
financial health and how prepared company is for growth. By uncovering the gaps in finances
and operations, changes can be made to put company on more solid footing and more in touch
with the state of business and its opportunities and risks. Samsung, is using is Growth Strategies.

Samsung is an innovative brand and has used a mix of cost leadership and differentiation
cleverly to grow market share and achieve stronger financial results. Instead of leading only on
the basis of costs, it has used some elements of cost leadership alongside differentiation to reach
a larger audience segment worldwide which has led to higher sales and revenue. The smartphone
industry has grown highly competitive and there are several influential brands that are competing
for market share there. To beat the competitive pressure, apart from its higher-priced Galaxy
smartphones, the company has brought a large range of other smartphones that are priced
affordably. Unlike Apple, which relies exclusively on its range of premium iPhones, Samsung
has brought a wider mix with products in varying price ranges and catering to the different needs
and preferences of a wide segment of consumers.

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Innovation is one main source of competitive advantage for Samsung which is among the leading
investors in research and development in the entire industry. In the smartphone industry mainly
due to the overcrowding of brands, achieving differentiation has become difficult. However,
Samsung and its flagship product, Galaxy smartphone stand out easily from among the crowd. In
several other product categories too including televisions, the company has achieved strong
differentiation through technological innovation.

While product innovation is the main source of differentiation for the company, it has also
focused on marketing and promotions to build a differentiated image and create a unique identity
in the market. In this way, product quality and marketing both have helped the company
differentiate itself from the other brands in the market. However, the most important thing is that
the level of competition in the smartphone as well as the home appliances industry has grown too
high. So, companies like Samsung have to invest a large sum each year in R&D to maintain their
competitive edge.

This is the strategy that Samsung has employed very well to grow its customer base and achieve
higher sales and profitability. The company has expanded globally and sells its products to a
large base of customers in all corners of the world. The company has formed strong brand equity
through a consistent focus on product quality and technological innovation as well as customer
experience. Higher brand equity led to higher sales and the company benefited through growing
sales in all the leading markets globally. As a seller of smartphones and home appliances,
Samsung has always focused on customer experience and brand image which has led to strong
customer loyalty. This helped its further growth in the later years since increased reliability led to
higher penetration of existing markets. And Product development is the strategy of growing sales
through the release of new products in the existing markets. This is a leading growth strategy
followed by technology as well as home appliances and smartphone brands.

4.2 Success rate of Samsung

Samsung's success is largely based on its brand management processes. From its early days of
repositioning the brand from a cheap manufacturer to a brand of class and quality, Samsung has
had a consistent policy of basing all activities in line with its brand strategy. The revamped
competitive strategy and marketing programs that Samsung designed and implemented have

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been a huge success. The global value of Samsung's brand increased by more than 200% from
2003 to 2008, and it took over Sony as the most valuable consumer-electronics brand. By the end
of 2012, Samsung's profits were up a whopping 76%, fueled by the growth of the mobile
division, which suddenly became the most profitable part of Samsung. Samsung was the only
company other than Apple making a profit in mobile, and it seemed to be closing in on Apple’s
dominance, prompting The Wall Street Journal to publish its famous “Has Apple Lost Its Cool
To Samsung?” headline in January 2013.

By the time the Galaxy S4 launched in March 2013, the anticipation surrounding Samsung’s
products could only be rivaled by Apple. It was officially a two-horse race.

But it only took another year for things to come crashing down. Profits tumbled in 2014, even
during the normally lucrative holiday season. Throughout the year, Samsung blamed increased
competition in mobile for the downturn.

Samsung, one of the biggest smartphone players in the world, has the highest global smartphone
market share of nearly 21%. This is higher than other players like Apple and Huawei. Samsung’s
success with Android has been nothing short of brilliant. What’s even more fascinating is that
earlier Android players like HTC, LG and Sony weren’t able to match the success Samsung.
Even the parent company of Android, Google is still struggling with sales of their own Pixel
branded smartphones. In 2007, Apple reviled its iPhone to the public. It was a revolutionary
device, that intended to change the phone market forever. It introduced a new kind of operating
system, the iOS. iOS was different from other mobile operating systems in two ways:

 operating system was intended solely for touch screen devices.

 Secondly, it introduced an app store.

On the other hand Google was working on their own mobile operating system, known as
Android today. Google had acquired Android inc. for $50 million in 2005. However, after seeing
the new iPhone in 2007, Google started redesigning their own operating system with a clean
slate. In 2008, HTC Dream was released, which was first ever Android smartphone.

With the release of Android, Samsung also launched its first Android smartphone. Samsung
released Galaxy series of devices. Specifically, Samsung launched Galaxy S series in 2010,
which intended to take on the Apple’s iPhone. That was one of the biggest steps in company’s

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success that was about to follow. Samsung’s Galaxy S series is still today one of the best selling
smartphone series for the company. Samsung Galaxy S2, which was second iteration of the
Galaxy S series, launched in 2011, really helped Samsung to solidify itself as the Global
Smartphone leader by overtaking Apple in terms of sales with a market share of 21% compared
to 14% of Apple.

Chapter Five: Recommendation

Samsung has design several compensation and benefit policy based on the total return of work.
Cash compensation is about minimum wages and incentives while provided by Samsung are
income protection and work/life balance of the employees. The cash compensation of Samsung
is delivered in the forms of basic wage/salary and performance based incentives. Samsung is
applying the minimum wages laws in every country and pays up to three-times the minimum
salary in region in order to help improve the welfare and quality of life and its employees.
Incentives are paid according to the performance of an individual employee, team of employees,
a total business unit, or combination of them. Samsung incentive program is divided into
individual performance incentives and group performance incentives. The group performance
incentives program is also segmented into productivity incentive and profit sharing. Productivity
Incentive acts as an extra bonus that pays to employees when additional profit achieved to
improve work efficiency. Profit Sharing is a policy that gives out portion of additional profits to
employees when management of each unit of business performs is higher than targeted goal.
Compensation of employee is determined by group profit sharing partially. Profit sharing gives
out to employees in the form of cash or stock.

Samsung provides training programs tailored to different job levels and positions for all
employees around the world based on three pillars- Core Program, Leadership Program, and
Expertise Program. So that they share the same vision for our values and future growth.
Training is the process of planned programs and procedures undertaken for the enhancement and

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improvement of employees performance such as attitude, knowledge, skills and behavior. These
programs can incredibly improve the entire performance of group. Training can be considered as
a short process and it’s applied to lower, middle, senior level management and technical staff.
There are many purposes of training and development. First of all improving quality of
workforce is the program that can help improving the quality of work. Mostly, training is
conducted in a certain area such as marketing, finance or HR, which eventually help in
improving quality of work in that specific area. Next purpose is to enhance employee growth by
attending training and development program, employees are able to master their duty of jobs and
develop themselves in a professional way. Preventing obsolescence is also one of the effective
programs. This helps employees to keep themselves up to date with new trends in latest
technology. Samsung does not implement training and development in their HR management,
those untrained employees may be more costly than even the wage paid to them due to the
mistakes they easily make. Trained employees asks for less help and improve their own
efficiency and skills further. By letting the employees know that company always cares and
invest for them, employees would tend to work harder to reciprocate the favor. And hardworking
eventually will create more returns, profit margins and production. Training and development
provide employees a good chance to realize their potential and make them to work at their best
level of abilities.

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Reference

Book

 Philip Kotler & Kevin Lane Keller (2005), Marketing Management, 12thedition,
India: Asoke K. ghosh, Prentice Hall of India Private Limited
 Strategic Management Theory- An integrated approach 9th edition, Charles W. L.
Hill, Gareth R. Jones.

Report

 Samsung financial summary and financial reports year 2017,2019,2020

Internet

 http://trading.samsungcnt.com/EN/trading/re/402030/html.do
 https://www.samsungsem.com/global-network/philippines/training-development.do
 https://en.wikipedia.org/wiki/Samsung
 http://www.scribd.com/
 http://www.samsung.com/uk

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