Introduction

 The process of translating an idea or invention into a product or good that adds value
with the intention of increasing effectiveness or competitive advantages is known as
innovation.
 Innovation management involves the process of managing an organization's
innovation procedure, starting at the initial stage of ideation, to its final stage of
successful implementation.
 It encompasses the decisions, activities and practices of devising and implementing an
innovation strategy.
  is a business discipline that aims to drive a sustainable innovation process or culture
within an organization
 Oftentimes, these innovation management initiatives utilize a disruptive method of
change to transform business.
 Technology and innovation management means recognizing technological trends
early on and using new technologies for product innovations.
 Companies that are able match the potential of new technologies with the market’s
needs early on and to turn this into innovative products and services have a clear
competitive advantage: their product reaches the market more quickly (Time2Market)
and achieves profits more quickly (Time2Profit).
 In the age of digital transformation, organizations are faced with the need to innovate
more and innovate quickly.
 Innovation drives business growth and helps organizations stay ahead of their
competitors. 
 Innovation management helps in generating new business models and creates new
products, services and technologies designed for the changing market. 
  Proper innovation management also boosts customer satisfaction and employee
engagement.
Background
 Samsung was founded in 1938 by Byung-chull Lee
 In its early stages of development, Samsung Electronics Company (SEC, hereinafter
Samsung) had no proper technical skills and technologies.
 Samsung’s initial strategy was “imitation” acquisition, assimilation, transformation
and exploitation of products and processes from the US and Japanese companies.
 At that time, it was unclear and could not be anticipated that a company which mostly
rely on imported foreign technology, having inferior products, with low and cheap
prices, and poor quality and design would become one of the world’s leading
companies in the electronics market.
 ITICs (indigenous technological innovation capabilities) as “a process to explore
potential market with indigenous (in-house) R&D activities and foreign (external)
knowledge acquisition”
 Samsung is the best option for consumers opting for low-priced replacement option.
 It has become an explorer in the growing digital era and offered affordable prices and
competitive products with the emergence of technology.
 new globalization era, Samsung not only runs its business in electronics but also
expands into information, healthcare and biotech, environment energy, convenience,
and comfort.
 This mission is related to their vision that is “Inspired the World, Create the Future.”
 Samsung has introduced an extensive program of its management transformation in
2012.
 When it comes to n IT & Mobile Communication (IM) they opt for a 'fast follower'
strategy to design and production. This plan leads Samsung to get ready with any
changes in the market demands.
 Samsung will manufacture their product fast with various products, such as design,
features, and prices, to get the market attention.
 Samsung has established a New Concept Development (NCD) process that all
business units can apply while renewing and innovating new products and services.
Samsung uses PIT as its innovation strategy.
Samsung’s Innovation Models
Innovation strategy shows how a firm grows and utilizes its resources, capabilities, and
processes to achieve corporate purposes. innovation strategy transform from 'fast follower' to
'leadership' in 5G technology era. The simple model of innovation strategy contains four
components including strategy, resources, capabilities, and processes.

 The first is a strategy to achieve goals, existing innovation efforts and the
environment.
 The second is resources as it is mentioned to all obtainable preferential and fixed
assets of a company to be innovative.
 The third is capabilities which manages and enables the resources to be evaluated,
configured and reconfigured.
 The fourth is processes where all innovation processes are utilized to produces the
outputs.

Fig. Model of innovation strategy

Innovation strategy:

 Samsung’s divisions are divided into digital imaging business (digital camera),
network business (3G, LTE network infrastructure system) and mobile
communication business (smartphone, tablet pc, and computer).
  Samsung's need to continually innovate in the IM division by launching new and
different innovative products.
 Samsung's strategic management revolves around creativity, partnership, and talent
and is applied throughout the whole division
 Example: Phablet

Innovative Capabilities

 In order to keep renewing and find some creative and innovative ideas to produce new
products and services, Samsung decided to develop a New Concept Development
(NCD).
 It is a concept to process all business units which can perform while renewing new
products.
 established an innovation process team because Samsung believe that it can provide
more market insight and achieve the goal more easily by having a special team to
study and work with every business unit.
 The main components come from inhouse production which is about 70% used in
Samsung Electronics smartphones

Innovation Processes

 Samsung chooses to adopt some marketing strategy such as low pricing and multiple
devices to carry out some innovation process
 It produces the smartphones in a very short period of time and also comes out with a
variety of devices and sees market’s response.
 Samsung has an integrated feature known as Samsung PIT (Partition Information
Table) for its smartphones which accommodates a map including all the system's
parts with different internal phone memory portions.
 The purpose of the PIT is to develop production and solution concepts by using the
consumers’ opinion and perspective, market-driven technologies,

Resources for Innovation

 Samsung cooperates with various R&D, Research Centers, and partnerships labs from
overseas in producing new smartphones and introducing them to the market in a fast
and effective way
  Samsung also participates in global consortiums partnered with automotive
companies to drive "global innovation for in-vehicle connectivity".
 This allows the people to use their smartphones in their cars by doing the vehicle
connectivity partnership

Spiral process model

 Samsung developed its technological capability by means of reverse engineering and

transfer of technology. It implemented, accumulated and made innovative imported
technology
 The four developmental stages at Samsung are discussed as follows:
1. Technological innovation (TI)
2. Transfer of technology
3. Adaptive technological innovation
4. Indigenous technological innovation (ITI)

Stage I: Technological innovation (TI)

 It was the developmental start of technological innovation capability for local small
firms including Samsung.
 The denial of firms like Toshiba, Motorola created new self-development
opportunities for the local firms.

Stage II: Transfer of technology

 In Stage II of the spiral model of technological innovation the multinational firms had
already created opportunities for Samsung to establish new businesses.
 Samsung initiated its developmental progress by implementation of imported foreign
technologies.
 Samsung’s initial strategy was imitation also “duplicative imitation”, that is, an
implementation of foreign technology through reverse engineering.

Stage III: Adaptive technological innovation

 In Stage III, Samsung increased its technological learningby absorptive capacity.

 It had already successfully implemented DRAM technology imported from Micron
Technology and diffused it in Korea.
Stage IV: Indigenous technological innovation (ITI)

 Samsung is leading the global market in high-tech electronics and e-digital media.
 Samsung has moved on to improvement strategy, accumulating and adapting
imported technology

Fig. The spiral process model at Samsung

Samsung’s 4P Innovation Framework:
Product innovation: changes made by the organization in their product/services

Process innovation: changes made by the organization in the ways of creating or delivering
the product/service

Position innovation: changes made by the organization in the context in which the
product/service was introduced.

Paradigm innovation: changes made by the organization in the basic mental models which
frame what organization does

Samsung Product Innovation

The ability to have a competitive advantage over your competitors only lies in
creation and innovation. In recent years Samsung Electronics has launched a number of
new innovative products like:

 Samsung launched SUHD TV, with curved screen, 4K display, LED lighting
system and High Dynamic Range (HOR) picture.

 Samsung Electronics for the first time ever launched Galaxy S6 edge, a smartphone
with the curved screen on both ends.
 Samsung Introduced a smart watch "Gear S", with super AMOLED display, Wi-
Fi and 3G connectivity.
 Samsung’s foldables is the Ultra-Thin Glass, a proprietary material that can be folded
hundreds of thousands of times while maintaining its durability and strength

Fig. Product Innovations by samsung

Samsung Process innovation:
 Through standardization of systems in the field of manufacturing, development
sales and logistics, Samsung Electronics improve the speed and flexibility of
their work process
 To help decision making, the Enterprise resource planning (ERP) of Samsung
Electronic involves the integration of material mobilization functions
(manufacturing, procurement, logistics, sales and services) with accounting and
financial functions, to provide business information regarding, inventory, profits
and losses in real time
 Samsung has changed it non-standardized ERP system into an integrated global
ERP system through process standardization.
 This help Samsung Electronics to connect worldwide worksites as one system to
improve global operation's efficiency
 New Chipmaking Process: Many other big companies, such as Intel and
GlobalFoundries, are also developing technology along these lines, but Samsung
seems to be much farther along

Samsung Position Innovation

 Samsung is committed to exploring new dimensions of business, including
health, medicine, and biotechnology, by being a creative leader in new markets
 three strategic approaches in management: Creativity, Partnership and Talent

Samsung Paradigm Innovation:

 Samsung Electronics has shifted the Air conditioning paradigm by introducing its
new 360 Cassette air conditioning unit, DVM Chillers, next generation DVM S
30HP, the DVM S Eco 14HP.
 These innovations will transform the High Voltage Air Conditioning (HVAC)
Engineering will transform the AC industry in terms of energy efficiency,
performance and increased cooling speed
Recommendations

 Samsung should focus on its marketing strategy.

 Samsung should keep brand loyalty in high-end products so that the customers will
keep buying its products.
 Samsung is recommended to expand the market area such as IoT (Internet of Things)
so that there is a healthy competition with other brands.
 Samsung should focus more on the 5G core technology and secure its patent to ensure
they are still the market leader for smartphones
 They can focus on management and market innovations as well

Conclusion
 The company has created a system that allows them to produce new and innovative
products consistently.  
 Other companies have tried to copy Samsung's model, but few have been successful;
this is likely because innovation is often unpredictable and challenging to replicate.
 Nevertheless, Samsung's innovation process is something worth studying and
observing.  
 The key element of Samsung's innovation process, is the importance of R&D,
empowering employees, and vertical integration.  
 Although the “fast follower” approach still serves well the company and might even be
part of the company strategy, in innovation, every company holding many important
R&D patents can become a market leader if they apply an effective innovative
strategy.
 These lessons can help other companies to improve their innovation processes and
become more successful.