Business Strategy

Samsung business strategy is well defined as Porter’s Differentiation strategy. The key word that differentiates Samsung products from the rest of the market is Innovation. Samsung’s innovative technologies such as the super sleek LED TV and being the first on the market to launch the unique 3D LED TV, and two new home projectors the A800 with 3D technology, as well as the SP-H03 LED Pico projector, measuring less than three inches on each side very convenient as a personal projector. It always helps for the last minute meeting presentations. Samsung has proves once again that it is able to sustain the top of the market and furthermore anticipate customer's demands.

Samsung Electronics is one of the leading electronics companies and has been for some time. Samsung Electronics strives to achieve advantage over its competitors by offering a variety of products in this ever changing digital age. Not only do they offer electronic products, they also sell air conditioners, refrigerators and washing machines. Samsung Electronics’ motto is, “We will devote out human resources and technologies to create superior products and services thereby contributing to a better global society.” However, the threat of new rivalry has been constant for Samsung. Competitors such as Sony, Panasonic and Nikon could be a major threat to Samsung Electronics.

To stay ahead of the competition, Samsung Electronics has expanded their Research & Development facilities, purchased DRAM Technology from another company to enhance their memory capabilities in digital cameras, games, PCs, etc. and have lowered their prices on many of their products. Samsung Electronics is one of the world’s top semiconductor suppliers, allowing them to maintain the number one spot in important markets such as memory and LCD panels. Samsung Electronics’ market share has been affected by new entrants segregating markets by offering products at a lower price. Samsung Electronics has exceptionally great relationships with their suppliers such as Walmart, Sears, Target and Lowes due to lengthy partnerships and a good supply chain management system. These supplies know too that Samsung Electronics depends on them because they don’t act as their own supplier. Because of their well-known brand name, customers feel comfortable buying Samsung Electronics’ products no matter what the cost may be.

Samsung Electronics also has to continuously differentiate their products as other competitors are offering the same things. For instance, the same type of cell phone could be sold from a couple of sources but Samsung could differentiate their cell phone by making it a touch screen with additional features. Samsung Electronics has 61 offices globally which gives them an edge over the competition. The CEO strives to hire more knowledgeable employees with the necessary expertise required in both the United States and abroad offering a great compensation plan.

The threat of substitute products that Samsung Electronic sales can be on the low end. For digital cameras, one major substitute could be the enhancement of cameras on cell phones. However, pictures from cell phones are not as clear as those of a digital camera. For the cell phone, the threat of substitute products could be low to high depending on the features. In today’s market, the iPhone is known as the best cell phone product because of its features but there are gaps in the communication applications and it is pricey over the high-end phones that Samsung offers. Recently, the substitutes for televisions, has been very high with the addition of HDTV and now televisions in 3D.

Samsung Electronics and SAP, which is a world leading provider of e-business software solutions, announced the successful implementation of a private exchange based on MarketSet™, the joint result from SAP and Commerce One, Inc. Through SAP, businesses around the world have improved their relationships with customers, streamlined their operations and achieved significant efficiencies throughout their supply chains. Samsung Electronics’ private exchange, called “Worldwide Trading Network” (WTN), is a single global network that links all of Samsung R/3® and legacy systems using one common platform.

Samsung works as a fully integrated company. Therefore, many IT personnel are located within other functional units. The major Business incentive that Samsung uses is their Customer Relationship Management (CRM). With their CRM tool, the CEO was aiming to upgrade its customer base and to induce profits. Samsung’s logo is “The Voice of the Customer” and their new initiative works hand and hand with it. Samsung chose to put a registration card in every product they sale. With this card you will register your product and it will also be put into your customer profile. This will help the corporation target its sales and promotions to again induce profit. Samsung uses a CRM tool by SAP, it is a foundation for marketing campaigns and it is aimed to improve customer service and increase the brand’s awareness. Samsung uses a Bottom-line initiative. With it being bottom-line, there is space for low cost reduction and top-line revenue. The supply chain management will organize the following Fulfillment, Logistics, Production, Revenue and Profit, and Cost & Price.

Samsung uses a fully integrated IT organization; it has over 24 network centers. Samsung has six research center in Korea and 18 additional centers in 9 different countries. By Samsung being fully integrated, Samsung has many IT personnel located with several different functional units. In these different units, they can approve they own budgets and research and implement a project.

Samsung have a vertical axis structural placement structure. It ranges from greatly decentralized to greatly centralize. It empowers employees throughout the organization to try new technologies in hopes of finding a few that will lead to some competitive advancement.