Samsung Objectives

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Intro
Company: Samsung
CEO : Koh Dong Jin, Kim Ki Nam, and Kim Hyun Suk
Year founded : 1938
Headquarter : Samsung Town, South Korea
Number of Employees (2018): 320,671
Public or Private: Public
Ticker Symbol: SSNLF
Market Cap (2018): $326 Billion
Annual Revenue (2018) : $225 Billion
Profit | Net income (2018): $41 Billion

Products & Services: Camera | Smart Phones | Memory Cards |

Camcorder | TV/LEDs | PC | Stove | Refrigerator | Bulb | Home Appliances
Competitors: Apple | Huawei | Xiaomi | Oppo | Vivo | Lenovo | Sony | HTC
| Motorola | Microsoft | Google Pixel | Micromax | Asus | Gionee | Iball | Intex
| Nokia

PESTLE Analysis of Samsung

Political

In most of the markets where Samsung operates, the political environment is

conducive to its operations and though there are minor irritants in some of the foreign
markets like India, overall Samsung can be said to be operating in markets where the
political factors are benign. However, in recent months, it has faced significant political
headwinds in its home country of South Korea because of the country’s tensions with
North Korea wherein the company has had to take into account not only the political
instability but also the threat of war breaking out in the Korean Peninsula. Apart from
this, Samsung faces political pressures in many African and Latin American countries
where the political environment is unstable and prone to frequent changes in the
governing structures. Of course, this is not yet a major cause for worry as the company
has more or less factored the political instability into its strategic calculations.

Economic

This dimension is especially critical for Samsung, as the opening up of many markets in
the developing world has meant that the company can expand its global footprint.
However, this dimension is also a worry since the ongoing global economic crisis has
severely dented the purchasing power of consumers in many developed markets forcing
Samsung to seek profitable ventures in the emerging markets. The key point to note
here is that the macroeconomic environment in which Samsung operates globally is
beset with uncertainty and volatility leading to the company having had to reorient its
strategies accordingly. The saving grace for the company is that it has adjusted rather
well to the tapering off of the consumer disposable incomes in the developed world by
expanding into the emerging and the developing markets. Indeed, this is the reason
Samsung has begun an aggressive push into the emerging markets in the hope of
making up for lost business from the developed world.

Socio-Cultural

Samsung is primarily a South Korean Chaebol or a family owned multinational. This

means that despite its global footprint it still operates from the core as a Korean
company. Therefore, there are several aspects to its global operations some of which
include adapting itself to the local conditions. In other words, Samsung being a Global
company has had to act locally meaning that it has had to adopt a Glocal strategy in
many emerging markets. Apart from this, Samsung has had to tailor its products to
the fast changing consumer preferences in the various markets where it operates. The
key point to note here is that Samsung operates in a market niche that is strongly
influenced by the lifestyle preferences of consumers and given the fact that socio
cultural factors are different in each country; it has had to reorient itself in each
market accordingly.

Technological
Samsung can be considered as being among the world’s leading innovative companies.
This means that the company is at an advantage as far as harnessing the power of
technology and driving innovation for sustainable business advantage is concerned. This
has translated into an obsessive mission by the company to be ahead of the
technological and innovation curve and a vision to dominate its rivals and competitors
as far being the first to reach the market with its latest products is concerned. however,
as we shall discuss later, this has also resulted in the company cutting corners with its
imitation of the legendary Apple’s product design and this has brought legal and
regulatory scrutiny and troubles for the company. There is a lesson here for other
technology driven companies from Samsung’s experiences and it is that no matter how
fast you are to reach the consumer in this age of Big Bang Disruption, doing the basics
right is still the key to success.

Legal

As mentioned in the last section, Samsung has had to face heavy penalties for its
alleged imitation of the Apple’s iPad and iPhone and this has led to the company
taking a beating as far as public perceptions and consumer approval of its strategies
are concerned. It remains to be seen as to how the company would wriggle out of the
legal maze that it finds itself in the developed markets because of the various lawsuits.

Environmental

With the rise of the ethical consumer who wants his or her brands to source and make
the products in a socially and environmentally responsible manner, Samsung has to be
aware of the need to make its products to satiate the ethical chic consumer. This means
that it has to ensure that it does not compromise on the working conditions or the
wages it pays to its labor who are engaged in making the final product.

TAGLINE

Samsung has been using its “Do What You Can’t” tagline in Galaxy advertising
since about a year ago and it’s been working out nicely for them. The company wants
customers to realize that “Do What You Can’t” is what they do every day, not just a
marketing slogan, so they’ve put together an impressive brand philosophy video on
their website and Youtube channel.
Concept Of Manufacturing Process:
In order to perform manufacturing processes effectively and completing the entire
development cycle for the electronics products, Samsung Electronics use several
well-planned stages (Suh et al. 2016). These stages are arranged in such a fashion that
the product development can be time and cost effective. The major stages used in
Samsung Electronics are described below.

Conceptualization:

Samsung Electronics continuously attempt to formulate a new concept of products

based on advanced technologies. It can be a new product or development of variances
of the existing products in the market.

Research:

After developing the product concept, Samsung Electronics greatly emphasizes on the
identification of suitable technology, vendors as well as methods for the production of
the products (Lee et al. 2016).

Circuit Design:

Samsung Electronics uses several computers drafting software in order to develop a

schematic diagram. In addition to that, the company also generates a preliminary
parts list for prototyping as well as costing the product.

Packaging And Printed Circuit Design:

Samsung Electronics focuses on developing of attractive enclosure design as well as

selection. After that, the company designs the outline of the printed circuits. The major
steps for this stage are

 Selection of package style

 Design of graphics and nomenclature

 Resolving the requirements of printed circuit diagram

 Processing the printed circuit artwork on film

Developing Prototype:

Samsung Electronics develops a prototype product for the trial purpose. However, it is
also noted that often hand-wired prototype products are used for the design process.
Design Review:

Samsung Electronics extensively focuses on evaluating the appearance, function,

possible enhancements as well as build cost of the initial units as well as prototype
products.

Test Setup:

In order to ensure the quality of the products Samsung Electronics places the
apparatus, test procedures, detailed instruction of assembly as well as fixtures.

Documentation:

This stage is focused on providing the project's deliverables. This deliverable includes list
of parts circuit diagram, parts sources, master printed circuit artwork, mechanical
drawings, software source code as well as assembly drawings (Lee et al. 2013).

Agency Compliance:

According to the current law and regulation, Samsung Electronics requires several
agency compliances.

Following Up:

Samsung Electronics actively review the supporting data of products, user response as
well as experience of manufacturing facility. It is a major factor for improving the
lower cost, value, and quality.

Samsung Marketing Strategy:

Not too far ago, Samsung wasn’t as popular as now.

They struggled to keep up with the smartphone market, but

now Samsung has progressed so much that they are
the main competitor of the Apple Inc.

Furthermore, Samsung is the largest tech business by revenue

and seventh most valuable brand today.
The Samsung marketing strategy was one of the most
effective strategies ever created because it helped a
cost-driven company to change its structure and become an
authority manufacturer.

Due to the ever-changing tastes of consumers in the

technology industry, companies had to follow the pace and
offer progressive and evolving gadgets to their customers.

So, Samsung also had to change in order to gain the upper

hand on the market and the new Samsung marketing
strategy was the key to evolution.

Samsung Marketing Strategy: The Master

Brand
Growth and development are essential parts of the
technology.

Consumers were never attached with certain technology

products, they always strive to have the best. Such situation
has obliged technology manufacturers to rapidly create new
gadgets that would satisfy the needs of customers, and for
several years, Samsung has never failed in this component.

Society has always loved when the gadget maximizes their

life comfort and decreases the time spent on
unwanted/simple tasks.
Today, Samsung has sparked in terms of innovation and
instead of satisfying the needs of the society, they have
literally started to create the need for people.

Besides, Samsung has an interesting and vast product

portfolio. Their product range includes laptops, tablets,
smartphones, TVs, cameras, Refrigerators, etc.

By this, I mean that the Samsung marketing strategy has

helped the firm to build trust on every product they
manufacture.

Now, let’s start discussing and analyzing parts of the

well-praised marketing strategy of Samsung.

Marketing Mix of Samsung – Samsung has reached

unbelievable heights with its smartphones, which helped the
brand to become a symbol of quality and reliability for its
consumers.

Besides the product, Samsung is famous for its customer

service (Samsung has one of the fastest product services).
Though, product variation is the most powerful aspect of the
marketing mix of Samsung.

Samsung Marketing Mix Pricing Strategy – Samsung

marketing strategy involves two pricing strategies and let’s
see for what goals are they used.
 Skimming Price – Smartphones of Samsung are leading
the market with Apple’s iPhone. As Apple, Samsung also
uses skimming price to gain the upper hand over their
competitors. For instance, Galaxy S6 and S6 Edge are
the brands new products of Samsung carrying the slogan
“Next is Now” and claiming that they are the most
beautiful smartphones ever created. Without a doubt, S6
Edge (64 GB) that costs 1 180$ will brilliantly/smoothly
sell around the globe. But, what will happen when other
competitors will launch a smartphone with identical
features? Simple. Samsung will lower the price
and easily steal customers from the competitor.
 Competitive Pricing – One of my favorite parts of
Samsung marketing strategy. Due to the fact, that
unlike smartphones, Samsung has difficulties in gaining
an edge over its competitors with other products (for
example, Samsung has trouble keeping up with robotic
vacuums like the Roomba 650 and 880). Surely,
Samsung is an authentic brand, but in terms of home
appliance, it can’t possibly surpass LG. Furthermore, in
Cameras Cannon and Nikon are leading the market. So,
for Samsung to withstand this fierce competition, it’s
vital to use competitive pricing. Also, Samsung never is a
late comer in production and non-innovative, but they
are mostly the first ones to introduce a change.
Placing in Samsung Marketing Strategy – Samsung uses
channel marketing in its industry. And from this strategy,
only service dealers are taken into account for corporate
sales.

Retailers who present the technology chain are bound to

include Samsung in their list, because of the firm being a
world-famous brand and Samsung can also serve as an
alternative for the consumers.

The distribution is a compelling part of the Samsung

marketing strategy.

In certain cities, Samsung has a contract with a single

distribution company that distributes the product
throughout the city.

For instance, Mumbai is a great example of a city, where

Samsung distributes its product through a single company.

These reasons may vary, but some of them might be like less
concentration required for monitoring distribution channels
or paying less to distribution companies because while
placing a large order, discounts are always present.

Promotion in the 4Ps of Samsung – Samsung marketing

strategy uses diverse forms of promotion.
As Coca-Cola and Nike, Samsung is convinced that
advertising is one of the best forms of promotion to engage
potential consumers.

Besides advertising, Samsung approaches different

promotional tactics to make customers buy the product.

For instance, quite often, Samsung introduces discounts,

sponsors events, engages with national and worldwide
festivals, etc.

Hence, the Samsung marketing strategy simultaneously helps

the organization progress in different aspects.

Sponsorship – Samsung is one of the largest companies in

the world. Today, they have 150,00 employees worldwide.

Samsung is mostly famous for its product quality, but besides

the gadgets, Samsung is known for being a sponsor giant.
Current sponsorship of Samsung is Sydney Opera
House, Australian Olympic Team, NSWIS Awards, Oceania
Foundation, etc.

Advertising – Samsung doesn’t concentrate on commercials

like Coca-Cola or Pepsi, but they always promote their most
important products.
To get the hang of Samsung’s advertising system, let’s review
some of their famous and most successful advertisements.

Marvel’s Avengers: Age of Ultron and Samsung Mobile

present ‘Assemble’ Part 1 and 2 -The
advertisement, starring Lionel Messi, Eddie Lacy, John
Florence, Fabian Cancellara and 2 awesome fans, was the
huge success of Samsung’s marketing department.

At the moment, both parts of the video have more than 51

million views. The commercial focuses on the compatibility of
the Gear VR and the Galaxy S6, showing the awesomeness of
the new product that Samsung introduced.

Furthermore, it’s important to note that Samsung gave

non-famous people a chance to participate in this
breathtaking commercial, making the company and the
advertisement even more successful and at the same time,
increasing the public image of the organization.

SAMSUNG RAW MATERIALS SOURCES

Samsung SDI's main supply chain is a partner company that supplies raw
materials for products and is defined as a supplier of battery raw
materials such as electrode plates, assembled materials, and PACK
materials, and a supplier of raw materials of electronic materials such
as SILICA. Samsung SDI strives to enhance the market competitiveness by
pursuing mutual growth and cooperation with the partner companies. In 2016,
we concluded mutual growth agreements with 250 1st/2nd tier suppliers and
offer support and cooperation programs in finance, education, technology,
 new market opening and performance sharing to live by our mutual growth
value ‘we can go farther when we go together’.

Samsung | Return on Equity

Last Quarter:

11.19 KRW
Last Year:

10.81 KRW

Sales Revenues

62048
B

Net Income

11039
B

Assets

296578
B

Cash and Equivalent

30788
B
Debt

18562
B

PE Price to Earnings

0.3
3

EPS Earnings Per Share

80.3
K

Market Capitalization

7.02
B

Dividend Yield

40.9
5

Employees

99.3
K
 Stock Price Monthly Trend

44350.00 3.99%

Samsung Organizational Structure:

Divisional according to Product Types
Posted on November 20, 2017 by John Dudovskiy
Samsung organizational structure is divisional and the company is divided
into three key divisions: IT & Mobile Communications (IM), Consumer
Electronics (CE), and Device Solutions (DS). The rationale behind the
choice of divisional organizational structure relates to Samsung’s large
product portfolio and differences between products and services the
company offers to the market.
Accordingly, Samsung’s each division is managed separately taking into
account the characteristics of their products that have implications on new
product development, marketing, selling and other aspects of the business.
Moreover, Samsung Electronics has more than 200 subsidiaries around the
world.
The Financial Strategy of Samsung and its
Significance
The financial strategy of Samsung is highly significant in getting the most of its
financial resources and achieving sustainability. But to be able to do these
things, Samsung had managed all its funding and financial resource utilizing
the most effective strategy.

Many companies manage their income and finances in various different ways.
An effective financial strategy enables organizations and companies asses
their financial needs and support sources to successfully meet their objectives
and fulfill company’s mission.

The success of this company does not just rely on the financial strategy of
Samsung but also with proper financial planning for continued stability and
growth. The financial strategy must be based on the mission set by the
company so it is essential to clearly define the reason behind the company’s
existence. Samsung also believes that adaptation of the best financial strategy
leads the company to a direction where enormous profits are expected.
Samsung Adverstisement