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Samsung Electronics Case Study

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Niklas Koch

on 14 December 2013

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Transcript of Samsung Electronics Case Study

Case Background Information
Company Outline
Situation Analysis
Industry and Competitive Analysis
SWOT, Organizational Assessment & External Situation
Strategy Models Application
Strategic Alternatives Going Forward
Recommended Strategy
Samsung Electronics Co., Ltd. Case Study
How Samsung Became the World's No. 1 Smartphone Maker

Background Information

From first smartphone introduction in 2009 to present time
Global orientation
Mr. Lee Kun Hee, chairman of Samsung Electronics
Mr. Lee Keon Hyok, Global Head of Communications of Samsung Electronics
Company Outline
Samsung Electronics versus Samsung Group

Samsung Group is a chaebol
Samsung Electronics is the largest subsidiary

Our focus is the smartphone industry
Vision statement
Samsung is dedicated to developing innovative technologies and efficient processes that create new markets, enrich people's lives and continue to make Samsung a digital leader
Samsung Electronics revenue 2012 (US$ billion): 191.37
Samsung Electronics employee count (2012): 221,726
Situation Analysis

Market overview
Global market cap:
Global market cap projection 2015:
Unit sales (expected 2013):
Unit sales (forecast 2017):
$290.1 billion
$341.4 billion
$ 1 billion
Sources MarketandMarkets & IDC
$ 1.7 billion
Industry and Competitive Analysis
Industry Macro-environment characteristics
Few major companies
(mainly: Samsung, Apple, Nokia, Motorola/Google, Lenovo, LG, HTC, ZTE, Huawei, Sony & Blackberry)

Industry Driving Forces
Technology changes
Product innovation
Key Success Factors
Continued need of smartphones!
Evolving use
Powerful advertising
Good performance and usefulness
Sharing and customization (the ecosystem of smartphones)
Apple's Competitive Position
Brand loyalty
Premium pricing
Most important: Products integrate as one
Market share: 12.1%
Nokia's Competitive Position
Second largest distributor of cell phones (not the smartphone market)
Competes on performance and Windows
Know-how of selling mobile devices
Qualified personnel
Market share: 7.3%
Summary of Industry Attractiveness

SWOT, Organizational Assessment & External Situation
Global market leader (smartphones)
Hardware integration
Excellence in technology, development and innovation
Diverse product line
Too low profit margins compared to competitors
Not a software giant (dependent on external software development)
Too broad product line (underperforming models?)
Price wars (as Samsung is not overall low cost!)
Cheaper alternatives and other product that may fulfill the same need as smartphones
Software development (both Google and competitors)
Exchange rates
Lawsuit if patents are breached
Growing market and demand (both technology and innovation)
Further use of smartphones globally
Joint venture in health application
Acquiring smaller competitors or software companies gaining market share and patents
Aggressive Strategy

Global Strategy?
Transnational Strategy?
Strategic Approaches to Competing Internationally
Generic Strategy Model

Broad differentiation strategy
Global market requirements vs. Product characteristics

Maintain differentiation
Model of Grand Strategy Cluster

Concentrated Growth

Grand Strategy Selection Matrix
Supports all of:
Concentrated Growth
Market Development
Product Development
Multinational Diversification
Models Guidance
Industry Analysis: Very attractive for existing companies, but not for (completely) new entrants
SWOT Analysis: S-O surpass weak W-T
Competing Internationally: Global Strategy
Generic Strategy: Broad Differentiation Strategy
Global Market Requirements: Maintain Differentation
Grand Strategy Clusters: Concentrated Growth
Grand Strategy Selection Matrix: Concentrated Growth, Market Development, Product Development, Multinational Diversification & Innovation
Strategic Assessment
Strategic Alternatives Going Forward

#1: Maintain current strategy
#2: Develop own smartphone operating system
#3: Start joint venture in healthcare application
#4: Acquisition (other smartphone companies or software engineering companies)
Best Alternative

#1: Maintain current strategy
Recommended Strategy

All alternatives comply with existing strategy:
"... developing innovative technologies and efficient processes that create new markets, enrich people's lives .."
Innovative and game-changing
Heavy invest i R&D
Continues broad differentiation - focus on cheaper alternatives for emerging markets
Full transcript