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Samsung IBS

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by

Pierre Lallier

on 25 October 2013

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Transcript of Samsung IBS

International Strategy Analysis

Who Is Samsung ?
• Originating in Korea, Samsung has grown to be one of the worlds leading electronics companies specialising in digital appliances and media.

•Samsung Philosophy: “to devote our talent and technology to creating exceptional products and services that contribute to a better global society”

• Key business values target People, Excellence, Change, Integrity and Co-Prosperity.

• Goal for the future: Inspire communities around the world by developing new technologies, innovative products and creative solutions.

• Within their own networks their goal is to create value in their core networks within the industry, its partners and employees.
Verbeke's Framework
International coordinator archetype
Concepts of bounded rationality and reliability
Recombination capability
Non-location bounded FSAs
Challenge 1
Samsung as global R&D network of stakeholders

• Extends Verbeke’s international coordinator
archetype to a new level of a network of
stakeholders (McDermott et a, 2013)
Challenge 2
Samsung as an MNE with regional strategies

• In Carr et al (2011) and Rugman (2009)

• Global strategy definitions and local definitions are not enough

• Samsung is tackling markets in the Asian region first and then the other regions
Current Strategy
Use of Market Place Strategy to gain market share
Use of Global partnership strategy to build strategic partnerships with leading global companies
Use of the mix and match strategy to restructure business model

Future Strategy
Be a part of Asia Top 10 by 2015 and Global Top 10 by 2020
Expand market leadership of core business
Secure core competitiveness and brand equity
Be committed to social improvement vie their Corporate Citizenship
=>International Coordinator to access new resources (R&D and markets)
Competitors Analysis
• Sony was once dominating the electronics industry has declined
in sales and losing the war to Samsung which was traditionally an equipment manufacturing company.
• During this time Sony and Samsung were the giants of the industry prior to apple becoming a main actor in the market.
• Sony and Samsung have been analysed using porters diamond .

Recommendation
Market Place Strategy
Flooding the market with a wide range of products in a short time to appeal to a greater part of the market by providing a variety of gadgets and electronic items suitable for both the higher and lower ends of the market
Global Partnership Strategy
Create market partnerships with leading companies and mutually beneficial relationships
Sustainable partnerships are formed, based on the strategic fit and brand attributes to make improve their processes.
Restructuring Business Model
Western business practices are introduce into their business model
Steady efforts in opening Samsung’s work culture to improve marketing, design and R&D
Retain their core competencies such as manufacturing, continuous improvement and innovation.
How ?
Invest in R&D (differentiation)
Acquire new talents & patents
Creating alliances in Europe & the US
Cheaper and Wider range of devices (China)
Assets already in house ?
Close from the Asian Market
Location
Culture
Positive goodwill from customer/media
Acquisition in the Silicon Valley (USA)
Competitors ?
Apple:
Chinese market (Cheaper devices)
R&D in house
International Supply Chain
Sony:
Survival oriented
R&D + SC in Japan
Cut of 10,000 Jobs

DOMESTIC MARKET
Samsung electronics is as competitive in the Korean market as Sony is in the Japanese market. When looking at the domestic market both Samsung electronics and Sony are competing on similar grounds and the utilisation of the resources follows similar patterns. Competitiveness of demand conditions for the both the companies show that it depends on the complexity of demand not only the size of the demand. Comparing the market conditions the Japanese people are expecting more quality and consumer relations compared with the Korean people

INTERNATIONAL MARKET
For the international diamond for the two firms data shows that Sony has upper hand with more balanced competitiveness than Samsung. Sony was successful in the international market and from the data we can see that Samsung international diamonds 74 % of Sony. Sony had a better competitiveness in the international firm strategy.

Economic Sustainability
• Use of strategic partnerships and alliances
• Investments in recruitment and employee developments
• Research and development
• Consumer Relationship Management
Environmental Sustainability
Use of renewable materials within the manufacturing process
Research and development
Recycling
Supply chain management
Top 10 by 2015
Top 10 by 2020
Top 10 by 2020
Challenge 3
Samsung and new rapid-to-market competitors

• The Goldilocks theory (Cuervo-Cazurra 2012) is
about the influence of developing MNEs in Asian
markets

• Mediatek technology and the Asian market
(Chang 2010)

‘How to kits’ to instant quality new technologies
‘White Brands’ disrupting Asian markets (from low-quality / low-cost to high quality / low cost
Partnerships
Products
Practices
Thank you for listening
Strategice Alliances
Partnerships
Close competitors in electronic technologies
Always ahead in major segments
Cooperation between Samsung and Sony has had a big impact in the LCD segments and Television industry.
This co-operation created a value for both the firms and changed the technology.
Before partnership Samsung (3rd) and Sony (4th) in the LCD TV
After the strategic alliance partnership Samsung is 1st and Sony 2nd

Handout: FSAs
Handout:
PESTEL & SWOT
Risks
Force Field Analysis
Driving Force
Resisting Force
Porter's
Five Forces
Competitive rivalry (
high
)
Apple
Lenovo
Threat of new entry (
low
)
High cost of entry
High rate of change
New Developing MNE
High cost of R&D
Threat of substitutes (
high
)
Lot of similar options
Digital TVs
High rate of change
Depend upon local Legislation
Power of buyers (
high
)
Buyers have good leverage
Lot of options to choose
High demand for prices
Power of supplier (
low
)
Samsung case is very low
Samsung developed global supply chain
Wars of Mobile Giants
Conclusion
Handout:
Force Field Ananlysis
Handout:
SWOT & Porter's Five Forces
Samsung are successfully competing globally through
• strategic alliance partnerships
• market penetration strategies - continuous improvement and flooding the market with products.

• Clear goals and values ensure direction for strategic decision making
Eg: large investments in HRM through upskilling, recruitment and retention policies for their team members.

• Acknowledge core competencies of competitors and compete on different competencies

• Ensure sustainability through NLB FSA within all stakeholder groups and a commitment to social improvement
Full transcript