Strategic Management and Samsung

Samsung Strategic Management and Strategic Competitiveness

Samsung Electronics was established by Byung-Chull Lee in 1969 in Suwon City in South Korea and was at the time referred to as Samsung electric industries. When founded, the company was designed to manufacture computer constituents, radios, televisions and other electronic devices. A decade into its establishment, the company began to manufacture telecommunication devices. Its initial product offerings consisted of switchboards. Subsequently, Samsung started manufacturing mobile phones (Samsung, 2017)

Assess how globalization and technology changes have impacted the corporation you researched

Globalization encompasses a practice by which state and regional economies, communities, and cultures have come to be assimilated through the international network of trade, communication, migration and transportation. In addition, in recent years, the world has experienced a substantial advancement in technology, which has had a major influence on industries and companies. These two aspects have largely affected Samsung Electronics. One of the influences of globalization on Samsung has been its business expansion to various markets across the globe (Hill et al., 2014). Samsung has various business units retailing different products and through globalization, the company has been able to retail these various products across the globe. Not only has this increased the revenue generated by the company, but it has elevated the company's status and brand to a wide consumer base. At the same time, globalization together with advanced technology have enabled Samsung to open increased number of sales networks and assembly and manufacturing plants in various nations. This has given rise to a wider network and more success for the company (Samsung, 2017).

Secondly, globalization has facilitated Samsung's business partnerships and strategic alliances. For instance, in entering the mobile and networks business market, Samsung has formed important partnerships with major companies such as Sprint, Verizon Wireless and T-Mobile. This has enabled the company to retail more products over the years, increasing its bottom-line. At the same time, globalization has created an increase in the number of key competitors faced by Samsung. For instance, in the mobile market, Samsung faces competition from key rivals such as Apple, Huawei, Sony and Nokia. In other business fronts such as electrical appliances, Samsung faces intense competition from competitors such as LG (Hoovers, 2017).

The advancement in technology has significantly influenced the success of the organization. In overall, technology changes have facilitated Samsung Electronics to become a leader in the market renowned for providing cutting-edge and innovative products and services Samsung has been able to retail a wide range of products and have a diversified product portfolio. In particular, Samsung Electronics is one of the leading and biggest semiconductor manufacturers in the world. Through the modern innovations, the company has elevated itself to become one of the top retailers of electronics. Samsung has been able to manufacture more cutting-edge products such as digital televisions, LCD panels, semiconductors and also printers. In the same manner, technology can be attributed to the major success that Samsung has enjoyed in the smartphone industry. Samsung has been able to create major competition to Apple Inc. in the mobile market by constantly unveiling cutting-edge smartphones such as the Galaxy series smartphones. These mobile devices have provided consumers with inventive solutions and satisfied their constantly changing preferences. Through technology, the company has also been able to unveil inventive products such as refrigerators, fans and coolers. In addition, this has facilitated Samsung in accomplishing sustainability in the community and relating with the societal groups at large (Samsung, 2017).

Apply the industrial organization model and the resource-based model to determine how your corporation could earn above-average returns

A strategy is the amalgamation of actions to make the most of core competencies through which a company forms its own competitive edge. A strategy provides insight on the direction an entity should take to succeed and prosper. Strategy takes into account differentiation of an organization from its competitors. In order to sustain a competitive advantage within its industry of operation, an organization has to lay emphasis on renovating resources in order for the product offerings to hold value whether external changes take place or not (Olsen and Sadfar, 2014). The industrial organization and the resource-based models are the leading models in strategic management.

1. Industrial Organization Model

The Industrial Organization (I/O) Model espouses an external perspective to provide insight that external forces influencing the organization signify the dominant impacts on an organization's strategic actions. The I/O model is centered on four key assumptions. The first supposition is that the model is reliant on the external environment. In particular, the overall industry and competitive settings lay pressures and restrictions on organizations and ascertains strategies that give rise to superior above-average returns (Poudel, 2016). The second assumption is that majority of the organizations in an industry or within a segment of an industry control identical sets of strategically pertinent resources, and therefore pursue the same strategies. Third, resources utilized to carry out strategies are highly mobile across organizations. The final assumption is that the decision makers within the organization are assumed to be sensible and devoted to acting only in the best interests of the organization (Olsen and Sadfar, 2014).

In applying the I/O model to determine how Samsung Electronics could earn above-average returns, the external influences and forces, obtained in its external environment, are fundamental and pivotal in ascertaining the suitability of strategic actions. One of the key aspects encompasses the intense competition the company faces from other companies in various fronts. For instance, in the mobile sector, Samsung faces intense competition from Apple, Sony and Huawei. Another aspect that influences Samsung with regard to above-average returns is bad reputation. In recent periods, Samsung has been associated with manufacturing explosive mobile phones. In particular, a number of Samsung Note 7 smartphone devices manufactured by the company burst into flame while charging and this has had an adverse and detrimental impact on its bottom line (Pham, 2017).

2. Resource-Based Model

The Resource-Based model espouses an internal perspective to provide insight on how an organization's unique and distinctive internal resources and capabilities act as a foundation for earning above-average returns. This particular model is based on three suppositions. First, every organization encompasses a set of distinctive resources and capabilities that offers the framework for its strategy and is the main source of firm returns. Basically, that is to say that features of the organization itself restricts the scope of strategies that may be fitting. Secondly, in the course of time, firms obtain different resources and develop distinctive or dissimilar capabilities. As a result, there is a likelihood of organizations to espouse and carry out different strategies in their endeavors to attain strategic competitiveness. Lastly, different from the I/O model, resources may not be highly mobile across organizations (Grant, 2001).

In applying the Resource-Based model to determine how Samsung Electronics could earn above-average returns, the resources and capabilities, obtained in its internal environment, are more vital to ascertaining the suitability of strategic actions. Samsung has several different strategic business units, including network technology, video, audio and most recently, the smartphone division. This has enabled the company to attain above-average returns as revenue streams are obtained from the different business units (Fahy, 2002). Secondly, Samsung has considerably high research and development expenditure, which correlates with its revenues and earnings. For instance, the company has been able to create and unveil several of the capabilities of its rivals such as Apple Inc. In addition, the company has comprehensive and superior marketing and manufacturing capabilities and competencies (Jung, 2014).

Assess how the vision statement and mission statement of the corporation influence its overall success

The vision statement outlines the future of an organization and it instigates individuals to act toward a common goal. The vision offers a sense of direction and it is significant for strategy and planning. Samsung's vision as stated in its motto is "Inspire the World, Create the Future" (Samsung, 2017). This vision statement of the company influences its overall success. In particular, it mirrors the company's dedication to the consumers and community at large in three ways, including new technology, creative solutions and innovative products. Therefore, every year, the company strives to come up with cutting-edge and trailblazing products that satisfy the needs of the consumer (Samsung, 2017). In recent times, Samsung has unveiled pioneering products in all of its business fronts that provide creative solutions to the various consumer needs. In contrast, an organization's mission statement is a fundamental aspect, which delineates who the entity is and what it does on a daily basis. The company proclaims "At Samsung, we follow a simple business philosophy: to devote our talent and technology to creating superior products and services that contribute to a better global society" (Samsung, 2017). This influences its success as it instigates a corporate philosophy and culture that is followed by employees and members within the organization.

Evaluate how each category of stakeholder impacts the overall success of this corporation

An organization consists of several different stakeholders, who in their own respective way have an influence on the general success and prosperity of the company. One of the key stakeholders of Samsung Electronics is shareholders. Shareholders are the owners of the organization and usually have a significant impact with regard to the direction taken by the company. Samsung is a publicly owned company and therefore the shareholders have a great say on what takes place within the organization. More often than not, the owners take part in the everyday operation of the organization and also cast votes on the major decisions to be undertaken by the company. Samsung's stakeholders act as a fundamental source of financial accountability, which impels the management of the company to make rational and sensible decisions regarding the decision-making within the company. Moreover, stakeholders of a company can influence or be influenced by its objectives, decision-making, policies and activities. For instance, in their annual general meeting (AGM), the company can make decisions on whether certain members of the board or management should continue working within the organization or not (Kokemuller, 2017).

A second important company stakeholder for Samsung Electronics is employees. The contribution that is made by personnel have a significant value on the company and can determine whether the company succeeds or fails. Being in a product-based industry, the employees are responsible for researching, nurturing, developing and finally retailing the product offerings being retailed by the organization. The products offered and sold by the organization generate its value and revenues. Therefore, if employees manufacture and sell poor products, it can have a disparaging impact on the success of the company. For instance, one of the key aspects that has elevated Samsung to become one of the most renowned companies in the world is its research and development department and the creation of innovative products. This has propelled the company to become a major success. Such creation of innovative products is associated with the employees. For instance, if the employees provide substandard products to the consumers, then this causes bad publicity of Samsung and subsequently negatively impacts the company's success (Kokemuller, 2017). Moreover, employees act as the intermediary between Samsung as a company and the consumers through the services offered. This implies that a company's success is influenced depending on the services rendered by the personnel. In the contemporary, customer service reviews can have a make or break impact on the customer base and ultimately the revenues generated by the company (Hill et al., 2014).