Impact of technology and globalization on Samsung
Samsung is a global company and due to the globalization, much exchange of technology within the company’s network has been experienced. Due to this, one of the branches of the corporation, Samsung Electronics emerged winners in 32 design and innovation engineering awards back in 2008. After this, the company has steadily grown through the years. The company has increased its plants and sales network to 61 countries with over 160,000 employees. The level of technology that is being experience in today’s age and era is of great impact to the company as it gives it the motivation and ability to come up with new and better models of their electronics. Samsung has unveiled the Galaxy model of their mobile phones, with Galaxy S5 being the latest model in the market after Galaxy S4.
Technology has also lest an impact on Samsung. The company has been on a long law suit with Apple. Apple filed a law suit against Samsung for infringing on a number of patents concerning the models of their smart phones and iPads. The models that have been claimed to have been developed by Apple first are seen in a number of Samsung’s smart phones and pads. Some of the patents included the touch capacity of the smart phones, the zooming of some of the applications such as Google maps, among many others. When the case was ruled in favor of Apple, Samsung was order to stop using the models and pull of their phones of the market. But the company filed a suit at the high court to overrule the judgment. The advancement in technology has affected Samsung in a negative was such as this, leading to the loss of many funds in trying to win the law suit and paying for the damages.
Industrial organization model and the resource-based model can be used to determine how the corporation could earn above-average returns (Haracleous, 2003). The frame work of industrial organization model entails environmental analysis and the model of resource based model entails organizational analysis. In industrial organization model, we shall look at how Samsung can analyze its opportunities and threats to help it earn above average returns. In resource based model, we shall consider the strengths and weaknesses of Samsung to see how it can use them to earn above average returns. Above average returns are returns that are in excess of what investors expect to earn from their investments in the company. Samsung can use these models to earn more returns that what the investors expect them to earn.
Samsung has much strength that it can use to earn above average returns including; its ability to improve innovation and designs. Samsung Electronics has many employees who are talented and passionate about their job and due to this, the company is able to come up with many innovative products, of different designs. Samsung is the second ranked company in terms of patent assignees, which helps strengthen its position among its competitors. Samsung has also won many awards on the designs of their products making it have superior advantage over its competitors. Samsung can use these strengths to its advantage by ensuring that their designs and innovations are always better than those of its competitors, and through this, the company will widen its market base and increase it sales. Another strength that Samsung has to its advantage in that it focuses on producing products that are environment friendly. The company has also a number of recycling programs. Its focus on the environment has helped the company to win over the customers thus giving them a more competitive edge. With more focus on such matters, the company will win over more customers as people are struggling to protect the environment and will support any company that is line with their course. Another strength that Samsung has is that it has the largest share in mobile phones and second place in terms of smart phones sales in the world. Apart from the mobile phones and the smart phones, Samsung Electronics has a large market in other electronics including television sets and semiconductors. With the large market share, Samsung has high bargaining power and it can use to reduce further demands and costs for better contract conditions. With all these, Samsung can attain above-average returns. For its weaknesses, Samsung has suffered patent infringement especially the long dragged case with Apple. The case created a negative image concerning its products.
Samsung can overcome this by ensuring that they become more innovative and produce products that are different from those of Apple and any other smart phone manufacturers. They have to differentiate their products in terms of design and applications, and if this is done, Samsung can overcome the negative image the lawsuit brought about. Another weakness that Samsung has is that it does not have its own software and OS. Software and OS production provides high profit margin, which Samsung does not have, and can increase integration of its products and brand loyalty. If Samsung can get its own Software and OS product, then the competitive advantage that their competitors have over them will be limited. The high profit margin that software and OS production provides and the less competitive edge from its competitors will help Samsung earn above-average returns. Samsung has a number of opportunities that can help it earn above average returns. One of these opportunities is the growing smart phone market in India.
Samsung has strong presence in India’s market and the smart phone market in India is one of the least penetrated markets in Asian countries. Using its high presence Samsung can use this opportunity to expand its sales. Another opportunity that Samsung has and can use to its advantage is the growing demand for quality application processors. Being one of the main manufacturers of application processors for tablets and smart phones, Samsung can use the growing demand for these products to its advantage. Only Samsung can provide high quality application processors and due to this it has a chance to earn above average returns. Samsung has a number of threats than can prevent it from earning above average returns. One of the threats that Samsung faces is the saturated market for smart phones in developed countries. To overcome this, Samsung can diversify its smart phone market to developing countries. If it has to concentrate in the developed countries more, Samsung has to ensure that it has better quality smart phones than those of its competitors such as apple and Sony. Another threat that Samsung has in the rapid change in technology that gives the company and its rival’s pressure. Most of the pressure that Samsung has due to this is ensuring that they keep up with the changing technology and produce new products faster and of high quality than the previous products and those of the competitors.
The vision and mission statement of Samsung have contributed its success over the years. In the vision statement, Samsung states that it is dedicated to developing innovative technologies and efficient processes that create new markets, enrich people’s lives and make the company a digital leader. Samsung has accomplished and these and strives to keep up with their vision statement. In the present, Samsung has diversified its market from the developed countries to the developing countries. The company has also succeeded in being the market leader especially in electronics such as smart phone, television sets, fridges and tablets. The mission statement of Samsung is contributing to a better global society by devoting their human resources and technology towards the creation of superior products and services. Samsung’s mission statement has helped the company to be a household good. The lives of many people around the world have been improved by their products. The smart phone that people get from Samsung help them connect them connect with friends and family members who are far away from them. Samsung also has a program of distributing their tablets to students which helps them study and improve in their studying methods. Other products from Samsung such as their tablets, fridges and television sets are used world and have improved the lifestyles of people.
Samsung has an open, relationship drive communication with its stakeholders that has helped the company promote the growth. The diversity of the company’s stakeholders includes customers, shareholders, employees, suppliers, local communities, NGO’s, the governments and the mass media (Song, Jeong & Park, 2013). Having a close relationship with all these stakeholders has enabled Samsung to develop the appropriate communication channel with them all. These communication channels have brought about a good feedback channel for the company’s future policies and actions. Samsung Electronics has designated a specialized communication department for various stakeholders.
Heracleous, L. (2003). Strategy and Organization: Realizing Strategic Management. Cambridge:
Cambridge University Press.
Song, S., Jeong, E., Park, D. (2013). Sustainability report. Global Policy & Relations Team,
Corporate Management Office.