-----Assignment Prepared On-----

Business Strategy Followed By

Samsung Telecommunication

Submitted To:
Md. Shahadat Hossain
Lecturer in Management
Department of Management
School of Business
Bangladesh University of Business & Technology

Submitted By:
Name : Sarah Hasan
ID No. : 06072101075
Program : BBA
Intake : 12th
Section :2
Semester : Spring 2010

Date of Submission:
December 22, 2009

Bangladesh University of Business and Technology

(BUBT)
Dhaka Commerce College Road, Mirpur- 2, Dhaka- 1216
 Business Strategy Followed By Samsung
Telecommunication

 Introduction:
Mobile Phones are one of the most needed things now days in the fast pacing life of
people. Previously mobile phones were considered as just a wireless phone which was
easily movable with the person owning it. But now the circumstances have changed.
Mobile phone is a multi dimensional device which is a part of people’s life style and
represents a person’s choice too. In Bangladesh, the number of mobile phone users has
increased and increasing rapidly and thus the variety of different handsets has emerged as
well. So, for the assignment of analyzing the business strategy of a particular company- I
have chosen one of the most popular brand “Samsung” thus the company “Samsung
Telecommunication” and their chosen business strategy for successfully operating their
business.

 Company Profile:
Samsung Telecommunications is one of five business units within Samsung Electronics,
belonging to the Samsung Group, and consists of the Mobile Communications Division,
Telecommunication Systems Division, Computer Division, MP3 Business Team, Mobile
Solution Centre and Telecommunication R&D Centre. Telecommunication Business
produces a full spectrum of products from mobiles and other mobile devices such as MP3
players and laptop computers to telecommunication network infrastructure. Headquarters
is located in Suwon, South Korea. Samsung is a global company and it has 40 production
plants all over the world and a market span around 58 countries.

Samsung, the second largest Korean conglomerate after Hyundai, is in the third position
with 10.2 percent global market share of mobile handsets after Nokia and Motorola.
The mission statement of Samsung simply implies the creativity of it. When the
innovation goes beyond your imagination, than imagine yourself, Next is what???

 Samsung in Bangladesh:
Electra International has been marketing Samsung consumer products since 1995 and is
the sole distributor of SAMSUNG mobile in Bangladesh. Electra has inaugurated its
journey on Bangladesh's telecommunication sector as the authorized for pre-denoted
product since 2001.Due to an awesome marketing strategy & the up-to date innovative
variation of an internationally recognized brand, within a very short timeline Electra able
to got a dignified position on the mobile market of Bangladesh.

Samsung Electronics developed manufacturing plant in all the neighboring countries of

Bangladesh, which included India, Thailand, Vietnam, Indonesia, and Malaysia. They
have earnest desire to have the manufacturing plan in Bangladesh too considering the
increasing market.

 Strategy followed by Samsung:

Samsung's strategy to win is pretty basic, but it's executing it with ferocious drive over a
remarkably broad conglomerate.
Samsung managers who have worked for big competitors say they go through far fewer
layers of bureaucracy to win approval for new products, budgets, and marketing plans,
speeding up their ability to seize opportunities.

Second, Samsung often forces its own units to compete with outsiders to get the best
solution. Rather than outsource manufacturing, the company sinks billions into huge new
factories. Instead of bearing down on a few "core competencies”, Samsung remains
diversified and vertically integrated -- Samsung chips and displays go into its own digital
products. "If we get out of manufacturing," says CEO and Vice Chairman”, we will lose."

The next step is to customize as much as possible.

The final ingredient is speed. Samsung says it takes an average of five months to go from
new product concept to rollout, compared to 14 months six years ago. In 2003, when
Motorola planned to introduce a dozen new cell-phone models, says Technology
Business Research Inc. analyst Chris Foster. Samsung had launch 20. Nokia also was in a
whiz at snapping out new models. However, most are based on two or three platforms, or
basic designs. The 130 models Samsung introduced globally that year were based on 78
platforms. Whereas Motorola completely changes its product line every 12 to 18 months,
Samsung refreshes its lineup every nine months. Samsung was the brand which
introduced the first voice-activated phones, handsets with MP3 players, and digital
camera phones that send photos over global system for mobile (GSM) communications
networks.

The five Theoretical Business level strategies are:

Figure: Five
Business level
strategies
Lower Cost

Overall Low -Cost

Broad
ket

Provider
Range of Strategy
Samsung operates on both low-cost and differentiation strategies means the integration of
both the strategies.

 Low Cost Strategies:

Samsung’s low cost is mainly due to lower raw materials, R&D and labor cost.

 Raw Materials:
Lower raw material cost is achieved through producing multiple product architectures on
each production line, with skilled engineers stationed to handle all kinds of contingencies.
Samsung’s innovative technology contributed to lower raw material costs and higher
yield rate. Samsung needs less material than others to produce the same product, reducing
overall production cost. Its innovation not only reduced cost, but also formed its
differentiated core competency. Noticeably, its innovation has reduced defects in its
product also help to lower wastage and hence lower cost of production.

 Research & Development:

In contrast to its competitors, Samsung has only a single main R&D facility in Seoul,
South Korea. The collocation of R&D facility with its fab (fabrication plant for
semiconductor manufacture) lines has allowed savings of up to 12% on fab construction
cost for Samsung. Moreover, Samsung has placed R&D engineers with product engineers
together so that problems can be solved in the minimum amount of time possible and
facilitate the communication of ideas at the same time. Because of these, Samsung tend to
have a lower R&D cost compared to its competitors which have R&D facility located
across the globe.

 Labor Cost:
As for labor cost, Samsung generally has a lower labor cost compared to its competitors
because its competitors tend to operate in countries like America and Japan which have a
higher wage rate than Korea. Samsung has a relatively lower labor cost for each
production unit because its merit based hiring and evaluation system, reward policies,
employees’ welfare and benefits to employees’ family allow employees to focus on
innovation and productivity. Hardworking employees are always ready to work overtime,
thereby eliminating wastage of resources needed to source for additional help or last
minute hire. In addition, its strategic location in Korea translates into some savings in
labor cost compared to companies that operate in Japan and US.

 Differentiation Strategies:
Samsung Mobile Handset differentiation is enormous. They have provided every possible
option available to the mobile phone users. Slim, slides, fold, music, and basic everything
is available via Samsung mobile handsets. The customers have a huge choice between
various handsets to choose to suit their need, choice and budget as well.
Samsung mobile innovators, engaging simple lifestyle of human with the most dynamic
technology. By using MOBILE TRACKER, now one can easily find out the lost/stolen
mobile. Solar charging is now possible in SAMSUNG Crest Solar. To avoid water, dust,
shock, & unbearable temperature SAMSUNG MARINE will gives the resistive support.
To go more dynamically- there is touch & feel SAMSUNG...
CORBY-STAR-JET-PIXON & windows mobile like OMNIA.

The recent products in the line of differenciation is the touch screen sets of samsung.
Samsung's touch-screen focus came at a time when the market for touch-screens is
already competitive. J.K. Shin, the head of Samsung's Mobile Communications division,
says that Samsung can differentiate itself in several ways, such as support for DLNA
features that allow its phones to interact with home networks.

The main differentiation, though, will come from better touch technology, better user
interfaces and a focus on lifestyles.

"The handsets we are launching all focus on different customer needs - style, music fans,
business professionals and early adopters," Shin said. "Other manufacturers only have
one or two touch-screen devices, but we are coming onto the market with more devices."

For the question for quality I’ll end up with a small real real life incident. A friend of
mine uses Samsung folding handset (Model SGH-X160) since quiet a few years. A few
months ago her niece dropped it from 5th floor of her house. Even after falling to the hard
ground from such a height, the set is still working properly without any significant
damage or repair work. So the quality maintenance of Samsung is proved by its actual
performance.

 Recommendation and Conclusion:

For mobile handsets, Samsung provides every possible option for a choosy buyer. It is the
only branded handset in the market giving higher benefits at lowest price. In Bangladesh,
overwhelming Nokia, Samsung is the only brand giving sliding, folding and touch screen
quality handsets with various multimedia options at the most competitive price.

Samsung telecommunications is following the most suitable and competitive business

strategy for mobile handset market all over the world. The price, the style, the variety
everything is very much positive. The constant innovation by the R&D department keeps
the changing pace effective to survive in the dynamic environment of mobile handset
market. So, my point of view is that it is just what a company like this is supposed tobe.
So the progress is hopefully sustainable in the long run.