340 625 2 PB PDF
340 625 2 PB PDF
ABSTRACT
In other words, the purpose of this paper is oriented towards the study of the
internationalization processes carried out by the company to reach the different
countries. In this way, variables such as: industry and competition analysis, company’s
challenges, entry mode to different countries, promotional channels, prices, logistics,
finance, human resources and product design will be included. Likewise, the way in
which the company has managed the competition with other large technology
companies in the world and what barriers it has overcome to get ahead of these will be
investigated.
INTRODUCTION
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always been oriented to the idea of offering a wide range of electronic devices that
adapt to each person.
However, it is difficult for a company to try to satisfy all the consumers of the world,
aspect that has not limited Samsung as it also aims to challenge its competitors.
Despite this, it could be considered that its success is not only due to its varied
portfolio, but it has built a market strategy and a positive policy that allows it to reach
further and further away. Today, thanks to its internationalization strategy, Samsung
forms a multinational conglomerate that is made up of subsidiaries and affiliated
companies. In this way, the company is in prominent sectors such as: financial
services, heavy industry, chemical services, etc.
In this way, its internationalization strategy has been based on investments aimed at
the creation of design, research and development centers. In this way, the company
leads the world market with technology of great progress and quality, an aspect that
catches the attention of the consumer since its products manage to differentiate
themselves in a market with a lot of competition. For these reasons, in the present
study various analysis variables are presented that allow us to deal more deeply with
Samsung's actions when reaching other markets and present at the end a significant
contribution of the steps followed by the company that can help other companies to
expand their horizons.
Background
Currently, Samsung is one of the largest companies in the world specialized in
technology, which not only promotes innovation in technological products but pretends
to improve the quality of people’s life. In its beginnings, the company was founded with
the name of "Samsung-Sanyo Electronics" in 1969; however, later it changes to
"Samsung Electronics Industry Co Ltda". Its first activities are oriented to the
production and export of televisions, as well as washing machines and refrigerators
even though these last products were not the best sellers.
From the decade of the 80s, the company begins the production of what would be
other products for the home such as microwave oven, computers and video recorders
among them. In this way, the main lines of the company were electrical appliances,
telecommunications and semiconductors. At the beginning of the 90’s Samsung was
making inroads into color televisions, as well as developing and producing mobile
phones and the first digital video recorder with the help of industrial robots that had
been produced for mass production purposes. Likewise, it offered the world new
technological concepts in the telephone and television products, launching the first
LCD screen and the wireless telephone for the Internet.
From the decade of 2000, the company managed to produce all its products on a large
scale through the construction of new factories. It also highlights the progressive
innovation in its products and services in the following years and its foray into the
global semiconductor and process technology markets. In this way, Samsung will
become a leading company in technology for the dedication and application of its
products to everyday life. Currently, it has various business lines and services oriented
to them. The big categories that make up its business are: products, solutions for
businesses and global sites.
In this way, with all the products and services that the company has developed
throughout history, its internationalization process was mainly highlighted by direct
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foreign investment. In this way, the investment of the company is very high when it
comes to reaching new countries. According to this, the first internationalization
processes carried out by Samsung focused on the export and marketing of televisions
to Panama. Likewise, in 1978 it establishes its first foreign branch located in the United
States and in 1982 it establishes its first subsidiary manufacturing plant abroad in
Portugal. In the following years, after their first productions abroad and expanding their
sales, they managed to reach more countries and position their brand as one of the
best in the world.
RESEARCH METHOD
Education: The solutions for education are divided into three main categories:
integrated solutions, support for BYOD environments and collaboration tools.
These categories respond to the general idea that all products respond to the
ease of management of the artifacts, the tactile and technical functions are
collaborative for the student and the participation of the students is encouraged.
Health Care: Health care solutions are aimed at improving the lifestyle of the
elderly, as well as their care, improving the patient's experience on health
issues, diagnosing visually and optimizing workflow in medical facilities.
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Government: The main objectives of Samsung products propose security in
mobile devices with a very high quality. In this way, the management of
confidential information is promoted through governmental certifications. All of
this is done through plans that lead to independent control of zones and easy
adaptation and management of them.
Retail: The technologies offered to this sector promise the optimization in the
experience in the point of sale, digital transformation in the means of payment
and the attraction of
In this way, with the number of sectors that require innovative technologies and
processes as shown above, Samsung competes with other brands that manage to
surpass it in many aspects. Among the brands that generate most competition for
Samsung are Apple, Huawei, LG, Motorola, Sony and Lenovo. In this way, being
companies with large market share generally compete with Samsung aggressively for
the acquisition of new customers.
2. Samsung’s Challenges
Samsung laid bare its smartphone strategy amidst its fourth quarter earnings report.
The world's largest maker of smartphones by volume essentially plans to reverse the
course it set a couple of years ago. The company said it will diversify its handset
portfolio and improve its software. If we look back to the 2012 and 2013 era Samsung,
we see a different company than the one we know today. Samsung blitzed the
smartphone market with dozens of models, ranging from miniscule to ginormous. The
company made devices with screen sizes ranging from 2.8 inches to 6+ inches. These
smartphones covered every price point imaginable. They all ran Android with
Samsung's TouchWiz UI on board. TouchWiz has always been a rather heavy user
interface skin, but at least it was manageable back then. These devices were sold like
gangbusters.
There are many disadvantages of using a Samsung phone, let's start from where it
hurts the most:
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Performance: The Touchwiz UI on every Samsung smartphone is draining so
much of resources of any phone, that it just can't keep up and hence is either
bogged down by a bug in the apps or the UI itself and doesn’t recover easily
from them.
Slowing Down: This is not experienced in many of the other Android devices,
especially Nexus ones with pure Android. Over time, Samsung phones tend to
slow down considerably from where they start and hence sometimes
benchmark lower than average, so very bad UI decisions at play.
In this way, Samsung has penetrated the markets in three ways: direct export,
concerted export and manufacturing in foreign markets. In this sense, the direct export
has consisted in the direct sale of its products from the national market or a subsidiary
that is in foreign markets. Within this type of export, the company has implemented
mechanisms such as: direct sales, agents and distributors, subsidiaries or sales
commercial.
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The concerted export has been based on the commercialization of products in the
foreign market with the help of a third party. In this case, the contracts that can be
given are: Piggyback, export consortium, joint-ventures, European Economic Interest
Grouping, franchises or strategic alliances. This is how Samsung uses a concerted
export through Joint-ventures to enter countries that require it such as China or India.
4. Promotional Channels
Samsung struggled a lot to keep their products on the top of the market, specially the
smartphones. Samsung has progressed so much to be the top competitor of Apple in
terms of smartphones through the way of Advertising, Branding, Marketing, Sales
Promotion, Personal Sales, Publicity, Sponsorship and by developing new technologies
on the prior basis. Samsung is considered as the largest tech business by revenue and
seventh most valuable brand today. The main reason for Samsung to become an
industry tech leader is through the promotional channels they applied.
The first marketing strategy applied by Samsung was most effective because it helped
the cost driven company changed its structure and it became an authority
manufacturer. While considering smartphones, the taste of consumers usually changes
on the technological basis, the company must follow the rapid progress to evolve such
kind of gadgets to the customers. So, Samsung also had to change in order to be the
top hand of the market and its promotional channels were the keys to evolution.
Samsung has never failed to satisfy their customer in terms of evolving new gadgets,
services, retaining customers, brand addiction and manufacturing new technologies to
be the upper hand of the market and used the best marketing strategies to retain
customers as well as to switch customers from the other brand. That is the reason
Samsung said that to be the master brand of marketing strategies. Samsung has
always sparked in terms on innovation. An advertisement for the new innovations
usually drags the customer to go for this brand and the product.
Samsung persuade that advertising is one of the best ways of promotion. Samsung
marketing strategy can be considered as a perfect example for marketers to progress
and grow.
5. Price Strategy
Pricing strategy is one of the ways to seek a good competitive advantage compare with
competitors. pricing decisions are difficult and complicated because it affects on sales
and revenues. There are some factors affecting on price: quantity sold, profit margin,
taxes and shipping, marketing costs. production, storage, raw materials, packaging and
packaging costs, offers and discounts. Samsung use 2 pricing strategies, one of them
is Skimming price which the company sell the product in highest possible price that
customers can pay. Then, after a period the company decrease the prices over the
time and offer it to general market. The advantage of this method is achieving high
profit margin and cost recover as faster as can. Also using this strategy can build a
high-quality image for its products. The disadvantages are that competitors will
challenging the sellers extreme price point with lower price offerings. Also, if high prices
point remain very high for too long, it may be not accepted for the general market. The
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other strategy is competitive pricing strategy. this strategy is to put prices based on
competition. It allows companies to set prices quickly with little effort. Samsung is good
in this strategy comparing with Apples prices. The price of Galaxy N9 128 GB is 1,000
$ but the price of IPhone X 128 GB is 1,173$ which is good and consider as
competitive advantage.
6. Logistics
Samsung is the king of technology in Korea (Asia), it has a business that is closely
related to supply chain management under Samsung SDS. The company has a core
business in the form of logistics and distribution of devices, where its business value
reaches billions of dollars. Song Kwang-woo, the leader of the blockchain division on
Samsung SDS said that blockchain technology can revolutionize the industry, not only
in the financial sector but also in other fields such as supply chain management. It will
have an enormous impact on the supply chains of manufacturing industries. Blockchain
is a core platform to fuel our digital transformation.
Blockchain will help increase efficiency by eliminating paper usage, by recording all
transactions electronically on blockchain. Because, according to IBM, this paper
document costs are quite high in a business that must prioritize efficiency and cut
unnecessary costs. Samsung SDS make a predicts that the use of blockchain
technology in the supply chain management industry will be able to cut costs up to 20%
because Blockchain can cuts overhead and eliminates buildup of goods. And all of This
is about maximizing efficiency and supply visibility. It doesn’t have just an impact on
business efficiency, blockchain technology will also increase customer satisfaction,
because the transaction speed will be increased, including the acceleration of
production and distribution time with blockchain technology.
7. Finance
Samsung’s finance is good at all. With all the electronic goods that they sell they
already have been the king of electronic products in Asia till 2017. The results of 2018
are not already posted by Samsung, but the analysis will be taken data from 2017 and
the years before. The ANNEXE 1 shows a graph with the prices of 2016 and 2017.
Operating profit jumped from KRW 6.68 trillion to KRW 9.9 trillion (different Rp. 116.7
trillion), in the first three months of 2017 the second most successful quarter in
Samsung's history. This is also the most profitable first quarter, giving high hopes to the
South Korean company. The Mobile Division provides sales results like the Christmas
holiday period, namely KRW 2.07 trillion or around Rp. 24.4 trillion. However, when it is
compared with the results of the first quarter of 2016, this result fell 47%.
Results in the second quarter of 2017 should improve due to the launch of the Galaxy
S8 and Galaxy S8 +. Both smartphones are the most pre-ordered smartphones in
South Korea with orders of more than 1 million. In addition, Samsung also has plans to
sell refurbished Samsung Galaxy Note 7 products to cover the loss that happened last
year when their product got pull because of disability.
8. Human Resources
Samsung introduced a management system called "Management Seek". The point is
that Samsung must find geniuses to work with Samsung. This departs from the
realization that the decline in Japanese companies’ performance is partly due to the
inability to hunt down talents. The genius category that Samsung is looking for is, first,
not looking at the person's nationality. Second, they have strong intellectual abilities
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globally. Third, prioritizing Engineering students or exact sciences. Samsung made
several levels of genius levels, namely levels S, H and A. Genius level S (Super), has
super hidden abilities and can complete the work with amazing results and is a
prospective person who will lead Samsung in the future. Level H (High Potential),
which is not enough to be judged based on work but has hidden talent that shows
super probability. Level A is not as good as S level but must show the possibility of
super hidden ability level.
T-type quality human resources that Samsung wants can be formed with the
development of HR in Samsung's Master of Business Administration system. Samsung
promotes and explores the quality talent of its next generation among its own
employees. The Samsung MBA system is carried out by selecting employees from the
ranks of division heads and deputy heads, then building them into leaders or CEOs of
the Company. For new employees, Samsung also makes education through a four-
week training camp. Learning materials are varied, including education for SVP
(Samsung Shared Value Program), SLP (high-level manager development program)
and SGP (global HR development program).
We strive to improve the 'quality of life' of our employees that they will
provide equal opportunities for all employees and treat them according to
their abilities and performance. We recommend continuous employee
development and support for the improvements needed to carry out the
task. In addition, we create an environment that can work autonomously
and creatively. We can make a conclusion that Samsung has a lot of
natural resources, it's natural to see the size of the company. And of
course, it is very difficult in managing such natural resources. Samsung has
a way to manage it. With this we have understood that Samsung employs
its employees to the maximum to provide benefits to the company. The
Samsung company also has a way to make its employees comfortable in
their work so that they can serve the company by providing guarantees,
compensation, insurance, bonuses and others to their employees.
Samsung also provides special training for employees who want to get
promoted or new people who want to work at Samsung (Samsung, 2018).
Samsung Diversity at a Glance: Samsung employees rate their Diversity score a "C-
". Samsung's Diversity score ranks 4th place compared to its competitors Apple, Sony,
Nokia, Qualcomm, and Motorola. Compared to 317 nearby companies in New York,
Samsung is in the Bottom 30%. At Samsung, African American employees and
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employees with Entry Level experience gave the best feedback on the company culture
for diverse employees unlike employees who have been at the company 1 to 2 Years
and the Product department who provided the lowest ratings. Samsung's Diversity
score remains steady over the last 90 days.
9. Product Design
Samsung is very interested in research and development making it a leader in this
field. The progress achieved by Samsung is an important point to highlight the
company globally. Samsung has spent nearly $ 33 million in research and
development. Samsung has about 70,000 research and development engineers, 22
centers worldwide and 1700 designers working to achieve the company's vision in the
field of research.
According to Samsung, “the Research actively conducts research to identify new future
growth areas for the company, creating new value to improve people's lives”. They
specially search on artificial Intelligent, Data Intelligent, and Smart Machine all with
collaboration with worldwide universities, research institutions, and partner companies.
The new generation of mobile technology is 5G that will be used by Samsung during
2019. 5G performance targets high data rate, reduced latency, energy saving, cost
reduction, higher system capacity, and massive device connectivity.
At the level of mobile phones, Samsung recently announced its Galaxy Note 9. It
features a large 6.4 "screen and high-resolution clarity. The device is also
characterized by its ideal design with soft edges and harmonic size for flexible and
smooth use. In this way, it can be seen in ANNEXE 2 Some of the characteristics of
Samsung mobile phones, which are the best known worldwide.
Interview
Unfortunately, the interview that was planned to be carried out could not be carried out
because the company protects its information a lot. In this way, when looking for
various media and different people we could address, they told us that due to security
issues, the company did not allow them to give information about it. In this way, the
questions that were wanted to be answered by the company are presented:
2. What are the most important aspects that Samsung considers establishing a
subsidiary or production and distribution center in other countries?
6. How does Samsung differentiate itself from other brands in foreign markets and
how does it manage to position this difference in the mind of the foreign
consumer?
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8. How does Samsung respond to the criticism it receives regarding copying apple
products?
9. What are the management systems used in human resources?
10. What does Samsung's own systems promote the company's success in financial
and human resources issues?
CONCLUSIONS
In conclusion, much of Samsung's success has been due to the correct selection of
strategies that direct the activities to the desired goals. In this way, the strategic
decisions taken by the company to address the international market has ensured a
good positioning of the company's brand, policies and practices. Likewise, through the
study addressed, it is possible to get to know Samsung from a purely managerial
perspective, which allows evaluating its versatility to reach new markets and guarantee
an increase in revenues during the last years.
Although the company has presented moments of difficulty, the most important factor
has been its constant reading of the environment that surrounds them to improve their
practices and revolutionize the market. This is how the internationalization strategies
addressed by Samsung allow an adequate coupling for all types of companies;
However, the important thing is to have a complete knowledge of the industry to know
how to act at each stage of the process.
Recommendations
It is important to know that the processes tackled by Samsung to achieve success has
been constant; that during the time it has been in the market it has looked for the best
practices to present to the world a unique and outstanding performance. In this way,
the process of internationalization of Samsung can present an effective guide for those
companies that initiate their processes in external markets or that wish to expand their
reach.
Although Samsung is a company that is in the technology sector, other companies that
are not in the same industry can support their activities in the strategies chosen by
Samsung to penetrate new markets. Related to this, it is important to clarify that the
guidelines outlined in this study can also serve as a guide for other companies to carry
out in-depth analyzes of the general market based on information collected and
existing, with the purpose of continuously improving processes.
In this way, it is recommended that companies carefully analyze each point in order to
adequately understand Samsung's actions and effectively follow its steps towards
success. The strategies addressed by Samsung in each of the points discussed above
can be evaluated and copied by other companies that wish to achieve success as has
one of the largest companies in the world.
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Annexes
Annexe 1. Prices of 2016 and 2017
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Annexe 2. Characteristics of some of Samsung's technological devices
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