Preparing a term paper is a difficult task. We faced many problems when we started the work on the report but we are greatly thankful to Almighty Allah for enabling us to get successfully through our responsibilities. Very warm and special thanks to our respected course instructor Romanization assigning this task to us. We would like to give thanks especially to our friends and group members, for their enthusiastic encouragements and helps during the preparation of this term paper by sharing ideas regarding this subject and for their assistance in typing and proof reading this manuscript.
Executive Summary The term paper on ‘WALTON” and “Samsung” business level strategy and their current position along with their strength and weakness was based on the based on the course materials that we have learnt in Strategic Management. We have gathered what we believed to be the most complete information from the text and reference books. Strategic department, Research and development department, and Management department of WALTON Company have helped us extensively in prepare this term paper named “The overall strategy of WALTON and Samsung”. WALTON HILL (Walton Hi tech Industry Ltd. Is the pioneer of Refrigerator, Freezer, Motorcycle, and Mobile in Bangladesh. It is also the manufacturer of Energy Saving Lamp R. B Group (Mother Company) is the country’s top business Group in electrical and electronics goods using the brand name WALTON with some other sector like Textile, Dairy etc. The company has been running its business with a great reputation since 1977. Established of Walton HILL to manufacture Refrigerator and Freezer, Energy Saving Lamp, Motorcycle and Mobile. In the country is a milestone in the path of success and reputation of the brand WALTON. Samsung Electronics Co.
Ltd has just been named as the number one nonuser electronics brand in the world* and is an acknowledged leader in the digital convergence revolution. Since its inception in 1 969, Samsung has successfully transitioned from an analogue driven product line to a cutting-edge and award-winning digital innovator that is currently the world’s number one manufacturer of CDMA mobile phones, LCD and CRT monitors, DRAM memory chips and microwave ovens. With worldwide electronic product sales of $ASSES. 9 billion, over 75,employees and a global network in 47 countries, Samsung is truly a global giant Table of Contents TERM PAPER Part 2 SAMSUNG 2. Samsung outlook 6 2. 2 Mission Goal Objectives and Strategies 7 2. 3 Business level Strategy of Samsung 8-12 2. 4 Corporate level Strategy 12-16 2. 5 Functional level Strategy 17-19 2. 6 BCC matrix 19-21 Soot 22-25 2. 8 Porters Five Model 25-27 WALTON Walton outlook 27-28 Mission, vision, goals 28-30 30-31 32 33 33-34 34-36 Porters Five model 37-38 Recommendation & Conclusion 39 _4() Samsung Electronics Co. , Ltd. ) Is a South Korean multinational electronics company headquartered in Swoon, South Korea.
It is the flagship subsidiary of the Samsung Group, amounting to 70% of the group’s revenue in 2012 and as been the world’s largest information technology company by revenues since 2009. Samsung Electronics has assembly plants and sales networks in 80 countries and employs around 370,000 people. For 2012 the CEO is Swoon Oh- Hymn. Samsung has long been a major manufacturer of electronic components such as lithium-ion batteries, semiconductors, chips, flash memory and hard drive devices for clients such as Apple, Sony, ETC and Monika. In recent years, the company has diversified into consumer electronics.
It is the world’s largest manufacturer of mobile phones and Smartened fueled y the popularity of its Samsung Galaxy line of devices. The company is also a major vendor of tablet computers, particularly its Android-powered Samsung Galaxy Tab collection, and is generally regarded as pioneering the tab market through the Samsung Galaxy Note family of devices. Samsung has been the world’s largest maker of LCD panels since 2002, the world’s largest television manufacturer since 2006, and world’s largest manufacturer of mobile phones since 201 1 . Samsung Electronics displaced Apple Inc. S the world’s largest technology company in 2011 and is a major part of the South Korean economy. In June 2014 Samsung published the Tizzy SO with the new Samsung Z. Vision, Mission, Goals, Strategic directions (Samsung) Vision: A Vision Statement defines what your business will do and why it will exist tomorrow and it has defined goals to be accomplished by a set date. A Vision Statement takes into account the current status of the organization, and serves to point the direction of where the organization wishes to go. Samsung Electronics’ vision for the new decade is, “Inspire the World, Create the Future. Ins new vision reflects Samsung Electronics’ commitment to inspiring its immunities by leveraging Samsung three key strengths: “New Technology,” “Innovative Products,” and “Creative Solutions. ” And to promoting new value for Samsung core networks Industry, Partners, and Employees. Through these efforts, Samsung hopes to contribute to a better world and a richer experience for all. Mission: A mission statement is a concise description of the nature of your business and the goods and services provided. Samsung mission is “To be the best digital company”.
Samsung mission seems focused in building its brand and becoming a creative leader in new markets. It looks like Samsung is set-to change its reputation of being fast followers, a company that succeeds through watching others pioneer new technologies and markets and then rush in behind. Goal: Samsung has quantitative goal as well as qualitative goal. Quantitative goal: Samsung has mapped out a specific plan of reaching $400 billion in revenue and becoming one of the world’s top five brands by 2020. Qualitative goal: Samsung is committed to being a creative leader in new markets and becoming a truly No. Business going forward. To achieve the goal, Samsung has also established three strategic approaches in its management. Creativity Partnership Talent Business level strategy (Samsung) An organization’s core competencies should be focused on satisfying customer needs or preferences in order to achieve above average returns. This is done through Business-level strategies. Business level strategies detail actions taken to provide value to customers and gain a competitive advantage by exploiting core competencies in specific, individual product or service markets.
Every firm must from and use a business-level strategy. However, every firm may not use all the strategies _ corporate-level, acquisition and restructuring, international. Two types of ‘competitive advantage’ firm must choose between Cost Uniqueness Two types of ‘competitive scope’ firm must choose between Broad target Narrow target Fig: Business level strategies The Cost Leadership Strategy: Becoming a low-cost producer in the industry allows the company to lower prices to customers. Competitors with higher costs cannot afford to compete with the low-cost leader on price.
The Differentiation Strategy Good research, development and innovation. The ability to deliver high-quality products or services. Effective sales and marketing, so that the market understands the benefits offered by the differentiated offerings. Focused Strategy: Target to a niche market Porters five model that impact on cost leadership and differentiation. Bargaining Power of Customers [Buyer power Customers can grow large and powerful as a result of their market share. Choices of whom to buy from Low when comes to limited items Supplier Power High- when buyers have few choices of whom to buy from.
Low- when their choices are many. Threat of Substitute products & Services Many High – when there are many alternatives to a product or service. Low – when there are few alternatives from which to choose. Ideally, an organization would like to be on a market in which there are few substitutes of their product or services. Business level strategy of Samsung: Samsung has an experience of pursuing both, cost leadership as well as product differentiation strategies during its lifetime. Samsung wants to contribute more with consumers and provide better services.
From business-level strategies, a competitive advantage of a business can be created over its rivals. Samsung has an experience of pursuing both, cost leadership as well as product differentiation strategies during its lifetime. Samsung wants to contribute more with consumers ND provide better services. Product Differentiation Strategy Samsung one of the regional strategy is product differentiation. Samsung always differentiates their mobile phone models based on product attributes, customer relationships and firm linkages. Always they try to make a unique product.
For developed market, it planned to develop high-end and carrier specific models in 2009. However, their plans changed in 2010. For emerging market, Samsung planned to develop mass market models At present, they have various models differentiated by carriers, style, features, and phone operating system. Samsung is also a global leader in screen technology, TV’s, batteries, and chip design. They are also differentiate TV’s , chip, refrigerator etc.. Broad Differentiation Strategy Samsung follows a broad strategy based on differentiation.
Samsung builds mobile phone models that are used to generate customer loyalty. They build products that are different from competitor’s products. They often found ways to differentiate and create value for customers. By following this mode, they are able to set a premium price for their mobile phones gain trust and build brand loyalty. Their latest Samsung Galaxy Models mobiles are he best example. It has HAD super EMAILED display, Supreme portability and advance smart pen feature to meet the consumer’s creativity and productivity needs.
Samsung Latrobe is another example. It is a slimmest note books among the windows platform based laptops which has combined great design with amazing performance. It has various variants available in customer needs. It has ultra- durable casing, delivers long term reliability and value. But it still weight less than 1. 03 keg and boasts an anti-reflective screen and latest mobile technology. Focused Differentiation Strategy Samsung follows a focus strategy based on differentiation, where they offer nice customer, a model that is customized to their requirements.
The key objective of such a strategy is to do perform better than the competitors to serve the market. The customer they serve has a distinctive preference and unique needs. Samsung always address these unique needs by developing the models that they want. Their latest mobile phone models with advanced cameras are the best example. Recently Samsung launched a mobile phone with AMP camera. Cost Leadership Strategy Samsung is able to provide the various models at a affordable prices for their nonusers. They operate in two different ranges.
Overall Low-Cost Strategy By following this strategy, Samsung is able to compete with other overall low- cost providers in the market. Samsung as an organization is a better position to compete with others on their lower price range of mobiles. At the same time, Samsung is able to compete with Chinese manufacturers who are low cost providers. Samsung is also in a position to use price as a defense against substitute products. As being a large organization, they are able to build economies of scale, examining each cost activity and reengineering them to educe overall costs.
Samsung labor cost 35% cheaper as compared to non- Chinese manufacturers. Its raw materials cost 37% less than its competitors probably due to volume discounts and better bargaining power. Samsung can be saved an average of 12% of the FAA construction costs. They have better manufacturing processes so their yield rates were is at 80%, as compared to 50-67% for the competitors. Samsung was able to get 2. 4 times the amount of dies by using 1 2-inch wafers as compared to 8-inch wafers, at 90% of the costs per chip leading to better gross margins. Samsung is able to compete with local layers with superior technology and low cost.
Table: Price comparison of TV Model Samsung Sony Brave Philips 32″ LED TV $549. 99 $610 $753 64″ plasma TV $1299. 99 $1370 $1450 Focused Low-Cost Strategy Samsung as being a large organization, are able to focus on a narrow customer segment and still able to surpass competition on lower cost. Samsung has widest range of smart phones with advanced features and multimedia functions, and offer them at a low cost. They develop products for niche customers and offer them at low cost. By doing this, they specialize in being both overall low cost provider as well soused low cost providers.
The overall low cost strategy is mostly followed in the emerging market while the focused cost strategy is followed in the developed markets. Best-Cost Providers Strategy In strive to provide the best price value and best differentiation, the objective of Samsung is to create superior value by following the best-cost provider strategy. Samsung combine low cost and differentiation and create superior value by meeting or surpassing the customer expectation. Samsung does this by matching them very closely on their competitors product attributes and offering them at a low cost.
Samsung followed cost leadership and differentiation strategy by developing smart phone with a focus on meeting strict quantitative target. Samsung galaxy Duos series has the multi-function with low price. Corporate level strategy of Walton and Samsung A corporate level strategy specifies actions a firm takes to gain a competitive advantage by selecting and managing a group of different business competing in different products markets. Corporate level strategy is concerned with the strategic decisions a business makes that affect the entire organization.
Financial performance, mergers and acquisitions, human resource management and the allocation of resources are considered part of corporate level strategy. Corporate strategy is concerned with two key issues Expected to help firm earn above-average returns Value ultimately determined by degree to which “the businesses in the portfolio are worth more under the management of the company then they would be under any other ownership The decisions that senior management makes and the actions it takes in the quest for competitive advantage in several industries and markets simultaneously; addresses where to compete.
Product diversification: a primary form of corporate level strategies, concerns the cope of the markets and industries in which the firms competes as well as “how manager buy”‘, create and sell different business to match skills and strengths with opportunities presented to the firm. Successful diversification is expected to reduce variability in the firm’s profitability as earnings are generated from different business.
Level of diversification: Single Business Strategy: Corporate-level strategy in which the firm generates 95% or more of its sales revenue from its core business area Dominant Business Diversification Strategy: Corporate-level strategy whereby rim generates 70-95% of total sales revenue within a single business area Moderate to High Levels Related Constrained Diversification Strategy Less than 70% of revenue comes from the dominant business Direct links (I . E. Share products, technology and distribution linkages) between the firm’s businesses Related Linked Diversification Strategy (Mixed related and unrelated) less than 70% of revenue comes from the dominant business Mixed: Linked firms sharing fewer resources and assets among their businesses (compared with related constrained, above), concentrating on the transfer of knowledge and competencies among the businesses. Very High Levels: Unrelated Less than 70% of revenue comes from dominant business No relationships between businesses.
Corporate level strategy of Samsung Samsung has grown to become one of the world’s leading electronics companies, specializing in digital appliances and media, semiconductors, memory, and system integration. Today Samsung innovative and top quality products and processes are world recognized. Product diversification of Samsung Product diversification is primary formed of corporate level strategies. Successful versification is expected to reduce variability in the firm’s profitability as earnings are generated from different business.
Samsung has been successful in diversifying strategy due to a powerful and well- known brand name; advanced technology, Samsung Diversification are mix of unrelated diversification and related diversification. Samsung adds new or unrelated product lines to penetrates new markets, such as : Textiles, insurance, securities, construction, Solar cells, rechargeable batteries for hybrid cars, LED technology, Smartened, pharmaceuticals and medical equipment, Samsung also expands its existing nine of production, markets, starts manufacturing new products market related to its business activity.
The popular forms of diversification are vertical integration, horizontal diversification, and geographic diversification. Vertical Integration: Samsung opted to use its core manufacturing competence in all components of electronics. By transferring the capital investment and inventory risk, between 1998 and 2003, Samsung invested 19 billion in new chip factories and estimated another 17 billion in TFTP-LCD manufacturing. Company’s quality products had been used by many other leading brands like Sony. This will increase the Samsung brand’s awareness in consumer’s mind.
Although contamination and downward pressure on prices and margins might argue against vertical integration, Samsung overcame this situation by customized as much production as possible Horizontal diversification: Company creates or acquires production units for outputs which are alike – either complementary or competitive. Company relies on sales and technological relations to the existing product lines. Based on similar interests and needs to current consumers they sell new products through an existing distribution.