Samsung

Introduction

Description of Retail Business in Korea

Retail business is emerging as one of the most promising businesses in Korea due to what Samsung-Tesco calls a ‘powershift’ from manufacturing to distribution. Indeed, it is especially true in Korea; while the retail business of U.S. and Japan took 32% of GDP on average, that of Korea’s took only 21% in year 2000. Samsung-Tesco conservatively forecasts that the average growth of retail business, between 2000 and 2005, would be 8.6%. Currently, the ‘big five’—Homeplus (Samsung-Tesco), E-Mart, Carrefour, Magnet, Walmart— consists 52% of the market. As small retail businesses are increasingly being absorbed to big retailers, department store, and supermarket, the competition among the ‘big five’ is becoming fierce to take advantage of high growth market, which also possesses the strategic advantage of a spearhead for entering Chinese market.

This Case Study and the Timeframe

This case study describes the implementation of new economy paradigm, which took place during and after the merger of Samsung Corporation and Tesco PLC. Although the major target of the merger was not exactly on uptaking new economy paradigm, the merger process has played critical role in implementing new economy paradigm in Samsung-Tesco. The case study timeframe stretches from early 1994 to the present while many of the important issues in this case unfolded from 1997 to present. Information in this case was gathered through an interview and questionnaires along with direct observations.

Background

In March 1994, after separating out from Samsung group (chaebol), Samsung Corporation entered into retail business. There was little doubt that Samsung Corporation would be very competitive because of its well-recognized management skills and capital. However, when it opened its first three retail stores (Homeplus Taegu, Samsung Plaza Bundang, Samsung Plaza Seoul) in 1997, the financial crisis broke out.

Plummeting consumer confidence and viciously high cost of financing inevitably placed Samsung Corporation into financial status of literally a step away from bankruptcy; accumulated loss during 1998 was KRW 249 billion (approximately US$200 million)1. To overcome this unprecedented difficulty, Samsung Corporation began to restructure its business and downsized the organization while searching 1 Calculated in KRW 1,200 per US$. It should be much higher if it was calculated by exchange rate of that time (Approximately KRW 1,800 per US$). for the breakthrough strategy. Recognizing that retail business is too attractive to give up, Samsung Corporation decided to seek for foreign investment2. At the same time, after successfully establishing its business in Thailand, Tesco PLC was also looking for partner that could provide strong local background as well as capability of creating synergy for Tesco’s regional network. As the need of both parties met, Samsung- Tesco was established in May 1, 1999. Through the merger, and initial investment of US$ 220 million from Tesco PLC, Samsung-Tesco was able to clear out all debts and rehire all of 1,137 workers who were laid off during 1998. Strategy and Planning Division of now Samsung-Tesco evaluates the merger a success for two reasons. First advantage was financial.

The merger not only saved Samsung-Tesco from bankruptcy but also guaranteed Samsung- Tesco a subsequent investment of $170 million (KRW200 billion) to dominate the market. Second advantage was access to the advanced management skills and IT technology to compete with other world class rivals such as Wal-mart, Carrefour, Costco, etc.

New Economy Narratives

As it was shown in the case of U.S., new economy benefits cannot be fully exploited unless it is supported by infrastructures including human resources capabilities and organizational (socio-cultural) capacity. And it is obvious that, depending on the stages of the development, each recipient of new economy paradigm (business, civil society, government agency etc.) will have different degrees of impact and will show different reactions to the new economy paradigm.

Samsung-Tesco’s situation was unique in that it had already had IT hardware prepared but it had to adopt global standard IT hardware as well as software (infrastructures such as readiness of workers to adopt new system and culture) for heightened competitiveness.

Since the financial crisis of 1997, Korean government actively promoted foreign investments and deregulated related laws. It would have been much difficult or impossible if the regulation that existed before the financial crisis still existed. define3 new economy paradigm narrowly and limit to just IT hardware, Samsung Corporation had already established its own IT system independently. The IT industry of Korea was quite competitive and the very nature of retail business required intensive IT system throughout its entire value chain. However, after the merger, the requirements on the system have expanded to cover global network, as well as future expansion of logistics system. Samsung Corporation’s former system did not meet the requirements of global standards although it worked well on the domestic basis. Samsung-Tesco faced dilemma of either just modifying the former system or changing the entire system to Lotus system that has been used in Thailand4. The Lotus system was more desirable for it was a global standard and flexible enough to take into account a rapid expansion; the former system was consistent with Korean currency, language, practices, and most importantly, people were used to it. The former system was operated in Windows system while the Lotus system was operated in DOS system5.

Samsung-Tesco decided to partly adopt Lotus system: for retail system, Samsung-Tesco fully adopted Lotus system, and for finance, Samsung-Tesco adopted Oracle financial. However, for personnel management and groupware, Samsung-Tesco decided to stay with the former system. The Lotus system was chosen for retail system—the backbone of the entire value chain in retail business—because of following reasons.

• First, the former system does not reflect characteristics of multiple stores network—the multiple stores network requires simplification, standardization, and specification of the system. This problem will inevitably be intensified as Samsung-Tesco expands its business.
• Second, it is clear that, in the near future, global supply chain system will be developed and it will require global standard that the former system is lacking of6. It is highly probable that future competitiveness of Samsung- Tesco will be built around its global network; one of Samsung-Tesco’s tough competitor— Wal-mart—already introduced its global EDI system.
• Third and the most important reason was reliability of the Lotus system. Because the Lotus system has already proven its performance in practice, Samsung-Tesco did not have to risk reliability of the system in the situation where the competition is already intensifying. The principle in adopting the Lotus system in Samsung-Tesco was glocalization (globalization + localization), which is one of the business motto introduced by Seung Han Lee, the CEO of Samsung-Tesco.

Glocalization basically pursues, as far as possible, the global standard while recognizing that global standard is not the panacea and therefore business environment of Korea should also be respected. The transition process took three stages as shown in <Table 2>. Note that it took almost one year (10 months) to adopt new IT system.

In this case study we define new economy as economic model which any networked two-way information and data communication devices facilitate better decision making of the organization and lead to higher performance.

Samsung-Tesco has chosen the Lotus Thailand system because the Thai environment was most similar to that of Korea’s among Tesco’s global network. It does not necessarily mean that DOS system is global standard.

Samsung Electronics Co Ltd was founded in 1938 Seoul, Korea. The company has been around for decades, providing the world with “electronic products & device solutions”[9]. Not only do they build devices, over 80 different businesses exist under the Samsung name. Their workforce consists of more than 370,000 employees to this day. This is more than all of its top competitors combined.

Throughout the course of this Spring 2013 quarter, I have conducted a project on the financial management of Samsung. After extensive review of the firm’s annual 10k report, their tactics appear to be quite impressive. The corporation has integrated an innovative diversity management program as part of their strategic sustainability. They have invested a significant amount of their treasury into their staff. This seems to have seized positive results in employee performance. We will be evaluating this program and its significant weight within the workforce.

Literature Review Sustainability Report

Samsung’s Annual 10k includes a Sustainability Report that effectively defines their new diversity management program.[7] It is a précis of the research and development that was involved. This is perhaps the most reliable source thus far. It is a publication devised by the corporation itself and delivers their perspective.

First highlighted was the firm’s interest in recruiting both domestic and foreign workers. “Global talent” is a priority that has definitely not been overlooked. The report continues on to emphasize their practice of anti-discrimination. Samsung has always aspired to be a global business leader and needs global talent to do so. Having Asian origins, their code of honor is examined and addresses Human Rights. Here, an overview of rights that every employee holds is stated. Fairly distributed incentives are also covered within the report. Documenting the provided incentives shows the firm’s eagerness to maintain employee satisfaction.

Literature Review Forbes Insights

Our second reference is a publication by Forbes Insights titled, “Global Diversity and Inclusion: Fostering Innovation Through a Diverse Workforce”.[2] Forbes Insights is an extension of Forbes LLC that acts as a wing of specialization. Interestingly enough, it questions our view of diversity before it provides a detailed explanation of how and why it is indeed a key to success. The “formula for diversity” is an ever-changing entity. It is a living, breathing thing of many colors that cannot be swept under the rug. Rather, business leaders can control it and use it to their advantage in order to maintain internal sustainability. A workforce that is aware of its diverse environment is able to have a drive. Potential applicants see such organizations as attractive. Recruiting will then be less problematic.

Forbes is undoubtedly a credible resource in that its writers compile of the most highly respected business analysts in the world. Not only are researches provided with well-written articles, but with official publications and external sources as well.

Literature Review Asia News Network

Our third source is an article from the Asia News Network written by Cho Ji-huyn called, “Samsung Moves Towards Workforce Diversity”. [5] Ji-hyun is also a writer for the Korean Herald and is nationally respected. Expanding our research and including a Korean writer’s perspective is absolutely helpful when reporting on an international matter. This publication was composed specifically for ANN’s business segment. It is a collection of quotes from Samsung executives themselves. Because these quotes originate from internal sources, it is most definitely reliable.

Ji-hyun writes about Samsung’s maximized efforts to amp up diversity. This does not simply mean ethnic diversity, but that of education level, physical ability, and other aspects as well. Their recruiting officers are so specialized, this program has proven to be the most effective thus far. The article also discusses improvements Samsung has made since the program’s implementation. This includes both facilities and management levels.

Methodology When Samsung identified diversity issues back in 2009, the majority of their stakeholders jumped on board. [7] After a serious interview with these stakeholders, Executive Director John Depreatera offered the following quote, “In my opinion, the three most important points for the definition of globalization are global decision making, global mindset, and global culture.” In just two years, Samsung’s foreign worker’s portion jumped from 38% to 48% of overseas employees – and still growing. Their secret in success is their commitment “to putting shareholders at the heart of management.”

In a comprehensive survey by the corporation’ internal human resource department, we see that 600 disabled workers were employed in 2005, and 2,600 in 2010.[5] This shows the firm’s urgency in addressing the issue at hand. As a result, Samsung executives now stand as some of the world’s most trusted business leaders.

Samsung is fortunate to have a handful of financial highlights. Revenue, operating profit, net profit, assets, liabilities, shareholder equity, & net cash flow are all skyrocketing figures from the past fiscal year. In the past year, Samsung’s personnel expense has increased yet again by 7.1%.[1] The last pay-out totaled over $14 billion. This shows the firm’s trust, goodwill, & investment into its workforce. One of the underlying reasons for Samsung’s success is their powerful implementation of diversity management.

Discussion In my personal experience, I can honestly say that I have yet to work with a diversified team. My last job at Pioneer Marketing had virtually no diversity whatsoever. Literally every worker in the company, from sales representatives to the president, were young adults within the age range of 18 to 26, all of whom were in college or recent graduates. The predominant ethnicity was Caucasian and almost everyone was in a fraternity or sorority. It was extremely difficult to stand out as an individual because a worker was not accepted until he or she accepted the ways of the company. I was unable to attain multiple perspectives on an issue because each and every leader provided me with identical answers. Pioneer preached that there is only one answer to every problem.

My last internship at La Femme Fashion was strikingly similar. Most of the workers were young adult females with all the same taste in fashion. When the owner approached us with a gown and asked for our opinions, I was the only one whose opinion differed. This led me to stand out in a negative way and I was getting more attention than I was comfortable with. I felt like an outsider rather than an individual.

I believe that recruiting employees from all trades and backgrounds is critical to the well being of a company. The workforce is what keeps a business’ veins pumping. To underestimate one’s own staff is to lack faith in them.

Conclusion One of the underlying reasons for Samsung’s success is their powerful implementation of diversity management. As a result, creativity is fostered and teamwork is encouraged. International business relationships are able thicken as communication can be more open. Having a narrow approach to recruiting only causes discomfort within the workforce. This is why one key to success is to build, solidify, and maintain a culturally alive establishment. As George Martin from A Game of Thrones said, “Different roads sometime lead to the same castle”.

Samsung Electronics announced an $8 billion deal on Monday to buy Harman International Industries, marking a major push into the auto electronics market and the biggest overseas acquisition ever by a South Korean firm.

The electronics giant previously shunned big acquisitions, and the latest deal underscores a strategic shift as the company tries to break into the high-barrier automotive industry where it has little track record.

“An M&A deal this big is a first for us. But it shows that under Jay Y. Lee, the company is changing and open to new ways to grow,” a source familiar with the deal told Reuters, referring to Samsung Electronics’ vice chairman.

The purchase of the Stamford, Connecticut-based maker of connected car and audio systems is part of Samsung’s efforts to find new areas of growth as its mainstay smartphone business — scarred by the disastrous withdrawal of the fire-prone Galaxy Note 7 — slows.

Automakers already include or are developing technologies to enhance safety and provide better smartphone connectivity and entertainment systems, creating an opening for tech companies to break into a market for software, services and components.

Samsung agreed to acquire Harman for $112.00 per share in cash, a 28 percent premium to the U.S. firm’s closing price on Friday.

“Samsung is using its huge cash pile to pull ahead of rivals in the auto technology market. But it remains to be seen whether Harman will be able to grow into a company that will be able to compete with the likes of Bosch and Continental,” said HDC Asset Management fund manager Park Jung-hoon.

Harman’s products, which provide infotainment, telematics, connected safety and security services, are used in more than 30 million vehicles made by automakers such as BMW, Toyota Motor Corp. and Volkswagen, according to its website.

Harman, the maker of JBL audio system, earns around two thirds of its revenue from the automotive-related segment, and its automotive order backlog as of end-June stood at $24 billion, more than three times annual sales of $6.9 billion in fiscal year 2016.

Samsung created an automotive electronics business team a year ago to identify growth opportunities in the sector. This year it invested $450 million in Chinese automaker and rechargeable batteries firm BYD Co. Ltd.

Separately, Samsung has held talks with Fiat Chrysler Automobiles (FCA) over a potential sale or partnership for the latter’s Magneti Marelli auto parts maker, sources have said. The current status of those talks is unclear.

The Harman acquisition is subject to regulatory approvals and is expected to close in mid-2017.

The deal was announced a day after media reports said Lee and several other heads of South Korea’s family-owned conglomerates were questioned by prosecutors investigating a political scandal engulfing South Korean President Park Geun-hye.

(Reporting by Hyunjoo Jin and Miyoung Kim; Editing by Edwina Gibbs and Jacqueline Wong)

Executive summary

Mobile phone, which is defined as a high technology electronic product, is popular all over the world. Bangladesh must be one of the biggest markets for those mobile phone manufacturers.

As a leader in mobile telecommunications market, Samsung has its scientific business strategy that leads to success, and pays a great attention to the market of Bangladesh. Based on the Bangladesh mobile phone market, this paper analyzes Samsung’s business strategy to show reason of Samsung’s success. The business strategy includes the strategic intent, the competitive strategy and marketing mix. The strategic concept of Samsung is to take the demand-side strategy. Samsung subdivides the whole market into several objective markets according to the researches about the partialities of different individuals.

And then different types of mobile phones are put into the market aimed at attracting different consumer groups. The competitive strategy of Samsung is to improve the innovative ability to win the competitive advantage. Strong technological innovation ability makes Samsung stand in the forward position of mobile industry all the time, and characterized this brand by a special vitality. And the marketing mix of Samsung is to use the integrated marketing strategy including product, price, promotion and place.

It values the construction of a brand, the orientation of its products and pays a lot of attention to technology improvement. It increases the sales through sensitive advertisement, presentation to the celebrities and large-scale entertainment. Current Market Situation Increasingly, we are observing that handsets are following the pattern of typical consumer electronics; the trend is toward phones with improved features at lower prices. Simultaneously, there are more manufacturers who will deliver cheaper handsets to capture the mass market.

Multifunction cell phones, e-mail devices are increasingly popular today. Touch screen phone is very much attractive because it is Very much easy to use and people can browse the website like they browse in a laptop computer. Competition is therefore more intense. So it is easily visible that there will be massive demand for such phones in the future. To gain market share in the dynamic environment, Samsung must carefully target Specific segments with features that deliver benefits valued by each customer group. Market Description Samsung Wave II touch pad phone’s primary target consumers are young people.

It is very much attractive for student because of it’s wide touch screen which could be used as a hand Held palmtop. It supports Wi-Fi technology so people can transfer their documents and other important file through this phone like a workstation. In the prospect of Bangladesh people can easily monitor the Stock market movement through its high-speed Internet technology. Other users are entrepreneurs and professionals. It is very much cheap in compare with an apple I-phone. Product Review The Samsung Wave II S8530 (or “Samsung Wave II”) is the Successor f Samsung Wave S8500 smartphone running the bada 1. 2 operating system designed by Samsung, which was commercially released on October, 2010. The Wave is a slim touchscreen phone powered by Samsung’s “Hummingbird” CPU (S5PC110), which includes 1 GHz ARM Cortex-8 CPU and a powerful built-in PowerVR SGX 540 graphics engine, “Super LCD” screen and 720p high-definition video capture capabilities. Our Product Samsung Wave II smart phone offers the following standard features With a bada 1. 2 operating system Hardware features Calling – The speakerphone is great.

It was very loud and clear. Conference calling was also easy. Once you’ve placed your second call, an icon appears to conference the two calls. It can connected 20 calls at once and had no trouble swapping and dropping individuals from the conference. Design The phone is made of mostly metal alloy and is measured at 10. 9 mm thick. In terms of form factor, it is a slate style featuring only 3 physical buttons on the front: call, reject/ shutdown, and main menu button. The ergonomically designed body also makes it more comfortable to hold. Screen The screen is a 3. -inch (94 mm) capacitive touchscreen Super LCD with an anti-smudge oleophobic coating on top of the scratch-resistant tempered-glass (Gorilla Glass Display) touch panel which has been shown to be capable of resisting extreme friction (scratch-resistant). The screen resolution is 800×480 WVGA. Processor The phone features a 1 GHz SoC, which internally contains an ARM Cortex A8 CPU core that is identical to the ARM Cortex CPU core used in Apple’s A4 package on package SoC. The Phone graphics engine is SGX 540 which is said to be capable of generating 90 million triangles per second (same as the SoC used on the Samsung Galaxy S).

And 512MB RAM (same hardware as Samsung Wave S8500). Camera The phone features a 5 megapixel which supports 2592 x 1944 pixels, along with autofocus, LED flash, Geo-tagging, face, blink detection, image stabilization, touch focus,etc. Other than these features it has various shooting modes such as beauty shot, smile shot, continuous, panorama and vintage shot. As a camcorder it is able to shoot 720p HD recording (1280×720) at 30 FPS with flash. As well as this, it is also able to record slow motion video (320×240) at 120 FPS with flash. Other features

Other feature includes A-GPS, 2 GB/8 GB of internal storage with a microSDHC slot for an additional 32 GB. It also has a magnetometer, a proximity sensor, an accelerometer, 5. 1-channel surround sound Mobile Theater, music recognition, a fake call service, smart search, Social Hub and it is the first phone to support Bluetooth version 3. 0. In addition to Bluetooth 3. 0, the phone also features Wi-Fi 802. 11 b/g/n, HSDPA 3. 2 Mbit/s and HSUPA 2 Mbit/s. This phone is available with both European/Asia 3G bandings and the North American 3G bandings.

Software Features User Interface The phone is one of the few smartphone to feature the Samsung bada operating system platform. The UI is Samsung’s own Touchwiz 3. 0. Touchwiz 3. 0, like the 2 predecessors (Touchwiz 2. 0 and Touchwiz), utilises widgets. The 3 most notable widgets pre-installed in Touchwiz 3. 0 are Daily Briefing (which includes all essential information such as weather, finance, AP mobile news and schedule), Feeds and Updates and Buddies now (which allows users to call, send texts to and read Facebook/Twitter feeds off their favourite contacts).

Users are allowed to have up to 10 homescreens to add widgets. Applications In terms of Internet Browser, Samsung Wave is pre-installed with Dolphin Browser v2. 0 (based on WebKit). While this browser supports Flash it is disabled by default to improve page load time. By default, the phone comes with Picsel Viewer which is capable of reading . pdf and Microsoft Office file formats. Users from selected countries can buy and download Picsel Office Editor from Samsung Apps. As for Samsung apps, users can also download applications, games and widgets from the application store.

Other software includes the GPS software that comes with this phone (LBS Route 66), Palringo IM, Facebook, Twitter, social hub, mini diary, daily briefing, memo, video player, FM radio, media browser, voice recorder, e-mail and pre-installed asphalt5. Media Support MP3, AAC, AAC+, e-AAC+, WMA, AMR, WAV, MP4, FLAC, MPEG4, H. 263, H. 264, WMV, AVI, DivX, XviD, MK Competitive OVERVIEW Players There are currently four tiers of players in the handset market: · Tier 1: Nokia, Samsung and Apple · Tier 2: Motorol and Ericsson · Tier 3: Alcatel, Siemens etc · Tier 4: the rest

Nokia swept into the market, overtaking both Motorola and Ericsson to achieve the largest handset sales during 1998. Samsung after a brief struggle against Nokia and apple finally got a large share of customer. The failure of Motorola to move from analog to digital and of Ericsson to pursue fashionable designs enabled Nokia’s market position to improve. Since then, both Motorola and Ericsson have been aggressively playing catch- up, attempting to leverage their strengths in technology and semiconductors to attack Nokia’s share in the overall world market. Tier 3 companies cater to a lower-end, lower-margin market.

Relative lack of economies of scale, product range, and brand equity make market dominance or even parity a very difficult challenge for these smaller players. However, Samsung – with its new stylish design and technology – is well positioned in the emerging smart phone market, and is capable of threatening the larger two companies (nokia and apple). Compare between Samsung Wave-II and I-phone Because the large chunk of market segment who prefers Smartphone is captured by the apple’s I-phone.

SWOT ANALYSIS

Strengths Having the advanced technology over the competitors in the mobile phone industry – Decentralized company structure, innovative and creative employees and Charismatic strong leader – One of the best market leadership in the mobile industry – Strong brand name and company image in the global market – Has its own manufacture and network – Product innovation – Economy of scale Weaknesses – Complacency and arrogance – Few customized operator-specific handsets – Few alliances, company sticks to its standing in the market, do not want to cooperate with the operators Opportunities – The emerging market in developing countries, such as China, India, Bangladesh – The emerging market for high-end mobile phone such as business user phone Threats – Facing more new competitors, especially from Asia – Stronger buyer power from the network operators – Lost market share – Strong competition in mobile industry Objectives

We have set aggressive but achievable objectives for the first and second years of market entry. • First-year objectives: During the Samsung wave-II initial year on the market, we are aiming for a 40 percent share of the Bangladesh smart phone market through unit sales volume of 1,00,000 units. • Second-year objectives: Our second-year objectives are to achieve a 60 percent share based on sales of two models and to achieve break-even early in this period. Market Segmentation Our target market is mainly focused on young and professional people with a attraction for technology which is available in a relatively cheap price.

Gender : Male & Female Family Life Cycle: Young, single, married, married with children, older, under18. Occupation: Professional and technical, managers, officials and proprietors, clerical, sales, craftspeople, supervisor, Operatives, farmers, retired, students, homemakers, unemployed. Social Class: Lower Lowers, upper lowers, working class, middle class, upper middles, upper uppers Monthly income: Below Over10,000 Taka Size of potential market : Total population of Bangladesh. Geographical Location: Rural, Semi-Urban, and Urban User status: Potential user, first time users & regular users Usage rate: Light user, medium user & heavy user.

Readiness stage: Aware, informed, interested, desirous and intending to buy Marketing Strategy Positioning In 2007 Samsung Telecommunication Business reported over 40% growth and became the second largest mobile device manufacturer in the world. [1] Its market share was 14% in Q4 2007, growing up form 11. 3% in Q4 2006. In Q1 2008 Samsung strengthened its second position on the market and achieved 15. 6% world handset market share. So as per the concern regarding Bangladesh Samsung is already achieved a good market share after Nokia. Product Strategy

The development of a product with global appeal

Nimble movement to sell it internationally Most importantly, a commitment to learning what consumers want, without consideration of the limits of existing technology

1. Best mobile devices for everyone regardless the price and geography
2. Internet services on mobile devices
3. Business mobility markets
4. Once the superior business devices are introduced, Corporate users will take advantage of the stability and innovation
5. Low cost innovative devices in the emerging markets will generate revenue due to the brand loyalty
6. Introducing the device for business solutions, superior from its competitors
7. Giving SDK(software development kit) to the developers to develop more applications on its new OS platform
8. Introducing low cost ,innovative, devices in the emerging markets
9. Leading Brand Pricing strategy

Samsung Wave-II smart phone will be introduced at BDT 20000/- per unit in compare with Apple-iphone, which costs BDT 55000/- per unit. Though it is not superior than I-phone but it could Outrun some function of I-phone like as we have mentioned in our previous discussion. Distribution Strategy In Bangladesh by selective distributor Samsung could promote the market and also by media Advertisement. Samsung could also promote the consumers with joint co-operation with major Carriers like Grameenphone and Banglalink. Marketing Communication Strategy

• At TV Advertisement
• At Radio Advertisement:
• At Outdoor Advertisement:
• At Press Conference:

Action Program The Samsung Wave-II will introduce in February 2012. Through a series of scheduled program Samsung will carry out its marketing strategy and achieve its objectives. A monthly basis detail about these programs are given below February 2012

• We will initiate a huge amount trade sales promotion ad. Campaign to educate dealers and generate excitement for the product launch.
• Send catalogs & brochures to 50000 likely customers
• Set-up showrooms
• Provide samples product reviewers, opinion leaders and celebrities as the part of our public relation strategy.
• Create own website. March 2012
• Collecting marketing information. Start an integrated print/radio/TV/ Internet campaign targeting consumers.
• Launching Samsung Wave-II April 2012

Study consumer satisfaction and identify opportunities. Budget [pic] Total first-year revenue : Tk. 200 Core sales volume: 100,000 average wholesale price : Tk. 20000/- per unit. Variable cost per unit : TK 2500 for units Samsung Wave-II projects sales of Tk 60 Lac on 1st quarter and consequently Tk. 60 Lac, Tk. 40 Lac and Tk. 40 Lac Estimated first-year fixed costs: TK. 170 Core Break Even calculation = TK. 1700000000 /TK. (20000-2500) = 97143 Units(approximated) Controls There should be a tight monitoring system in every level of execution from top to bottom.

We will carefully monitor customer satisfaction through our product and customer service Center. Any sign of deviation will be corrected through our highly skilled manpower. Further plan has been developed in the context of severe price downgrading. CONCLUSIONS Samsung must rethink its strategies if it is to remain successful. The recent economic slowdown coupled with impending market saturation and the demand for increased functionality, is beginning to dramatically change the handset market. Samsung should take aggressive measures to resist commoditization if it is to grow and continue being profitable. We have outlined some ways that it can accomplish this.

Its brand has proven to be one of its most valuable assets, and Samsung should continue building it. Samsung must also thoroughly research evolving customer needs and provide a positive impetus for brand differentiation. Finally, by forming strategic alliances with industry and service providers, Samsung can ensure and maximize its visibility to the end- user. Samsung also needs to bring new products to market, and, as the market is showing signs of saturation, shift its focus onto the replacement market. This means developing data-driven services and appropriate partnerships with content providers. There simply needs to be an incentive for existing handset owners to purchase a new Samusng handset.

Purpose of Report

This report involves the development of a marketing plan for 12 months from February 2012 to January 2013 for the launch of Samsung Hybrid Smart TV in February 2013 in Singapore which has new motion feature. Samsung Hybrid is being innovated to satisfy the social needs of technology savvy and family orientated group. As a fast-paced and busy country, Singapore like to have many features in one device to multicast.

In the current technology, most of the people are enjoying on a “touch” sensation on their smartened or tablet PC. Samsung Hybrid’s uniqueness lies in becoming the first to have a built-in motion sensor that enables consumers to interact and control the TV without the need to use a remote control. Based on Samsung market research data has being shown that consumers are indeed looking for a feature like Samsung Hybrid. This allows us to plan and expand our market structure to achieve our organization’s vision.

Scope of Report

There are 3 stages that will guide us through the marketing plan to make Samsung Hybrid a success.

• Stage 1 The macro-environment, market and competitors analysis will be conducted to evaluate for Samsung Hybrid.
• Stage 2 Identify the marketing objectives and strategies for Samsung Hybrid.
• Stage 3 Implementation and Budget for Samsung Hybrid from February 2012 to January 2013.

1. Company Profile & Product Information

Samsung is one of the world’s leading electronics companies which are world recognized by its quality products.

Samsung portfolio consists of televisions, home appliances, mobile handsets, printers and many more. Samsung distributes its product through its authorized distributor and ensures their products to be in accordance based on procedures by their quality checks. In 2011, our net profit was 13. Trillion won, due to the strong sales of smartness comparing to previous year it declined of 15%. Revenue increased to 6. 7% posted 165 trillion won and operating profit decreased to 6. 05% posted 16. 2 trillion won.

Samsung branding strategies are world class design and innovation to make lifestyle interesting, creative and classy. Now, Samsung is setting up a platform for Singapore developers to create applications for smart TV which can surf, login Faceable and twitter. Previously, Samsung has created a design competition for amp targeting youngsters to design a hip product; this has drawn 2000 designs mainly from students. In this way, Samsung has strengthened the connection with the communities. Smart TV series 8 NIXON ECHO Bubble Marketing Plan By esoteric

PEST Analysis

Political Samsung to obtain an IN Permit or OUT Permit through Trainee@ (including controlled and non-controlled items) before goods can be imported or exported in out of Singapore. For certain high-technology goods subjected to export control by the exporting country. Singapore importer may advise us to provide an Import Certificate and Delivery Verification (ACID) from Singapore Customs. Goods that are covered by an ACID must be imported into Singapore straight. Generally, under patent law the owner of the invention obtains a 20-year monopoly to prevent others from making, using or selling the invention without his consent.

The Intellectual Property Office of Singapore (IPSO), a statutory board, is the lead government agency that advises on, administers intellectual property (P) laws, promotes IP awareness and provides the infrastructure to facilitate the development of ‘P. An IPSO’ work has become increasingly important is in leading negotiations on IP issues in Singapore growing network of Free Trade Agreements with other countries.

Economic Singapore expecting GAP growth of 5. % in 2012, with inflation remaining relatively high at 5. 5% for upcoming months before slowing down to 2-3. % in the second half of the year. 1 As inflation eases away, business will pick up slowly while employment still stays at a high rate. Overall, the high employment evens out the impact of high inflation rate.

Social :Corporate Social Responsibility (CARS) Samsung makes every effort to listen to the views ; resolves issues of internal and external stakeholders and incorporate them into CARS initiatives, led by CARS Liaison Office and CARS executives, as it is essential for sustainable growth.

CARS awareness is provided for employees to highlight CARS importance and standards. As part of Samsung Engineering’s initiatives to increase awareness about the environment for children and teens around the world, they Joined with UNEVEN in 2006 and launched Concentration program, interacting with children from all over the world. Tuna Echo-Generation website was launched during the Tuna International Children Youth Conference providing a connecting platform for young people worldwide to share their thoughts, exchange ideas on initiatives to help preserve and protect the environment.

By participating in forum, they are able to share their own stories and photos about the environment. 2 advertise on social networking sites such as You Tube, Faceable & twitter which is easily accessible to know the latest technology introduced worldwide. As the technology is pretty advance consumers might take a longer time to adapt on the function of the feature. We will create an inbuilt troubleshooting menu guide to prompt the consumers on any enquires. We also will be launching a roadster to let consumers have the feel of how smart their TV can react by using gestures.

Market Analysis

Singapore new internet economy Singapore aggressive role in adopting of Internet technology is the ranked top in Asia-Pacific region. The internet awareness of our population is estimated to be close to 100%. Singapore with the help of favorable regulatory regime is influential to the world going online. 3 Growing Industry TV technologies for Asia countries have registered a substantial 27% increase in overall sales revenue this year.

These segments have been experiencing production price erosion, with average prices dropping 20% from 2010, hush having greater affordability and increases demand in this region. Singapore, with tremendous growing technologies, will embrace new Smart TV’s favorably; while nearby countries are new potential markets in future.

Competitive analysis

Customer profile

Market segmentation Demographics and Behavioral segmentation are chosen to identify potential customer market portion by knowing customers’ social needs.

For demographics segmentation the age is 25 to 55, family orientated, socializing and play online games. For Behavioral segmentation part, they can watch, surf as well as interacting with the TV and this can also strengthen family bonds. They are the positive users, open minded, ready to accept and learn new technology. Targeting Market There are five criteria which we will be using to become our target segments. Firstly is market size, right now we are focusing in Singapore. Creativity and technology are well encouraged in this small, but well developed country.

We expect this market to grow significantly. By introducing new features to our Smart TV, we can outpace growing competition. For how we are reaching out to our customers, media etc.. Lastly, we have allocated a budget for this commercial use so that we will not overspend beyond our limits. Positioning Apart from stating Samsung Hybrid with its unique feature, we also want to know the ideas in customers’ mind by using these four steps:

Identify the important features for Samsung Hybrid.

Discover how customers rate other smart TV with Samsung Hybrid’s unique feature.

Discover where Samsung Hybrid is being projected in customers’ mind.

Repositioning Samsung Hybrid in the minds of targeted customers.

The uniqueness of Samsung Hybrid is eliminating the need to have a remote control to start up your TV, Just by waving your hand. It is simple, easy and you do not need to be a genius. With this, Samsung Hybrid will become the hottest topic in the market and indirectly will attract the interests of the customers. Therefore, we want to fix Samsung Hybrid as the family household’s first choice.

Marketing Research

Samsung will be using the following 5 steps of approach that lead to marketing actions.

• Step 1

Samsung Hybrid is a new product so we need to find out whether consumers are receptive about the new motion feature added onto the smart TV. The measure of success of this objective will be looking at the current features versus the proposed new feature.

• Step 2

By developing the research plan, Samsung will be facing competition with time which we need to complete the research within 12 months and the possible funding of the research plan.

We will need to analyze the data and to could come up with a decision on whether to incorporate the new feature into our Smart TV, the approach we are targeting on will be using via the statistical data.

• Step 3

We are creating a set of survey which consists f six types of question to potential customers for our primary data. As for secondary data, we searched through using internet, flipping the newspaper and magazines.

• Step 4

Based on the findings in step 4, it had concluded that customers prefer motion than the other two features.

We had listed our marketing plan, implementing and evaluating the results.

SWOT Analysis

Marketing Objectives

Samsung seeks to achieve:

1. To accomplish the number in sales of 42300 units by earning a profit of from the period of Feb. 2013 to Jan 2014
2. To increase our market % share in the TV product category
3. Marketing Mix Strategies

Product

Samsung Hybrid is classified under shopping product where most consumers will be comparative over price, style and quality.

By having a rather competitive and fairly expensive pricing, we stressed to differentiate ourselves from our competitors by having better and more innovative promotion strategies, and pride ourselves by maintaining a constant product quality revolution in technology, touch screen panels and internet age, we introduce Samsung Hybrid, a Smart TV with motion functionality. Samsung categories in product line, where produces not only Smart TV, but also more on electronic devices such as Mobile, home appliances, camera/cam-corded, PC and Peripherals.

These range of products are usually sold in home appliances retail stores that carry all brands, and are closely priced for comparisons. Valued added service All Samsung Hybrid customers are offered a post sales service, by providing them by free delivery, installation and carry back their existing TV when they are using it for a trade in. Also, we will be giving them extra 3 years for warranty coverage during our roadster promotion, as well as 30 days one-to-one exchange if there is any technical fault.

Stage new product development process

Stage 1: New product strategy development There is an increase of close substitute goods from various brands. Samsung wish to provide more enhancements or to provide a more advanced technology than other brand. Our SOOT analysis have proven that Samsung have the potential to capture the eye of the prospective customer, which they will continue to support our brand.

Stage 2: Idea generation Samsung are continuing to develop new features to market customers who enjoy living with the latest technology.

We will generate new features from the comment or feedback provided by our existing customer. We will also work with DIED, to come with new ideas to solve the existing common issues. DIED is one of the most recognized global design firm which is highly efficient in generating many ideas within a short time.

Stage 3: Screening and Evaluation. Screening and evaluation is a stage whereby new innovations ideas are made, by considering feedbacks from both internally and externally. For internal approach, colleague will analyses the technical feasibility of new innovations to decide if the objectives are being met.

As for external approach, surveys are conducted to get feedbacks from consumers. Samsung will also be conducting incept tests by providing minor modifications to the existing Smart TV sets to test its capability, get feedbacks on how they can apprehend the product, and what are the other recommended enhancements needed for improvisation of this new product.

Stage 4: Business Analysis A crucial and final stage specifying the features and marketing strategies needed for introducing the product to the market. Financial projections are scrutinized before development of the prototype.

Stage 5: Development Most ideas for creating a new product don’t work at the very first time. With a prototype, it allows us to define the primary faults or issue to be adjusted before launching the product. Once concept test are completed, it will be brought up to the shareholders and CEO for presenting this new idea to get an POP from them. Also ensuring this new product will also meet the reasonable cost of manufacturing with the required quality.

Stage 6: Marketing Testing Exposure of new actual products to prospective consumer is a stage for market testing.

After product evaluation, it will be tested again for getting consumers feedback. Competitors from Samsung will only produce a number of new Smart TV, selecting internal staff from ACH department to give their personal review and feedback.

Stage 7: Centralization Centralization will be the final stage for the new product process whereby full-scale productions and sales commences when it is launched. Critical positioning is also needed to ensure our innovative idea turns into a profitable shopping product.

Being highly costly among all the stages, Samsung must make sure that meticulous attention is put forth to include an analysis on economic, technological, social and competition factors before developing a strategically well- implemented marketing plan to ensure a successful product launch. Product Life Cycle of Samsung Hybrid All product sales trends can be determined by the product life cycle diagram, which reflects 4 stages, from development of a marketing plan, to the time when a product is phased out. Samsung hybrid is now in the product development stage.

Introduction stage (Beebe to Paper – 3 Months) During the first launch of our new product into the market, Samsung are focused in creating high customer awareness ; product knowledge, by having a product launch roadster. It is the 1st of its kind technology, thus skimming price strategy will be employed. Growth (May to Octet – Months) The growth stage is at a period where there will be an increase in revenue. Sales will be increasing as there are more customers are aware of our product. After the successful initial product launch, with more customer awareness, demand increases.

Therefore, sales will also increase further when more resellers are interested in carrying it. Pricing will be maintained as Samsung can enjoy in increasing demand with the only brand with this unique feature. Maturity (Novel to Ganja – 3 Months) At maturity stage, sales revenue will begin to slow down and will be approaching to the point where the inevitable decline will commence. In addition, competitors will be stepping forward to challenge their new product against us. Samsung will focus on how to perpetual customer’s loyalty. Samsung will be having special discounts and promotion bundle to attract the customers.

Decline (Beebe – 1 Month) This stage occurs when the product reaches its peak in the maturity stage and begins a downward slide in sales. This will cause a decrease in the sales revenue as more new production from competitors will be launch into the market. Samsung will be maintaining the reduced price and lowering down the marketing expenses which will be focusing on the upcoming new product.

Price

Skimming Pricing Samsung adopts market skimming pricing for hybrid range as we are confident it would be the upcoming “IT” product, with a new product feature no one in the market has come up with, a Smart TV with motion sensor.

With the growing trend in technology, connectivity and social networking, trend followers are consistently looking for the coolest IT products which packs a great deal of features and combining products into one. With the high development and research costs to incorporate Kinetic motion sensors into the frame of the TV, setting a higher enable us to maximize profits before our competition starts to set in. In the IT industry, new products and new technology are being introduced every few months, and when competitors come out with the same product in future, prices would likely be adjusted to remain competitive.

Thus, using a skimming price enables us to get the most profit before lowering our costs. A higher pricing not only gives a perspective of a higher quality product with a greater value, we believe that trend followers are willing to pay for its superior pricing.

Cost-Plus Approach

Samsung will be computing a final price by looking at the fixed ND the variable cost during producing the new product. This is to ensure that Samsung Hybrid will be moving in an upslope for its revenue and profiting. Break Even Calculations Branding Strategies Samsung is one of the most recognized brand that in Singapore.

Regardless of Smart TV, tablet, mobile phones or PC peripherals, Samsung has been introducing innovative product, increasing brand loyalty, thus overtaking Sony and L. G as a leading consumer electronics brand and now is ranked 17. 5 Samsung will continue to serve their existing customer by offering them more benefit when they are purchasing any product.

Place

We will launch Samsung Hybrid into Singapore market through a one-tier indirect marketing channel of distribution.

Samsung Electronics Corporation Limited (Singapore) will be the distribution center which will perform a variety of distribution functions, responsible for product quality check and sales distribution in Singapore. The diagram below shows the indirect marketing channel of distribution.

Producer

Samsung Semiconductor Distributor Samsung Electronics Corporation Limited Consumers With the above channel, consumers will be benefit from here. We will provide goods and services that consumers want, to help buyers to perform free delivery service and also provide free maintenance service for the first year.

Vertical Marketing System

Samsung uses Corporate Vertical Marketing System for worldwide distribution, including Singapore. It is a forward integration process Samsung Singapore. By using this type of marketing system, it enables to reduce distribution costs, and have an increased control over the places of distributions. However it also increases capital investments and fixed costs, nevertheless Samsung s least being affected by it as it is well within their capabilities by being the leading electronics brand.

Samsung cooperates closely and distributes to a few chosen large resellers like Harvey Norman, Courts and Best Denim. It coordinates and target to achieve efficient distribution to target markets that is located not only in town area, and also at neighborhood malls to ensure convenience for customers. Selective Distribution Strategy Samsung will manufacture the product in China and imports it to corporate owned distributor in Singapore before being distributed to the selective resellers. Information is an important aspect when customers choose to buy products.

We ensure that Samsung Hybrid is placed at a place easily seen, with special and vibrant videos playing on our screen, to attract customer’s attention. Other than display, Samsung sales staff would be positioned at the various stores, to help to educate the customers on the product features and have demonstrations on the spot. Customers are able to test out our motion sensor feature from playing some interactive games provided. Other than information, convenience is also important. The selected resellers are positioned in almost all of the shopping centers in

Singapore, from town area, to neighborhood malls ensuring easy accessibility and able to buy our product when shopping for other home appliances. A good variety of Smart TV’s are available in the few resellers, so the customers are able to do comparisons on the functionality, feature and pricing of the range of Smart TV. We are confident that the customers would be awed by our Samsung Hybrid motion sensor feature which is the one and only in market now. Logistics process and customer service We ensure that customer satisfaction is well maintained by providing prompt and free delivery when you purchase our Samsung Hybrid.

Not only do we deliver, but we also help our customers to install it wherever you want it. Our technicians will then help to configure the TV and connect it to your modem, and also giving our customers an easy to understand explanation on how to use the TV. Other than that, we also have a rah technical hotlist to provide customers with help. Credit can also be used when buying from resellers, ensuring affordability. A one year warranty card will also be issue when purchasing, to ensure increased customer satisfaction in our products.

Promotion

Promotion is one of the most important aspects in the racketing mix, it determines how effectively and efficiently we communicate with current and new customers. With an ever improving technology, more people are looking forward to see a product which combines all into one, but with the simplicity of usage. In an effort to raise awareness, marketing strategy is implemented; it will then influence the customers favorably and will satisfy customers’ need at the same time achieving our company’s objectives.

With this strategy, it would increase our customers’ knowledge on our new product feature and encourage them to purchase our Smart TV. Introduction stage (months: Feb. 2013 to April 2013)

– Advertising During the introduction stage, we will be doing mass advertising through different mediums like broadcast, internet and prints.

1) Broadcast Advertising – Tape will be engaging Mediator Advertising to broadcast our advertisement in Channel 5, 8 and Channel U. The advertisement will be allocated in an hourly time slot from noon to pm.

As our target customers are mainly people who favor watching TV, we will incorporate more broadcast advertising in our promotion strategy. With creative and humorous advertisements, it enables to create awareness of our new feature and at he same time have a deep impression on our product.

2) Internet Advertising With the increasing internet users in Singapore and worldwide, it would not only be an excellent channel with high accessibility and also a much lower cost to advertise.

Advertisement will be done on a websites such as Youth, Faceable, Twitter and Samsung official website.

3) Prints Advertising By engaging Mediator Advertising, we will publish our product posters at various bus stops island wide, and also advertise at MR. station which located at central area where there are more crowds ND there will be prints on public transports such as bus, MR. and taxi as there will be increased exposure when they move about. Plus, magazine advertisements like Hardware Zone, All Stuff and TO.

Growth Stage (months from May 2013 to Cot 2013) – Sales Promotion In this stage, customers will enjoy discounts and get the chance to know and experience our new product through events and loyalty programmer. This is the time where customers will start to purchase our product and increase our company profit.

1) Roadster for official launch of Samsung Hybrid A pre-launch online event will be held prior to the official road show launch, for customers to register their interest in Samsung Hybrid. The 1st 100 to register with us will get a $200 cash rebate voucher when they purchase our Samsung Hybrid at the launch.

There will be 2 parts of the road show, the 1st wave of promotion for the initial 2 days, the 2nd wave for the rest of the week.

2) Discounts and Packages During the road show event, we will give a 15% discount for the first 88 customers who purchase our TV. For the 1st wave, we offer free extended warranty. For the 2nd wave, we will sell our product in a Smart TV package which including sound system, DVD player and Karaoke set with a special price.

3) Loyalty programmer We will be having a loyalty programmer for our Samsung users and we allowed them to trade-in their used TV to get a 20% cash rebate.

Maturity Stage (2 months from Novo 2013 to DCE 2013) – Direct marketing Customers will generate queries for purchase through direct communication or they will visit the retail outlets.

• 1)Credit card rebates

Walk-in customers will enjoy cash rebates while purchasing Samsung Hybrid when payment was made by Visa or Master credit card. This privilege will be available at all retail stores.

• 2) Deals at IT shows

By having cooperation with IT show organizers, frequent IT shows are held every few months to attract customers to purchase IT products at a promotion.

Samsung Hybrid will also be our main feature there, as it is the newest addition to our TV product range. We will have attractive promotional price and bundles for sale at the IT shows.

• 3) Online Marketing

Customers are able to purchase our product through our online stores. No extra surcharge, free goods delivery and services and customers who purchase online will be entitled to special discounts.

Setting the Promotion Budget Objective and Task Method

1. Determine promotion objectives
2. Outlines the tasks to accomplish those objectives
3. Determines the promotion cost of performing these tasks

Conclusion

With the current world revolving around technologies and innovations, it has become an essential part of our everyday lifestyle. With this in mind, Samsung has put together an intensive analysis looking at needs ; wants, economics, social, political, and technological factors, to find out our target market, competitive factors that would influence our product and pricing strategy. We came out with Samsung Hybrid, a Smart TV with motion feature.

Combining Kinetic functions with TV that have internet capabilities, not only you can watch while you surf, you can also command your TV with a wipe of your hands. With this, Samsung believes we can capture the hearts of our target market from a youngster to a working adult, a TV where you enjoy no matter it is with your families or having some relax time after work. By having a well-planned and timely implemented strategy, we ensure that all our sales targets are being met throughout the whole product life

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Samsung was founded in Samsung town, Taegu, Korea in 1969 by Byung-Chull Lee. Less than 60 years ago, the Samsung Group was a small Korean trading company, supplying rice and agricultural commodities to neighboring countries. Today, Samsung is composed of 35 businesses including electronics, chemicals, machinery, construction, textiles, entertainment, financial services, and insurance, with 423 offices and facilities in 68 countries (Samsung, 2011).

1996 saw a turnaround of a lot of events in the organization. A new CEO, Yun Jong Yong addressed the financial crisis aggressively by enunciating some bold moves and strategies. He wanted to bring a change in the organization and the manner in which business was run. Yun recruited new staff that would act as change agents and help in achieving the organizational goals. He wanted Samsung to be the number one brand in consumer electronics and change their market position from being price oriented copycat manufacturers to being premium-priced product leaders. Yun lay off 24000 employees, shut down factories and sold off business units which did not fit his strategic plans.

The new strategy was to discard the failing strategies and build a new brand. In order to gain worldwide recognition, a lot of advertising and marketing activities were undertaken, in particular, Samsung being the official wireless sponsors for the Olympics and other major sporting events. Samsung has come a long way since 1969 to has become one of the most reputed and recognized brands globally.

Until 1998, Samsung relied on a strategy of competing on price with products that were based on technologies that had been developed by other firms. Samsung was generating a majority of its profits from the lower priced appliances that consumers bought since they could not afford a higher priced brand such as Sony or Mitsubishi. The success of this price competitive strategy was tied to the ability of Samsung to continually explore for locations that would allow it to keep its manufacturing costs down. At the same time, it would need to keep generating huge orders to maintain its economies of scale and keep its production costs low (Dess, Lumpkin, & Eisner, 2010).

In 1996, the president and CEO, Yun Jong Yong was concerned about the future prospects of the firm and its heavy reliance on a strategy of competing on price. There was also a growing concern about the competition that the firm would likely face from the low cost producers from China and other countries. The financial crisis of 1997 made conditions worse for Samsung as it was left with huge debts due to a drop in demand and a crash in the prices of many electronic goods which resulted in their warehouses being stacked with unsold products (Dess, Lumpkin, & Eisner, 2010).

After much consideration, Yun set the stage for gaining global leadership by enunciating a bold strategy (Aaker, 2008). To start with, he decided to lay off about 24000 employees, shutdown factories and sold off about $2 billion worth of businesses like pagers and electric coffeemakers that were perceived as to be of marginal significance for the firm’s future (Dess, Lumpkin, & Eisner, 2010).

Evolution of a new Samsung As a company, Samsung lacked any common brand identity; it was a ‘house of brands’ which enjoyed minimal recognition and positive evaluation by consumers, and so lacked brand equity. As part of the makeover, first, Samsung adopted a top-down “single Samsung” policy to develop its business across the globe. Samsung concentrated primarily upon increasing brand recognition and esteem, using billboards to plaster its logo and products across the planet and associating these with prestigious events and associated life-styles (Willmott, 2010).

Second, Samsung changed its market position from being a price-oriented copycat manufacturer to a premium-priced product leader whose wares were sold in upscale retail outlets. Third, they would continue to be vertically integrated and turn their memory and component design and manufacturing into an asset by gaining direct access to the latest technology. Fourth, Samsung would be a world leader in creating new products designed to be distinctive and cool; the organization would become much faster to market with these products (Aaker, 2008).

Samsung wanted to follow a differentiated strategy compared with its past strategy of being low cost leaders by offering new cool, innovative and distinctive products. Rather than being cheap copycat manufacturers whose products appealed to laggards, Samsung wanted to be premium-priced innovative product manufacturers whose innovative products were targeted towards a section of consumers called innovators. Acceptance of their products by these consumers would pave way for other consumers who would want to buy Samsung products. Instead of creating an order qualifying product, Samsung wanted to focus on creating order winning products which would help them to be successful and competitive globally.

In order to achieve these objectives, the organization refocused on its business by investing heavily in corporate branding and R&D with a strong support from the Korean government (Yeung, 2007). The focus of all these initiatives was on quality, listening to markets, creating distinctive advantages, being the best, anticipating the future, creating an organizational environment to foster innovation and growth, and contributing to a better global society (Aaker, 2008). Samsung has since then maintained its design and technology leadership through a strong commitment towards R&D, to come up with innovative and differentiated products.

Developing a Premium Brand

Samsung began developing its own products rather than copying those that other firms had developed. In particular, Yun placed considerable emphasis on the development of products that would impress consumers with their attractive designs and their advanced technology which would allow Samsung to become a premium priced brand (Dess, Lumpkin, & Eisner, 2010). To achieve this goal, Yun recruited new managers and engineers, many of whom had both knowledge of the local market and experience in the international market; who would have a key influence on the development of the organizations plans (Lin, 2009). To create incentives for this new talent, Yun discarded Samsung’s rigid seniority based system and replaced it with a merit-based system for advancements.

Close links with retailers helped Samsung to get information regarding the needs of the customers and come up with distinctive, innovative and attractive products to meet these needs. Samsung began launching an array of products that were designed to make a big impression on consumers and were focused on the specific un-met needs of the prospective customers. Samsung calls these customized versions of their core products as ‘WOW’ products (Dess, Lumpkin, & Eisner, 2010).

Finally, to help Samsung change its image among consumers, Yun hired Eric Kim, who worked hard to create a more upscale image of the firm and its products. He consolidated the disparate business operations and drove towards a single vision based on the new cool, upscale Samsung brand of technology leadership in digital convergence by replacing the firm’s 55 advertising agencies with one global agency and delivering a presentation to top Samsung managers in English (Aaker, 2008).

Alternative Value Propositions

A successful business strategy needs to add value for customer, and this value needs to be real rather than merely assumed. Value is more likely to be real if it is driven from the customer’s perspective rather than from that of the business operation and must be recognized and perceived as worthwhile by the customers. A business has to make what customers want to buy. Samsung has been able to sustain its value proposition by owing important product dimensions which can be differentiated from its competitors (Aaker, 2008). Samsung has invested in continuous improvement and R&D activities which have helped them to stay ahead of their competitors. The strategic options that the company has followed over the last decade have allowed it to remain competitive across the globe and are discussed in this section.

Being Global – Samsung invested in a lot of activities to be perceived as a global brand. It associated itself with global events and personalities to build its brand equity. A successful brand would allow it to compete in the global markets and the more the number of its consumers; the higher will be its brand value. This could translate into the share of voice leading to a share of mind which leads to a share of the market.

Appealing Design – The innovative and distinctive design of Samsung products will appeal to a customer, providing them with substantial self-expressive and functional benefits. In order to make the designs credible and visible, Samsung associated with branded sports personalities.Superior Customer Relationship – Samsung listened to the needs of the market and created products which catered to these un-met needs. Their products were able to deliver a satisfying experience to its customers on several levels e.g. self-expressive, social.

Quality and Value – ‘Quality first’ is a core value of every product Samsung sells. By creatively applying technological expertise, Samsung enhances the value of their existing products and develops new categories of breakthrough ideas. Samsung’s world-class products don’t just meet consumer needs, they exceed them, and delight customers with benefits not found in competitive products (Oswald, 1996). Brand Familiarity – Successful brands drive consumer preferences, preserve margins and build customer loyalty, even in the face of tough competition. Brands provide peace of mind to consumers and create value for shareholders (Oswald, 1996). Samsung has been investing a lot in advertising and marketing in order to constantly remind the consumers of their presence.

Getting Noticed

According to Chairman Lee Kun-Hee, “Devise strategies that can increase brand value, which is a leading intangible asset and the source of corporate competitiveness, to the global level” (Samsung, 2011). By sponsoring various global sports events including the Olympics, Samsung announced its arrival on the global screen. The sponsorship associations suited perfectly with the CEO’s vision of becoming a global brand by showcasing the company as hard working, striving for excellence in the industry, being focused and creative and being fiercely competitive. Samsung acquired a new corporate identity by changing its logo and that of the group. The white colored letters on a blue color background represented reliability, stability, and warmth. Samsung was written in English so that it would be easy to read and remember globally. The logo was shaped elliptical representing a moving world – symbolizing advancement and change (Fine, 2005)

Apart from communicating its brand identity through sport event sponsorships of various kinds, Samsung also used other channels to communicate its identity. Samsung associated itself with the South African fashion industry and sponsored many fashion events. It also joined hands with the famous fashion house- Giorgio-Armani to introduce a new mobile phone which was the size of a credit card. This initiative was a big hit with fashion conscious customers. Samsung also ventured into sponsoring Hollywood movies, notably The Matrix trilogy. All these initiatives have helped build its brand over the years.