Introduction
For more than 50 years, Samsung has directed all its efforts towards making world a better place through varied businesses. The business activities of Samsung range from advanced technology, plant construction, petrochemicals, etc. Though the company expanded itself through various businesses but the flagship company i.e. Samsung Electronics dominate the global market in manufacturing of high-tech electronics and digital media. Numerous factors have added in making Samsung the market leader including continuous innovation in manufacturing, offering reliable products and services, capable human resource, making alliances with partners and by adopting responsible approach to business and keeping worldwide citizenship.
Globalization is one of the phenomena which have resulted in continuous and drastic change. It refers to transfer of products and services, human resource, idea, information and technology. Technological advancement and its transference has change the shape and dimension of business. Over the past few years Samsung has been successfully benefitting from the facet of technological innovation. Technological advancement in smart phone has revitalized the mobile industry for which Samsung has enabled itself of becoming world leader in smart phone industry.
Global Strategy
Franchising
Samsung internationally position itself through franchising which is referred to special type of licencing. Franchising is considered as more comprehensive strategy as it contains complete prescription to operate in certain market. The franchisor formulates the marketing strategy including brand logo, name, slogan and method operation. Trademarks, trade names, copyright, designs, patents, trade secrets and know-how may all be involved in different mixtures in the package to be license. It is the most effective mean for marketing and distribution of the products. There are two types of franchising such as product franchising and business format franchising.The strategies must be aligned with the short and long term goals of the company. The objective of Samsung is to offer the product at a competitive price to all the tier of the market (Hamill & Campbell, 2004).
Appropriateness of Franchising
Samsung apply to product franchising for massive distribution of its products, especially smart phones. In product distribution Samsung, the franchisor licenses its products to franchisees that is retailors. There is rapid increase in the usage of smart phones, which contributes into major market share of Samsung across the nations. Due to this reason the marketing strategy of the company remains the same whereas alliances are made in distribution of product.
Strategic Alliance
Samsung uses strategic alliance as a ownership strategy in different countries. As a mode of international market entry, strategic alliances allow Samsung have access to assets not readily available in the market. Strategic alliance is one of the most effective strategy to enter into the foreign market as it allows the companies to understand the working criterion of a particular . region. Though moves in the markets are made after through research, still strategic alliance will help in understanding the physical experience by selling the products to the target market. The strategic alliance is the most influential mean to gain confidence of the supplier, retailors and distributed of the company. Strategic alliance is favourable to Samsung in many ways. It allows access to technology and new products to smaller and larger firms by imposing synergetic effect in foreign market. Samsung is suggested to make Strategic alliance with retailers, distributers and suppliers (Diaconu, 2012).
Appropriateness of Strategic Alliance
The strategic alliance approves to be the most effective strategy for Samsung. The major portion of Samsung’s profit comprised of electronic items. In past five years Samsung has positioned itself as premium mobile phone company and created a niche in the market. The high-tier market segment is internet savvy andprice conscious; therefore the company has recruited more authentic supply channels. Strategic alliances is made with the local distributers for timely and speedy availability of smart phone which facilitates the company with appropriate information about the demand and response of the target market.
Global Challenges faced by Samsung
Internet Savvy Customer
Internet has redefined the taste, preferences, awareness level and buying patterns of customers. The customer is well aware of different brands, models and other features of mobile phones and analyses the prices competitively. The availability of accurate information has transform the buying trend of customers and resulted in large number of buyers over the past few years. With excessive use of social media network the general public is more globally connected. Samsung can use social media networking websites to advertise their products to capture wide audience (Thomke, 2006).
E-commerce Application
E-commerce is a revolution in today’s business environment where organizations have become more technologically advanced and achieve sustainable competitive advantage by adopting IT strategies in their business processes. IT and E-commerce strategies greatly help Samsung in identifying the business opportunities so that the organization can clearly develop its strategic plan to achieve maximum advantage of these opportunities. Through the effective and efficient information management system, Samsung’s major opportunities are identified such as entering a global market which is not yet identified by any other competitor and thus conducting a thorough market reach and analysis will be supported by the E-commerce applications for targeting the market successfully (Turban, 2004).
Sustainability
Among the various challenges, the issue of sustainability has gained widespread awareness. Samsung ensures to conduct its operation by following international laws and ethical standards. The company has maintained a culture of high norms and valued that are well integrated in all its international businesses. Samsung also strive to maintain healthy relation with all stakeholders. The company has special focus on recruiting and retaining its valuable work force and had taken measures for the safety of environment. After the financial recession of 2009, the economies of third world countries were badly affected. The company is continuously striving to positively contribute in the global economies of the world by providing equal employment opportunities (Thomke& 2006).
Intense Competition
Although Samsung has created distinguished identity in the international market, it is accompanied with acute competition. The industry is bombarded withlocal and international manufacturers asserting the companies to come up with innovative design with increased level of quality. China is involved in massive production and has taken second mover advantage in producing Smart phone mobiles by imitating the technology. The abundant availability of Smart phones has reduce the charm of international branded phones. Secondly most of the targeted Asian countries comprised of middle class population, declining the profit margin in the specific region.
Conclusion
Samsung gained a special place in international market, yet there are some challenges that need profound consideration from the company. The franchising and strategic alliance should be used as positioning and ownership strategy in exploring the untapped market of the world. Both franchising and strategic alliance verifies to be effective strategies in reaching and capturing the target market. Global phenomena’ssuch as sustainability, high awareness level, intense competition and e-commerce activities require special consideration and practical measures to address the issue.
References
Hamill, J & Campbell, D, (2004) Global and Transnational Business, Strategy And Management, 4 John Wiley & Sons Ltd, Data retrieved from http://khurrambukhari.files.wordpress.com/2012/02/qbzovtkwdy.pdf
Diaconu, L(2012)Business Strategies of the Multinational Corporations, CES Working Papers, Data retrieved from, http://www.ceswp.uaic.ro/articles/CESWP2012_IV2_DIA.pdf
Thomke, Stefan &Hippel, (2006), Customers as Innovators: A New Way to Create Value”. Harvard Business Review. pp5-12. Data Retrieved from www.mccombs.utexas.edu//MKT382_High%20Tech%20Products_Srinivasan.doc
Turban.E, king, D., Mckay, J., marshal, P., &Lee. J. (2004), overview of Electronic commerce published by prentice hall, pp.15-30.
