Internal Analysis
Samsung group was founded by Lee byung- chul as a company in 1938 which was later developed as Samsung Electronics in 1969. It was earlier known as Samsung Electronics Industry Co., Ltd. which has changed into Samsung electronics. It operates three business divisions which are based on self-determination. Three divisions include Information Technology and Mobile Communication (IM), Device Solutions (DS) and Consumer Electronics (CE) (Samsung Electronics (a) p.20). Samsung Electronics is a global company and headquarter is situated in Korea. It has around 161 units around the world including 14 regional headquarters. Samsung group has around 67 affiliations out of which 18 affiliations are associated with Samsung Electronics (Samsung Electronics (b), p. 6). Samsung is one of among well known and successful name in silicon world. Samsung Company was established on the basis of vision and mission to become leading organisation of electronic industry, digital world, and silicon industry and memory system. First black and white TV was produced by Samsung in 1970s (Samsung). The brand has managed to win ground over Apples and Sony as it is leading competitors by offering extensive value to its customers (Adamson and Shaughnessy).
INTERNAL CAPABILITY ANALYSIS
The evaluation of the success of the business as a result of its internal strength is assessed using VRIO model proposed by J.B. Barney (Witcher, and Vinh Sum Chau, p.126). The model reviews the internal strength from four dimensions as discussed in the table below:
Value
Samsung Electronics is a global organisation and one of the most successful organisations in terms of financial performance. Samsung Electronics have a wide range of product lines and services that are valuable in the market (Samsung (a), pp.8-13). The range of products from electronics from telecommunication devices to computer and TV and other household electronic items provide the company with a valuable edge over competitors in terms of economies of scale and scope. Samsung has valuable product line as compared to other electronic companies (Worstall). Samsung was emerged with drastic engineering ideas for producing DRAMS at a time when there were a downturn of DRAMS in the market in 1981. Samsung has valuable ability to lead the market since it has emerged (Mathews, p.99). Hence, the brand name is another valuable resource for the company to achieve a competitive advantage as Samsung is well-known name around the globe and one of the most successful brands of electronic items.
Samsung financial statement showed that Samsung has been improving its financial performance every year with a great margin. For example, the company has made total sales of around 201,103,613 Million KRW in 2012 which has increased to 228,692,667 (Million KRW) in 2013 (Samsung Electronics, (a) p.31). Therefore, in terms of financial performance, the organization also has the valuable edge. Samsung used the valuable system to fabricate the products to reduce the time of product lifecycle (Leachman, Keen young, and Vincent, p. 61).
The company has strong human resource, and its board of directors is considered as one of the most responsible management that manages a huge number of employees across the world associated with different cultures and languages. Aim of Samsung is to understand the needs of customers to satisfy them to achieve competitive advantage. Samsung has strong capability to develop innovative technologies in its product line to successfully lead the market. Samsung has strong position in R&D as its engineer’s research to response needs and demands of customers resulted in new design and advanced products. Samsung strives to provide quality products to its customers which are one of the major reasons for its improved financial statement. Quality assurance is a core value at Samsung electronics and consumers around the globe trust Samsung and rate of customer loyalty is very high (Samsung electronics (b), p. 22).
Rare
Supply chain management system of Samsung is considered as very effective, advanced and influential. The company organized different programs in order to generate experts and specialists of supply chain, The black belt program in Six Sigma supply chain has developed talented and trained managers and experts to deal with supply chain of company (Yang, et al. p.88). Supply chain management of Samsung is one of among those resources that are rare in the market as the company has been exploring and exploiting the opportunities in multiple related markets such television, mobile and laptops, etc. This gives the opportunity to Samsung to achieve competitive advantage with simplicity across product as well as innovative interface (Choi, Byung-Joon, and SuKyung, p. 703). Samsung generates innovative technologies and also provide these at affordable price. Innovation with affordability is a rare resource and very few companies in the market have this capability to utilize this resource (Mathews, p.99).
There are very few companies exist in the worlds that are considered as successful brands and organisations such as Apple, Samsung, Sony and Philips. Samsung has brand value resource and capability to use it providing a range of products in the electronics industry. It is noted Samsung is one of among those firms that produce a range of products more than competitors and very few companies have this resource of generating strong product line (Giachetti, and Giovanni, p. 1399). Technological development of Samsung increases its advantage in the competitive world of digital devices and electronic accessories.
Inimitable
Samsung has experts who generate different technologies to meet the requirements and demands of customers such as wired and wireless communication, mobile technologies, laptops and advanced televisions. Samsung has some advanced technologies include OfficeServ™ 7000 which is a game for business solutions and provides advantages for needs of business communications. It offers as a secure platform for business communications and also makes growth increment enable as using OfficeServ™ 7000, investment will be able to carry business with considerable ROI in bright future. Samsung maintained its position in the market with its advanced technologies and achieved competitive advantage (Zhang, p.2).
Samsung has experts who developed an advanced methodology for supply chain management Six Sigma. A design for supply chain system is advanced and based on complete research. These experts were generated from the use of black belt program thus; Samsung has most advanced and strong supply chain system that provides a competitive advantage to the company. Supply chain management of Samsung is excellent in terms of ensuring the quality of products, logistics, the satisfaction of customers and sales (Yang, et al., p. 89). In addition to this, the brand identity of the company is also one of a non-imitable asset of the company as compared to the competitors (Choi, Byung-Joon, and SuKyung, p. 703 and Shaughnessy).
Organised to capture value
All resources of Samsung organisation are organised in terms of capturing value in the market. Samsung is striving to respect choice, needs and demands of customers. The company has a strong network for its product line and its distribution as Samsung has always intended to do business with more selectivity and choice among partners. It is an opportunity for investors to become a partner of Samsung across the world in any way such as a direct dealer, indirect partner or corporate at headquarters.
Samsung spends nearly 10% of the total investment (sales revenue) every year for research and development. Samsung Company is continuously involved in improving its technology and products quality as its aims to lead the market by providing technologically advanced products. Financial resources of Samsung is well organised in terms of what, why and how much to spend where. Samsung always makes efforts to maintain its position as leading firm and in fact, Samsung is owner of the patent portfolio as one of largest owners and publishers in U.S. Leachman et al. stated that Samsung is a leading firm in electronics and silicon industry as it produces it DRAM, SRAM and many other digital and memory devices and largest manufacturer in digital world.
Also, Samsung has a direct connection with a number of dealers who are authorised. The company always focuses on making the right choice among business partner and customers to achieve competitive advantage. For example, providers of telecommunications and its solutions are authorised dealers of Samsung, which assures quality and keep the needs of customers fulfilled. Samsung dealers are taken as trusted in terms of advising and informing for advancements of technology, measures of cost effectiveness which resulted in achieving competitive advantage. Samsung respects to work with those partners and dealers who are committed to increasing capabilities of the company and provide exceptional solutions (Maghsoudlou et al. p.178).
Works Cited
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Choi, Junho, Byung-Joon Kim, and SuKyung Yoon. "UX and Strategic Management: A Case Study of Smartphone (Apple vs. Samsung) and Search Engine (Google vs. Naver) Industry." HCI in Business. Springer International Publishing, 2014. 703-710.
Giachetti, Claudio, and Giovanni Battista Dagnino. "Detecting the relationship between competitive intensity and firm product line length: Evidence from the worldwide mobile phone industry." Strategic Management Journal 35.9 (2014): 1398-1409.
Leachman, Robert C., Jeenyoung Kang, and Vincent Lin. "SLIM: Short cycle time and low inventory in manufacturing at Samsung Electronics." Interfaces32.1 (2002): 61-77.
Maghsoudlou, Zeinab, Hormoz Mehrani, and Fereydoon Azma. "The Role of After-Sales Service in Customer Satisfaction: Case Study (Samsung House Appliances)." International Research Journal of Management Sciences. 175-179. 2.6 (2014).
Mathews, John A. "Ricardian rents or Knightian profits? More on Austrian insights on strategic organization." Strategic Organization 4.1 (2006): 97-108.
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Samsung Electronics (b). “Interim business report 2015”. 2015. 27 Jul. 2015. <http://www.samsung.com/us/aboutsamsung/investor_relations/financial_information/downloads/2015/2015_business_quarter01.pdf>
Samsung. “About Samsung”. 2015. 27 Jul. 2015. <http://www.samsung.com/us/aboutsamsung/corporateprofile/history06.html>
Shaughnessy, Haydn. “Why Apple Is Losing Ground To The Samsung Brand”. Forbes. Jan. 2014. 27 Jul. 2015. <http://www.forbes.com/sites/haydnshaughnessy/2014/01/11/why-samsung-is-gaining-on-apple-as-best-loved-brand/>
Witcher, Barry J., and Vinh Sum Chau. Strategic management: principles and practice. Cengage Learning, 2014.
Worstall, Tim. “Why Samsung Beats Apple Or Perhaps Vice Versa”. Forbes. Sep. 2013. 27 Jul. 2015. < http://www.forbes.com/sites/timworstall/2013/09/09/why-samsung-beats-apple-or-perhaps-vice-versa/>
Zhang, Meng. "A simulation modeling approach to understanding information technology value cocreation." Pacific Asia Conference on Information Systems (PACIS) 2014 Proceedings. AIS Electronic Library (AISeL), 2014.
