Samsung Electronics: Global Strategies Harvard Case Solution & Analysis

Question 01: What recommendations would you make to Chairman Lee regarding Samsung’s response to the threat of large-scale Chinese entry?

            The recommendation for the Chairman of Samsung Mr. Lee will be to enter new markets and explore new innovative products to remain sustainable in the Chinese market. As for now, the company has been under severing threat from the local Chinese players who offer products are very cheap rates which is quite difficult for Samsung to manage.

Therefore, the recommendation for the company will be to introduce new consumer electronic goods for the market. For instance, the company shall look to offer medical devices, security camera, etc which can be a diverse profile for Samsung, and this will also help the company to eliminate the competition with the local players where Samsung will be playing in an entirely new market.

Question 02: What were the factors that led to Samsung’s dramatic rise over the past 20 years?

The major factors that led to the dramatic rise of Samsung were the fact that it prioritized speed as a major source of competitive advantage. The company looked to introduce new technologies in all the different business sectors at a faster pace than the competitors. Along with this, Samsung also invested a lot on new product development.

Moreover, another major success factor has been the element of vertical integration where most of the manufacturing is done in house. Samsung has also been successful because it has hired talented bunch of engineers which have been working in more than 79 countries to deliver high quality electronic consumer goods to the customers.

Another major success factor for Samsung has been the fact that it produces customized goods for particular segments. For instance, Samsung introduced Rex Series in mobile phones for the Indian market and the developing market where it offered high quality features at reasonable rates.

The company has always been able to penetrate in developing markets and sustain in mature markets. The above factors can be considered as major success attributes for Samsung.

Question 03: What are the sources of Samsung’s cost advantage?

The major source of cost advantage for Samsung has been the fact that the company produces its products in various parts of the world, rather than relying on the home country. For instance, India and China have been two markets where the products that are manufactured by Samsung are reasonable because of the low labour cost and cheap raw material cost.

Along with this, another major source of competitive advantage for Samsung has been the fact that the company has been offering products that are priced for the specific market.

For instance, the Indian market is less developed and people look for cheaper products, therefore, to sustain in Indian market, the company offers low cost products and electronic consumer items. This is generally made possible with the help of vertical integration. 

Question 04: What are the sources of Samsung’s price premium?

The major source or Samsung’s price premium has been the fact that the brand name of Samsung has an image and customer loyalty. The company cannot just reduce prices in order to stay competitive and sustainable in the market. For instance, in China the products offered by Samsung in cell phones are ranked number six, which is quite low.

Samsung Electronics Global Strategies Case Solution

The reason for this rank is because, competitors in the market offer similar features cell phones at half the price of Samsung. However, Samsung cannot just reduce the prices because it has invested huge amounts in research and development, product innovation, human resource, marketing etc. This therefore ensures that the company has to charge a premium price for its electronic consumer goods.

Question 05: What will be the most essential steps to implement the Global Strategies for the immediate future?

            The major step which Lee has to take to actually implement Global Strategies at Samsung in the competitive markets such as India and China is to further penetrate in these markets. The most essential steps that need to be taken by the company in the near future are to spend on advertising and marketing of its products. Samsung, already spends ample revenues on advertising, however, in the future the company should look to work upon ATL and BTL activities which can increase the chances of implementing global strategies.

            Along with this, the company shall also look to introduce new product range such as security cameras, medical electronic devices which are not being manufactured by any of the competing rival firms. BY entering into this segment, Samsung can increase its sales in the market. .................

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