Analysis of Innovation Strategy
Analyse strategic innovation threats and opportunities for the Samsung Company.
The report helps in analysis of the strategic innovation threats and opportunities for the Samsung Company. The different kinds of appropriate analysis are required to be done as to gain more analysis on the strategic objectives along with the strategic capabilities. Samsung is one of the South Korean Company and this is one of the conglomerate that is based in Samsung Town, Seoul. The headquarter of Samsung Company was Seocho District and the areas served by them is worldwide. The revenue earned by the company is US$305 billion and the employees who are working in Samsung are more than 489,000 and the main competitor of Samsung is iPhone in the present scenario.
The most significant part of the technology strategy of Samsung is the usage of the innovation along with the terms and processes through which the entire process of innovation is being managed (Hill, Jones and Schilling 2014). The most important cultural kind of philosophy that has been able to influence the different organizations is the philosophy of moving from one imitation to the innovation. The respective perspective is evident in different kind of circumstances wherein it has been seen that there are different kind of similarities that can be noticed between the products produced by Samsung and iPhone.
Furthermore, the main significant part of Samsung Electronics Company is the innovative strategy that has been adopted by them. The recent and emerging kind of recession has forced the different companies to undergo major kind of changes. As of the different consequences, Samsung tried to strengthen their position by merging with the most powerful businesses and this is positive move by Samsung. With such positive movement that has been done by Samsung has tried to establish the excellence in the entire hardware manufacturing organization (Ginter, Duncan and Swayne 2018).
Additionally, the strategic management of Samsung revolves around the partnership, talent along with creativity as well. The same kind of strategy is applied throughout the entire divisions of the company including the different kind of smart phone devices. Furthermore, Samsung has opted to diversify the entire portfolio as to keep innovating along with creating the products that will reflect the different needs of the customers in an effective manner. Samsung is referred to as the market leader and they have tried to establish themselves as fast follower to Apple when the different mobile devices are concerned in an effective manner.
Need for Innovation at Samsung
Innovation is essential and important in the long-term success of the Samsung Company by improving the business models and adopting to the different changes in an effective manner as well. With the implementation of PESTEL analysis, the proper analysis of the threats from the industry will be observed and this will assist the company in analysing their position in the competitive market as well.
Political Aspect is one of the major aspects that has to be ascertained effectively wherein Samsung operates in an effective manner. The entire political environment is conducive in nature towards the different operations in different markets wherein the political factors benign. However, in the present scenario, it has been noticed and seen that there are different kinds of political headwinds in the home country South Korea and this has given rise to tensions in home country and other countries as well (Lasserre 2017). Furthermore, Samsung faces political pressures from different African and Latin American countries and this has affected the different instability in the growth of the company as well.
Economic Aspect is the other aspect that is critical in nature for Samsung Company as the company is trying to open new branches in different all around the world and this is reaching towards the global expansion as well. However, these aspects has a negative aspect on the company as the ongoing economic crisis has severely dented on the entire purchasing power of the consumers in the developed countries that has forced Samsung to seek the different profitable ventures in the entire markets that is emerging in nature (Rothaermel 2017). There is huge volatility and uncertainty in the market and this has led the company to change their strategies and make them more innovative in nature as well. Furthermore, Samsung has begun with the entire aggressive push into the entire emerging kind of market and this can help them in making up for the lost kind of business as well (Wheelen, et al. 2017).
Social Aspect is the other factor wherein Samsung has tried to create their presence in different parts of the world and make their business globally emerging in the market. Furthermore, Samsung required to tailor the products as per the fast-changing requirements of the customers in the market and this has helped the company in analysing the lifestyle of the individuals in an effective manner as well (Barney 2014).
Technological Aspect is the other factor that is required to be considered in an effective manner. Furthermore, Samsung is one of the leading innovative electronic company and this has tried in harnessing the power of the entire technology and this drives the innovation for gaining sustainable kind of business advantage as well. The technological advancements are essential in nature as this will help Samsung in gaining competitive advantage (Moutinho and Vargas-Sanchez 2018).
Legal Aspect is the other factor that has to be considered in an effective manner wherein Samsung have faced different legal issues and heavy penalties for the alleged imitation of the Apple’s iPhone and iPad. This has led the respective company taking beating as far the perceptions of the public along with approval of the consumers of the different strategies are concerned as well.
Environmental Aspect is the other aspect wherein this will rise the ethical consumers who wants the brands to source along with make the different products in socially along with environmentally responsible manner. Samsung is required to be more aware of the different needs as to make the products to satiate with the ethical kind of consumers.
Therefore, it can be analysed that from PESTEL analysis, that the companies are required to take different steps as to gain more competitive advantage in comparison to the other competitors in the entire market. Furthermore. Samsung has to take different kind of initiatives in order to gain more success in comparison to the other competitors.
Furthermore, Samsung is the global conglomerate and Samsung is not being competent in nature to cope up with different kind of happenings. It has been noticed that the company has to undertake different innovative kind of strategies as to gain more competitive advantage and this will help in operating more in the respective environment in different countries effectively.
In the next sections, proper analysis of the innovation threats and opportunities have been analysed that will help the company Samsung in managing the different kinds of opportunities in the environment wherein it is operating along with analysis of the threats that can affect the brand image of the company as well. It has been noticed that the PESTEL analysis has helped in analysing the different kinds of drivers of innovation that will help in understanding the strategy that can help the company in analysing the strategy that will help the company in being more innovative in nature.
Samsung is a renowned organization in the technology industry that has its operations in the electronics sector. The organization operates various other business units which is analysed with the help of BCG matrix. The analysis can be performed in the following manner,
- Cash cows – The organization has a business unit which is considered to be a part of the mature industry and can be further identified as the cash cow. The main feature of the business or the products of the company is to qualify as the cash cow which helps in increasing the profits of Samsung. The products need to be highly resource intensive in nature for the purpose of qualifying in the cash cow based segment of the entire matrix. The share that has been gained by Samsung in the market is high and the major role is played by the cash cows in this case so that the company is able to maintain the position in the industry (Deslatte, Swann and Feiock 2016). The appliances and the electronic based products that are manufactured by Samsung are considered to be the cash cows for the company. The organization has been successful in reaching the various global markets for with the help of the cash cows. The management has also been able to recognise the potential of the products to provide a suitable position to the organization. The products of the company are totally based on the innovations that have been made and the new technologies that have been used.
- Stars – The stars of the company are those products and services which are considered to be a part of the evolving areas of the business. Samsung will thereby tend to invest high amounts of money on the products which will be able to provide the high profits to the company in the future. Samsung has been investing the resources for the purpose of expanding its presence in the market. The management of Samsung has been successful in achieving the objectives that are based on providing the company with the topmost position in the market (Johnsen 2015). The introduction of new products in the market has been helpful in increasing the shares of the company in the market. The stars of the company are those products which have the future potential to increase market share of Samsung and enhance its profitability as well.
- Question Marks – The products that belong to this category are those which are able to formulate a major part in the industry, however being in the development based phase. The products of Samsung like the printers have proved to be a part of the question mark category of the matrix. The investment that is made in the business is able to make the products a star or the products can also remain in the position of question mark. The example of the product which is a part of the question mark category is the Samsung Galaxy 7. The negative image that has been created by the brand has been the major reason behind the inclusion of this product in the category of question mark (Barros, Hernangómez and Martin-Cruz 2016).
- Dogs – The products that belong to this category are mainly identified as those which are not able to provide enough profits to the company. The future prospects of the company are also not provided much help by these products. The smart watch of Samsung mainly belongs to the category of Dogs (Punt and Handling editor: Emory Anderson 2015).
The GE Matrix is based on the analysis of the business based prospects of an organization which can be examined based on the operations of the company. The GE analysis of Samsung is based on the analysis of the operations of the company and ways by which the profitability is affected by the various external factors. The attractiveness of the market is one of the major dimensions of the GE matrix. This helps in determining the attractiveness of the products that are offered by Samsung in the market. The size of the market is quite high and this is a major reason behind the successful operations of Samsung. The growth of the company is also quite high which helps in increasing the potential of the products that are provided to the customers. Samsung has been able to create a competitive position in the market which has been helpful in building the strength of the company (Dagnino and Cinici 2015). This is also the second dimension of GE framework analysis. The third dimension is based on the measurement of the factors that are helpful in determining the market size. The fourth dimension is based on the determination of the strategies based on the investments that can be made by the company based on its resources. Samsung has invested its resources in the development of new technologies and products that have been helpful for the creation of competitive advantage of the company. Samsung has been able to remain strong in all the categories of products that are offered to the customers (Rugman and Verbeke 2017). The competitive advantage has been created by the company with the help its huge product line and the excellent services that they are able to provide to the customers. The company has been able to maintain its position in the highly competitive technology industry with the help of its different products and services. The strength of the business units of Samsung are totally based on the sectors that are growing fast and are being able provide the growth and profitability that has been desired by the company. The cash cows of Samsung have been the most successful in providing the maximum levels of profitability to the company (Inyang and Egor 2017).
Samsung is successful in creating its position in the market with the help of different high quality products that are offered to the customers. The innovation that can be implemented by the company for enhancing the position in the industry is based on increasing the features that are provided to the customers. The company needs to implement more innovative features that are unique and have not been used by the other organizations in the past. The innovative features can thereby help the company to create a different position in the highly growing technology market. This will help Samsung to enhance the products and transform the stars into cash cows with the aim of increasing the overall profitability of the company in the technology industry (Ambrosini, Jenkins and Mowbray 2015).
The McKinsey’s analysis and the BCG matrix analysis has depicted that Samsung has been able to remain strong in the different parts of the product segments and the various business units that are operated by the company. The organization has been able to gain huge profits from the cash cows such as the electronic appliances and the smartphones. The organization has been successful in maintaining the positions of various cash cows which have been helped in increasing the profitability of the company in the market. The major growth vehicle of Samsung are the smartphones and the electronics departments of business (Inyang and Egor 2017). The company has however been accused many times of copying the features from its competitors in order to enhance their products. Samsung therefore needs to be more innovative in the features that are added in the different products. The features can help the organization to enhance its position in the market in an effective manner. The increase in innovativeness is the most important factor that can help in increasing the profitability and the growth of Samsung in the technology industry. MACS framework or McKinsey and Company framework has thereby shown that innovative ideas are the most helpful for the growth of Samsung (Ambrosini, Jenkins and Mowbray 2015).
References
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