Introduction to Samsung
Samsung is the company that started its operations in South Korea. The company has started its businesses in different countries after that and enters the electronics industry in late 90’s. The company has become global soon and now owning around 200 subsidiaries in different parts of the world (Griffith, Cavusgil & Xu, 2008). The company offers various products such as washing machines, refrigerators, mobile phones, laptops etc. as far as the vision of the company is considered, it has been identified that the company wants to be the innovative and technological leader in the market.
Strength:
Brand image: Samsung is the very well-known company in the world and this is the major strength of the company (Coe & Lee, 2013). It has been analyzed that the brand value of the company is continuously increasing and this makes it a very well-known and a popular brand. The below figure provides a clear picture of the increasing brand value of the company.
Range of products: The large range of products in another important element that act as the strength of the company (Nam, 2009). The company provides the customers with the products such as machines, refrigerator, hones, laptops, Ac’s etc.
Efficient research and development: Samsung is the firm that has a great research and development department. The company faces on attaining the competitive advantage by its technological innovations.
Weakness:
Easily imitable: Some of the Chinese manufacturer are imitating the products and thus it is difficult for the company to retail the customers as those products are being sold on very low prices as compared to Samsung.
Opportunities:
Growing online market: It is an opportunity for the company to grow its online market (Xue, 2010). This helps the company to make its reach higher to the larger masses.
Developing its own software like Apple: It is also the major opportunity that the company has. Samsung should also develop their operating software like iOS of Apple. This helps the firm to target the market with more efficiency. This is because android is not the preference for most of the people these days.
Threats:
Premium brands like Apple: in the product category of phones, Samsung is facing high threat from the competition that is given by Apple (Khanna, Song & Lee, 2011). This is because the premium customers have the mindset that Apple is the brand of standards and high lifestyle thus most of the high level customers focuses towards buying apple.
Strengths of Samsung
Chinese market: Chinese market is also the biggest threat for the company. This is because the Chinese market is able to copy the Samsung phones and other products (Lee & Slater, 2007). They copy it in such a way that it becomes difficult for the customers to even differentiate between to original and the duplicate.
As far as the competitors for the company are considered, Samsung is working under so many industries and thus it has to face competition from any companies in each other industry. If the mobile or the electronic industry is considered, the company faces competition with Apple, nokia, LG, Mi etc. in terms of laptops there are competitors like dell, HP, Sony etc. the major competitors in term so mobile phone industry and laptop industry for Samsung is apple. Apple and Samsung have a neck to neck competition because both acquired around equal market share in the industry and both are considered as the most innovative firms (Daniels, Radebaugh, Sullivan & Salwan, 2009).
What is globalization: Globalization is the term that refers to the process that allow the businesses to exchange the goods, knowledge, technology, services etc. It is the process that helps and supports the organizations conduct their businesses in different countries other than their parent company and it’s also helps the firm to conduct the process like export and import easily (Luthans & Doh, 2009). It is not that easy to expand the business to other country and it involves various risks. There are several benefits of globalization but some of the risks and disadvantages are also associated with the same which are being discussed below:
Unite the world: Globalization is the process that helps the business to expand from parent country to international country. This brings unity in the world and the business work together and it also brings the unity among the diverse workforce (Griffith, Cavusgil & Xu, 2008).
Diversity in workforce: Globalization helps the company to hire the people from different places and thus it results in brining diversity among the workforce of the people.
Employment generation: Globalization allows the foreign companies to settle their business in different countries thus generates the employment in the country where the new business is being established.
Negative impact on local market: It is the fact that if the foreign company comes in the country and settles their business then it affects the functioning of the local market companies (Wild, Wild, & Han, 2014). This is because the market share gets distributed and it also increases the competition for the local companies.
Weaknesses of Samsung
Excessive use of resources: Globalization results in excess use of resources. It increases the pace of using the resources by the companies.
Increase the gap between rich and poor: It has been analyzed that the benefits of the globalization can only be attained by the rich people. Researches have shown that 20% of the rich people make use of 86% of the total global resources on the other hand around 80% of the people from poor population acquire or make use of rest of the global resources.
Consistency in the legal and moral standards: The biggest issue that has come up for the businesses in globalization is that it becomes difficult for the firms to maintain that consistency the process and the ethical standards (Scherer, Palazzo & Matten, 2009). This is because the ethical standards and the process to conduct the similar activity is very different in different countries and thus it is difficult for the country to integrate the own country standards with the host country standards.
Cost: It is defined that the cost of the businesses increased in globalization. This is because reaching a new or foreign marketplace even from the online medium is very much costly for the companies. The costs like infrastructure cost, communication cost, hiring cost, and translator cost etc. raise the overall cost of the company.
High customer expectation: Globalization results in increasing the expectation of the customers. If the foreign company settles their business in any other country then the market the products in such way that in enhances the customer expectation from those products or the firm and thus it needs be fulfilled by the firm.
Cultural barriers: The difference in culture acts as on of the most major barrier for the firms operating globally. This is because it is difficult for the companies to accept the local culture or implement the local culture in all their products according to the culture of country where they are operating.
Globalization of the market is the term that is made by two terms that is, globalization and markets. Globalization refers to expansion of business and market refers to the place where the business expands (Dunning, J. H. (2014). Thus, globalization of the market is the process of integrated the overall international market under single segment. With the advancement in the technology, it has becomes easy for the firm to market their products internationally or to make the customers of the world aware about the product with some common strategies. The companies that are small can also integrate their world market and create globalization in that but there is still some kind of distinctness in the market because of the local culture of the people, and its impact on their choice and buying behavior.
Opportunities for Samsung
Globalization of products:
Product globalization is the process of modifying the products in such a way so that it can be used at global level with consistency. This modification in the products takes place according to the legal framework of different countries etc.
Samsung has come up with many strategies in order to deal with the global market. The company has started its operation in South Korea but now has expanded its businesses to almost all over the world (Crane & Matten, 2016). The major strategy of the company in order to expand its business is the innovation. The company is considered as one of the most innovative form and launched the android phones to cater the market of overall world with the same. Anther strategy of the firm that helped it in global expansion is the formation of alliances in other countries. Marketing plays a very major role in expanding the business. Only establish the firm in the foreign country is not enough. Samsung has used as many tools to market its products in different countries such as India, US, UK etc. Samsung has also selected the low cost strategy to cater the market of developing countries like India. This is because the company know that they can only penetrate in the market of they come up with low cost differentiation.
In order to meet the local needs, Samsung tries to analyze the market of the local area and bring out the innovation according to that. But, the company does not make the localized products that is the company does not differentiates in the products at every country but serve the market with the consistent designed products in the whole world. The difference can be in the strategies to the products or to price the products (Hitt, Ireland & Hoskisson, 2012). This takes place in accordance with the local people and the way the people wants to avail the products. This is because every country has different culture and thus the people have different beliefs. This enables the people to have different choices of the products. The company who wants the global successive Samsung has to target the market with the relevant strategies according to the people of the country or the place.
Production issues: In case of Samsung, it has been identified that the company has faced so much of production issues in terms of globalization or catering the market of the whole world. This is because the production units of the company require the similar material all over the world to design the consistent product in order to serve the, market with similar products.
Threats faced by Samsung
Marketing issue: the strategies of marketing depend on the culture and beliefs of the people in that area. The companies like Samsung face the problem very declining the strategies that are used to market the products (Beck, 2015). The company chooses to market by direct selling India as a priority but market the products online in china the most. This is because of the nature and the beliefs of the people. The Indian market requires the out strategy for sales unlike China and US market.
Competitors: As the company like Samsung operates in different part of the world, the company needs to consider the competitors of every area and then design the products. As the company needs to maintain the consistency in the products all over so this is big issue for the company to consider the practices of all the competitors in every country.
Political and government: This is a major issue and the concern for the companies at the time of moving global. This is because every province or country has different political and intensity of government interference in the industries (Hirst, Thompson & Bromley, 2015). In India the role of government is so much important while in US the government has limited interference in the industry in which the Samsung operates, thus, the company needs to look for the stability in the political environment of the firm and the interference of the government in the industry before entering the market.
Conclusion:
The study reveals about the various factor that affect the functioning of Samsung as global company. It has been analyzed that globalization is the contextual factor that affect the company in many ways. This requires the companies to change the strategies in order to expand their businesses in other countries. Samsung has also used some of the strategies such as innovation, range of products, alliances etc. globalization is necessary for the firm to enter the new market and to compete with the competitors.
References:
Hirst, P., Thompson, G., & Bromley, S. (2015). Globalization in question. John Wiley & Sons.
Beck, U. (2015). What is globalization?. John Wiley & Sons.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2012). Strategic management cases: competitiveness and globalization. Cengage Learning.
Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
Dunning, J. H. (2014). The Globalization of Business (Routledge Revivals): The Challenge of the 1990s. Routledge.
Scherer, A. G., Palazzo, G., & Matten, D. (2009). Introduction to the special issue: Globalization as a challenge for business responsibilities. Business Ethics Quarterly, 19(03), 327-347.
Wild, J., Wild, K. L., & Han, J. C. (2014). International business. Pearson Education Limited.
Griffith, D. A., Cavusgil, S. T., & Xu, S. (2008). Emerging themes in international business research. Journal of International Business Studies, 39(7), 1220-1235.
Luthans, F., & Doh, J. P. (2009). International management: Culture, strategy, and behavior. New York, NY: McGraw-Hill Irwin.
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Chang, S. J. (2011). Sony vs Samsung: The Inside Story of the Electronics Giants’ Battle For Global Supremacy. John Wiley & Sons.
Xue, X. (2010, September). Notice of Retraction The enlightenment from “the Samsung Model” to Lenovo’s “going out” strategy. In Network Infrastructure and Digital Content, 2010 2nd IEEE International Conference on (pp. 821-825). IEEE.
Coe, N. M., & Lee, Y. S. (2013). ‘We’ve learnt how to be local’: the deepening territorial embeddedness of Samsung–Tesco in South Korea. Journal of Economic Geography, lbs057.
Nam, K. M. (2009). Spatial integration of corporate R&D and mass production activities in high-tech manufacturing: a case study of Samsung Electronics.
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