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3 M Individual Case Financial Analyses Case Study Solution and Analysis


Intro

Historically, the company's core customers include the Original Devices Manufacturers (OEMs), which used to sell 3 M Individual Case Financial Analyses Case Study Solution items withtheir own brand name. Its client circle includes Original Equipment Manufacturers (OEMs), who utilized to sell Samsung items with their own brand name. He repositioned Samsung as a worldwide brand and educated his divisional supervisors to comprehend marketing and its significance.

Problem Declaration

Samsung's transition from a product based to a marketing company is not going as smoothly as planned.Overcoming the reluctance of divisional managers to include marketing successfully is still a significant difficulty. Developing a constant brand identity throughout the entire world and employing marketing strategies that finest fits the regional culture is no simple job.
Executive Summary
Situational Analysis

3 M Individual Case Financial Analyses Case Study Analysis efforts for constructing its trademark name across the world was started after presenting the "new management effort" by Chairman Lee in 1993. The objective was to transform Samsung from an inexpensive OEM to a high value-added product supplier. To make the vision of Samsung a truth, Chairman Lee selected Yun as a vice chairman in 1997. Yun had a rather clear picture in his mind about how Samsung can transform from a low end to a high end product company. He knew that improvement can just be done through placing Samsung as a business providing high-end products and this could just be done through high level of marketing.

In spite of having a clear vision about how to develop Samsung brand, with a potential support of its executives, Yun faced several marketing obstacles in early years of its efforts.

One of the marketing difficulties for Yun was the understandings of executives about the worth of marketing. They considered marketing and selling as same tools and thought that quality items do not needed marketing for increasing sales. As their focus towards marketing was quite low in their previous service practices, and the present marketing requirement was excessive high, the space was too broader and to fill this gap with wrong perceptions about marketing was rather difficult for Yun.

Along with it the product range of the company was increasing with the ripening of brand-new item concepts by the R&D sector of Samsung. Yun had a challenge to carry out marketing planning and to develop marketing budget plans for existing as well as for brand-new products from the very start, and this would take a huge time.

A substantial shift would be needed in existing marketing expenditures to build the 3 M Individual Case Financial Analyses Case Study Analysis brand name. This would lead to increased marketing expenses for Samsung and could interrupt the administration regarding increased expenditures, as they hesitated to marketing expenses formerly and an abrupt big shiftwould make them interrupt. This might lead to decreasing executive support for global marketing. In this scenario, Yun faces a challenge for justifying increased marketing expenses by showing the long term value of big marketing expenditures.

Internal Analysis
SWOT Analysis
Strengths


3 M Individual Case Financial Analyses Case Study Help strengths lie in its substantial item portfolio. Samsung has biggest number of patents in the industry with overall number of 15499 patents granted in US( USP).

Another strength of 3 M Individual Case Financial Analyses Case Study Help is its capability to develop ingenious products at a constant rate. It major shows for the development and item developing of Samsung is that the business has actually gotten many awards for its development and product design.

Unlike Apple and other competitors, Samsung is concentrated on producing devices which can be easily integrated with any kind of open source Operating System (OS) and software application. This supplies Samsung an edge over Apple devices.
Porter's 5 Forces Analysis
Samsung's capability to produce luxury products at low cost of production is likewise one of the major strength of Samsung as it enables the company to record more market by offering quality products with cost control.

Weak points

3 M Individual Case Financial Analyses Case Study Analysis weak points are concealed in the company's reliance on outsourcing software application for its gadgets due to business's failure in establishing software application, unlike Sony. Samsung likewise has low earnings margins as compare to Apple due to big difference in the rates of Apple and Samsung with a much lesser distinction in quality. The varied focus of the company due to large number of items in its portfolio, lead to the less efficient production and make the company not able to charge greater prices like Apple. The business is also ineffective in managing its patents and regularly deals with the problem of patent infraction.

Opportunities

Opportunities for Samsung depend on the growing Smartphone market and the business's performance in the market. It can increase its market share and profits from cellular phone as the business is quite efficient in smart phone market. Samsung currently runs in about 80 countries and the company has an opportunity to increase its geographical growth by moving towards more emerging markets outside Asia. Samsung can move towards acquisitions to acquire patents. It would enable the business to increase its product portfolio with a boost in its wealth.

Hazards

The dynamic market environment of technology industry posture an extreme risk on Samsung's survival and require the company to spend much of its revenues share on R&D in order to survive in the long run. The market saturation in industrialized countries i.e. saturation of mobile company is also a big hazard for the company's development in the existence of strong rivals like Apple.

4 P's of Marketing
Swot Analysis
Product

3 M Individual Case Financial Analyses Case Study Help offers quality items and has a rather rich portfolio which deals with different segments. Most of the products remain in the leading three of their respective industries. LCD and cellphones are the greatest items of Samsung, whereas DRAM is likewise not far behind in comparison of them. Following is the product line of Samsung:

• LCD/ TELEVISION
• Laptops.
• Smart phone.
• Air conditioner.
• Desktop computer.
• Hard disk drives.
• Washer.
• Fridges.
• Cams.
• Microwaves.
• Flash memory.
• DRAM.

Price.

3 M Individual Case Financial Analyses Case Study Help utilizes both market competitive and market skimming rates techniques for its wide range of items. In competitive rates it adjusts the price according to the competition in order to acquire benefit, whereas, it utilizes market skimming method where the product has actually an added value and by selling a couple of products it can reach break-even.

Place.

It has among the best supply chain networks, with retail suppliers, their own sole suppliers, E commerce channels like Amazon and so on. All its items are timely provided to the selling place/ provided to the clients straight in case of online order.

Promotion.
Vrio Analysis
It wasn't a widely known company outside of Korea until 1993. The management initiative taken by their CEO has pressed them to market more effectively outside the borders and now it has actually gotten in the league of leading 25 companies in the world in just 9 years. This is an exceptional achievement regardless of the continuous arguments amongst the managers about adopting marketing practices. It utilizes both offline & online channels of promo to market their items. Paid item ads, social promotion and digital advertisements are uses to create awareness about Samsung products.

Value Chain Analysis.

It's an analytical framework for recognizing service activities that include worth or competitive benefit for the company.

Inbound Logistics.

It has one of the most efficient and efficient supply chain network and has over 2700 providers across different markets around the globe. Nearly 80% of which is based in Asia and the remaining around the world. For its inbound logistics it owns various logistics companies as it subsidiaries. It takes care of its providers and develops an unified relationship with them and even lowered their payment cycles to enhance this relationship even more which adds worth to their chain network.

Operations.

Samsung's core proficiency is its mass making it produces 90% of its items in-house. Divided into 3 various departments its operations are specifically IT & Mobile Communications, Device Solutions and Customer Electronic Devices. It is preserving operation centers worldwide to even more include worth to its value chain network.

Outbound Logistics.

Its outgoing logistics system performance is among the primary factors 3 M Individual Case Financial Analyses Case Study Solution has the ability to take on Apple. Samsung's own Electronic Logitec system plays a significant role in the outgoing logistics operations. It even performs the jobs of collection of payment, settling insurance claims, etc. on behalf of Samsung.

Marketing and Sales.

Drawing in target customer attention towards the item is done through marketing and sales to communicate with them the value and competitive advantage the item uses. 3 M Individual Case Financial Analyses Case Study Analysis advertising budget is continuously increasing since they began their repositioning worldwide and will continue to do so as they are constantly wanting to broaden and invest in high potential growth markets. The budget plan is invested in occasions, print and media advertisements, public relations etc.

Samsung put their customers at the leading and continuously make every effort to deliver unmatchable client service requirements. By including a direct support line to contact them 24 hours they have further increased the included worth of Samsung service.

Segmentation.

3 M Individual Case Financial Analyses Case Study Analysis has diversified market division, based upon its arrangement of wide range of items to a great deal of consumers. Samsung target customer sections can be divided into 3 classifications i.e. 3 M Individual Case Financial Analyses Case Study Help IT and Mobile Communications, Samsung Consumer Electronic Devices and Samsung Device solutions.

Geographic.

3 M Individual Case Financial Analyses Case Study Help geographic division is based upon 2 criteria i.e. area and density. Samsung serves about 80 countries worldwide with its products offered to Urban as well as Backwoods of the country. The Samsung is also growing its international presence and the business's versatility in locating its plants motivates worldwide expansion of Samsung.

Market.

Samsung produces products that can be used by both women and males. The target clients for Samsung IT and mobile interaction items have an age range of 18-65 with majority at a young or freshly married life cycle stage. Apart from it, Samsung Consumer Electronic devices are targeted to a client segment with an age range of 25-65.

Psychographic.

The psychographic segmentation of 3 M Individual Case Financial Analyses Case Study Solution s based upon the social class and the life style of the consumer. Samsung target consumers on the basis of social class are generally upper middle, middle and working class customers, as Samsung sell products like mobile phone very little cheaper i.e. Motorola in addition to very little pricey i.e. Apple. It supplies quality products to middle level customers at a somewhat high price than others targeting the very same sector.

Behavioural.

3 M Individual Case Financial Analyses Case Study Solution majority target clients have distinct behavioural attributes. They are brought in towards Samsung since of its moderate costs with a degree of quality.

Quantitative analysis.

Sales of Samsung has actually increased astonishingly from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net profit of.48 billion $ to 5.9 billion $. It has also minimized its financial obligation from 15 billion $ to 4.6 billion $. Digital media is the biggest selling category of Samsung with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales. Due to the fact that of the high overhead expense, incomes/ sales are increasing but net profit is not increasing appropriately. New expansions and hiring's were the primary reason of the increase in the overhead costs, with china presently not supplying any revenue to Samsung, but there is so much potential in the current market with 75 % yet to be explored.

Qualitative analysis.

Yes, this decision is based upon the mission of Kim to target the younger audience and produce an international brand name image of the company. Whereas, the core strength of the business is presently producing but long gone are those days when good products were selling themselves. In the existing age marketing is really important and companies can not succeed without it. Kim has already begun to enhance the marketing activities of Samsung and very soon it will become one of its core strength like manufacturing if not much better.

VRIO.

Value.

Samsung operates styles, produces and offer a huge portfolio of customer electronic devices. It operates in a very competitive environment and has successfully placed itself as the maker of quality products. So, the answer is yes.

Rarity.

As, stated previously that 3 M Individual Case Financial Analyses Case Study Analysis operates in a highly competitive environment, which indicates all the companies have similar items. So, the answer for rarity is no.

Imitability.

Due to the nature of the industry, it is really easy for competitors to comprehend the functionality of the products and easily make their own models. Yes, Samsung is only behind IBM in signing up new patents every year, however the benefit is very short-term in this market.

Company.

Chairman Lee has entirely turn-around Samsung, from going practically insolvent throughout the Asian financial crisis of 1997 to the leading 25 company worldwide. Certainly yes there appertains organization in the company and the results speak for themselves.

External Environmental Analysis

PESTLE Analysis

Political

Being an international brand spread practically in every nation worldwide, bulk of the environments like U.S.A., Europe, China etc., are extremely conductive for its operations. It deals with some political pressures in less industrialized nations where law and order circumstance is not excellent. Latin American, African and some Asian countries fall in this category, where political instability do have a result on 3 M Individual Case Financial Analyses Case Study Analysis operations.

Economic

Buying power of customers is vital for business like Samsung to grow and prosper. Emerging markets like India, middle-eastern countries and so on provide development opportunities, whereas, due to economic crisis even the clients of industrialized nations suffer badly. For this reason it is really important for the business to keep an eye on the continuous financial circumstance of the nation before going into the marketplace.

Socio-Cultural

International companies have to face various social and cultural issues throughout its operations in a foreign country. Samsung has also faced lots of issues however have actually embraced to the local environments of most of the countries extremely well. It has actually customized its items, practices, policies and so on accordingly in order to achieve success.

Technological

With an annual expense of 2.4 billion dollars in Research & Development, and with consistent ingenious item launches, 3 M Individual Case Financial Analyses Case Study Help is one of the leading innovative companies of the world. With a clear mission to be ahead of the rest when it pertains to technological advancements, Samsung has actually increased to the no 25 of the leading effective companies of the world.

Legal

Each country has their own laws and policies, being a multinational business Samsung need to strictly follow those laws in their jurisdictions. Failure to do so, will result in serious legal effects. It has to study or work with a local law specialist before beginning its operations in a particular country.

Environmental

With the increasing awareness amongst customers about the ethical & ecological violations of companies, Samsung has to ensure that it follows all the security standards. Ecological damages, ethical misconducts are not appropriate and in some nations the consequences can be very extreme. On the other hand it needs to do some Business Social Obligation practices to reveal the locals that it cares about their environment and individuals.

Porter's 5 Forces

Threat of Replacement

Hazard of alternative for Samsung's each product classification is quite substantial. Running in an extremely dynamic industry lead the business to deal with a high danger of replacement. Factors for high danger of replacement for 3 M Individual Case Financial Analyses Case Study Analysis Mobile phone consist of the existence of high variety of suppliers and Market saturation in industrialized nations, which make the expense of changing for customers almost absolutely no. Substitution hazards for Samsung visual display lie in the altering life style of consumers. Customers can change to enjoying visuals in the house towards outside activities. Together with it, Samsung printing solutions items are threatened by the increasing attraction of customers towards cloud storage.

Rivalry Amongst Existing Companies:

The rivaly among Samsung and its close competitors is extreme. The significant factor behind this is the method of market saturation in different variety of item classifications, forcing Samsung to introduce more innovative features in existing items and brand-new innovative items to maintain its development. Other aspect for the extreme competition amongst the rivals is the little item distinction among the products. The prominent players in the technology market are rather aware of the importance of R&D spending for their survival and are encountering a race of marketing and R&D spending, to record the market. The major rivals for 3 M Individual Case Financial Analyses Case Study Help samrtphones include Apple, Motorola, LG, Nokia, Huawei, OPPO etc. High competition rivalry results in the fluctuating market shares which can be seen in Exhibit F.

Bargaining Power of Suppliers:

3 M Individual Case Financial Analyses Case Study Solution has a large supply chain consisting of about 2700 providers throughout the world.( Samsung Sustainability Report, 2016) Supplier's bargaining power for Samsung is low as Samsung runs economies of scale and its orders are of possible size and worth. These huge orders allow Samsung to negotiate rates with its providers. However, due to incapability of 3 M Individual Case Financial Analyses Case Study Solution to construct its own software, it needs to outsource its software development to Google, which ends up being a prospective supplier of software for Samsung, leading to high bargaining power of Google. Although, in most of cases Samsung has a power to negotiate costs, but it provide considerable costs to its providers to build a strong supply chain and to have strong relationships with its suppliers.

Bargaining Power of Purchasers:

Market saturation in many of the item classifications likewise make the bargaining power of purchasers more extreme in for Samsung. In spite of igh bargaining power Samsung is rather capable of selling its items at a higher cost than much of its competitors, due to high end quality item and a fair brand image.

Hazard of New Entrants:

Hazard of new entrants for Samsung is quite low. Among the significant aspect for low threat of new entrants is the high competitors in the industry. The requirement of substantial amount of capital to go into in the market is also among the prospective barrier to entry. Together with it, requirement of substantial competence and research study and advancement expenditures for survival in the industry also make new entrants reluctant to go into in the market. Market saturation is likewise one of the barrier of entry in innovation industry. High bargaining power of suppliers require the gamers in the market to charge as low prices as possible and this can only be achieved by production performance. New companies, in majority cases, lack the production efficiency, thus increasing the dangers for entrance in the innovation market.

Competitive Analysis

Samsung's high product diversification offers it distinction from its competitors. It is one of the 3 top brand names by market share. Unlikely to its close rivals consisting of Sony, Intel and Nokia, who focus bulk on a single item classification with Sony concentrating on consumer electronics, Nokia on mobile phone and Intel on chips, Samsung had a substantial R&D costs on all of its product classifications which allow the company to earn possible earnings from sales of almost all of its items. (See Exhibit) Nevertheless, due to the broad product range the company deals with high variety of rivals.

The company ranks initially in 4 item classifications i.e. DRAM Chips, LCD Displays, Big Screen Televisions and Microwave, in regards to international market share, among 8 various item categories. Samsung was the international leader in manufacturing DRAM, SRAM and NAND flash chips. Samsung profits from chips was less than Intel but its revenues from chips was growing quicker than Intel and has grown close to the profits levels of Intel, as given in the case Exhibition 2.

In addition to the chips Samsung mobile market was likewise thriving at a high rate than its competitors i.e. Motorola and Nokia. Samsung's cell phone's sales growth was 51% as compare to Motorola with only 4% and Nokia with absolutely no sales growth. The major reson behind Samsung's high growth despite of greater prices than Nokia and Motorola was the company's high-end quality mobile phone.

Samsung was likewise reaping the benefits from increasing market share of high-end LCDs as given in case Exhibition 3. The significant factor, making the company allow to get the opportunity is its mass production at low cost. Sony was the most significant rival for 3 M Individual Case Financial Analyses Case Study Analysis in LCD market, however, it had also begun joint venture with Samsung in 2003 for LCD producing, lessening the competitors for Samsung.

Porter's Competitive Technique

Low Cost Management strategy of porter is completely carried out by Samsung the way they accomplish economies of scale by enhancing their core proficiencies of production. They constantly bring something new and ingenious whether it's a service or a product.

Alternatives

Alternative Service 1

The Chief Marketing Officer (CMO) of 3 M Individual Case Financial Analyses Case Study Analysis would create a new brand image by targeting the more youthful generation of the particular nation. As, specifically mobile phones of Samsung are very popular amongst the younger demographic.

Pros

1. It is the very best strategy to build Client Lifetime Worth (CLV) by developing a long-lasting relationship with consumers. Construct commitment through providing worth and profit for long-term, as research study has revealed it is much cheaper to keep existing consumers than to draw in new ones.
2. Another pro of this alternative is that word of mouth spread quicker amongst more youthful people and which in turn will bring in brand-new consumers for my products.

Cons

1. Old customers who were related to Samsung prior to might not like this new image the business is attempting to depict.
2 It will sustain more expenditures to reposition some products and it may not even bring success as the patterns change extremely rapidly among the younger market.

Alternative solution 2.

It would be done by arranging training workshops during which importance of marketing will be taught and numbers will be given. Marketing environment ought to be developed internally initially as real marketing begins inside the corporation.

Pros

1. Its pro will be that all the marketing method fans will come out and also the opposite ones.

Cons

2. Its con can produce an extremely unhealthy environment in the workplace, as people frequently withstand change because they fear it.

Determine the best option

Very first alternative is the very best as it plainly has more pros because once a Customer Lifetime Worth is built the business will benefit from it till that customer lives and has acquiring power too. Plus, our target consumers are the more youthful generation which are bound to live longer than the present old age people. Samsung's primary goal is to create commitment among its clients and make them bought it from them and even buy their different products.

Execution Strategy

• Targeting younger generation through social marketing, producing a relate to them like Pepsi finish with music. And set the expectations achievable and realistic.
• A team consisting of finest marketing and sales specialists ought to be assemble, and both views should be taken into consideration prior to securing the resources needed to implement the strategy.
• Thorough communication of the strategy ought to be done as it is very important for everyone to be on the same page to make it work.
• Jobs and timelines ought to be build and interacted accordingly to each person accountable.
• The supervisor must utilize a control panel which shows the development of all the jobs which have actually been done or about to be done and by whom.
• The manager ought to keep track of and keep a continuous look at the individual and total performance.
• Everybody ought to want to adapt midway because any brand-new pattern or policy may can be found in due to which all the things currently prepared need to be changed. It's much better to have contingency strategies already prepared.
• At the end of the project the supervisor need to interact the results and if successful must commemorate with the team.

Spending plan

The M-net program exposed compelling analysis about the low and high growth possible locations and just how much advertising spending plan should be designated appropriately. This modification the budget allotment of numerous supervisors and various countries were unhappy and argued however the analysis done by the program was precise and showed figures like The United States and Canada and Russia growth potential warranted a 35% allocation while they were getting 45%. Whereas, China and Europe ought to be receiving 42% however were rather provided 31%. It truly assisted to fairly disperse the resources and capture more customers by spending more on ads on the high growth capacity regions of the world.
Recommendations
Conclusion

3 M Individual Case Financial Analyses Case Study Solution is a leading 25 company worldwide now and prepares to get ahead of Sony who sits currently at no. 20. Its consistent investment in R&D and innovative practices have propelled them to brand-new heights but for them its' just the start and they wish to be amongst the top 3 brands in the world. They completely turn-around from almost declaring bankruptcy during the Asian Financial Crisis to a world distinguished brand name, known for quality and innovation. Their value chain and their core proficiency their production ability, along-with worldwide brand image building have seen their sales go from 16 to 44.6 billion $ from 1997-- 2002. With additional growth in China and other emerging markets those numbers will just increase even more in the future. Their marketing efforts must be directed towards more youthful group in the middle of the internal arguments about marketing and ought to produce Client Lifetime Worth as it will not just give them advantages now but will continue to gain it till the consumer lifetime. As the expense of maintaining the client is more affordable than attracting a new one.