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3 M Individual Case Financial Analyses Case Study Solution and Analysis


Introduction

Historically, the company's core clients consist of the Original Devices Manufacturers (OEMs), which utilized to sell 3 M Individual Case Financial Analyses Case Study Help products withtheir own brand name. Its consumer circle includes Original Equipment Manufacturers (OEMs), who utilized to offer Samsung items with their own brand name. He rearranged Samsung as an international brand name and educated his divisional managers to understand marketing and its value.

Issue Declaration

Samsung's transition from a product based to a marketing company is not going as smoothly as planned.Overcoming the unwillingness of divisional managers to incorporate marketing successfully is still a major difficulty. Developing a constant brand name identity across the whole world and using marketing strategies that best fits the local culture is no easy task.

Situational Analysis

Yun had a rather clear image in his mind about how 3 M Individual Case Financial Analyses Case Study Analysis can transform from a low end to a high end item company. He understood that improvement can just be done through positioning Samsung as a company using high-end products and this might only be done through high level of marketing.

In spite of having a clear vision about how to build Samsung brand, with a potential assistance of its executives, Yun dealt with several marketing difficulties in early years of its efforts.

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

As mentioned above, marketing focus was really low in previous practices, for that reason there were no appropriate marketing spending plans for each of the item on the portfolio. There was no marketing preparation done for the existing products. Together with it the product range of the business 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 budgets for existing along with for brand-new products from the very beginning, and this would take a big time.

A substantial shift would be required in present marketing expenditures to develop the 3 M Individual Case Financial Analyses Case Study Help brand. This would result in increased marketing expenses for Samsung and could disrupt the administration concerning increased expenses, as they were reluctant to marketing expenditures formerly and a sudden big shiftwould make them interrupt. This might lead to decreasing executive assistance for global marketing. In this situation, Yun deals with a challenge for justifying increased marketing expenses by demonstrating the long term worth of big marketing expenditures.

Internal Analysis
SWOT Analysis
Strengths


Samsung strengths lie in its big product portfolio. Samsung has largest number of patents in the market with total number of 15499 patents given in United States( USP). Large amount of R&D spending has made it possible for the company to grow its product portfolio at a greater rate than its competitors. 3 M Individual Case Financial Analyses Case Study Analysis spent about $13.079 billion on its R&D sector in 2016, which is 7.3% of its total profits.

Another strength of 3 M Individual Case Financial Analyses Case Study Help is its capability to develop innovative items at a continuous rate. It significant proves for the innovation and item creating of Samsung is that the business has gotten many awards for its development and product style.

Unlike Apple and other rivals, Samsung is concentrated on producing devices which can be quickly integrated with any type of open source Operating System (OS) and software. This offers Samsung an edge over Apple devices.

Samsung's ability to produce luxury items at low expense of production is also one of the significant strength of Samsung as it enables the company to catch more market by supplying quality products with expense control.

Weaknesses

Samsung's weaknesses are hidden in the business's reliance on outsourcing software for its gadgets due to business's failure in establishing software application, unlike Sony. 3 M Individual Case Financial Analyses Case Study Analysis also has low profit margins as compare to Apple due to substantial difference in the costs of Apple and Samsung with a much lesser distinction in quality.

Opportunities

Opportunities for 3 M Individual Case Financial Analyses Case Study Help lie in the growing Smart device market and the business's efficiency in the market. Samsung presently runs in about 80 nations and the business has an opportunity to increase its geographical expansion by moving towards more emerging markets outside Asia.

Risks

The vibrant industry environment of technology market position an extreme threat on Samsung's survival and require the business to invest much of its profits share on R&D in order to survive in the long run. The market saturation in developed countries i.e. saturation of mobile business is also a big risk for the company's growth in the existence of strong competitors like Apple.

4 P's of Marketing

Item

Samsung offers quality items and has a quite rich portfolio which caters to various segments. LCD and mobile phones are the biggest products of Samsung, whereas DRAM is also not far behind in comparison of them.

• LCD/ TELEVISION
• Laptops.
• Mobile phones.
• A/c unit.
• Computer.
• Disk drives.
• Washer.
• Refrigerators.
• Video cameras.
• Microwaves.
• Flash memory.
• DRAM.

Cost.

3 M Individual Case Financial Analyses Case Study Analysis utilizes both market competitive and market skimming rates techniques for its wide variety of items. In competitive rates it changes the price according to the competitors in order to acquire benefit, whereas, it utilizes market skimming technique where the item has an included worth and by selling a few products it can reach break-even.

Place.

It has one of the best supply chain networks, with retail distributors, their own sole distributors, E commerce channels like Amazon etc. All its items are prompt provided to the selling place/ delivered to the consumers straight in case of online order.

Promotion.

It wasn't a widely known company beyond Korea till 1993. However the management initiative taken by their CEO has actually pressed them to market more efficiently outside the borders and now it has gotten in the league of leading 25 business in the world in just 9 years. This is a remarkable achievement in spite of the ongoing arguments amongst the managers about adopting marketing practices. It uses both offline & online channels of promo to market their products. Paid product ads, social promotion and digital ads are utilizes to develop awareness about Samsung products.

Value Chain Analysis.

It's an analytical structure for determining service activities that add value or competitive advantage for the business.

Inbound Logistics.

It has one of the most reliable and effective supply chain network and has more than 2700 suppliers throughout different markets all over the world. Almost 80% of which is based in Asia and the staying around the globe. For its inbound logistics it owns different logistics companies as it subsidiaries. It looks after its suppliers and creates a harmonious relationship with them and even lowered their payment cycles to improve this relationship even more which includes worth to their chain network.

Operations.

Samsung's core proficiency is its mass producing it produces 90% of its products internal. Divided into 3 different departments its operations are particularly IT & Mobile Communications, Gadget Solutions and Consumer Electronics. It is preserving operation centers worldwide to even more include value to its worth chain network.

Outbound Logistics.

Its outbound logistics system performance is one of the main factors 3 M Individual Case Financial Analyses Case Study Help is able to take on Apple. Samsung's own Electronic Logitec system plays a significant function in the outgoing logistics operations. It even carries out the tasks of collection of payment, settling insurance coverage claims, etc. on behalf of Samsung.

Marketing and Sales.

Bring in target consumer attention towards the item is done through marketing and sales to communicate with them the worth and competitive benefit the item provides. 3 M Individual Case Financial Analyses Case Study Help advertising budget plan is continuously increasing because they started their rearranging internationally and will continue to do so as they are continuously looking to broaden and invest in high prospective growth markets. The budget plan is spent on occasions, print and media advertisements, public relations etc.

Samsung put their clients at the leading and continuously aim to deliver unmatchable client service requirements. By adding a direct support line to contact them 24 hours they have further increased the added value of Samsung service.

Division.

3 M Individual Case Financial Analyses Case Study Analysis has actually diversified market division, based upon its arrangement of large range of items to large number of consumers. Samsung target customer sections can be divided into 3 classifications i.e. 3 M Individual Case Financial Analyses Case Study Analysis IT and Mobile Communications, Samsung Consumer Electronics and Samsung Gadget services.

Geographical.

3 M Individual Case Financial Analyses Case Study Analysis geographic division is based upon two criteria i.e. region and density. Samsung serves about 80 nations worldwide with its products provided to Urban as well as Rural areas of the nation. The Samsung is likewise growing its worldwide presence and the company's flexibility in locating its plants encourages worldwide expansion of Samsung.

Market.

The market segmentation of 3 M Individual Case Financial Analyses Case Study Solution is based upon gender, age, life-cycle phase and occupation. Samsung produces products that can be used by both females and males. The target consumers for Samsung IT and mobile interaction products have an age range of 18-65 with majority at a young or newly wed life process stage. They are mostly students, professionals and employees. Apart from it, Samsung Consumer Electronic devices are targeted to a customer sector with an age range of 25-65. They are mainly professionals and staff members. Samsung Gadget Solutions are targeted at trainees, employees and experts with an age variety of 25-65.

Psychographic.

The psychographic division of 3 M Individual Case Financial Analyses Case Study Help s based upon the social class and the life style of the consumer. Samsung target consumers on the basis of social class are primarily upper middle, middle and working class consumers, as Samsung sell products like cell phones not much cheaper i.e. Motorola in addition to not much expensive i.e. Apple. It supplies quality items to middle level consumers at a somewhat high rate than others targeting the same sector.

Behavioural.

3 M Individual Case Financial Analyses Case Study Analysis majority target customers have distinct behavioural attributes. They are attracted towards Samsung due to the fact that of its moderate prices with an extent of quality.

Quantitative analysis.

Sales of 3 M Individual Case Financial Analyses Case Study Analysis has increased astonishingly from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net earnings of.48 billion $ to 5.9 billion $. Digital media is the largest selling category of Samsung with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales.

Qualitative analysis.

Yes, this decision is based on the objective of Kim to target the younger audience and create a global brand picture of the company. Whereas, the core strength of the business is currently manufacturing but long gone are those days when great items were selling themselves. In the present age marketing is really essential and business can not prosper without it. Kim has already begun to strengthen the marketing activities of Samsung and soon it will become one of its core strength like manufacturing if not better.

VRIO.

Value.

Samsung runs styles, makes and sell a large portfolio of customer electronics. It operates in a very competitive environment and has successfully positioned itself as the maker of quality items. So, the answer is yes.

Rarity.

As, said earlier that 3 M Individual Case Financial Analyses Case Study Analysis operates in an extremely competitive environment, which means all the companies have comparable products. So, the answer for rarity is no.

Imitability.

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

Company.

Chairman Lee has entirely turn-around Samsung, from going nearly bankrupt during the Asian monetary crisis of 1997 to the leading 25 business in the world. Definitely yes there appertains company in the business and the results speak for themselves.

External Ecological Analysis

PESTLE Analysis

Political

Being a multinational brand name spread almost in every country worldwide, bulk of the environments like U.S.A., Europe, China and so on, are extremely conductive for its operations. It faces some political pressures in less industrialized countries where law and order situation is not excellent. Latin American, African and some Asian nations fall in this category, where political instability do have an impact on 3 M Individual Case Financial Analyses Case Study Solution operations.

Economic

Buying power of clients is important for business like Samsung to be successful and grow. Emerging markets like India, middle-eastern countries etc. offer growth chances, whereas, due to economic crisis even the clients of developed countries suffer badly. It is extremely crucial for the company to keep an eye on the continuous economic scenario of the nation prior to entering the market.

Socio-Cultural

International companies need to face various social and cultural issues throughout its operations in a foreign country. Samsung has actually likewise faced many problems but have actually adopted to the regional environments of most of the nations exceptionally well. It has actually tailored its products, practices, policies and so on accordingly in order to achieve success.

Technological

With a yearly expense of 2.4 billion dollars in Research & Advancement, and with constant ingenious item launches, 3 M Individual Case Financial Analyses Case Study Help is among the leading ingenious companies of the world. With a clear objective to be ahead of the rest when it concerns technological advancements, Samsung has risen to the no 25 of the leading successful companies of the world.

Legal

Each country has their own laws and policies, being an international company Samsung have to strictly follow those laws in their jurisdictions. Failure to do so, will lead to major legal effects. It has to study or work with a local law expert prior to beginning its operations in a particular country.

Environmental

With the increasing awareness amongst consumers about the ethical & environmental offenses of companies, Samsung needs to guarantee that it follows all the safety standards. Environmental damages, ethical misbehaviors are not appropriate and in some nations the consequences can be extremely extreme. On the other hand it needs to do some Corporate Social Obligation practices to show the residents that it cares about their environment and individuals.

Porter's 5 Forces

Threat of Substitution

Threat of replacement for Samsung's each item category is quite substantial. Running in an extremely vibrant market lead the business to deal with a high threat of replacement. Aspects for high hazard of substitution for 3 M Individual Case Financial Analyses Case Study Analysis Smartphone consist of the presence of high variety of providers and Market saturation in developed nations, that make the expense of changing for customers practically no. Replacement dangers for Samsung visual screen lie in the altering life style of consumers. Clients can switch to viewing visuals at home towards outdoor activities. Along with it, Samsung printing options items are threatened by the increasing tourist attraction of consumers towards cloud storage.

Rivalry Among Existing Firms:

The rivaly among Samsung and its close competitors is intense. The significant reason behind this is the method of market saturation in numerous number of product classifications, forcing Samsung to present more innovative functions in existing products and new ingenious products to maintain its development. Other element for the intense competition among the competitors is the little product distinction amongst the products. The popular players in the technology market are rather knowledgeable about the significance of R&D spending for their survival and are running into a race of marketing and R&D costs, to record the market. The significant competitors for 3 M Individual Case Financial Analyses Case Study Help samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO and so on. High competitors rivalry results in the changing market shares which can be seen in Exhibition F.

Bargaining Power of Providers:

3 M Individual Case Financial Analyses Case Study Solution has a vast supply chain including about 2700 suppliers 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 big orders enable Samsung to work out rates with its providers. Due to incapability of Samsung to build its own software, it has to outsource its software application development to Google, which becomes a possible provider of software application for Samsung, resulting in high bargaining power of Google. Although, in most of cases Samsung has a power to negotiate prices, however it offer considerable costs to its providers to develop a strong supply chain and to have strong relationships with its providers.

Bargaining Power of Purchasers:

Negotiating power of buyers for various number of item classifications of Samsung is intense. Among the factor causing the intense bargaining power is the schedule of large number of competitors in practically each product category i.e. rivals of Samsung Smart device, with a really little distinction. The high availability of suppliers of Smart devices with minimum distinction, make the changing cost for buyers almost zero, thus increasing the bargaining power of buyers. Market saturation in the majority of the product classifications also make the bargaining power of purchasers more extreme in for 3 M Individual Case Financial Analyses Case Study Help. In spite of igh bargaining power Samsung is quite efficient in selling its items at a higher rate than much of its rivals, due to luxury quality product and a fair brand name image.

Danger of New Entrants:

Hazard of brand-new entrants for 3 M Individual Case Financial Analyses Case Study Help is rather low. Along with it, requirement of substantial knowledge and research and advancement expenses for survival in the industry likewise make new entrants hesitant to go into in the market. Market saturation is also one of the barrier of entry in innovation market.

Competitive Analysis

Samsung's high item diversification supplies it differentiation from its competitors. Unlikely to its close rivals including Sony, Intel and Nokia, who focus bulk on a single item classification with Sony focusing on customer electronics, Nokia on cell phones and Intel on chips, 3 M Individual Case Financial Analyses Case Study Solution had a big R&D costs on all of its product categories which allow the company to make prospective income from sales of practically all of its items.

The business ranks first in 4 item classifications i.e. DRAM Chips, LCD Displays, Cinema Televisions and Microwave ovens, in regards to worldwide market share, amongst 8 various item categories. Samsung was the worldwide leader in manufacturing DRAM, SRAM and NAND flash chips. Samsung profits from chips was less than Intel but its revenues from chips was growing faster than Intel and has grown close to the profits levels of Intel, as provided in the case Display 2.

Together with the chips Samsung mobile market was also flourishing at a high rate than its rivals i.e. Motorola and Nokia. Samsung's cellular phone's sales development was 51% as compare to Motorola with only 4% and Nokia with no sales growth. The major reson behind Samsung's high growth despite of higher rates than Nokia and Motorola was the company's high-end quality cellular phone.

Samsung was also profiting from increasing market share of luxury LCDs as given in case Display 3. The major reason, making the company enable to obtain the chance is its mass production at low cost. Sony was the greatest rival for 3 M Individual Case Financial Analyses Case Study Solution in LCD market, nevertheless, it had actually also started joint venture with Samsung in 2003 for LCD producing, lessening the competition for Samsung.

Porter's Competitive Strategy

Low Cost Management strategy of porter is totally carried out by Samsung the way they attain economies of scale by enhancing their core competencies of manufacturing. They always bring something innovative and brand-new whether it's a service or a product.

Alternatives

Alternative Solution 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, especially mobile phones of Samsung are popular among the younger market.

Pros

1. It is the best technique to build Consumer Life time Value (CLV) by creating a long-lasting relationship with consumers. Build loyalty through delivering worth and reap the benefits for long-lasting, as research has revealed it is more affordable to keep current consumers than to attract new ones.
2. Another pro of this option is that word of mouth spread quicker among more youthful people and which in turn will generate new clients for my items.

Cons

1. Old consumers who were related to Samsung prior to might not like this brand-new image the company is trying to represent.
2 It will sustain additional expenditures to reposition some products and it might not even bring success as the trends change really rapidly among the younger market.

Alternative service 2.

Samsung has made making its core competency for the a lot of part of their organisation and due to which its managers are not afraid to fully get out of their convenience zone. It would be done by arranging training workshops throughout which importance of marketing will be taught and numbers will be provided. Failure to get the passing scores will get benched. Marketing environment need to be produced internally first as real marketing starts inside the corporation.

Pros

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

Cons

2. Its con can develop a very unhealthy environment in the workplace, as people typically resist modification due to the fact that they fear it.

Identify the very best alternative

First alternative is the best as it plainly has more pros since once a Customer Lifetime Value is built the company will profit from it till that client lives and has purchasing power also. Plus, our target clients are the more youthful generation which are bound to live longer than the present old age people. Nevertheless, Samsung's primary goal is to produce commitment among its consumers and make them bought it from them and even purchase their different items too.

Application Plan

• Targeting more youthful generation through social marketing, producing a link with them like Pepsi finish with music. And set the expectations reasonable and possible.
• A team consisting of finest marketing and sales experts ought to be assemble, and both views must be considered prior to securing the resources required to carry out the strategy.
• Thorough interaction of the plan must be done as it is extremely important for everybody to be on the same page to make it work.
• Jobs and timelines should be construct and communicated accordingly to each person responsible.
• The manager need to utilize a control panel which reveals the development of all the jobs which have been done or about to be done and by whom.
• The supervisor should monitor and keep a constant examine the overall and individual performance.
Since any brand-new trend or policy might come in due to which all the things currently planned have actually to be changed, • Everybody ought to be ready to adapt midway. It's much better to have contingency plans currently prepared.
• At the end of the project the supervisor must communicate the results and if successful need to celebrate with the group.

Budget plan

The M-net program revealed engaging analysis about the low and high growth potential areas and just how much advertising budget plan must be designated accordingly. This change the budget plan allowance of lots of supervisors and different nations were dissatisfied and argued but the analysis done by the program was precise and showed figures like The United States and Canada and Russia development prospective merited a 35% allowance while they were getting 45%. Whereas, China and Europe must be receiving 42% however were rather given 31%. It truly helped to relatively distribute the resources and record more clients by investing more on ads on the high development capacity areas of the world.

Conclusion

3 M Individual Case Financial Analyses Case Study Analysis is a top 25 company in the world now and plans to get ahead of Sony who sits presently at no. 20. Its consistent financial investment in R&D and innovative practices have moved them to new heights but for them its' just the start and they want to be amongst the leading 3 brands on the planet. They completely turn-around from practically declaring bankruptcy during the Asian Financial Crisis to a world prominent brand, known for quality and development. Their worth chain and their core competency their manufacturing capability, along-with global brand image building have actually seen their sales go from 16 to 44.6 billion $ from 1997-- 2002. With additional expansion in China and other emerging markets those numbers will just increase further in the future. Their marketing efforts should be directed towards more youthful demographic in the middle of the internal arguments about marketing and should create Consumer Lifetime Value as it will not just provide advantages now but will continue to enjoy it till the customer life time. As the expense of maintaining the consumer is more affordable than bring in a new one.