Boston Pine Street Case Study Solution & Analysis
Boston Pine Street Case Study Analysis is a popular international brand in technology market, established in 1938 by Lee Byung Chul, in South Korea. Boston Pine Street handle a great deal of item categories including Semiconductors, Telecommunications, Digital Media, Digital Appliances and a lot more other electronic products. Historically, the business's core customers consist of the Original Devices Manufacturers (OEMs), which used to sell Samsung products withtheir own brand name. Till early 1990s, the core competency of Samsung depend on its low cost offerings than its competitors by producing existing items at economies of scale. Its customer circle consists of Original Devices Manufacturers (OEMs), who used to offer Boston Pine Street Case Study Analysis products with their own trademark name. Samsung was not simply understood outside Korea. There were likewise no or little interest in developing the trademark name worldwide. Marketing budget plan was controlled by production department with a focal point on providing low-cost products.During the 1997 Asian Financial Crisis the business nearly got bankrupt, however with the Vision of Chairman Lee it entirely turn its fortune around and in 2002 was listed the top 25 most important company worldwide. When Kim was employed as a Chief Marketing Officer in 2000 the company was not even listed. He rearranged Samsung as a global brand and educated his divisional managers to comprehend marketing and its significance. Now their goal is to arrive 10 by 2005.
Samsung's transition from an item based to a marketing business is not going as smoothly as planned.Overcoming the reluctance of divisional managers to integrate marketing efficiently is still a significant difficulty. Creating a constant brand name identity throughout the whole world and using marketing methods that finest fits the regional culture is no easy job. The M-net program analysis have been really useful in figuring out the high and less prospective growth areas, but allowance of resources appropriately is not well gotten among the supervisors. There is no consensus among the hierarchy regarding the very best suited future method.
Yun had a quite clear picture in his mind about how Boston Pine Street Case Study Solution can change from a low end to a high end product service provider. He knew that improvement can only be done through placing Samsung as a business offering high-end products and this could only be done through high level of marketing.
In spite of having a clear vision about how to build Samsung brand name, with a potential support of its executives, Yun faced several marketing difficulties 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 very 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 business practices, and the present marketing requirement was excessive high, the space was too broader and to fill this gap with wrong understandings about marketing was rather challenging for Yun.
Along with it the product range of the company was increasing with the ripening of new product ideas by the R&D sector of Samsung. Yun had an obstacle to perform marketing preparation and to develop marketing budgets for existing as well as for new items from the very start, and this would take a huge time.
A huge shift would be required in present marketing expenses to build the Boston Pine Street Case Study Solution brand name. This would lead to increased marketing expenses for Samsung and could disrupt the administration regarding increased expenses, as they hesitated to marketing expenditures formerly and an unexpected big shiftwould make them disrupt. This could lead to decreasing executive support for global marketing. In this scenario, Yun faces an obstacle for justifying increased marketing expenses by showing the long term value of substantial marketing expenditures.
Samsung strengths lie in its big item portfolio. Samsung has biggest number of patents in the industry with total variety of 15499 patents approved in US( USP). Large amount of R&D spending has allowed the business to grow its product portfolio at a greater rate than its rivals. Boston Pine Street Case Study Help spent about $13.079 billion on its R&D sector in 2016, which is 7.3% of its overall earnings.
Another strength of Boston Pine Street Case Study Help is its ability to develop innovative products at a constant rate. It major proves for the development and product designing of Samsung is that the business has actually gotten a lot of awards for its development and product style.
Unlike Apple and other rivals, Samsung is concentrated on producing devices which can be easily integrated with any kind of open source Operating System (OS) and software. This offers Samsung an edge over Apple devices.
Samsung's capability to produce high-end items at low expense of production is also one of the significant strength of Samsung as it enables the business to catch more market by supplying quality items with cost control.
Boston Pine Street Case Study Solution weak points are hidden in the company's dependence on outsourcing software application for its devices due to company's inability in developing software application, unlike Sony. Samsung also has low revenue margins as compare to Apple due to substantial distinction in the rates of Apple and Samsung with a much lower distinction in quality. The diverse focus of the business due to a great deal of items in its portfolio, result in the less effective production and make the company not able to charge greater costs like Apple. The company is likewise ineffective in managing its patents and frequently deals with the issue of patent infraction.
Opportunities for Samsung lie in the growing Smartphone market and the company's performance in the market. It can increase its market share and profits from cell phone as the business is rather efficient in smart phone market. Samsung currently runs in about 80 nations and the business has a chance to increase its geographical growth by moving towards more emerging markets outside Asia. Samsung can move towards acquisitions to get patents. It would enable the company to increase its product portfolio with an increase in its wealth.
The vibrant industry environment of technology market pose a serious risk on Samsung's survival and force the company to invest much of its revenues share on R&D in order to endure in the long run. The market saturation in developed nations i.e. saturation of mobile business is also a big threat for the business's growth in the presence of strong competitors like Apple.
4 P's of Marketing
Samsung uses quality products and has a quite rich portfolio which caters to various segments. LCD and mobile phones are the greatest items of Samsung, whereas DRAM is also not far behind in contrast of them.
• LCD/ TELEVISION
• Mobile phones.
• Ac system.
• Desktop computer.
• Disk drives.
• Flash memory.
Boston Pine Street Case Study Help uses both market competitive and market skimming prices strategies for its wide variety of items. In competitive pricing it adjusts the rate according to the competition in order to get advantage, whereas, it utilizes market skimming technique where the item has an added value and by offering a few items it can reach break-even.
It has one of the best supply chain networks, with retail suppliers, their own sole distributors, E commerce channels like Amazon and so on. All its products are timely supplied to the selling location/ provided to the customers directly in case of online order.
It wasn't a well-known company outside of Korea up until 1993. But the management effort taken by their CEO has actually pushed them to market more effectively outside the borders and now it has actually entered the league of top 25 business on the planet in just 9 years. This is a remarkable achievement despite the continuous arguments amongst the managers about adopting marketing practices. It uses both offline & online channels of promotion to market their items. Paid item advertisements, social promotion and digital ads are utilizes to develop awareness about Samsung products.
Worth Chain Analysis.
It's an analytical framework for determining organisation activities that include value or competitive advantage for the company.
For its incoming logistics it owns numerous logistics companies as it subsidiaries. It looks after its suppliers and produces a harmonious relationship with them and even lowered their payment cycles to boost this relationship further which includes value to their chain network.
Samsung's core competency is its mass manufacturing it produces 90% of its products in-house. Divided into three different departments its operations are namely IT & Mobile Communications, Device Solutions and Customer Electronic Devices. It is maintaining operation centers worldwide to further add value to its value chain network.
Its outgoing logistics system performance is one of the main factors Boston Pine Street Case Study Solution is able to take on Apple. Samsung's own Electronic Logitec system plays a major role in the outbound logistics operations. It even carries out the jobs of collection of payment, settling insurance coverage claims, etc. on behalf of Samsung.
Marketing and Sales.
Bring in target customer attention towards the product is done through marketing and sales to communicate with them the worth and competitive advantage the product provides. Boston Pine Street Case Study Analysis advertising spending plan is continually growing given that they began their rearranging worldwide and will continue to do so as they are constantly wanting to invest and expand in high potential growth markets. The budget plan is spent on events, print and media advertisements, public relations etc.
Samsung put their consumers at the top and continuously aim to provide unmatchable consumer service standards. By including a direct assistance line to contact them 24 hours they have further increased the added value of Samsung service.
Boston Pine Street Case Study Help has actually diversified market segmentation, based upon its arrangement of wide range of products to large number of customers. Samsung target customer segments can be divided into 3 categories i.e. Boston Pine Street Case Study Analysis IT and Mobile Communications, Samsung Consumer Electronics and Samsung Gadget solutions.
Boston Pine Street Case Study Help geographical division is based upon two criteria i.e. region and density. Samsung serves about 80 countries worldwide with its items offered to Urban in addition to Rural areas of the country. The Samsung is also growing its international existence and the business's versatility in finding its plants motivates international expansion of Samsung.
Samsung produces items that can be used by both males and women. The target clients for Samsung IT and mobile interaction products have an age range of 18-65 with majority at a young or freshly wed life cycle phase. Apart from it, Samsung Consumer Electronics are targeted to a client section with an age variety of 25-65.
The psychographic division of Boston Pine Street 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 generally upper middle, middle and working class clients, as Samsung offer items like cell phones very little more affordable i.e. Motorola along with very little expensive i.e. Apple. It provides quality items to middle level consumers at a somewhat high cost than others targeting the exact same sector.
Boston Pine Street Case Study Analysis majority target customers have unique behavioural characteristics. They are attracted towards Samsung since of its moderate prices with an extent of quality.
Sales of Samsung has increased remarkably from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net revenue of.48 billion $ to 5.9 billion $. It has actually likewise minimized its debt from 15 billion $ to 4.6 billion $. Digital media is the biggest selling classification of Samsung with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales. Incomes/ sales are increasing however net earnings is not increasing appropriately since of the high overhead cost. New expansions and hiring's were the main reason of the boost in the overhead costs, with china currently not offering any profit to Samsung, but there is so much potential in the present market with 75 % yet to be explored.
Whereas, the core strength of the company is presently making but long gone are those days when great products were selling themselves. Kim has currently begun to reinforce the marketing activities of Samsung and really quickly it will end up being one of its core strength like making if not much better.
Samsung operates designs, produces and offer a large portfolio of customer electronics. It operates in a very competitive environment and has successfully placed itself as the maker of quality items. So, the answer is yes.
As, stated previously that Boston Pine Street Case Study Help operates in an extremely competitive environment, which indicates all the companies have comparable products. So, the response for rarity is no.
Due to the nature of the industry, it is very easy for competitors to comprehend the functionality of the items and easily make their own models. Yes, Samsung is only behind IBM in registering new patents every year, however the benefit is extremely short term in this market.
Chairman Lee has completely turn-around Samsung, from going practically bankrupt throughout the Asian financial crisis of 1997 to the top 25 company worldwide. Definitely yes there appertains company in the business and the results promote themselves.
External Environmental Analysis
Being a multinational brand name spread almost in every country worldwide, bulk of the environments like U.S.A., Europe, China etc., are really conductive for its operations. It deals with some political pressures in less industrialized countries where law and order scenario is not good. Latin American, African and some Asian countries fall in this classification, where political instability do have an effect on Boston Pine Street Case Study Help operations.
Purchasing power of clients is essential for business like Samsung to prosper and grow. Emerging markets like India, middle-eastern countries and so on offer development chances, whereas, due to economic crisis even the customers of industrialized countries suffer terribly. It is extremely important for the company to keep an eye on the continuous economic situation of the country before getting in the market.
Multinational business have to face numerous social and cultural problems throughout its operations in a foreign nation. Samsung has likewise dealt with numerous problems however have actually adopted to the local environments of most of the nations incredibly well. It has actually tailored its products, practices, policies and so on appropriately in order to achieve success.
With a yearly expenditure of 2.4 billion dollars in Research & Development, and with continuous ingenious item launches, Boston Pine Street Case Study Analysis is one of the top innovative companies of the world. With a clear mission to be ahead of the rest when it concerns technological advancements, Samsung has actually risen to the no 25 of the top successful companies of the world.
Each nation has their own laws and policies, being an international company Samsung need to strictly follow those laws in their jurisdictions. Failure to do so, will lead to severe legal consequences. So, it needs to study or employ a local law professional before beginning its operations in a specific country.
With the increasing awareness among consumers about the environmental & ethical violations of business, Samsung has to ensure that it follows all the security standards. Environmental damages, ethical misbehaviors are not acceptable and in some nations the repercussions can be extremely extreme. On the other hand it needs to do some Business Social Duty practices to reveal the locals that it appreciates their environment and people.
Porter's 5 Forces
Risk of Alternative
Risk of replacement for Samsung's each product classification is quite substantial. Aspects for high threat of replacement for Boston Pine Street Case Study Help Mobile phone include the existence of high number of suppliers and Market saturation in developed nations, which make the cost of changing for consumers practically absolutely no. Along with it, Samsung printing services items are threatened by the increasing attraction of consumers towards cloud storage.
Competition Among Existing Companies:
The rivaly amongst Samsung and its close competitors is extreme. The major reason behind this is the method of market saturation in various variety of item classifications, requiring Samsung to introduce more innovative features in existing products and brand-new ingenious items to preserve its development. Other factor for the extreme competition among the rivals is the little product differentiation amongst the items. The popular gamers in the technology market are rather aware of the importance of R&D costs for their survival and are facing a race of marketing and R&D spending, to record the marketplace. The significant competitors for Boston Pine Street Case Study Solution samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO etc. High competition rivalry results in the fluctuating market shares which can be seen in Display F.
Bargaining Power of Suppliers:
Boston Pine Street Case Study Solution has a large supply chain including about 2700 providers across the world.( Samsung Sustainability Report, 2016) Provider's bargaining power for Samsung is low as Samsung runs economies of scale and its orders are of prospective size and worth. These huge orders enable Samsung to negotiate prices with its providers. Due to incapability of Samsung to construct its own software application, it has to outsource its software application development to Google, which ends up being a possible supplier of software for Samsung, resulting in high bargaining power of Google. In many of Boston Pine Street Case Study Help has a power to work out rates, however it offer significant costs to its providers to construct a strong supply chain and to have strong relationships with its providers.
Bargaining Power of Purchasers:
Negotiating power of purchasers for various number of item categories of Samsung is extreme. One of the aspect resulting in the extreme bargaining power is the schedule of large number of rivals in nearly each item category i.e. competitors of Samsung Smartphone, with a very little distinction. The high accessibility of providers of Mobile phones with minimum differentiation, make the changing expense for buyers almost absolutely no, hence increasing the bargaining power of purchasers. Market saturation in the majority of the item classifications also make the bargaining power of purchasers more intense in for Boston Pine Street Case Study Solution. In spite of igh bargaining power Samsung is quite efficient in selling its products at a greater cost than much of its rivals, due to luxury quality product and a fair brand image.
Risk of New Entrants:
Threat of new entrants for Boston Pine Street Case Study Solution is rather low. Along with it, requirement of big proficiency and research study and advancement expenses for survival in the industry likewise make brand-new entrants unwilling to go into in the market. Market saturation is also one of the barrier of entry in technology market.
Samsung's high product diversity offers it differentiation from its competitors. It is among the three top brand names by market share. Unlikely to its close rivals including Sony, Intel and Nokia, who focus majority on a single product classification with Sony concentrating on customer electronic devices, Nokia on cell phones and Intel on chips, Samsung had a substantial R&D spending on all of its item classifications which enable the business to make potential profits from sales of nearly all of its products. (See Exhibit) Nevertheless, due to the large product variety the business deals with high number of rivals.
The company ranks initially in 4 item categories i.e. DRAM Chips, LCD Displays, Cinema TVs and Microwave ovens, in regards to global market share, among 8 various product classifications. Samsung was the international leader in producing DRAM, SRAM and NAND flash chips. Samsung profits from chips was less than Intel however its profits from chips was growing faster than Intel and has actually grown close to the revenue levels of Intel, as provided in the case Exhibit 2.
In addition to 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 absolutely no sales growth. The significant reson behind Samsung's high growth despite of greater costs than Nokia and Motorola was the business's high-end quality cell phones.
Samsung was likewise profiting from increasing market share of high-end LCDs as given up case Exhibit 3. The significant factor, making the business make it possible for to obtain the opportunity is its mass production at low expense. Sony was the most significant rival for Boston Pine Street Case Study Help in LCD market, however, it had likewise begun joint endeavor with Samsung in 2003 for LCD making, lessening the competitors for Samsung.
Porter's Competitive Strategy
Low Expense Leadership method of porter is completely implemented by Samsung the method they achieve economies of scale by enhancing their core proficiencies of production. They always bring something ingenious and brand-new whether it's a service or a product.
Alternative Service 1
The Chief Marketing Officer (CMO) of Boston Pine Street Case Study Solution would create a brand-new brand name image by targeting the more youthful generation of the specific nation. As, particularly mobile phones of Samsung are popular among the more youthful group.
1. It is the very best technique to construct Consumer Lifetime Worth (CLV) by creating a long-lasting relationship with clients. Construct loyalty through delivering worth and reap the benefits for long-lasting, as research has actually showed it is much cheaper to keep present consumers than to draw in new ones.
2. Another pro of this option is that word of mouth spread more quickly amongst younger people and which in turn will generate brand-new clients for my items.
1. Old customers who were associated with Samsung before might not like this brand-new image the company is attempting to represent.
2 It will sustain more costs to reposition some products and it might not even bring success as the trends alter very rapidly among the younger market.
Alternative option 2.
It would be done by arranging training workshops throughout which value of marketing will be taught and numbers will be provided. Marketing environment ought to be created internally first as real marketing starts inside the corporation.
1. Its pro will be that all the marketing method supporters will come out and also the opposite ones.
2. Its con can create an extremely unhealthy environment in the workplace, as individuals typically resist change because they fear it.
Identify the best alternative
First option is the best as it plainly has more pros because when a Customer Lifetime Worth is developed the business will benefit from it till that customer lives and has buying power as well. Plus, our target consumers are the younger generation which are bound to live longer than the existing old age individuals. However, Samsung's primary goal is to produce commitment among its customers and make them repurchase it from them and even purchase their various products as well.
• Targeting younger generation through social marketing, developing a link with them like Pepsi finish with music. And set the expectations possible and practical.
• A group consisting of finest marketing and sales professionals ought to be put together, and both views ought to be taken into consideration before protecting the resources required to implement the strategy.
• Thorough communication of the plan ought to be done as it is really important for everybody to be on the very same page to make it work.
• Jobs and timelines must be develop and interacted accordingly to each person responsible.
• The manager must use a dashboard which shows the progress of all the jobs which have been done or about to be done and by whom.
• The manager must keep track of and keep a continuous look at the total and individual performance.
• Everyone ought to want to adjust midway since any new pattern or policy may be available in due to which all the important things already planned need to be changed. It's better to have contingency plans already prepared.
• At the end of the campaign the manager should interact the results and if effective must commemorate with the group.
This modification the spending plan allowance of various countries and many managers were dissatisfied and argued however the analysis done by the program was precise and showed figures like North America and Russia growth potential merited a 35% allocation while they were receiving 45%. It really helped to fairly disperse the resources and record more clients by investing more on ads on the high development potential areas of the world.
Boston Pine Street Case Study Help is a leading 25 company worldwide now and prepares to get ahead of Sony who sits presently at no. 20. Its continuous investment in R&D and ingenious practices have moved them to new heights however for them its' just the start and they wish to be among the leading 3 brands worldwide. They entirely turn-around from nearly going bankrupt throughout the Asian Financial Crisis to a world renowned brand, understood for quality and development. Their value chain and their core proficiency their manufacturing ability, along-with global brand image building have seen their sales go from 16 to 44.6 billion $ from 1997-- 2002. With further expansion in China and other emerging markets those numbers will just increase even more in the future. Their marketing efforts need to be directed towards younger market in the middle of the internal arguments about marketing and should develop Consumer Lifetime Worth as it will not only provide benefits now however will continue to reap it till the customer lifetime. As the cost of maintaining the consumer is much cheaper than drawing in a brand-new one.