Chipotle Mexican Grill Case Study Solution & Analysis
Chipotle Mexican Grill Case Study Solution is a popular worldwide brand in innovation industry, established in 1938 by Lee Byung Chul, in South Korea. Chipotle Mexican Grill deals in a great deal of item categories consisting of Semiconductors, Telecom, Digital Media, Digital Appliances and much more other electronic products. Historically, the company's core clients consist of the Original Equipment Manufacturers (OEMs), which used to offer Samsung products withtheir own brand name. Till early 1990s, the core competency of Samsung depend on its low cost offerings than its competitors by manufacturing existing products at economies of scale. Its client circle consists of Original Devices Manufacturers (OEMs), who used to sell Chipotle Mexican Grill Case Study Help items with their own brand. Samsung was not merely understood outside Korea. There were also no or little interest in constructing the brand name globally. Marketing budget plan was controlled by production department with a focal point on supplying low-cost products.During the 1997 Asian Financial Crisis the business practically got bankrupt, however with the Vision of Chairman Lee it totally turn its fortune around and in 2002 was listed the top 25 most important business worldwide. When Kim was hired as a Chief Marketing Officer in 2000 the business was not even noted. He rearranged Samsung as an international brand name and informed his divisional managers to understand marketing and its value. Now their objective 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 effectively is still a significant challenge. Developing a consistent brand identity across the entire world and using marketing techniques that best fits the regional culture is no simple job. The M-net program analysis have actually been really helpful in determining the high and less prospective development areas, however allowance of resources accordingly is not well received amongst the managers. There is no agreement amongst the hierarchy regarding the very best fit future strategy.
Yun had a rather clear photo in his mind about how Chipotle Mexican Grill Case Study Help can change from a low end to a high end item company. He knew that change can only be done through positioning Samsung as a company offering 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 dealt with several marketing obstacles in early years of its efforts.
One of the marketing difficulties for Yun was the perceptions of executives about the worth of marketing. They considered 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 business practices, and the existing marketing requirement was too much high, the space was too broader and to fill this gap with incorrect perceptions about marketing was quite tough for Yun.
As specified above, marketing focus was really low in previous practices, for that reason there were no appropriate marketing budget plans for each of the product on the portfolio. There was no marketing preparation provided for the existing items. Along with it the item range of the business was increasing with the ripening of brand-new item ideas by the R&D sector of Samsung. Yun had a difficulty to carry out marketing preparation and to create marketing spending plans for existing along with for new items from the very start, and this would take a big time.
A huge shift would be required in existing marketing expenses to construct the Chipotle Mexican Grill Case Study Solution brand. This would lead to increased marketing expenditures for Samsung and could disturb the administration regarding increased expenditures, as they hesitated to marketing expenditures previously and an unexpected big shiftwould make them disrupt. This could lead to decreasing executive assistance for international marketing. In this circumstance, Yun faces a difficulty for justifying increased marketing expenses by showing the long term worth of big marketing expenditures.
Samsung strengths lie in its substantial item portfolio. Samsung has largest variety of patents in the industry with overall variety of 15499 patents approved in United States( USP). Large amount of R&D costs has actually enabled the business to grow its item portfolio at a higher rate than its rivals. Chipotle Mexican Grill Case Study Solution spent about $13.079 billion on its R&D sector in 2016, which is 7.3% of its overall earnings.
Another strength of Chipotle Mexican Grill Case Study Solution is its ability to develop ingenious items at a constant rate. It significant proves for the development and item designing of Samsung is that the company has gotten many awards for its innovation and product style.
Unlike Apple and other rivals, Samsung is focused on producing devices which can be easily integrated with any type of open source Operating System (OS) and software application. This offers Samsung an edge over Apple gadgets.
Samsung's ability to produce high end products at low expense of production is also one of the major strength of Samsung as it makes it possible for the business to catch more market by providing quality products with expense control.
Chipotle Mexican Grill Case Study Solution weak points are hidden in the company's reliance on outsourcing software for its gadgets due to business's failure in developing software, unlike Sony. Samsung likewise has low profit margins as compare to Apple due to big distinction in the prices of Apple and Samsung with a much lower difference in quality. The diverse focus of the company due to large number of items in its portfolio, lead to the less efficient production and make the business not able to charge higher prices like Apple. The business is also inefficient in handling its patents and often deals with the issue of patent infraction.
Opportunities for Chipotle Mexican Grill Case Study Help lie in the growing Smartphone market and the company's performance in the market. Samsung currently runs in about 80 nations and the company has an opportunity to increase its geographical growth by moving towards more emerging markets outside Asia.
The dynamic industry environment of technology industry pose a severe threat on Samsung's survival and require the business to invest much of its incomes share on R&D in order to make it through in the long run. The market saturation in developed nations i.e. saturation of mobile business is likewise a huge threat for the company's development in the existence of strong competitors like Apple.
4 P's of Marketing
Chipotle Mexican Grill Case Study Solution uses quality products and has a quite rich portfolio which accommodates various segments. Most of the items are in the leading three of their particular industries. LCD and smart phones are the most significant products of Samsung, whereas DRAM is also not far behind in comparison of them. Following is the line of product of Samsung:
• LCD/ TELEVISION
• Smart phone.
• Hard drives.
• Washing machines.
• Flash memory.
Chipotle Mexican Grill Case Study Analysis utilizes both market competitive and market skimming prices strategies for its wide range of items. In competitive rates it adjusts the rate according to the competitors in order to get benefit, whereas, it utilizes market skimming strategy where the product has an added worth and by selling a few items it can reach break-even.
It has among the very best supply chain networks, with retail suppliers, their own sole suppliers, E commerce channels like Amazon etc. All its items are prompt supplied to the selling location/ delivered to the clients directly in case of online order.
It wasn't a well-known company beyond Korea up until 1993. But the management initiative taken by their CEO has actually pushed them to market more efficiently outside the borders and now it has actually gotten in the league of leading 25 companies on the planet in just 9 years. This is a remarkable achievement in spite of the continuous arguments among the supervisors about adopting marketing practices. It utilizes both offline & online channels of promotion to market their items. Paid product ads, social promo and digital advertisements are utilizes to create awareness about Samsung products.
Value Chain Analysis.
It's an analytical framework for determining business activities that add worth or competitive advantage for the company.
For its inbound logistics it owns different logistics firms as it subsidiaries. It looks after its providers and produces a harmonious relationship with them and even decreased their payment cycles to boost this relationship further which adds value to their chain network.
Samsung's core competency is its mass manufacturing it produces 90% of its items in-house. Divided into 3 different departments its operations are specifically IT & Mobile Communications, Device Solutions and Customer Electronic Devices. It is preserving operation hubs worldwide to even more add value to its worth chain network.
Its outgoing logistics system efficiency is one of the main factors Chipotle Mexican Grill Case Study Solution is able to take on Apple. Samsung's own Electronic Logitec system plays a significant role in the outgoing logistics operations. It even carries out the jobs of collection of payment, settling insurance coverage claims, etc. on behalf of Samsung.
Marketing and Sales.
Attracting target consumer attention towards the item is done through marketing and sales to interact with them the worth and competitive advantage the item offers. Chipotle Mexican Grill Case Study Analysis marketing spending plan is continuously rising since they began their repositioning worldwide and will continue to do so as they are constantly seeking to invest and broaden in high prospective development markets. The spending plan is spent on events, print and media advertisements, public relations and so on.
Samsung put their consumers at the leading and constantly aim to deliver unmatchable customer service requirements. By adding a direct support line to call them 24 hours they have actually further increased the added worth of Samsung service.
Chipotle Mexican Grill Case Study Solution has diversified market segmentation, based upon its provision of large range of products to large number of customers. Samsung target consumer sections can be divided into 3 classifications i.e. Chipotle Mexican Grill Case Study Help IT and Mobile Communications, Samsung Customer Electronic Devices and Samsung Device solutions.
Chipotle Mexican Grill Case Study Solution geographical segmentation is based upon 2 requirements i.e. area and density. Samsung serves about 80 nations worldwide with its products provided to Urban along with Backwoods of the country. The Samsung is also growing its worldwide existence and the business's flexibility in finding its plants encourages international expansion of Samsung.
The demographic segmentation of Chipotle Mexican Grill Case Study Help is based upon gender, age, life-cycle stage and profession. Samsung produces products that can be used by both females and males. The target clients for Samsung IT and mobile communication products have an age variety of 18-65 with majority at a young or newly married life process phase. They are mostly experts, staff members and students. Apart from it, Samsung Consumer Electronics are targeted to a consumer segment with an age series of 25-65. They are mainly workers and professionals. Samsung Device Solutions are targeted at students, staff members and professionals with an age variety of 25-65.
The psychographic segmentation of Chipotle Mexican Grill Case Study Analysis s based upon the social class and the life style of the customer. Samsung target consumers on the basis of social class are primarily upper middle, middle and working class consumers, as Samsung offer items like cellular phone not much more affordable i.e. Motorola as well as not much expensive i.e. Apple. It supplies quality products to middle level customers at a somewhat high cost than others targeting the very same section.
Chipotle Mexican Grill Case Study Analysis bulk target clients have unique behavioural qualities. They are drawn in towards Samsung due to the fact that of its moderate prices with a degree of quality.
Sales of Samsung has increased amazingly from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net revenue of.48 billion $ to 5.9 billion $. It has likewise lowered its financial obligation 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. Since of the high overhead cost, profits/ sales are increasing but net profit is not increasing accordingly. New growths and working with's were the main factor of the increase in the overhead expenses, with china currently not offering any revenue to Samsung, but there is a lot capacity in the current market with 75 % yet to be checked out.
Whereas, the core strength of the business is currently manufacturing however long gone are those days when excellent products were offering themselves. Kim has currently begun to enhance the marketing activities of Samsung and really quickly it will end up being one of its core strength like making if not better.
Samsung runs designs, produces and sell a vast portfolio of customer electronic devices. It operates in an extremely competitive environment and has actually effectively positioned itself as the maker of quality items. So, the answer is yes.
As, said previously that Chipotle Mexican Grill Case Study Help runs in a highly competitive environment, which means all the business have comparable products. The answer for rarity is no.
Due to the nature of the industry, it is extremely easy for rivals to comprehend the functionality of the items and quickly make their own models. Yes, Samsung is only behind IBM in signing up new patents yearly, but the advantage is very short-term in this industry.
Chairman Lee has entirely turnaround Samsung, from going nearly insolvent during the Asian monetary crisis of 1997 to the leading 25 company on the planet. Absolutely yes there is proper organization in the company and the results speak for themselves.
External Ecological Analysis
Being an international brand spread nearly in every country worldwide, majority of the environments like USA, Europe, China etc., are very conductive for its operations. Nevertheless, it deals with some political pressures in less industrialized nations where order situation is not good. Latin American, African and some Asian nations fall in this classification, where political instability do have a result on Chipotle Mexican Grill Case Study Solution operations.
Buying power of customers is vital for business like Samsung to grow and succeed. Emerging markets like India, middle-eastern countries and so on provide growth chances, whereas, due to economic crisis even the customers of developed countries suffer badly. It is really important for the business to keep an eye on the continuous financial situation of the country prior to getting in the market.
International business have to deal with different social and cultural problems throughout its operations in a foreign country. Samsung has actually likewise dealt with numerous problems but have embraced to the local environments of most of the nations incredibly well. It has actually tailored its items, practices, policies etc. appropriately in order to be successful.
With a yearly expense of 2.4 billion dollars in Research study & Development, and with continuous innovative item launches, Chipotle Mexican Grill Case Study Help is one of the leading ingenious companies of the world. With a clear objective to be ahead of the rest when it comes to technological advancements, Samsung has increased to the no 25 of the top successful business 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 serious legal consequences. It has to study or work with a regional law expert before beginning its operations in a particular country.
With the increasing awareness among customers about the ethical & environmental violations of business, Samsung needs to guarantee that it follows all the security standards. Ecological damages, ethical misconducts are not acceptable and in some countries the consequences can be extremely severe. On the other hand it has to do some Corporate Social Obligation practices to reveal the residents that it appreciates their environment and people.
Porter's 5 Forces
Hazard of Replacement
Risk of alternative for Samsung's each product category is quite considerable. Running in an exceptionally vibrant market lead the company to face a high risk of replacement. Elements for high danger of alternative for Chipotle Mexican Grill Case Study Help Smart device include the existence of high number of suppliers and Market saturation in industrialized countries, which make the cost of changing for customers practically no. Substitution dangers for Samsung visual screen depend on the changing lifestyle of consumers. Consumers can switch to watching visuals in your home towards outdoor activities. Together with it, Samsung printing solutions products are threatened by the increasing destination of customers towards cloud storage.
Competition Among Existing Firms:
The rivaly amongst Samsung and its close competitors is extreme. The major reason behind this is the approach of market saturation in various number of product classifications, forcing Samsung to present more innovative functions in existing products and new innovative products to preserve its development. The significant rivals for Chipotle Mexican Grill Case Study Analysis samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO etc.
Chipotle Mexican Grill Case Study Solution has a vast supply chain including about 2700 suppliers 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 make it possible for Samsung to work out rates with its suppliers. Due to incapability of Samsung to develop its own software application, it has to outsource its software application advancement to Google, which becomes a potential provider of software application for Samsung, resulting in high bargaining power of Google. Although, in most of cases Samsung has a power to negotiate costs, but it supply considerable costs to its suppliers to construct a strong supply chain and to have strong relationships with its providers.
Bargaining Power of Buyers:
Market saturation in many of the product categories also make the bargaining power of purchasers more intense in for Samsung. In spite of igh bargaining power Samsung is quite capable of selling its items at a higher cost than much of its rivals, due to high end quality item and a fair brand name image.
Threat of New Entrants:
Risk of new entrants for Samsung is rather low. One of the major aspect for low danger of new entrants is the high competition in the market. The requirement of huge amount of capital to go into in the marketplace is likewise one of the potential barrier to entry. In addition to it, requirement of big expertise and research and advancement expenditures for survival in the industry likewise make new entrants unwilling to go into in the marketplace. Market saturation is also among the barrier of entry in innovation industry. High bargaining power of suppliers require the players in the market to charge as low rates as possible and this can just be accomplished by production performance. New companies, in majority cases, lack the production effectiveness, thus increasing the dangers for entrance in the technology industry.
Samsung's high product diversity offers it differentiation from its competitors. Unlikely to its close competitors including Sony, Intel and Nokia, who focus bulk on a single product classification with Sony focusing on customer electronic devices, Nokia on cell phones and Intel on chips, Chipotle Mexican Grill Case Study Analysis had a substantial R&D costs on all of its item categories which make it possible for the company to earn prospective profits from sales of nearly all of its items.
The business ranks first in 4 product classifications i.e. DRAM Chips, LCD Displays, Cinema TVs and Microwave, in regards to worldwide market share, amongst 8 various item categories. Samsung was the global leader in making DRAM, SRAM and NAND flash chips. Samsung revenues from chips was less than Intel but its earnings from chips was growing faster than Intel and has actually grown close to the profits levels of Intel, as provided in the case Display 2.
In addition to the chips Samsung mobile market was also growing at a high rate than its competitors i.e. Motorola and Nokia. Samsung's cellular phone's sales growth was 51% as compare to Motorola with just 4% and Nokia with no sales growth. The significant reson behind Samsung's high growth despite of higher prices than Nokia and Motorola was the company's high-end quality cell phones.
Samsung was also reaping the benefits from increasing market share of luxury LCDs as given in case Exhibit 3. The significant reason, making the business enable to get the opportunity is its mass production at low expense. Sony was the most significant competitor for Chipotle Mexican Grill Case Study Solution in LCD market, nevertheless, it had also started joint venture with Samsung in 2003 for LCD making, lessening the competition for Samsung.
Porter's Competitive Method
Low Cost Leadership technique of porter is totally implemented by Samsung the way they achieve economies of scale by reinforcing their core proficiencies of manufacturing. Even to the point that their competitor SONY decided to form an alliance with them to produce for them, due to the fact that they were unable to compete with them on low cost. Differentiation is another method well carried out by Samsung by constant financial investment in the R&D and remaining ahead of the competition. They constantly bring something ingenious and brand-new whether it's a service or an item.
Alternative Option 1
The Chief Marketing Officer (CMO) of Chipotle Mexican Grill Case Study Solution would produce a brand-new brand name image by targeting the more youthful generation of the specific nation. As, specifically smart phones of Samsung are preferred amongst the more youthful market.
1. It is the very best method to build Customer Lifetime Worth (CLV) by developing a long-lasting relationship with clients. Build loyalty through providing worth and reap the benefits for long-term, as research has actually revealed it is more affordable to retain current clients than to bring in new ones.
2. Another pro of this option is that word of mouth spread quicker among younger people and which in turn will bring in new consumers for my products.
1. Old consumers who were related to Samsung prior to may not like this brand-new image the company is attempting to depict.
2 It will incur more expenditures to reposition some items and it may not even bring success as the trends change really quickly among the more youthful demographic.
Alternative solution 2.
Samsung has actually made making its core competency for the many part of their service and due to which its supervisors are not afraid to totally get out of their comfort zone. It would be done by setting up training workshops throughout which importance of marketing will be taught and numbers will be given. Failure to get the passing ratings will get benched. Marketing environment ought to be developed internally first as real marketing starts inside the corporation.
1. Its pro will be that all the marketing method fans will come out and also the opposite ones.
2. Its con can create an extremely unhealthy environment in the work environment, as people frequently withstand change since they fear it.
Recognize the best alternative
Alternative is the best as it plainly has more pros since once a Customer Lifetime Worth is built the company will benefit from it till that consumer is alive and has acquiring power. Plus, our target consumers are the younger generation which are bound to live longer than the current old age individuals. Samsung's main objective is to produce loyalty amongst its customers and make them redeemed it from them and even purchase their various products.
• Targeting younger generation through social marketing, producing a link with them like Pepsi finish with music. And set the expectations possible and reasonable.
• A group including finest marketing and sales professionals ought to be assemble, and both views must be taken into account prior to securing the resources needed to carry out the plan.
• Thorough interaction of the plan should be done as it is very crucial for everyone to be on the very same page to make it work.
• Jobs and timelines should be develop and communicated accordingly to each person responsible.
• The manager ought to utilize a control panel which shows the progress of all the tasks which have been done or about to be done and by whom.
• The manager should monitor and keep a continuous look at the total and specific efficiency.
• Everyone should be willing to adapt midway because any new trend or policy may can be found in due to which all the important things already prepared need to be changed. It's better to have contingency plans currently prepared.
• At the end of the project the supervisor must interact the results and if successful must commemorate with the group.
This modification the budget plan allotment of various countries and lots of supervisors were dissatisfied and argued but the analysis done by the program was precise and revealed figures like North America and Russia growth possible merited a 35% allocation while they were receiving 45%. It really helped to relatively distribute the resources and catch more consumers by investing more on advertisements on the high development capacity areas of the world.
Chipotle Mexican Grill Case Study Help is a top 25 company on the planet now and plans to get ahead of Sony who sits currently at no. 20. Its consistent investment in R&D and innovative practices have actually propelled them to new heights however for them its' only the start and they wish to be among the leading 3 brands on the planet. They completely turnaround from nearly declaring bankruptcy during the Asian Financial Crisis to a world prominent brand name, understood for quality and innovation. Their worth chain and their core proficiency their production capability, along-with international brand image building have seen their sales go from 16 to 44.6 billion $ from 1997-- 2002. With further growth in China and other emerging markets those numbers will just increase even more in the future. Their marketing efforts should be directed towards more youthful market amidst the internal arguments about marketing and must create Consumer Life time Value as it will not only give them advantages now however will continue to reap it till the customer lifetime. As the expense of maintaining the customer is much cheaper than bring in a new one.