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From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Solution & Analysis


Introduction

From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Solution is a widely known worldwide brand name in innovation industry, established in 1938 by Lee Byung Chul, in South Korea. From Free Lunch To Black Hole Credit Default Swaps At Aig handle large number of item categories consisting of Semiconductors, Telecom, Digital Media, Digital Appliances and a lot more other electronic products. Historically, the company's core customers consist of the Original Devices Manufacturers (OEMs), which used to offer Samsung items withtheir own brand. Till early 1990s, the core proficiency of Samsung depend on its low cost offerings than its rivals by producing existing products at economies of scale. Its client circle includes Original Equipment Manufacturers (OEMs), who utilized to offer From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Solution items with their own brand name. Samsung was not simply known outside Korea. There were likewise no or little interest in constructing the trademark name worldwide. 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 almost got insolvent, but with the Vision of Chairman Lee it completely turn its fortune around and in 2002 was noted the leading 25 most valuable company on the planet. When Kim was employed as a Chief Marketing Officer in 2000 the business was not even listed. He repositioned Samsung as a worldwide brand and informed his divisional managers to understand marketing and its significance. Now their goal is to arrive 10 by 2005.

Issue Statement

Samsung's transition from an item based to a marketing company is not going as smoothly as planned.Overcoming the unwillingness of divisional supervisors to incorporate marketing efficiently is still a significant challenge. Creating a constant brand identity across the entire world and using marketing strategies that finest fits the regional culture is no easy job. The M-net program analysis have actually been actually handy in identifying the high and less potential growth areas, but allowance of resources appropriately is not well received among the supervisors. There is no agreement amongst the hierarchy regarding the best matched future strategy.

Situational Analysis

From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Analysis efforts for constructing its brand name across the world was begun after presenting the "brand-new management effort" by Chairman Lee in 1993. The objective was to transform Samsung from an inexpensive OEM to a high value-added item company. To make the vision of Samsung a truth, Chairman Lee selected Yun as a vice chairman in 1997. Yun had a rather clear photo in his mind about how Samsung can change from a low end to a high end product company. He understood that change can just be done through positioning Samsung as a company using 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, with a potential assistance of its executives, Yun faced several marketing obstacles in early years of its efforts.

Among the marketing obstacles for Yun was the perceptions of executives about the value of marketing. They thought about marketing and selling as exact same tools and believed that quality products 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 understandings about marketing was rather difficult for Yun.

As stated above, marketing focus was very low in previous practices, for that reason there were no correct marketing budget plans for each of the product on the portfolio. There was no marketing preparation done for the existing products. In addition to it the product variety 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 perform marketing preparation and to create marketing spending plans for existing in addition to for brand-new items from the very start, and this would take a big time.

A big shift would be needed in present marketing expenses to build the Samsung brand name. This would result in increased marketing expenses for Samsung and might interrupt the administration concerning increased costs, as they were unwilling to marketing expenditures previously and a sudden huge shiftwould make them disrupt.

Internal Analysis
SWOT Analysis
Strengths


From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Solution strengths lie in its huge product portfolio. Samsung has largest number of patents in the industry with overall number of 15499 patents given in US( USP).

Another strength of From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Solution is its ability to develop ingenious items at a constant rate. It major proves for the development and product designing of Samsung is that the company has received so many awards for its development and item style.

Unlike Apple and other competitors, Samsung is concentrated on producing gadgets which can be quickly incorporated with any type 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 likewise one of the major strength of Samsung as it enables the company to catch more market by supplying quality items with cost control.

Weak points

From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Analysis weaknesses are concealed in the company's reliance on outsourcing software application for its gadgets due to company's inability in developing software application, unlike Sony. Samsung likewise has low revenue margins as compare to Apple due to substantial difference in the rates of Apple and Samsung with a much lesser distinction in quality. The diverse focus of the business due to large number of items in its portfolio, result in the less effective production and make the company unable to charge higher costs like Apple. The business is also ineffective in managing its patents and frequently deals with the problem of patent offense.

Opportunities

Opportunities for Samsung depend on the growing Smart device market and the company's efficiency in the market. It can increase its market share and profits from mobile phone as the business is rather effective in cellular phone market. Samsung currently runs in about 80 countries and the business has an opportunity to increase its geographical growth by moving towards more emerging markets outside Asia. Samsung can move towards acquisitions to obtain patents. It would enable the business to increase its item portfolio with a boost in its wealth.

Risks

The dynamic market environment of technology market posture a serious danger on Samsung's survival and require the company to spend much of its earnings share on R&D in order to make it through in the long run. The marketplace saturation in developed nations i.e. saturation of mobile company is likewise a huge danger for the company's growth in the presence of strong competitors like Apple.

4 P's of Marketing

Product

From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Analysis offers quality items and has a quite rich portfolio which accommodates various segments. The majority of the products are in the top 3 of their particular markets. LCD and cellphones are the biggest items of Samsung, whereas DRAM is also not far behind in comparison of them. Following is the product line of Samsung:

• LCD/ TELEVISION
• Laptops.
• Mobile phones.
• Air conditioner.
• Desktop computer.
• Hard disks.
• Washer.
• Fridges.
• Electronic cameras.
• Microwaves.
• Flash memory.
• DRAM.

Rate.

From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Help uses both market competitive and market skimming rates techniques for its wide array of products. In competitive pricing it changes the rate according to the competitors in order to gain advantage, whereas, it utilizes market skimming technique where the product has actually an added value and by offering a couple of products it can reach break-even.

Place.

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

Promotion.

It wasn't a popular company beyond Korea till 1993. However the management initiative taken by their CEO has actually pushed them to market more efficiently outside the borders and now it has actually gone into the league of leading 25 companies on the planet in simply 9 years. This is an impressive accomplishment in spite of the continuous arguments amongst the managers about embracing marketing practices. It utilizes both offline & online channels of promotion to market their products. Paid product advertisements, social promo and digital ads are utilizes to develop awareness about Samsung products.

Value Chain Analysis.

It's an analytical structure for identifying organisation activities that include value or competitive benefit for the company.

Incoming Logistics.

For its inbound logistics it owns various logistics firms as it subsidiaries. It looks after its providers and produces 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 competency is its mass manufacturing it produces 90% of its items in-house. Divided into three various departments its operations are specifically IT & Mobile Communications, Device Solutions and Consumer Electronics. It is maintaining operation hubs worldwide to even more include worth to its value chain network.

Outbound Logistics.

Its outbound logistics system performance is among the main factors From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Solution has the ability to compete with Apple. Samsung's own Electronic Logitec system plays a major role in the outbound logistics operations. It even performs the tasks of collection of payment, settling insurance coverage claims, etc. on behalf of Samsung.

Marketing and Sales.

Bring in target customer attention towards the item is done through marketing and sales to interact with them the worth and competitive benefit the item provides. From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Solution advertising budget is constantly growing given that they started their rearranging globally and will continue to do so as they are continually wanting to invest and expand in high prospective development markets. The budget plan is invested in occasions, print and media ads, public relations etc.

Samsung Service. Samsung put their customers at the top and continuously make every effort to provide unmatchable customer service requirements. As after sales service is ending up being exceptionally essential to keep clients pleased and engaged, they even carry out studies through third parties to discover their customer's feedback and execute it in the positive way to decrease or if possible totally remove their customer problems. By adding a direct assistance line to call them 24 hours they have even more increased the added worth of From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Help service.

Segmentation.

From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Help has diversified market segmentation, based upon its arrangement of large range of products to a great deal of consumers. Samsung target customer sectors can be divided into 3 classifications i.e. From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Help IT and Mobile Communications, Samsung Consumer Electronic Devices and Samsung Device solutions.

Geographic.

From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Analysis geographical segmentation is based upon 2 requirements i.e. area and density. Samsung serves about 80 countries worldwide with its products provided to Urban in addition to Rural areas of the country. The Samsung is likewise growing its global existence and the company's versatility in finding its plants encourages worldwide expansion of Samsung.

Demographic.

Samsung produces items that can be utilized by both women and males. The target customers for Samsung IT and mobile communication products have an age variety of 18-65 with majority at a young or newly married life cycle stage. Apart from it, Samsung Consumer Electronics are targeted to a customer segment with an age variety of 25-65.

Psychographic.

The psychographic segmentation of From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Help s based upon the social class and the lifestyle of the customer. Samsung target clients on the basis of social class are primarily upper middle, middle and working class customers, as Samsung offer products like cell phones very little less expensive i.e. Motorola as well as very little pricey i.e. Apple. It supplies quality products to middle level customers at a somewhat high cost than others targeting the same segment.

Behavioural.

From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Help majority target consumers have unique behavioural attributes. It has customers with an ambitious, stylish and identified character with moderate level of loyalty towards the brand. Its customers have some degree of shift towards other popular brands i.e. Apple. The majority of Samsun customers desire quality along with cost control. They are attracted towards Samsung because of its moderate prices with a level of quality.

Quantitative analysis.

Sales of From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Solution has actually increased remarkably 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.

Whereas, the core strength of the business is currently producing however long gone are those days when excellent items were selling themselves. Kim has actually currently started to enhance the marketing activities of Samsung and really quickly it will become one of its core strength like manufacturing if not better.

VRIO.

Value.

Samsung operates styles, manufactures and sell a vast portfolio of customer electronics. It runs in an incredibly competitive environment and has actually successfully placed itself as the maker of quality products. So, the answer is yes.

Rarity.

As, said previously that From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Analysis operates in a highly competitive environment, which implies all the companies have similar items. The response for rarity is no.

Imitability.

Due to the nature of the industry, it is very easy for rivals to comprehend the functionality of the products and quickly make their own models. Yes, Samsung is just behind IBM in signing up brand-new patents each year, however the advantage is really short-term in this industry.

Company.

Chairman Lee has entirely turnaround Samsung, from going almost insolvent throughout the Asian monetary crisis of 1997 to the leading 25 company worldwide. Certainly yes there appertains company in the business and the outcomes speak for themselves.

External Environmental Analysis

PESTLE Analysis

Political

Being an international brand name spread nearly in every nation worldwide, majority of the environments like USA, Europe, China and so on, are extremely conductive for its operations. It faces some political pressures in less developed nations where law and order situation is not good. Latin American, African and some Asian countries fall in this category, where political instability do have an effect on From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Help operations.

Economic

Purchasing power of clients is important for companies like Samsung to prosper and grow. Emerging markets like India, middle-eastern nations etc. provide development opportunities, whereas, due to recession even the clients of industrialized nations suffer severely. It is very important for the company to keep an eye on the continuous economic situation of the country prior to going into the market.

Socio-Cultural

Multinational companies need to face various social and cultural issues during its operations in a foreign nation. Samsung has likewise dealt with numerous issues however have adopted to the local environments of the majority of the nations remarkably well. It has customized its items, practices, policies and so on appropriately in order to be successful.

Technological

With a yearly expenditure of 2.4 billion dollars in Research study & Advancement, and with continuous ingenious item launches, From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Analysis is among the leading innovative business of the world. With a clear objective to be ahead of the rest when it concerns technological improvements, Samsung has actually risen to the no 25 of the leading successful companies of the world.

Legal

Each country has their own laws and policies, being a multinational company Samsung need to strictly follow those laws in their jurisdictions. Failure to do so, will result in severe legal consequences. It has to study or work with a regional law expert before starting its operations in a particular nation.

Environmental

With the rising awareness amongst customers about the ecological & ethical infractions of companies, Samsung needs to guarantee that it follows all the security standards. Ecological damages, ethical misconducts are not appropriate and in some nations the effects can be very serious. On the other hand it has to do some Corporate Social Responsibility practices to reveal the locals that it appreciates their environment and individuals.

Porter's 5 Forces

Danger of Alternative

Danger of alternative for Samsung's each item category is quite substantial. Aspects for high threat of replacement for From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Analysis Mobile phone consist of the existence of high number of providers and Market saturation in industrialized nations, which make the expense of changing for consumers nearly absolutely no. Along with it, Samsung printing solutions products are threatened by the increasing destination of customers towards cloud storage.

Rivalry Amongst Existing Companies:

The rivaly amongst Samsung and its close competitors is intense. The significant reason behind this is the method of market saturation in numerous number of item classifications, requiring Samsung to introduce more innovative features in existing products and new innovative products to maintain its development. The major competitors for From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Analysis samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO and so on.

From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Analysis has a large supply chain consisting of about 2700 suppliers across 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 potential size and worth. These huge orders allow Samsung to negotiate prices with its suppliers. Nevertheless, due to incapability of From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Solution to construct its own software, it has to outsource its software development to Google, which becomes a prospective supplier of software for Samsung, leading to high bargaining power of Google. In most of From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Help has a power to negotiate costs, however it offer substantial costs to its providers to develop a strong supply chain and to have strong relationships with its suppliers.

Bargaining Power of Purchasers:

Haggling power of buyers for numerous variety of product categories of Samsung is intense. Among the aspect causing the extreme bargaining power is the availability of large number of rivals in nearly each product category i.e. rivals of Samsung Mobile phone, with an extremely little differentiation. The high schedule of suppliers of Smart devices with minimum distinction, make the switching cost for purchasers nearly no, thus increasing the bargaining power of buyers. Market saturation in the majority of the item categories likewise make the bargaining power of purchasers more extreme in for From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Solution. In spite of igh bargaining power Samsung is rather efficient in offering its products at a higher cost than much of its competitors, due to high end quality item and a reasonable brand name image.

Risk of New Entrants:

Danger of brand-new entrants for Samsung is rather low. One of the major aspect for low danger of brand-new entrants is the high competition in the industry. The requirement of huge quantity of capital to enter in the market is also one of the possible barrier to entry. Along with it, requirement of substantial expertise and research study and development expenses for survival in the industry likewise make brand-new entrants hesitant to enter in the market. Market saturation is also among the barrier of entry in innovation industry. High bargaining power of providers force the players in the industry to charge as low rates as possible and this can just be attained by production efficiency. Brand-new firms, in majority cases, lack the production efficiency, for this reason increasing the threats for entrance in the innovation market.

Competitive Analysis

Samsung's high item diversity provides it differentiation from its rivals. Unlikely to its close rivals consisting of Sony, Intel and Nokia, who focus majority on a single product classification with Sony focusing on consumer electronics, Nokia on cell phones and Intel on chips, From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Help had a substantial R&D spending on all of its product categories which make it possible for the business to earn prospective earnings from sales of nearly all of its items.

The company ranks first in 4 product classifications i.e. DRAM Chips, LCD Displays, Cinema TVs and Microwave ovens, in terms of global market share, among 8 various product categories. Samsung was the international leader in manufacturing DRAM, SRAM and NAND flash chips. Samsung earnings from chips was less than Intel but its earnings from chips was growing faster than Intel and has grown close to the profits levels of Intel, as provided in the case Exhibit 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 mobile phone's sales development was 51% as compare to Motorola with only 4% and Nokia with absolutely no sales development. The major reson behind Samsung's high development 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 in case Display 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 From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Analysis in LCD market, however, it had also started joint endeavor with Samsung in 2003 for LCD producing, reducing the competitors for Samsung.

Porter's Competitive Strategy

Low Cost Management strategy of porter is completely executed by Samsung the way they achieve economies of scale by enhancing their core competencies of production. They constantly bring something new and ingenious whether it's an item or a service.

Alternatives

Alternative Solution 1

The Chief Marketing Officer (CMO) of From Free Lunch To Black Hole Credit Default Swaps At Aig Case Study Analysis would develop a brand-new brand name image by targeting the more youthful generation of the specific nation. As, especially smart phones of Samsung are popular among the younger group.

Pros

1. It is the best technique to build Consumer Life time Worth (CLV) by creating a long-term relationship with customers. Build commitment through providing value and profit for long-term, as research study has actually revealed it is much cheaper to maintain current consumers than to attract brand-new ones.
2. Another pro of this alternative is that word of mouth spread more quickly among more youthful people and which in turn will bring in brand-new clients for my products.

Cons

1. Old customers who were related to Samsung before may not like this brand-new image the company is trying to represent.
2 It will incur additional expenses to rearrange some products and it may not even bring success as the patterns change really rapidly amongst the younger market.

Alternative service 2.

It would be done by arranging training workshops throughout which importance of marketing will be taught and numbers will be provided. Marketing environment ought to be produced internally first as genuine 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 frequently resist modification due to the fact that they fear it.

Recognize the best alternative

Very first alternative is the best as it plainly has more pros since once a Customer Life time Worth is constructed the business will benefit from it till that customer is alive and has acquiring power also. Plus, our target consumers are the younger generation which are bound to live longer than the existing old age people. Nonetheless, Samsung's main objective is to produce loyalty amongst its clients and make them redeemed it from them and even buy their different products also.

Application Plan

• Targeting more youthful generation through social marketing, producing a relate to them like Pepsi do with music. And set the expectations practical and achievable.
• A group consisting of best marketing and sales specialists need to be put together, and both views should be taken into account before securing the resources needed to execute the strategy.
• Thorough communication of the strategy ought to be done as it is very crucial for everyone to be on the exact same page to make it work.
• Jobs and timelines need to be develop and interacted appropriately to each person accountable.
• The supervisor ought to use a control panel which shows the progress of all the tasks which have actually been done or about to be done and by whom.
• The supervisor need to monitor and keep a consistent examine the individual and overall performance.
• Everybody should want to adjust midway because any new trend or policy may be available in due to which all the important things currently planned need to be changed. It's better to have contingency plans already prepared.
• At the end of the campaign the supervisor must communicate the results and if successful ought to commemorate with the group.

Budget plan

The M-net program revealed compelling analysis about the low and high growth prospective areas and how much marketing spending plan must be assigned appropriately. This modification the budget allotment of various nations and numerous supervisors were unhappy and argued but the analysis done by the program was accurate and revealed figures like North America and Russia growth possible merited a 35% allocation while they were getting 45%. Whereas, China and Europe must be getting 42% however were rather provided 31%. It truly assisted to fairly distribute the resources and capture more clients by investing more on ads on the high development potential areas of the world.

Conclusion

Its constant financial investment in R&D and innovative practices have propelled them to brand-new heights but for them its' only the start and they desire to be among the leading 3 brand names in the world. Their marketing efforts must be directed towards more youthful demographic amidst the internal arguments about marketing and must create Consumer Life time Worth as it will not just provide them benefits now but will continue to gain it till the customer lifetime. As the cost of retaining the customer is much less expensive than bring in a brand-new one.