Luca De Meo Speaks At Harvard Business School 2 Case Study Solution & Analysis
Luca De Meo Speaks At Harvard Business School 2 Case Study Help is a well-known worldwide brand name in innovation market, established in 1938 by Lee Byung Chul, in South Korea. Luca De Meo Speaks At Harvard Business School 2 deals in large number of product categories including Semiconductors, Telecommunications, Digital Media, Digital Appliances and a lot more other electronic products. Historically, the business's core consumers consist of the Original Devices Manufacturers (OEMs), which used to offer Samsung products withtheir own brand name. Till early 1990s, the core competency of Samsung lie in its low cost offerings than its competitors by producing existing products at economies of scale. Its customer circle includes Original Devices Manufacturers (OEMs), who utilized to offer Luca De Meo Speaks At Harvard Business School 2 Case Study Help items with their own trademark name. Samsung was not simply known outside Korea. There were also no or little interest in constructing the trademark name globally. Marketing spending plan was controlled by production department with a focal point on offering cheap products.During the 1997 Asian Financial Crisis the business practically got bankrupt, but with the Vision of Chairman Lee it completely turn its fortune around and in 2002 was listed the leading 25 most important company on the planet. When Kim was worked with as a Chief Marketing Officer in 2000 the company was not even listed. He rearranged Samsung as an international brand and educated his divisional supervisors to understand marketing and its value. Now their objective is to arrive 10 by 2005.
Samsung's transition from a product based to a marketing company is not going as efficiently as planned.Overcoming the unwillingness of divisional managers to integrate marketing effectively is still a significant challenge. Developing a constant brand identity throughout the whole world and employing marketing methods that best fits the regional culture is no easy job. The M-net program analysis have actually been really practical in determining the high and less prospective growth areas, but allotment of resources appropriately is not well received amongst the supervisors. There is no consensus amongst the hierarchy relating to the best matched future technique.
Luca De Meo Speaks At Harvard Business School 2 Case Study Solution efforts for developing its brand across the world was started after presenting the "brand-new management effort" by Chairman Lee in 1993. The goal was to change Samsung from an inexpensive OEM to a high value-added product company. To make the vision of Samsung a reality, Chairman Lee appointed Yun as a vice chairman in 1997. Yun had a quite clear photo in his mind about how Samsung can change from a low end to a high end product company. He understood that improvement can just be done through positioning Samsung as a company offering high-end items and this could just be done through high level of marketing.
In spite of having a clear vision about how to build Samsung brand name, with a possible support of its executives, Yun faced a number of marketing difficulties in early years of its efforts.
Among the marketing obstacles for Yun was the perceptions of executives about the worth of marketing. They considered marketing and selling as very 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 company practices, and the current marketing requirement was too much high, the gap was too wider and to fill this space with wrong perceptions about marketing was quite tough for Yun.
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 challenge to perform marketing preparation and to create marketing budgets for existing as well as for brand-new items from the very start, and this would take a huge time.
A huge shift would be required in existing marketing expenses to build the Luca De Meo Speaks At Harvard Business School 2 Case Study Help brand. This would lead to increased marketing expenditures for Samsung and could disturb the administration relating to increased expenditures, as they were reluctant to marketing expenditures formerly and an abrupt huge shiftwould make them interrupt. This might lead to declining executive assistance for international marketing. In this scenario, Yun deals with a difficulty for validating increased marketing costs by showing the long term value of big marketing expenditures.
Luca De Meo Speaks At Harvard Business School 2 Case Study Analysis strengths lie in its big product portfolio. Samsung has largest number of patents in the industry with overall number of 15499 patents approved in US( USP).
Another strength of Luca De Meo Speaks At Harvard Business School 2 Case Study Solution is its ability to develop innovative products at a continuous rate. It major shows for the innovation and item creating of Samsung is that the business has gotten so many awards for its development and product style.
Unlike Apple and other competitors, Samsung is focused on producing devices which can be quickly integrated with any kind of open source Operating System (OS) and software application. This supplies 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 makes it possible for the company to catch more market by offering quality items with expense control.
Luca De Meo Speaks At Harvard Business School 2 Case Study Solution weak points are concealed in the company's dependence on outsourcing software application for its devices due to business's inability in developing software application, unlike Sony. Samsung likewise has low revenue margins as compare to Apple due to big difference in the prices of Apple and Samsung with a much lesser difference in quality. The diverse focus of the business due to large number of products in its portfolio, lead to the less efficient production and make the company not able to charge higher rates like Apple. The company is likewise ineffective in handling its patents and frequently deals with the problem of patent infraction.
Opportunities for Samsung depend on the growing Smart device market and the company's performance in the market. It can increase its market share and profits from mobile phone as the company is quite effective in smart phone market. Samsung presently runs in about 80 nations 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 acquire patents. It would allow the business to increase its item portfolio with an increase in its wealth.
The dynamic market environment of innovation industry present an extreme threat on Samsung's survival and require the business to invest much of its profits share on R&D in order to make it through in the long run. The marketplace saturation in industrialized countries i.e. saturation of mobile company is likewise a big risk for the business's development in the existence of strong rivals like Apple.
4 P's of Marketing
Samsung provides quality items and has a rather rich portfolio which caters to different segments. LCD and mobile phones are the biggest products of Samsung, whereas DRAM is likewise not far behind in contrast of them.
• LCD/ TV
• Ac system.
• Disk drives.
• Flash memory.
Luca De Meo Speaks At Harvard Business School 2 Case Study Solution uses both market competitive and market skimming prices methods for its variety of products. In competitive rates it adjusts the price according to the competition in order to acquire advantage, whereas, it utilizes market skimming method where the product has actually 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 distributors, their own sole distributors, E commerce channels like Amazon and so on. All its products are prompt supplied to the selling location/ provided to the consumers straight in case of online order.
It uses both offline & online channels of promo to market their products. Paid item ads, social promo and digital ads are uses to create awareness about Samsung items.
Worth Chain Analysis.
It's an analytical structure for identifying business activities that add value or competitive benefit for the business.
It has one of the most effective and efficient supply chain network and has more than 2700 suppliers throughout numerous markets around the globe. Nearly 80% of which is based in Asia and the staying around the world. For its incoming logistics it owns numerous logistics companies as it subsidiaries. It looks after its providers and develops an unified relationship with them and even reduced their payment cycles to increase this relationship further which includes worth to their chain network.
Samsung's core proficiency is its mass making it produces 90% of its products in-house. Divided into three various departments its operations are namely IT & Mobile Communications, Device Solutions and Consumer Electronics. It is preserving operation centers worldwide to further add worth to its worth chain network.
Its outgoing logistics system efficiency is one of the main factors Luca De Meo Speaks At Harvard Business School 2 Case Study Analysis is able to compete with Apple. Samsung's own Electronic Logitec system plays a significant function in the outgoing logistics operations. It even performs the tasks of collection of payment, settling insurance claims, etc. on behalf of Samsung.
Marketing and Sales.
Bring in target consumer attention towards the product is done through marketing and sales to interact with them the worth and competitive advantage the item provides. Luca De Meo Speaks At Harvard Business School 2 Case Study Solution advertising budget is constantly increasing considering that they started their repositioning globally and will continue to do so as they are continuously seeking to invest and expand in high potential growth markets. The budget is invested in occasions, print and media advertisements, public relations and so on.
Samsung Service. Samsung put their clients at the top and continually make every effort to deliver unmatchable customer care requirements. As after sales service is becoming very essential to keep customers happy and engaged, they even conduct surveys through 3rd parties to learn their client's feedback and implement it in the positive method to reduce or if possible completely eliminate their client concerns. By including a direct assistance line to contact them 24 hours they have actually further increased the added worth of Luca De Meo Speaks At Harvard Business School 2 Case Study Help service.
Luca De Meo Speaks At Harvard Business School 2 Case Study Analysis has actually diversified market division, based upon its provision of wide variety of items to large number of consumers. Samsung target customer sections can be divided into 3 classifications i.e. Luca De Meo Speaks At Harvard Business School 2 Case Study Analysis IT and Mobile Communications, Samsung Consumer Electronics and Samsung Device options.
Luca De Meo Speaks At Harvard Business School 2 Case Study Solution geographical division is based upon two criteria i.e. region and density. Samsung serves about 80 countries worldwide with its items provided to Urban in addition to Rural areas of the nation. The Samsung is likewise growing its international existence and the business's versatility in finding its plants motivates worldwide growth of Samsung.
The demographic segmentation of Luca De Meo Speaks At Harvard Business School 2 Case Study Help is based upon gender, age, life-cycle phase and occupation. Samsung produces items that can be used by both females and males. The target clients for Samsung IT and mobile interaction items have an age series of 18-65 with bulk at a young or newly married life cycle phase. They are primarily employees, experts and students. Apart from it, Samsung Customer Electronics are targeted to a client sector with an age variety of 25-65. They are primarily experts and workers. Samsung Gadget Solutions are targeted at students, employees and professionals with an age range of 25-65.
The psychographic segmentation of Luca De Meo Speaks At Harvard Business School 2 Case Study Analysis s based upon the social class and the life style of the customer. Samsung target customers on the basis of social class are generally upper middle, middle and working class customers, as Samsung offer products like cellular phone very little less expensive i.e. Motorola along with not much costly i.e. Apple. It supplies quality items to middle level customers at a somewhat high rate than others targeting the exact same sector.
Luca De Meo Speaks At Harvard Business School 2 Case Study Analysis bulk target clients have distinct behavioural attributes. They are brought in towards Samsung due to the fact that of its moderate rates with an extent of quality.
Sales of Samsung has increased amazingly from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net earnings of.48 billion $ to 5.9 billion $. It has likewise reduced 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. Due to the fact that of the high overhead expense, revenues/ sales are increasing however net profit is not increasing accordingly. New growths and hiring's were the main reason of the increase in the overhead expenses, 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.
Yes, this decision is based upon the objective of Kim to target the more youthful audience and develop a worldwide brand name picture of the business. Whereas, the core strength of the company is presently producing but long gone are those days when excellent items were offering themselves. In the present age marketing is extremely essential and companies can not be successful without it. Kim has actually currently begun to strengthen the marketing activities of Samsung and soon it will become one of its core strength like making if not better.
Samsung runs designs, produces and sell a vast portfolio of consumer electronics. It operates in an incredibly competitive environment and has effectively placed itself as the maker of quality products. The answer is yes.
As, stated earlier that Luca De Meo Speaks At Harvard Business School 2 Case Study Solution operates in a highly competitive environment, which means all the business have comparable items. So, the answer for rarity is no.
Due to the nature of the industry, it is very simple for competitors to comprehend the performance of the products and easily make their own designs. Yes, Samsung is only behind IBM in signing up new patents each year, but the advantage is really short term in this industry.
Chairman Lee has completely turnaround Samsung, from going almost insolvent during the Asian financial crisis of 1997 to the top 25 company worldwide. Definitely yes there appertains organization in the business and the outcomes speak for themselves.
External Ecological Analysis
Being a multinational brand spread almost in every nation worldwide, majority of the environments like U.S.A., Europe, China and so on, are really conductive for its operations. It faces some political pressures in less developed nations 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 Luca De Meo Speaks At Harvard Business School 2 Case Study Analysis operations.
Purchasing power of consumers is crucial for companies like Samsung to prosper and grow. Emerging markets like India, middle-eastern countries etc. offer development chances, whereas, due to economic crisis even the clients of developed countries suffer severely. It is very crucial for the company to keep an eye on the ongoing financial scenario of the nation prior to getting in the market.
International companies have to deal with different social and cultural problems during its operations in a foreign nation. Samsung has also faced lots of concerns however have actually adopted to the local environments of the majority of the nations remarkably well. It has customized its products, practices, policies etc. appropriately in order to be successful.
With a yearly expenditure of 2.4 billion dollars in Research & Development, and with consistent innovative item launches, Luca De Meo Speaks At Harvard Business School 2 Case Study Help is among the top innovative companies of the world. With a clear mission to be ahead of the rest when it comes to technological improvements, Samsung has increased to the no 25 of the top effective business of the world.
Each country has their own laws and policies, being a multinational business Samsung have to strictly follow those laws in their jurisdictions. Failure to do so, will result in severe legal repercussions. So, it has to study or employ a regional law expert prior to starting its operations in a particular country.
With the increasing awareness among consumers about the ecological & ethical infractions of business, Samsung has to guarantee that it follows all the safety standards. Environmental damages, ethical misconducts are not acceptable and in some nations the effects can be extremely severe. On the other hand it needs to do some Business Social Duty practices to show the locals that it appreciates their environment and people.
Porter's Five Forces
Hazard of Replacement
Danger of replacement for Samsung's each product category is rather significant. Factors for high danger of alternative for Luca De Meo Speaks At Harvard Business School 2 Case Study Help Smart device include the existence of high number of providers and Market saturation in developed nations, which make the expense of changing for consumers nearly zero. Along with it, Samsung printing solutions items are threatened by the increasing tourist attraction of clients towards cloud storage.
Competition Among Existing Companies:
The rivaly amongst Samsung and its close competitors is intense. The significant factor behind this is the approach of market saturation in numerous variety of product classifications, requiring Samsung to present more innovative features in existing products and brand-new ingenious items to maintain its growth. Other aspect for the intense competition among the rivals is the little item differentiation amongst the items. The popular players in the technology industry are quite knowledgeable about the importance of R&D spending for their survival and are encountering a race of marketing and R&D spending, to capture the marketplace. The major rivals for Luca De Meo Speaks At Harvard Business School 2 Case Study Solution samrtphones include Apple, Motorola, LG, Nokia, Huawei, OPPO etc. High competitors rivalry leads to the changing market shares which can be seen in Exhibition F.
Bargaining Power of Suppliers:
( 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. Due to incapability of Luca De Meo Speaks At Harvard Business School 2 Case Study Analysis to develop its own software application, it has to outsource its software application development to Google, which becomes a potential supplier of software application for Samsung, resulting in high bargaining power of Google.
Bargaining Power of Buyers:
Market saturation in many of the product classifications also make the bargaining power of buyers more intense in for Samsung. In spite of igh bargaining power Samsung is rather capable of offering its items at a higher price than much of its competitors, due to high end quality item and a reasonable brand image.
Risk of New Entrants:
Hazard of brand-new entrants for Samsung is rather low. Among the major factor for low danger of new entrants is the high competitors in the industry. The requirement of big amount of capital to go into in the market is also among the prospective barrier to entry. Along with it, requirement of big know-how and research study and development expenses for survival in the market also make brand-new entrants unwilling to go into in the market. Market saturation is likewise among the barrier of entry in innovation market. High bargaining power of providers require the players in the industry to charge as low costs as possible and this can only be accomplished by production performance. New firms, in bulk cases, do not have the production performance, hence increasing the threats for entrance in the innovation industry.
Samsung's high item diversification provides it distinction from its rivals. It is among the 3 leading brand names by market share. Unlikely to its close rivals including Sony, Intel and Nokia, who focus bulk on a single item category with Sony concentrating on customer electronics, Nokia on mobile phone and Intel on chips, Samsung had a big R&D spending on all of its product categories which enable the company to earn possible revenue from sales of almost all of its items. (See Exhibit) However, due to the large item range the company deals with high number of rivals.
The company ranks first in 4 product categories i.e. DRAM Chips, LCD Displays, Big Screen TVs and Microwave, in regards to global market share, amongst 8 different product classifications. Samsung was the global leader in producing DRAM, SRAM and NAND flash chips. Although, Samsung revenues from chips was less than Intel however its profits from chips was growing faster than Intel and has grown close to the profits levels of Intel, as given 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 major reson behind Samsung's high development despite of higher prices than Nokia and Motorola was the company's high-end quality mobile phone.
Samsung was likewise reaping the benefits from increasing market share of luxury LCDs as given in case Exhibit 3. The major factor, making the company make it possible for to avail the chance is its mass production at low cost. Sony was the greatest competitor for Luca De Meo Speaks At Harvard Business School 2 Case Study Solution in LCD market, nevertheless, it had likewise begun joint venture with Samsung in 2003 for LCD manufacturing, minimizing the competition for Samsung.
Porter's Competitive Technique
Low Cost Leadership technique of porter is totally carried out by Samsung the method they attain economies of scale by strengthening their core competencies of production. Even to the point that their rival SONY decided to form an alliance with them to manufacture for them, since they were not able to take on them on low cost. Differentiation is another technique well executed by Samsung by continuous financial investment in the R&D and remaining ahead of the competitors. They constantly bring something innovative and new whether it's a service or a product.
Alternative Solution 1
The Chief Marketing Officer (CMO) of Luca De Meo Speaks At Harvard Business School 2 Case Study Help would create a new brand image by targeting the younger generation of the specific country. As, particularly smart phones of Samsung are very popular amongst the younger market.
1. It is the best method to build Consumer Life time Value (CLV) by developing a long-lasting relationship with consumers. Build loyalty through providing worth and reap the benefits for long-lasting, as research study has showed it is much cheaper to maintain present customers than to draw in brand-new ones.
2. Another pro of this alternative is that word of mouth spread quicker amongst younger individuals and which in turn will bring in brand-new customers for my products.
1. Old customers who were associated with Samsung prior to may not like this new image the business is attempting to depict.
2 It will sustain further costs to reposition some items and it may not even bring success as the patterns change really quickly amongst the more youthful group.
Alternative option 2.
It would be done by organizing training workshops throughout which significance of marketing will be taught and numbers will be given. Marketing environment should be produced internally initially as real marketing starts inside the corporation.
1. Its pro will be that all the marketing approach fans will come out and also the opposite ones.
2. Its con can create a really unhealthy environment in the workplace, as people typically resist change due to the fact that they fear it.
Identify the best option
First alternative is the best as it clearly has more pros due to the fact that once a Customer Life time Worth is developed the company will make money from it till that client is alive and has acquiring power also. Plus, our target consumers are the more youthful generation which are bound to live longer than the present aging people. Samsung's primary goal is to develop loyalty amongst its clients and make them repurchase it from them and even purchase their different items.
• Targeting younger generation through social marketing, creating a relate to them like Pepsi finish with music. And set the expectations achievable and realistic.
• A team consisting of finest marketing and sales experts need to be assemble, and both views must be taken into account prior to protecting the resources required to implement the plan.
• Thorough communication of the plan ought to be done as it is very essential for everybody to be on the same page to make it work.
• Jobs and timelines ought to be build and interacted accordingly to each person responsible.
• The supervisor should use a control panel which shows the development of all the tasks which have actually been done or about to be done and by whom.
• The supervisor should keep track of and keep a constant look at the individual and total efficiency.
• Everyone must want to adapt midway since any new pattern or policy may be available in due to which all the important things currently prepared need to be adjusted. It's better to have contingency plans already prepared.
• At the end of the project the supervisor ought to communicate the results and if successful ought to commemorate with the team.
The M-net program exposed engaging analysis about the low and high growth potential locations and how much advertising spending plan need to be designated appropriately. This change the spending plan allocation of different countries and numerous supervisors were unhappy and argued however the analysis done by the program was accurate and revealed figures like The United States and Canada and Russia development possible merited a 35% allotment while they were getting 45%. Whereas, China and Europe ought to be receiving 42% but were rather given 31%. It actually assisted to fairly disperse the resources and capture more clients by investing more on advertisements on the high growth potential regions of the world.
Its continuous financial investment in R&D and ingenious practices have propelled them to new heights however for them its' only the start and they want to be amongst the leading 3 brand names in the world. Their marketing efforts must be directed towards younger demographic amid the internal arguments about marketing and ought to develop Customer Lifetime Worth as it will not just provide them benefits now however will continue to reap it till the customer lifetime. As the expense of retaining the customer is much cheaper than bring in a new one.