Lufthansa 2012 Case Study Solution and Analysis
Historically, the company's core customers include the Original Equipment Manufacturers (OEMs), which used to sell Lufthansa 2012 Case Study Solution items withtheir own brand name. Its customer circle consists of Original Devices Manufacturers (OEMs), who utilized to sell Samsung items with their own brand name. He rearranged Samsung as a global brand name and educated his divisional supervisors to understand marketing and its importance.
Samsung's transition from an item based to a marketing business is not going as efficiently as planned.Overcoming the reluctance of divisional managers to integrate marketing effectively is still a major challenge. Developing a consistent brand name 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 been really handy in determining the high and less potential growth locations, however allotment of resources appropriately is not well gotten among the managers. There is no consensus among the hierarchy relating to the very best matched future method.
Lufthansa 2012 Case Study Solution efforts for constructing its trademark name across the world was started after introducing the "brand-new management effort" by Chairman Lee in 1993. The objective was to change Samsung from a cheap OEM to a high value-added product service provider. To make the vision of Samsung a truth, Chairman Lee selected Yun as a vice chairman in 1997. Yun had a rather clear image in his mind about how Samsung can change from a low end to a high-end product supplier. He understood that transformation can just be done through positioning Samsung as a business 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 construct Samsung brand name, with a potential support of its executives, Yun faced several marketing challenges in early years of its efforts.
One of the marketing obstacles for Yun was the understandings of executives about the value of marketing. They thought about marketing and selling as very same tools and believed that quality items do not required marketing for increasing sales. As their focus towards marketing was quite low in their previous organisation practices, and the present marketing requirement was too much high, the space was too broader and to fill this space with wrong understandings about marketing was quite challenging for Yun.
Along with it the item variety 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 perform marketing preparation and to create marketing spending plans for existing as well as for brand-new items from the very start, and this would take a substantial time.
A substantial shift would be needed in current marketing expenses to construct the Samsung brand. This would result in increased marketing expenses for Samsung and could disrupt the administration relating to increased expenditures, as they were reluctant to marketing expenses previously and a sudden huge shiftwould make them disturb.
Lufthansa 2012 Case Study Analysis strengths lie in its substantial product portfolio. Samsung has largest number of patents in the industry with total number of 15499 patents given in US( USP).
Another strength of Lufthansa 2012 Case Study Help is its capability to establish ingenious items at a continuous rate. It significant proves for the innovation and item creating of Samsung is that the business has actually received a lot of awards for its development and item style.
Unlike Apple and other competitors, Samsung is focused on producing gadgets which can be quickly integrated with any kind of open source Operating System (OS) and software. This supplies Samsung an edge over Apple gadgets.
Samsung's capability to produce luxury products at low cost of production is likewise one of the significant strength of Samsung as it allows the business to capture more market by offering quality items with cost control.
Samsung's weaknesses are concealed in the company's reliance on outsourcing software for its gadgets due to business's failure in developing software, unlike Sony. Lufthansa 2012 Case Study Analysis likewise has low earnings margins as compare to Apple due to substantial distinction in the prices of Apple and Samsung with a much lesser difference in quality.
Opportunities for Lufthansa 2012 Case Study Analysis lie in the growing Mobile phone market and the business's efficiency in the market. Samsung currently runs in about 80 countries and the company has an opportunity to increase its geographical growth by moving towards more emerging markets outside Asia.
The vibrant market environment of technology industry present an extreme risk on Samsung's survival and require the company to invest much of its earnings share on R&D in order to endure in the long run. The marketplace saturation in industrialized countries i.e. saturation of mobile company is likewise a big danger for the business's development in the existence of strong competitors like Apple.
4 P's of Marketing
Lufthansa 2012 Case Study Analysis uses quality items and has a quite rich portfolio which deals with different segments. The majority of the items remain in the top 3 of their respective markets. LCD and cellphones are the biggest items of Samsung, whereas DRAM is also not far behind in contrast of them. Following is the line of product of Samsung:
• LCD/ TELEVISION
• Mobile phones.
• Air conditioning system.
• Hard disks.
• Flash memory.
Lufthansa 2012 Case Study Analysis uses both market competitive and market skimming prices techniques for its variety of products. In competitive pricing it changes the rate according to the competition in order to acquire advantage, whereas, it uses market skimming method where the item has actually an included worth and by offering a few products it can reach break-even.
It has one of the very best supply chain networks, with retail suppliers, 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.
It uses both offline & online channels of promotion to market their products. Paid product ads, social promo and digital advertisements are uses to produce awareness about Samsung products.
Worth Chain Analysis.
It's an analytical structure for identifying organisation activities that include worth or competitive benefit for the company.
It has among the most reliable and effective supply chain network and has more than 2700 providers across numerous markets around the world. Nearly 80% of which is based in Asia and the staying around the globe. For its incoming logistics it owns different logistics firms as it subsidiaries. It cares for its suppliers and develops an unified relationship with them and even lowered their payment cycles to enhance this relationship further which includes value to their chain network.
Samsung's core proficiency is its mass making it produces 90% of its products in-house. Divided into 3 different divisions its operations are namely IT & Mobile Communications, Device Solutions and Consumer Electronic Devices. It is maintaining operation hubs worldwide to further add worth to its value chain network.
Its outgoing logistics system performance is among the main factors Lufthansa 2012 Case Study Analysis is able to compete with Apple. Samsung's own Electronic Logitec system plays a significant role in the outbound logistics operations. It even performs the tasks of collection of payment, settling insurance claims, etc. on behalf of Samsung.
Marketing and Sales.
Drawing in target consumer attention towards the item is done through marketing and sales to interact with them the worth and competitive benefit the product uses. Lufthansa 2012 Case Study Solution advertising budget is continually growing given that they began their repositioning worldwide and will continue to do so as they are continually wanting to expand and invest in high prospective growth markets. The budget is invested in events, print and media advertisements, public relations and so on.
Samsung Service. Samsung put their clients on top and continually strive to provide unmatchable client service requirements. As after sales service is becoming very crucial to keep customers delighted and engaged, they even carry out studies through third parties to find out their customer's feedback and execute it in the positive way to lower or if possible completely eliminate their client concerns. By adding a direct support line to call them 24 hours they have actually even more increased the added worth of Lufthansa 2012 Case Study Analysis service.
Lufthansa 2012 Case Study Solution has diversified market division, based upon its arrangement of large range of items to large number of consumers. Samsung target consumer sectors can be divided into 3 classifications i.e. Lufthansa 2012 Case Study Analysis IT and Mobile Communications, Samsung Customer Electronic Devices and Samsung Device services.
Lufthansa 2012 Case Study Analysis geographic segmentation is based upon two requirements i.e. area and density. Samsung serves about 80 countries worldwide with its products offered to Urban as well as Rural areas of the country. The Samsung is also growing its worldwide existence and the business's flexibility in locating its plants encourages worldwide expansion of Samsung.
Samsung produces items that can be used by both women and males. The target consumers for Samsung IT and mobile communication products have an age range of 18-65 with bulk at a young or recently married life cycle stage. Apart from it, Samsung Customer Electronic devices are targeted to a consumer sector with an age range of 25-65.
The psychographic segmentation of Lufthansa 2012 Case Study Solution s based upon the social class and the life style of the consumer. Samsung target customers on the basis of social class are mainly upper middle, middle and working class clients, as Samsung offer items like cellular phone not much cheaper i.e. Motorola along with not much pricey i.e. Apple. It provides quality products to middle level customers at a slightly high cost than others targeting the same section.
Lufthansa 2012 Case Study Analysis majority target consumers have special behavioural characteristics. They are drawn in towards Samsung since of its moderate rates with a level of quality.
Sales of Lufthansa 2012 Case Study Solution has actually increased astonishingly from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net earnings of.48 billion $ to 5.9 billion $. Digital media is the biggest selling classification of Samsung with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales.
Whereas, the core strength of the business is presently manufacturing but long gone are those days when excellent items were offering themselves. Kim has currently begun to reinforce the marketing activities of Samsung and very soon it will become one of its core strength like producing if not better.
Samsung operates designs, manufactures and offer a large portfolio of consumer electronics. It runs in a very competitive environment and has effectively placed itself as the maker of quality items. So, the response is yes.
As, said previously that Lufthansa 2012 Case Study Solution runs in a highly competitive environment, which implies all the business have comparable items. So, the answer for rarity is no.
Due to the nature of the industry, it is extremely simple for rivals to comprehend the functionality of the items and quickly make their own designs. Yes, Samsung is only behind IBM in registering brand-new patents each year, but the benefit is very short-term in this industry.
Chairman Lee has totally turnaround Samsung, from going practically bankrupt during the Asian monetary crisis of 1997 to the top 25 company on the planet. Absolutely yes there is proper company in the business and the results speak for themselves.
External Environmental Analysis
Being a multinational brand name spread nearly in every country worldwide, bulk of the environments like USA, Europe, China and so on, are very conductive for its operations. Nevertheless, it deals with some political pressures in less industrialized countries where order circumstance is bad. Latin American, African and some Asian nations fall in this classification, where political instability do have an effect on Lufthansa 2012 Case Study Analysis operations.
Buying power of customers is essential for business like Samsung to prosper and grow. Emerging markets like India, middle-eastern countries etc. provide growth chances, whereas, due to recession even the clients of developed nations suffer terribly. Thus it is extremely important for the business to keep an eye on the continuous economic circumstance of the nation prior to entering the market.
International business need to face numerous social and cultural concerns throughout its operations in a foreign nation. Samsung has also dealt with numerous problems but have actually adopted to the regional environments of the majority of the countries extremely well. It has customized its products, practices, policies and so on accordingly in order to succeed.
With a yearly expense of 2.4 billion dollars in Research & Advancement, and with continuous innovative product launches, Lufthansa 2012 Case Study Help is among the leading innovative business of the world. With a clear mission to be ahead of the rest when it concerns technological improvements, Samsung has risen to the no 25 of the leading successful business of the world.
Each country has their own laws and policies, being an international company Samsung have to strictly follow those laws in their jurisdictions. Failure to do so, will lead to severe legal consequences. So, it needs to study or employ a regional law expert prior to starting its operations in a specific country.
With the rising awareness amongst consumers about the ecological & ethical infractions of companies, Samsung needs to guarantee that it follows all the security guidelines. Ecological damages, ethical misconducts are not appropriate and in some countries the effects can be very severe. On the other hand it has to do some Business Social Duty practices to show the locals that it appreciates their environment and people.
Porter's 5 Forces
Hazard of Replacement
Threat of substitution for Samsung's each product category is quite substantial. Running in an exceptionally dynamic industry lead the company to deal with a high risk of alternative. Factors for high risk of substitution for Lufthansa 2012 Case Study Solution Mobile phone consist of the existence of high variety of providers and Market saturation in developed nations, that make the expense of switching for customers nearly no. Substitution dangers for Samsung visual display screen lie in the altering lifestyle of consumers. Customers can change to seeing visuals at home towards outdoor activities. Together with it, Samsung printing solutions items are threatened by the increasing attraction of customers towards cloud storage.
Competition Among Existing Companies:
The rivaly among Samsung and its close rivals is extreme. The major reason behind this is the approach of market saturation in different number of item categories, requiring Samsung to present more innovative functions in existing products and new innovative items to preserve its development. The major competitors for Lufthansa 2012 Case Study Help samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO and so on.
( 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. Due to incapability of Lufthansa 2012 Case Study Help to develop its own software, it has to outsource its software development to Google, which ends up being a prospective provider of software application for Samsung, resulting in high bargaining power of Google.
Bargaining Power of Purchasers:
Market saturation in most of the item classifications also make the bargaining power of purchasers more intense in for Samsung. In spite of igh bargaining power Samsung is quite capable of offering its items at a higher price than much of its competitors, due to high end quality product and a fair brand image.
Threat of New Entrants:
Hazard of brand-new entrants for Lufthansa 2012 Case Study Solution is quite low. Along with it, requirement of huge knowledge and research study and advancement expenditures for survival in the market likewise make new entrants unwilling to enter in the market. Market saturation is also one of the barrier of entry in innovation industry.
Samsung's high product diversity offers it differentiation from its competitors. Unlikely to its close rivals consisting of Sony, Intel and Nokia, who focus majority on a single product category with Sony focusing on consumer electronic devices, Nokia on cell phones and Intel on chips, Lufthansa 2012 Case Study Help had a huge R&D costs on all of its item classifications which make it possible for the business to make possible income from sales of practically all of its products.
The business ranks first in 4 item classifications i.e. DRAM Chips, LCD Displays, Cinema TVs and Microwave, in regards to worldwide market share, among 8 different product classifications. Samsung was the worldwide leader in manufacturing DRAM, SRAM and NAND flash chips. Although, Samsung incomes from chips was less than Intel however its revenues from chips was growing quicker than Intel and has actually grown near the revenue levels of Intel, as given in the case Exhibit 2.
Together with the chips Samsung mobile market was likewise 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 absolutely no sales growth. The major reson behind Samsung's high development despite of greater prices than Nokia and Motorola was the company's high-end quality cellular phone.
Samsung was likewise reaping the benefits from increasing market share of high end LCDs as given up case Display 3. The significant factor, making the business make it possible for to avail the opportunity is its mass production at low expense. Sony was the most significant rival for Lufthansa 2012 Case Study Help in LCD market, nevertheless, it had also started joint endeavor with Samsung in 2003 for LCD manufacturing, decreasing the competition for Samsung.
Porter's Competitive Strategy
Low Expense Leadership technique of porter is completely implemented by Samsung the method they accomplish economies of scale by enhancing their core proficiencies of manufacturing. Even to the point that their competitor SONY chose to form an alliance with them to make for them, because they were not able to compete with them on low expense. Differentiation is another method well executed by Samsung by constant financial investment in the R&D and remaining ahead of the competitors. They constantly bring something ingenious and brand-new whether it's a service or an item.
Alternative Solution 1
The Chief Marketing Officer (CMO) of Lufthansa 2012 Case Study Analysis would develop a new brand name image by targeting the younger generation of the specific nation. As, especially smart phones of Samsung are incredibly popular amongst the younger market.
1. It is the best method to build Consumer Lifetime Worth (CLV) by producing a long-term relationship with customers. Build loyalty through providing worth and profit for long-term, as research has actually showed it is more affordable to keep current clients than to bring in brand-new ones.
2. Another pro of this option is that word of mouth spread faster among more youthful people and which in turn will bring in new consumers for my products.
1. Old customers who were connected with Samsung before might not like this new image the business is attempting to represent.
2 It will sustain more expenditures to rearrange some items and it might not even bring success as the trends change really quickly among the younger market.
Alternative solution 2.
It would be done by organizing training workshops during which importance of marketing will be taught and numbers will be offered. Marketing environment need to be created internally first as real marketing begins inside the corporation.
1. Its pro will be that all the marketing method supporters will come out and likewise the opposite ones.
2. Its con can develop an extremely unhealthy environment in the office, as individuals frequently resist modification because they fear it.
Determine the best option
First option is the best as it clearly has more pros due to the fact that as soon as a Consumer Lifetime Value is developed the business will make money from it till that customer is alive and has purchasing power as well. Plus, our target customers are the younger generation which are bound to live longer than the existing old age people. Samsung's main objective is to produce commitment amongst its clients and make them redeemed it from them and even purchase their various items.
• Targeting younger generation through social marketing, creating a relate to them like Pepsi finish with music. And set the expectations achievable and reasonable.
• A group consisting of finest marketing and sales specialists need to be put together, and both views ought to be considered before securing the resources required to implement the strategy.
• Thorough communication of the plan must be done as it is extremely crucial for everyone to be on the exact same page to make it work.
• Tasks and timelines ought to be build and communicated appropriately to each person responsible.
• The supervisor ought to use a dashboard which shows the progress of all the tasks which have actually been done or about to be done and by whom.
• The manager need to keep track of and keep a consistent check on the general and individual performance.
• Everyone need to want to adjust midway because any brand-new pattern or policy may be available in due to which all the things already planned have to be adjusted. It's much better to have contingency plans currently prepared.
• At the end of the project the supervisor should communicate the results and if successful must celebrate with the group.
This change the spending plan allowance of numerous managers and different nations were dissatisfied and argued but the analysis done by the program was precise and revealed figures like North America and Russia development prospective merited a 35% allotment while they were receiving 45%. It actually assisted to relatively disperse the resources and record more customers by spending more on ads on the high development capacity areas of the world.
Its continuous financial investment in R&D and ingenious practices have actually moved them to brand-new heights however for them its' just the start and they desire to be amongst the leading 3 brands in the world. Their marketing efforts ought to be directed towards younger demographic amidst the internal arguments about marketing and should develop Client Lifetime Value as it will not only provide them advantages now but will continue to reap it till the customer lifetime. As the expense of maintaining the customer is much more affordable than bring in a new one.