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Lumismart B Answering The Call For Negawatts 2 Case Study Solution and Analysis


Intro

Lumismart B Answering The Call For Negawatts 2 Case Study Help is a well-known international brand in technology industry, founded in 1938 by Lee Byung Chul, in South Korea. Lumismart B Answering The Call For Negawatts 2 handle a great deal of product categories consisting of 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 proficiency of Samsung lie in its low price 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 Lumismart B Answering The Call For Negawatts 2 Case Study Solution products with their own trademark name. Samsung was not merely known outside Korea. There were likewise no or little interest in constructing the brand worldwide. Marketing budget was managed by production department with a prime focus on supplying inexpensive products.During the 1997 Asian Financial Crisis the company almost got bankrupt, but with the Vision of Chairman Lee it entirely turn its fortune around and in 2002 was listed the leading 25 most important company worldwide. When Kim was employed as a Chief Marketing Officer in 2000 the business was not even listed. He rearranged Samsung as a global brand and informed his divisional managers to comprehend marketing and its importance. Now their objective is to reach the top 10 by 2005.

Problem Statement

Samsung's transition from an item based to a marketing company is not going as efficiently as planned.Overcoming the hesitation of divisional supervisors to incorporate marketing successfully is still a significant challenge. Producing a constant brand name identity across the whole world and employing marketing strategies that finest fits the regional culture is no simple job.

Situational Analysis

Yun had a rather clear picture in his mind about how Lumismart B Answering The Call For Negawatts 2 Case Study Solution can change from a low end to a high end product supplier. He knew that improvement can only be done through positioning Samsung as a business providing high-end items and this could only be done through high level of marketing.

In spite of having a clear vision about how to construct Samsung brand, with a prospective support of its executives, Yun faced several marketing difficulties in early years of its efforts.

One of the marketing challenges for Yun was the understandings of executives about the worth of marketing. They considered marketing and selling as same tools and believed that quality items do not needed marketing for increasing sales. As their focus towards marketing was rather low in their previous company practices, and the existing marketing requirement was too much high, the gap was too wider and to fill this space with incorrect perceptions about marketing was quite difficult for Yun.

Along with it the product range of the business was increasing with the ripening of brand-new item concepts by the R&D sector of Samsung. Yun had an obstacle to carry out marketing planning and to produce marketing budget plans for existing as well as for new items from the very beginning, and this would take a big time.

A substantial shift would be needed in existing marketing expenses to construct the Lumismart B Answering The Call For Negawatts 2 Case Study Solution brand. This would lead to increased marketing expenses for Samsung and might interrupt the administration concerning increased costs, as they were reluctant to marketing expenditures formerly and a sudden huge shiftwould make them interrupt. This could result in decreasing executive assistance for global marketing. In this situation, Yun deals with a challenge for validating increased marketing expenses by showing the long term value of big marketing expenditures.

Internal Analysis
SWOT Analysis
Strengths


Samsung strengths depend on its huge item portfolio. Samsung has biggest variety of patents in the industry with total variety of 15499 patents granted in United States( USP). Large amount of R&D costs has actually enabled the business to grow its product portfolio at a higher rate than its rivals. Lumismart B Answering The Call For Negawatts 2 Case Study Analysis spent about $13.079 billion on its R&D sector in 2016, which is 7.3% of its overall profits.

Another strength of Lumismart B Answering The Call For Negawatts 2 Case Study Help is its capability to develop innovative products at a continuous rate. It major proves for the innovation and product developing of Samsung is that the company has gotten many awards for its innovation and product design.

Unlike Apple and other rivals, Samsung is concentrated on producing gadgets which can be quickly integrated with any kind of open source Os (OS) and software. This provides Samsung an edge over Apple gadgets.

Samsung's ability to produce luxury items at low cost of production is likewise one of the significant strength of Samsung as it makes it possible for the business to record more market by supplying quality items with cost control.

Weak points

Samsung's weak points are concealed in the company's dependence on outsourcing software application for its gadgets due to business's failure in establishing software, unlike Sony. Lumismart B Answering The Call For Negawatts 2 Case Study Analysis likewise has low earnings margins as compare to Apple due to substantial difference in the prices of Apple and Samsung with a much lower difference in quality.

Opportunities

Opportunities for Lumismart B Answering The Call For Negawatts 2 Case Study Solution lie in the growing Smartphone market and the business's effectiveness 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.

Threats

The vibrant industry environment of technology market position a serious risk on Samsung's survival and require the business to invest much of its incomes 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 also a huge risk for the company's development in the presence of strong competitors like Apple.

4 P's of Marketing

Item

Lumismart B Answering The Call For Negawatts 2 Case Study Help provides quality products and has a rather abundant portfolio which deals with different sectors. The majority of the items are in the leading three of their respective markets. LCD and cellphones are the biggest products of Samsung, whereas DRAM is likewise not far behind in contrast of them. Following is the product line of Samsung:

• LCD/ TV
• Laptops.
• Smart phone.
• A/c unit.
• Desktop computer.
• Hard drives.
• Washing machines.
• Fridges.
• Cams.
• Microwaves.
• Flash memory.
• DRAM.

Rate.

Lumismart B Answering The Call For Negawatts 2 Case Study Analysis utilizes both market competitive and market skimming prices techniques for its variety of items. In competitive prices it changes the price according to the competition in order to acquire advantage, whereas, it utilizes market skimming method where the product has an added worth and by selling a couple of products it can reach break-even.

Place.

It has among the very best supply chain networks, with retail suppliers, their own sole suppliers, E commerce channels like Amazon and so on. All its items are prompt supplied to the selling place/ delivered to the clients directly in case of online order.

Promo.

It wasn't a well-known business outside of Korea until 1993. The management effort taken by their CEO has actually pressed them to market more effectively outside the borders and now it has entered the league of top 25 business in the world in simply 9 years. This is an impressive accomplishment in spite of the continuous arguments amongst the managers about embracing marketing practices. It uses both offline & online channels of promotion to market their products. Paid product ads, social promotion and digital ads are utilizes to produce awareness about Samsung products.

Value Chain Analysis.

It's an analytical structure for determining organisation activities that add worth or competitive benefit for the company.

Incoming Logistics.

It has one of the most reliable and effective supply chain network and has over 2700 providers throughout numerous industries around the globe. Nearly 80% of which is based in Asia and the staying around the world. For its inbound logistics it owns various logistics firms as it subsidiaries. It takes care of its providers and develops a harmonious relationship with them and even decreased their payment cycles to increase this relationship further which includes worth to their chain network.

Operations.

Samsung's core proficiency is its mass making it produces 90% of its items in-house. Divided into three various departments its operations are specifically IT & Mobile Communications, Device Solutions and Customer Electronics. It is keeping operation hubs worldwide to even more add value to its value chain network.

Outbound Logistics.

Its outbound logistics system performance is one of the main reasons Lumismart B Answering The Call For Negawatts 2 Case Study Solution is able to take on Apple. Samsung's own Electronic Logitec system plays a major function in the outgoing logistics operations. It even performs the jobs of collection of payment, settling insurance coverage claims, etc. on behalf of Samsung.

Marketing and Sales.

Bring in target customer attention towards the product is done through marketing and sales to communicate with them the worth and competitive benefit the product uses. Lumismart B Answering The Call For Negawatts 2 Case Study Help advertising spending plan is continually on the rise considering that they began their repositioning worldwide and will continue to do so as they are continually wanting to invest and expand in high prospective development markets. The budget is invested in events, print and media ads, public relations etc.

Samsung put their customers at the top and continuously make every effort to provide unmatchable consumer service standards. By including a direct assistance line to contact them 24 hours they have actually further increased the added worth of Samsung service.

Division.

Lumismart B Answering The Call For Negawatts 2 Case Study Analysis has diversified market division, based upon its arrangement of vast array of products to a great deal of customers. Samsung target client sections can be divided into 3 categories i.e. Lumismart B Answering The Call For Negawatts 2 Case Study Help IT and Mobile Communications, Samsung Consumer Electronic Devices and Samsung Gadget options.

Geographical.

Lumismart B Answering The Call For Negawatts 2 Case Study Help geographical division is based upon 2 requirements i.e. area and density. Samsung serves about 80 nations worldwide with its products offered to Urban as well as Backwoods of the nation. The Samsung is likewise growing its global existence and the business's versatility in finding its plants motivates global growth of Samsung.

Market.

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

Psychographic.

The psychographic division of Lumismart B Answering The Call For Negawatts 2 Case Study Help s based upon the social class and the lifestyle of the customer. Samsung target consumers on the basis of social class are mainly upper middle, middle and working class clients, as Samsung sell products like mobile phone very little less expensive i.e. Motorola in addition to not much expensive i.e. Apple. It offers quality items to middle level customers at a slightly high price than others targeting the same section.

Behavioural.

Lumismart B Answering The Call For Negawatts 2 Case Study Analysis bulk target consumers have special behavioural characteristics. They are attracted towards Samsung due to the fact that of its moderate costs with a level of quality.

Quantitative analysis.

Sales of Samsung has actually increased remarkably from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net revenue of.48 billion $ to 5.9 billion $. It has likewise decreased its debt from 15 billion $ to 4.6 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. Since of the high overhead cost, revenues/ sales are increasing but net revenue is not increasing accordingly. New expansions and employing's were the primary reason of the increase in the overhead expenses, with china presently not supplying any revenue to Samsung, however there is a lot capacity in the existing market with 75 % yet to be explored.

Qualitative analysis.

Whereas, the core strength of the business is currently producing but long gone are those days when excellent products were selling themselves. Kim has already begun to enhance the marketing activities of Samsung and really soon it will become one of its core strength like producing if not better.

VRIO.

Worth.

Samsung runs styles, makes and offer a large portfolio of customer electronic devices. It runs in an extremely competitive environment and has actually effectively placed itself as the maker of quality products. The response is yes.

Rarity.

As, stated earlier that Lumismart B Answering The Call For Negawatts 2 Case Study Solution operates in an extremely competitive environment, which suggests all the business have comparable items. So, the answer for rarity is no.

Imitability.

Due to the nature of the industry, it is very easy for rivals to understand the performance of the products and quickly make their own designs. Yes, Samsung is only behind IBM in registering brand-new patents every year, but the advantage is extremely short-term in this industry.

Company.

Chairman Lee has entirely turnaround Samsung, from going nearly bankrupt throughout the Asian financial crisis of 1997 to the top 25 business in the world. Absolutely yes there is proper company in the company and the results speak for themselves.

External Environmental Analysis

PESTLE Analysis

Political

Being an international brand spread almost in every country worldwide, bulk of the environments like U.S.A., Europe, China and so on, are really conductive for its operations. It deals with some political pressures in less industrialized nations where law and order situation is not good. Latin American, African and some Asian nations fall in this category, where political instability do have an impact on Lumismart B Answering The Call For Negawatts 2 Case Study Solution operations.

Economic

Purchasing power of customers is crucial for companies like Samsung to grow and succeed. Emerging markets like India, middle-eastern nations and so on supply development chances, whereas, due to economic crisis even the consumers of developed countries suffer terribly. It is really important for the company to keep an eye on the continuous financial situation of the country prior to going into the market.

Socio-Cultural

Multinational business have to deal with numerous social and cultural concerns during its operations in a foreign country. Samsung has likewise faced many problems but have embraced to the regional environments of most of the nations extremely well. It has customized its items, practices, policies etc. accordingly in order to succeed.

Technological

With a yearly expenditure of 2.4 billion dollars in Research study & Development, and with constant innovative item launches, Lumismart B Answering The Call For Negawatts 2 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 pertains to technological developments, Samsung has actually increased to the no 25 of the top successful companies of the world.

Legal

Each nation has their own laws and policies, being an international company Samsung need to strictly follow those laws in their jurisdictions. Failure to do so, will lead to severe legal consequences. So, it needs to study or hire a regional law professional prior to beginning its operations in a specific country.

Environmental

With the increasing awareness amongst customers about the ethical & ecological infractions of companies, Samsung has to guarantee that it follows all the safety standards. Ecological damages, ethical misconducts are not appropriate and in some countries the consequences can be extremely severe. On the other hand it needs to do some Business Social Responsibility practices to reveal the locals that it appreciates their environment and people.

Porter's 5 Forces

Risk of Alternative

Hazard of alternative for Samsung's each product classification is quite significant. Running in an incredibly dynamic market lead the business to deal with a high risk of substitution. Factors for high risk of replacement for Lumismart B Answering The Call For Negawatts 2 Case Study Solution Smart device consist of the presence of high number of providers and Market saturation in developed nations, that make the cost of changing for customers practically absolutely no. Substitution dangers for Samsung visual display lie in the changing lifestyle of customers. Clients can switch to seeing visuals in the house towards outside activities. Along with it, Samsung printing options items are threatened by the increasing tourist attraction of customers towards cloud storage.

Competition Amongst Existing Companies:

The rivaly among Samsung and its close rivals is intense. The major factor behind this is the approach of market saturation in various number of item classifications, requiring Samsung to present more ingenious features in existing items and brand-new innovative items to preserve its development. The major rivals for Lumismart B Answering The Call For Negawatts 2 Case Study Analysis samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO etc.

( Samsung Sustainability Report, 2016) Provider's bargaining power for Samsung is low as Samsung runs economies of scale and its orders are of possible size and worth. Due to incapability of Lumismart B Answering The Call For Negawatts 2 Case Study Solution to build its own software, it has to outsource its software application development to Google, which becomes a potential provider of software for Samsung, resulting in high bargaining power of Google.

Bargaining Power of Buyers:

Bargaining power of purchasers for various variety of product classifications of Samsung is intense. Among the factor resulting in the extreme bargaining power is the availability of a great deal of competitors in almost each item classification i.e. competitors of Samsung Mobile phone, with a really little distinction. The high availability of providers of Smart devices with minimum differentiation, make the switching cost for purchasers nearly absolutely no, thus increasing the bargaining power of buyers. Market saturation in the majority of the product categories likewise make the bargaining power of buyers more extreme in for Lumismart B Answering The Call For Negawatts 2 Case Study Solution. In spite of igh bargaining power Samsung is rather efficient in selling its items at a greater rate than much of its competitors, due to luxury quality product and a reasonable brand name image.

Threat of New Entrants:

Threat of new entrants for Lumismart B Answering The Call For Negawatts 2 Case Study Analysis is rather low. Along with it, requirement of huge expertise and research study and development expenditures for survival in the industry likewise make new entrants hesitant to go into in the market. Market saturation is likewise one of the barrier of entry in 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 bulk on a single product classification with Sony focusing on consumer electronics, Nokia on cell phones and Intel on chips, Lumismart B Answering The Call For Negawatts 2 Case Study Solution had a big R&D spending on all of its product categories which allow the company to earn prospective income from sales of nearly all of its products.

The company ranks initially in 4 item classifications i.e. DRAM Chips, LCD Displays, Cinema Televisions and Microwave, in regards to worldwide market share, among 8 different item categories. Samsung was the international leader in producing DRAM, SRAM and NAND flash chips. Samsung revenues from chips was less than Intel but its profits from chips was growing faster than Intel and has grown close to the profits levels of Intel, as given in the case Exhibition 2.

Along with the chips Samsung mobile market was also thriving 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 development. 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 also profiting from increasing market share of high-end LCDs as given in case Display 3. The significant reason, making the business enable to obtain the opportunity is its mass production at low cost. Sony was the most significant rival for Lumismart B Answering The Call For Negawatts 2 Case Study Help in LCD market, nevertheless, it had also begun joint endeavor with Samsung in 2003 for LCD manufacturing, lessening the competitors for Samsung.

Porter's Competitive Technique

Low Cost Leadership strategy of porter is fully carried out by Samsung the way they attain economies of scale by strengthening their core proficiencies of production. They always bring something brand-new and innovative whether it's a service or a product.

Alternatives

Alternative Option 1

The Chief Marketing Officer (CMO) of Lumismart B Answering The Call For Negawatts 2 Case Study Solution would create a new brand image by targeting the more youthful generation of the specific country. As, specifically cellphones of Samsung are popular amongst the more youthful market.

Pros

1. It is the very best technique to build Consumer Lifetime Worth (CLV) by creating a long-term relationship with clients. Develop loyalty through providing worth and reap the benefits for long-term, as research has showed it is much cheaper to retain current clients than to bring in new ones.
2. Another pro of this option is that word of mouth spread more quickly amongst more youthful individuals and which in turn will generate brand-new consumers for my items.

Cons

1. Old consumers who were connected with Samsung before might not like this new image the business is trying to depict.
2 It will sustain further expenditures to rearrange some items and it might not even bring success as the trends change very rapidly 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 provided. Marketing environment ought to be developed internally first as real marketing begins inside the corporation.

Pros

1. Its pro will be that all the marketing approach fans will come out and also the opposite ones.

Cons

2. Its con can create a really unhealthy environment in the work environment, as individuals frequently withstand modification because they fear it.

Recognize the best alternative

Option is the best as it plainly has more pros since as soon as a Consumer Lifetime Worth is constructed the business will benefit from it till that consumer is alive and has purchasing power. Plus, our target consumers are the more youthful generation which are bound to live longer than the existing aging individuals. Samsung's primary objective is to create commitment among its consumers and make them redeemed it from them and even buy their different items.

Execution Plan

• Targeting younger generation through social marketing, developing a relate to them like Pepsi make with music. And set the expectations realistic and achievable.
• A group consisting of best marketing and sales experts should be put together, and both views must be taken into consideration prior to securing the resources required to execute the plan.
• Thorough communication of the strategy need to be done as it is really essential for everybody to be on the very same page to make it work.
• Tasks and timelines must be develop and communicated appropriately to each person responsible.
• The supervisor ought to use a control panel which shows the progress of all the jobs which have been done or about to be done and by whom.
• The manager need to keep track of and keep a constant look at the general and specific efficiency.
Because any new trend or policy might come in due to which all the things currently prepared have actually to be adjusted, • Everyone should be willing to adjust midway. It's much better to have contingency plans currently prepared.
• At the end of the campaign the manager must communicate the outcomes and if successful must commemorate with the team.

Budget plan

This modification the budget allocation of lots of supervisors and different countries were dissatisfied and argued however the analysis done by the program was accurate and showed figures like North America and Russia growth possible warranted a 35% allocation while they were receiving 45%. It really helped to fairly disperse the resources and capture more consumers by investing more on advertisements on the high development capacity areas of the world.

Conclusion

Its consistent financial investment in R&D and ingenious practices have actually moved them to new heights but for them its' only the start and they desire to be amongst the top 3 brands in the world. Their marketing efforts need to be directed towards more youthful demographic amidst the internal arguments about marketing and ought to create Consumer Life time Value as it will not just give them benefits now but will continue to enjoy it till the client life time. As the expense of retaining the consumer is much cheaper than bring in a new one.