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Lumismart B Answering The Call For Negawatts 2 Harvard Case Study Analysis

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


Intro

Lumismart B Answering The Call For Negawatts 2 Case Study Analysis is a well-known worldwide brand in innovation industry, founded in 1938 by Lee Byung Chul, in South Korea. Lumismart B Answering The Call For Negawatts 2 deals in a great deal of product categories consisting of Semiconductors, Telecom, Digital Media, Digital Appliances and a lot more other electronic items. Historically, the company's core consumers consist of the Original Devices Manufacturers (OEMs), which used to sell Samsung products withtheir own brand. Till early 1990s, the core competency of Samsung lie in its low rate offerings than its competitors by making existing items at economies of scale. Its customer circle consists of Original Equipment Manufacturers (OEMs), who used to offer Lumismart B Answering The Call For Negawatts 2 Case Study Solution products with their own trademark name. Samsung was not simply known outside Korea. There were also no or little interest in constructing the trademark name internationally. Marketing spending plan was controlled by production department with a prime focus on offering low-cost products.During the 1997 Asian Financial Crisis the business almost got insolvent, however with the Vision of Chairman Lee it totally turn its fortune around and in 2002 was noted the leading 25 most important company in the world. When Kim was worked with as a Chief Marketing Officer in 2000 the business was not even noted. He rearranged Samsung as an international brand name and educated his divisional supervisors to comprehend marketing and its value. Now their objective is to reach the top 10 by 2005.

Issue Statement

Samsung's shift from a product based to a marketing company is not going as efficiently as planned.Overcoming the hesitation of divisional managers to integrate marketing effectively is still a significant difficulty. Creating a constant brand identity throughout the entire world and employing marketing methods that best fits the regional culture is no simple task. The M-net program analysis have been actually useful in figuring out the high and less possible growth locations, but allocation of resources accordingly is not well received amongst the supervisors. There is no consensus amongst the hierarchy regarding the best suited future technique.
Executive Summary
Situational Analysis

Lumismart B Answering The Call For Negawatts 2 Case Study Help efforts for building its trademark name across the world was begun after presenting the "brand-new management initiative" by Chairman Lee in 1993. The goal was to change Samsung from a low-cost OEM to a high value-added product supplier. To make the vision of Samsung a reality, Chairman Lee selected 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 transformation can only be done through positioning Samsung as a company using high-end products and this could just be done through high level of marketing.

In spite of having a clear vision about how to develop Samsung brand, with a possible support of its executives, Yun faced a number of marketing obstacles 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 same tools and thought that quality products do not required marketing for increasing sales. As their focus towards marketing was quite low in their previous organisation practices, and the current marketing requirement was too much high, the gap was too broader and to fill this gap with wrong perceptions about marketing was rather challenging for Yun.

Along with it the product variety of the business was increasing with the ripening of brand-new item ideas by the R&D sector of Samsung. Yun had an obstacle to perform marketing preparation and to produce marketing budget plans for existing as well as for brand-new products from the very start, and this would take a huge time.

A substantial shift would be required in present marketing expenses to construct the Lumismart B Answering The Call For Negawatts 2 Case Study Analysis brand name. This would lead to increased marketing expenditures for Samsung and might interrupt the administration concerning increased expenses, as they were reluctant to marketing expenses previously and a sudden huge shiftwould make them disturb. This could result in decreasing executive support for global marketing. In this circumstance, Yun deals with an obstacle for justifying increased marketing expenditures by showing the long term worth of huge marketing expenditures.

Internal Analysis
SWOT Analysis
Strengths


Samsung strengths depend on its substantial item portfolio. Samsung has largest number of patents in the industry with total variety of 15499 patents given in United States( USP). Large amount of R&D spending has made it possible for the business to grow its product portfolio at a greater rate than its rivals. Lumismart B Answering The Call For Negawatts 2 Case Study Solution spent about $13.079 billion on its R&D sector in 2016, which is 7.3% of its total incomes.

Another strength of Lumismart B Answering The Call For Negawatts 2 Case Study Solution is its capability to establish innovative products at a constant rate. It significant shows for the development and item designing of Samsung is that the company has gotten so many awards for its development and item design.

Unlike Apple and other competitors, Samsung is focused on producing gadgets which can be quickly integrated with any type of open source Os (OS) and software application. This supplies Samsung an edge over Apple gadgets.
Porter's 5 Forces Analysis
Samsung's capability to produce luxury items at low cost of production is also among the major strength of Samsung as it allows the company to catch more market by offering quality products with cost control.

Weaknesses

Lumismart B Answering The Call For Negawatts 2 Case Study Analysis weaknesses are concealed in the business's dependence on outsourcing software for its gadgets due to business's inability in developing software, unlike Sony. Samsung likewise has low revenue margins as compare to Apple due to big distinction in the prices of Apple and Samsung with a much lesser difference in quality. The diverse focus of the business due to a great deal of items in its portfolio, lead to the less effective production and make the company unable to charge greater prices like Apple. The business is also inefficient in managing its patents and often deals with the issue of patent offense.

Opportunities

Opportunities for Samsung lie in the growing Smart device market and the company's performance in the market. It can increase its market share and profits from cell phone as the business is rather effective in mobile phone market. Samsung presently runs in about 80 countries and the business has a chance to increase its geographical expansion by moving towards more emerging markets outside Asia. Samsung can move towards acquisitions to acquire patents. It would enable the business to increase its item portfolio with an increase in its wealth.

Hazards

The dynamic market environment of technology market posture a severe risk on Samsung's survival and require the company to spend much of its revenues share on R&D in order to endure in the long run. The marketplace saturation in industrialized nations i.e. saturation of mobile company is likewise a big risk for the business's development in the existence of strong competitors like Apple.

4 P's of Marketing
Swot Analysis
Product

Samsung uses quality items and has a quite abundant portfolio which caters to various sectors. LCD and mobile phones are the most significant items of Samsung, whereas DRAM is likewise not far behind in contrast of them.

• LCD/ TELEVISION
• Laptops.
• Mobile phones.
• A/c unit.
• Desktop computer.
• Hard drives.
• Washer.
• Refrigerators.
• Electronic cameras.
• Microwaves.
• Flash memory.
• DRAM.

Cost.

Lumismart B Answering The Call For Negawatts 2 Case Study Help utilizes both market competitive and market skimming pricing techniques for its wide array of products. In competitive rates it changes the rate according to the competitors in order to get advantage, whereas, it uses market skimming strategy where the product has actually an included value and by selling a few products it can reach break-even.

Location.

It has one of the best supply chain networks, with retail distributors, their own sole suppliers, E commerce channels like Amazon and so on. All its items are prompt supplied to the selling location/ delivered to the customers straight in case of online order.

Promo.
Vrio Analysis
It wasn't a popular business outside of Korea up until 1993. But the management effort taken by their CEO has actually pressed them to market more efficiently outside the borders and now it has actually gotten in the league of leading 25 business in the world in simply 9 years. This is an impressive accomplishment in spite of the ongoing arguments among the managers about embracing marketing practices. It utilizes both offline & online channels of promo to market their items. Paid item ads, social promo and digital advertisements are uses to create awareness about Samsung items.

Value Chain Analysis.

It's an analytical framework for identifying company activities that include value or competitive advantage for the company.

Inbound Logistics.

For its inbound logistics it owns numerous logistics firms as it subsidiaries. It looks after its providers and develops an unified relationship with them and even lowered their payment cycles to increase this relationship even more which adds value to their chain network.

Operations.

Samsung's core competency is its mass making it produces 90% of its items in-house. Divided into 3 different departments its operations are namely IT & Mobile Communications, Gadget Solutions and Customer Electronics. It is maintaining operation hubs worldwide to further include worth to its value chain network.

Outbound Logistics.

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

Marketing and Sales.

Attracting target consumer attention towards the product is done through marketing and sales to interact with them the value and competitive advantage the item offers. Lumismart B Answering The Call For Negawatts 2 Case Study Help marketing budget plan is constantly on the rise given that they began their repositioning worldwide and will continue to do so as they are continuously looking to broaden and invest in high possible development markets. The budget plan is invested in events, print and media ads, public relations etc.

Samsung put their customers at the leading and continually strive to provide unmatchable consumer service standards. By adding a direct support line to contact them 24 hours they have actually further increased the included value of Samsung service.

Segmentation.

Lumismart B Answering The Call For Negawatts 2 Case Study Analysis has actually diversified market division, based upon its arrangement of large range of products to a great deal of consumers. Samsung target customer 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 Customer 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 items provided to Urban in addition to Backwoods of the country. The Samsung is also growing its international existence and the business's flexibility in finding its plants motivates global growth of Samsung.

Market.

The market segmentation of Lumismart B Answering The Call For Negawatts 2 Case Study Solution is based upon gender, age, life-cycle phase and profession. Samsung produces items that can be used by both females and males. The target customers for Samsung IT and mobile communication products have an age series of 18-65 with majority at a young or recently wed life process phase. They are mostly staff members, specialists and trainees. Apart from it, Samsung Consumer Electronic devices are targeted to a client section with an age variety of 25-65. They are mainly workers and experts. Nevertheless Lumismart B Answering The Call For Negawatts 2 Case Study Solution Gadget Solutions are targeted at trainees, employees and specialists with an age range of 25-65.

Psychographic.

The psychographic division of Lumismart B Answering The Call For Negawatts 2 Case Study Solution s based upon the social class and the life style of the consumer. Samsung target consumers on the basis of social class are mainly upper middle, middle and working class clients, as Samsung sell products like cellular phone not much more affordable i.e. Motorola along with not much pricey i.e. Apple. It offers quality items to middle level consumers at a somewhat high cost than others targeting the exact same segment.

Behavioural.

Lumismart B Answering The Call For Negawatts 2 Case Study Solution bulk target consumers have distinct behavioural qualities. It has clients with an ambitious, fashionable and identified character with moderate level of loyalty towards the brand. Its consumers have some degree of shift towards other prominent brand names i.e. Apple. Most of Samsun consumers desire quality along with expense control. Because of its moderate prices with an extent of quality, they are brought in towards Samsung.

Quantitative analysis.

Sales of Lumismart B Answering The Call For Negawatts 2 Case Study Help has 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 classification 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 company is currently making however long gone are those days when good products were selling themselves. Kim has actually currently begun to strengthen the marketing activities of Samsung and really soon it will end up being one of its core strength like producing if not much better.

VRIO.

Value.

Samsung operates designs, produces and offer a vast portfolio of customer electronic devices. It runs in a very competitive environment and has actually successfully positioned itself as the maker of quality products. So, the response is yes.

Rarity.

As, stated previously that Lumismart B Answering The Call For Negawatts 2 Case Study Solution runs in an extremely competitive environment, which suggests all the companies have similar items. The answer for rarity is no.

Imitability.

Due to the nature of the industry, it is really easy for competitors to understand the performance of the items and easily make their own models. Yes, Samsung is just behind IBM in registering brand-new patents yearly, but the advantage is really short term in this industry.

Company.

Chairman Lee has entirely turnaround Samsung, from going practically bankrupt throughout the Asian monetary crisis of 1997 to the leading 25 business in the world. Definitely yes there appertains company in the business and the results speak for themselves.

External Environmental Analysis

PESTLE Analysis

Political

Being a multinational brand spread practically in every country worldwide, bulk of the environments like USA, Europe, China etc., are really conductive for its operations. However, it faces some political pressures in less developed countries where law and order situation is not good. Latin American, African and some Asian countries fall in this classification, where political instability do have an impact on Lumismart B Answering The Call For Negawatts 2 Case Study Analysis operations.

Economic

Buying power of customers is important for business like Samsung to grow and succeed. Emerging markets like India, middle-eastern countries and so on supply development opportunities, whereas, due to recession even the customers of industrialized countries suffer severely. Thus it is extremely essential for the business to keep an eye on the continuous economic scenario of the country before going into the marketplace.

Socio-Cultural

International business need to deal with various social and cultural concerns throughout its operations in a foreign country. Samsung has also faced many issues but have actually embraced to the local environments of most of the countries incredibly well. It has actually customized its items, practices, policies etc. appropriately in order to achieve success.

Technological

With a yearly expenditure of 2.4 billion dollars in Research study & Advancement, and with continuous innovative product launches, Lumismart B Answering The Call For Negawatts 2 Case Study Help is one of the leading ingenious business of the world. With a clear mission to be ahead of the rest when it pertains to technological improvements, Samsung has risen to the no 25 of the top effective business of the world.

Legal

Each nation has their own laws and policies, being an international business Samsung have to strictly follow those laws in their jurisdictions. Failure to do so, will result in major legal effects. So, it needs to study or work with a regional law specialist before starting its operations in a particular nation.

Environmental

With the increasing awareness amongst consumers about the ethical & environmental violations of business, Samsung needs to guarantee that it follows all the safety standards. Environmental damages, ethical misconducts are not appropriate and in some nations the repercussions can be extremely severe. On the other hand it has to do some Business Social Duty practices to reveal the residents that it appreciates their environment and people.

Porter's Five Forces

Threat of Substitution

Hazard of alternative for Samsung's each product classification is rather significant. Elements for high risk of alternative for Lumismart B Answering The Call For Negawatts 2 Case Study Help Smartphone consist of the existence of high number of providers and Market saturation in industrialized countries, which make the expense of changing for customers nearly zero. Along with it, Samsung printing options items are threatened by the increasing tourist attraction of consumers towards cloud storage.

Competition Among Existing Companies:

The rivaly among Samsung and its close rivals is extreme. The significant factor behind this is the approach of market saturation in numerous number of item classifications, forcing Samsung to present more innovative features in existing products and brand-new innovative products to maintain its growth. The significant rivals for Lumismart B Answering The Call For Negawatts 2 Case Study Help samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO and so on.

Lumismart B Answering The Call For Negawatts 2 Case Study Help has a vast supply chain including about 2700 suppliers throughout 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 possible size and worth. These big orders make it possible for Samsung to negotiate costs with its providers. Nevertheless, due to incapability of Lumismart B Answering The Call For Negawatts 2 Case Study Solution to build its own software application, it has to outsource its software advancement to Google, which becomes a potential provider of software application for Samsung, resulting in high bargaining power of Google. Although, in most of cases Samsung has a power to work out prices, but it supply considerable prices to its providers to develop a strong supply chain and to have strong relationships with its suppliers.

Bargaining Power of Buyers:

Bargaining power of buyers for various number of item classifications of Samsung is intense. Among the aspect causing the extreme bargaining power is the schedule of large number of rivals in practically each product classification i.e. competitors of Samsung Smartphone, with a really little distinction. The high availability of providers of Smart devices with minimum differentiation, make the switching expense for purchasers practically zero, for this reason increasing the bargaining power of buyers. Market saturation in most of the item classifications likewise make the bargaining power of buyers more intense in for Lumismart B Answering The Call For Negawatts 2 Case Study Analysis. In spite of igh bargaining power Samsung is rather capable of selling its items at a greater rate than much of its competitors, due to high-end quality product and a reasonable brand image.

Threat of New Entrants:

Risk of new entrants for Lumismart B Answering The Call For Negawatts 2 Case Study Analysis is rather low. Along with it, requirement of huge know-how and research study and advancement expenses for survival in the market also make brand-new entrants hesitant to enter in the market. Market saturation is also one of the barrier of entry in technology market.

Competitive Analysis

Samsung's high product diversity provides it distinction from its rivals. Unlikely to its close competitors consisting of Sony, Intel and Nokia, who focus bulk on a single item classification with Sony focusing on customer electronics, Nokia on cell phones and Intel on chips, Lumismart B Answering The Call For Negawatts 2 Case Study Help had a substantial R&D costs on all of its product classifications which enable the company to earn possible revenue from sales of practically all of its items.

The business ranks first in 4 item classifications i.e. DRAM Chips, LCD Displays, Cinema TVs and Microwave ovens, in terms of international market share, among 8 various item classifications. Samsung was the global leader in manufacturing DRAM, SRAM and NAND flash chips. Samsung profits from chips was less than Intel but its incomes from chips was growing quicker than Intel and has actually grown close to the profits levels of Intel, as offered in the case Display 2.

Along with the chips Samsung mobile market was also growing at a high rate than its rivals i.e. Motorola and Nokia. Samsung's cellular phone's sales growth was 51% as compare to Motorola with only 4% and Nokia with no sales growth. The significant reson behind Samsung's high development despite of greater rates than Nokia and Motorola was the company's high-end quality cell phones.

Samsung was likewise profiting from increasing market share of luxury LCDs as given up case Exhibit 3. The major factor, making the business allow to get the chance is its mass production at low cost. Sony was the most significant rival for Lumismart B Answering The Call For Negawatts 2 Case Study Analysis in LCD market, however, it had also begun joint venture with Samsung in 2003 for LCD manufacturing, reducing the competition for Samsung.

Porter's Competitive Method

Low Cost Leadership strategy of porter is totally executed by Samsung the way they achieve economies of scale by reinforcing their core competencies of manufacturing. Even to the point that their competitor SONY decided to form an alliance with them to make for them, due to the fact that they were not able to take on them on low cost. Differentiation is another strategy well implemented by Samsung by constant investment in the R&D and staying ahead of the competition. They always bring something innovative and new whether it's an item or a service.

Alternatives

Alternative Option 1

The Chief Marketing Officer (CMO) of Lumismart B Answering The Call For Negawatts 2 Case Study Analysis would create a brand-new brand name image by targeting the younger generation of the particular country. As, especially mobile phones of Samsung are popular amongst the more youthful group.

Pros

1. It is the very best strategy to build Customer Lifetime Value (CLV) by producing a long-lasting relationship with customers. Construct commitment through delivering value and reap the benefits for long-term, as research study has revealed it is much cheaper to retain current consumers than to bring in new ones.
2. Another pro of this option is that word of mouth spread quicker amongst more youthful individuals and which in turn will generate brand-new consumers for my products.

Cons

1. Old clients who were connected with Samsung before may not like this brand-new image the company is attempting to represent.
2 It will incur additional costs to reposition some products and it might not even bring success as the trends change very rapidly among the more youthful market.

Alternative option 2.

It would be done by organizing training workshops throughout which value of marketing will be taught and numbers will be given. Marketing environment must be produced internally initially as real 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 create a very unhealthy environment in the office, as people typically withstand change since they fear it.

Identify the very best alternative

Option is the finest as it plainly has more pros because once a Client Life time Value is developed the business will profit from it till that consumer is alive and has acquiring power. Plus, our target customers are the more youthful generation which are bound to live longer than the present aging individuals. Samsung's primary goal is to create commitment among its clients and make them redeemed it from them and even purchase their different items.

Application Strategy

• Targeting younger generation through social marketing, creating a relate to them like Pepsi finish with music. And set the expectations sensible and achievable.
• A team consisting of finest marketing and sales professionals ought to be assemble, and both views ought to be taken into consideration prior to securing the resources required to carry out the strategy.
• Thorough interaction of the strategy should be done as it is very important for everyone to be on the exact same page to make it work.
• Jobs and timelines need to be build and interacted accordingly to each person responsible.
• The manager should utilize a dashboard which shows the progress of all the tasks which have actually been done or about to be done and by whom.
• The supervisor should keep an eye on and keep a constant examine the total and specific efficiency.
• Everyone should want to adapt midway because any new pattern or policy may come in due to which all the things currently planned need to be adjusted. It's much better to have contingency plans already prepared.
• At the end of the campaign the manager must communicate the outcomes and if effective need to celebrate with the group.

Budget plan

This modification the spending plan allowance of numerous managers and various countries were dissatisfied and argued but 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 getting 45%. It actually assisted to relatively disperse the resources and record more consumers by investing more on advertisements on the high growth potential regions of the world.
Recommendations
Conclusion

Its consistent investment in R&D and innovative practices have moved them to new heights however for them its' only the start and they want to be among the top 3 brands in the world. Their marketing efforts should be directed towards more youthful group amidst the internal arguments about marketing and ought to produce Consumer Lifetime Worth as it will not only offer them benefits now however will continue to gain it till the customer life time. As the cost of maintaining the client is much cheaper than drawing in a new one.