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Lundbeck Korea Managing An International Growth Engine 4 Harvard Case Study Solution

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Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution & Analysis


Intro

Historically, the company's core customers include the Original Devices Manufacturers (OEMs), which used to sell Lundbeck Korea Managing An International Growth Engine 4 Case Study Analysis items withtheir own brand name. Its customer circle consists of Original Devices Manufacturers (OEMs), who utilized to sell Samsung products with their own brand name. He rearranged Samsung as an international brand name and educated his divisional managers to understand marketing and its value.

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 supervisors to incorporate marketing effectively is still a major obstacle. Developing a consistent brand identity throughout the whole world and employing marketing strategies that best fits the regional culture is no simple job.

Situational Analysis

Lundbeck Korea Managing An International Growth Engine 4 Case Study Help efforts for developing its trademark name across the world was started after introducing the "new management initiative" by Chairman Lee in 1993. The goal was to change Samsung from a cheap OEM to a high value-added item supplier. To make the vision of Samsung a reality, Chairman Lee selected Yun as a vice chairman in 1997. Yun had a quite clear image in his mind about how Samsung can change from a low end to a high-end product service provider. He understood that improvement can only be done through positioning Samsung as a company using high-end items and this might only be done through high level of marketing.

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

Among the marketing difficulties for Yun was the perceptions of executives about the worth of marketing. They considered marketing and selling as very same tools and thought that quality items do not required 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 larger and to fill this space with incorrect understandings about marketing was rather difficult for Yun.

Along with it the item variety of the business was increasing with the ripening of new item ideas by the R&D sector of Samsung. Yun had a difficulty to carry out marketing preparation and to produce marketing spending plans for existing as well as for new products from the very start, and this would take a substantial time.

A big shift would be required in existing marketing expenditures to develop the Samsung brand name. This would result in increased marketing expenditures for Samsung and might disrupt the administration relating to increased expenses, as they were hesitant to marketing expenses formerly and an unexpected big shiftwould make them disrupt.

Internal Analysis
SWOT Analysis
Strengths


Samsung strengths lie in its substantial item portfolio. Samsung has biggest variety of patents in the market with overall variety of 15499 patents granted in United States( USP). Large quantity of R&D spending has actually enabled the business to grow its item portfolio at a greater rate than its competitors. Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution spent about $13.079 billion on its R&D sector in 2016, which is 7.3% of its overall incomes.

Another strength of Lundbeck Korea Managing An International Growth Engine 4 Case Study Help is its capability to establish ingenious products at a continuous rate. It major proves for the innovation and product designing of Samsung is that the company has actually received many awards for its innovation and product design.

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 application. This supplies Samsung an edge over Apple devices.

Samsung's capability 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 catch more market by providing quality products with expense control.

Weaknesses

Lundbeck Korea Managing An International Growth Engine 4 Case Study Analysis weaknesses are hidden in the company's dependence on outsourcing software application for its devices due to company's inability in establishing software, unlike Sony. Samsung likewise has low earnings margins as compare to Apple due to substantial difference in the rates of Apple and Samsung with a much lower difference in quality. The diverse focus of the company due to a great deal of products in its portfolio, result in the less effective production and make the company unable to charge greater costs like Apple. The company is also ineffective in handling its patents and regularly deals with the issue of patent offense.

Opportunities

Opportunities for Lundbeck Korea Managing An International Growth Engine 4 Case Study Help lie in the growing Smartphone market and the business's effectiveness in the market. Samsung presently runs in about 80 nations and the business has an opportunity to increase its geographical expansion by moving towards more emerging markets outside Asia.

Dangers

The vibrant market environment of innovation market pose a severe hazard on Samsung's survival and require the company to invest much of its profits share on R&D in order to endure in the long run. The marketplace saturation in developed nations i.e. saturation of mobile company is likewise a big threat for the company's development in the existence of strong rivals like Apple.

4 P's of Marketing

Product

Samsung provides quality items and has a rather rich portfolio which caters to different segments. LCD and mobile phones are the greatest products of Samsung, whereas DRAM is likewise not far behind in comparison of them.

• LCD/ TV
• Laptops.
• Cellphone.
• Air conditioner.
• Personal computers.
• Hard disk drives.
• Washing machines.
• Refrigerators.
• Electronic cameras.
• Microwaves.
• Flash memory.
• DRAM.

Price.

Lundbeck Korea Managing An International Growth Engine 4 Case Study Help utilizes both market competitive and market skimming prices methods for its wide range of products. In competitive pricing it changes the cost according to the competitors in order to gain benefit, whereas, it utilizes market skimming method where the product has actually an included worth and by offering a few 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 location/ provided to the customers straight in case of online order.

Promotion.

It wasn't a popular business outside of Korea up until 1993. However the management effort taken by their CEO has actually pushed them to market more effectively outside the borders and now it has gone into the league of leading 25 companies on the planet in simply 9 years. This is a remarkable achievement regardless of the continuous arguments amongst the supervisors about embracing marketing practices. It utilizes both offline & online channels of promo to market their products. Paid item advertisements, social promotion and digital advertisements are utilizes to create awareness about Samsung products.

Worth Chain Analysis.

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

Incoming Logistics.

It has one of the most efficient and effective supply chain network and has more than 2700 providers across various industries all over the world. Nearly 80% of which is based in Asia and the remaining all over the world. For its incoming logistics it owns different logistics companies as it subsidiaries. It takes care of its providers and develops a harmonious relationship with them and even lowered their payment cycles to boost this relationship even more which adds worth to their chain network.

Operations.

Samsung's core proficiency is its mass producing it produces 90% of its products internal. Divided into three various divisions its operations are particularly IT & Mobile Communications, Gadget Solutions and Customer Electronic Devices. It is keeping operation centers worldwide to further add worth to its worth chain network.

Outbound Logistics.

Its outbound logistics system performance is one of the main factors Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution is able to take on Apple. Samsung's own Electronic Logitec system plays a major role in the outbound logistics operations. It even performs the tasks of collection of payment, settling insurance coverage claims, etc. on behalf of Samsung.

Marketing and Sales.

Bring in target consumer attention towards the item is done through marketing and sales to interact with them the value and competitive advantage the product provides. Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution marketing spending plan is continually on the rise given that they started their rearranging globally and will continue to do so as they are constantly looking to invest and broaden in high prospective development markets. The spending plan is invested in occasions, print and media ads, public relations etc.

Samsung put their clients at the leading and constantly aim to deliver unmatchable customer service requirements. By adding a direct assistance line to contact them 24 hours they have actually further increased the added worth of Samsung service.

Division.

Lundbeck Korea Managing An International Growth Engine 4 Case Study Help has actually diversified market division, based upon its provision of vast array of products to a great deal of customers. Samsung target client sections can be divided into 3 categories i.e. Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution IT and Mobile Communications, Samsung Consumer Electronics and Samsung Device services.

Geographical.

Lundbeck Korea Managing An International Growth Engine 4 Case Study Help geographical division is based upon 2 requirements i.e. region and density. Samsung serves about 80 countries worldwide with its items supplied to Urban in addition to Rural areas of the country. The Samsung is likewise growing its worldwide presence and the company's flexibility in finding its plants motivates global growth of Samsung.

Market.

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 variety of 18-65 with bulk at a young or newly married life cycle stage. Apart from it, Samsung Consumer Electronic devices are targeted to a consumer sector with an age range of 25-65.

Psychographic.

The psychographic segmentation of Lundbeck Korea Managing An International Growth Engine 4 Case Study Help s based upon the social class and the life style of the consumer. Samsung target clients on the basis of social class are generally upper middle, middle and working class customers, as Samsung sell products like mobile phone very little more affordable i.e. Motorola in addition to not much costly i.e. Apple. It offers quality products to middle level customers at a slightly high rate than others targeting the same segment.

Behavioural.

Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution bulk target clients have distinct behavioural attributes. It has consumers with an ambitious, stylish and identified character with moderate level of commitment towards the brand. Its customers have some degree of shift towards other popular brands i.e. Apple. Most of Samsun customers want quality as well as cost control. They are drawn in towards Samsung because of its moderate prices with a degree of quality.

Quantitative analysis.

Sales of Lundbeck Korea Managing An International Growth Engine 4 Case Study Help has actually increased amazingly from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net profit 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 presently manufacturing however long gone are those days when great items were offering themselves. Kim has actually already started to strengthen the marketing activities of Samsung and extremely quickly it will become one of its core strength like producing if not better.

VRIO.

Worth.

Samsung operates designs, produces and sell a large portfolio of consumer electronic devices. It operates in an extremely competitive environment and has actually successfully placed itself as the maker of quality items. So, the response is yes.

Rarity.

As, stated earlier that Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution runs in a highly competitive environment, which indicates all the business have similar items. So, the answer for rarity is no.

Imitability.

Due to the nature of the industry, it is really simple for competitors to comprehend the functionality of the products and quickly make their own designs. Yes, Samsung is just behind IBM in registering new patents annually, however the benefit is extremely short-term in this industry.

Organization.

Chairman Lee has completely turnaround Samsung, from going practically insolvent during the Asian financial crisis of 1997 to the leading 25 business on the planet. Certainly yes there is proper company in the business and the outcomes speak for themselves.

External Ecological Analysis

PESTLE Analysis

Political

Being a multinational brand spread practically in every country worldwide, majority of the environments like U.S.A., Europe, China and so on, are very conductive for its operations. Nevertheless, it deals with some political pressures in less industrialized countries where order situation is bad. Latin American, African and some Asian countries fall in this category, where political instability do have an effect on Lundbeck Korea Managing An International Growth Engine 4 Case Study Analysis operations.

Economic

Purchasing power of customers is vital for business like Samsung to prosper and grow. Emerging markets like India, middle-eastern nations and so on offer development chances, whereas, due to economic crisis even the consumers of industrialized countries suffer severely. For this reason it is very essential for the company to keep an eye on the continuous financial scenario of the nation prior to going into the market.

Socio-Cultural

International companies need to deal with different social and cultural concerns during its operations in a foreign country. Samsung has likewise dealt with many issues but have actually embraced to the local environments of the majority of the nations incredibly well. It has tailored its products, practices, policies etc. accordingly in order to achieve success.

Technological

With an annual expenditure of 2.4 billion dollars in Research & Development, and with constant innovative product launches, Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution is one of the leading innovative business of the world. With a clear mission to be ahead of the rest when it pertains to technological advancements, Samsung has increased to the no 25 of the top effective business of the world.

Legal

Each country has their own laws and policies, being a multinational company Samsung have to strictly follow those laws in their jurisdictions. Failure to do so, will lead to severe legal repercussions. It has to study or employ a regional law expert prior to beginning its operations in a specific nation.

Environmental

With the rising awareness among consumers about the ecological & ethical infractions of business, Samsung has to guarantee that it follows all the security guidelines. Environmental damages, ethical misbehaviors are not appropriate and in some nations the effects can be really serious. On the other hand it has to do some Business Social Duty practices to reveal the locals that it cares about their environment and people.

Porter's Five Forces

Danger of Substitution

Risk of substitution for Samsung's each item category is rather considerable. Factors for high danger of substitution for Lundbeck Korea Managing An International Growth Engine 4 Case Study Analysis Mobile phone include the presence of high number of providers and Market saturation in developed nations, which make the expense of changing for consumers almost no. Along with it, Samsung printing options products are threatened by the increasing attraction of consumers towards cloud storage.

Rivalry Among Existing Companies:

The rivaly among Samsung and its close competitors is intense. The significant factor behind this is the approach of market saturation in different number of item categories, requiring Samsung to present more innovative features in existing products and brand-new innovative products to preserve its development. Other aspect for the extreme competition among the competitors is the little item differentiation among the products. The popular players in the technology industry are rather familiar with the value of R&D spending for their survival and are running into a race of marketing and R&D costs, to catch the marketplace. The significant competitors for Lundbeck Korea Managing An International Growth Engine 4 Case Study Analysis samrtphones include Apple, Motorola, LG, Nokia, Huawei, OPPO and so on. High competitors rivalry leads to the changing market shares which can be seen in Exhibition F.

Bargaining Power of Suppliers:

( 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 Lundbeck Korea Managing An International Growth Engine 4 Case Study Help to build its own software, it has to outsource its software application development to Google, which ends up being a possible supplier of software application for Samsung, resulting in high bargaining power of Google.

Bargaining Power of Purchasers:

Market saturation in most of the item categories also make the bargaining power of buyers more intense in for Samsung. In spite of igh bargaining power Samsung is quite capable of offering its products at a higher rate than much of its rivals, due to high end quality product and a reasonable brand image.

Threat of New Entrants:

Risk of new entrants for Lundbeck Korea Managing An International Growth Engine 4 Case Study Solution is rather low. Along with it, requirement of big proficiency and research study and development expenses for survival in the industry also make new entrants hesitant to enter in the market. Market saturation is also one of the barrier of entry in innovation industry.

Competitive Analysis

Samsung's high product diversity provides it distinction from its competitors. It is among the 3 leading brands by market share. Unlikely to its close competitors including Sony, Intel and Nokia, who focus bulk on a single product classification with Sony concentrating on consumer electronics, Nokia on mobile phone and Intel on chips, Samsung had a huge R&D spending on all of its product categories which make it possible for the company to make possible revenue from sales of practically all of its items. (See Display) Nevertheless, due to the wide product range the company deals with high variety of rivals.

The business ranks first in 4 item classifications i.e. DRAM Chips, LCD Displays, Cinema TVs and Microwave ovens, in regards to international market share, among 8 various item classifications. Samsung was the international leader in producing DRAM, SRAM and NAND flash chips. Although, Samsung earnings from chips was less than Intel but its profits from chips was growing quicker than Intel and has actually grown near to the revenue levels of Intel, as given up the case Exhibition 2.

Together with the chips Samsung mobile market was likewise thriving at a high rate than its rivals i.e. Motorola and Nokia. Samsung's mobile phone's sales development was 51% as compare to Motorola with just 4% and Nokia with no sales development. The significant reson behind Samsung's high growth despite of higher prices than Nokia and Motorola was the company's high-end quality mobile phone.

Samsung was likewise profiting from increasing market share of high end LCDs as given up case Display 3. The major reason, making the company make it possible for to obtain the opportunity is its mass production at low cost. Sony was the most significant rival for Lundbeck Korea Managing An International Growth Engine 4 Case Study Help in LCD market, nevertheless, it had also started joint endeavor with Samsung in 2003 for LCD producing, minimizing the competitors for Samsung.

Porter's Competitive Strategy

Low Expense Leadership technique of porter is totally executed by Samsung the way they achieve economies of scale by reinforcing their core competencies of production. They constantly bring something innovative and new whether it's an item or a service.

Alternatives

Alternative Option 1

The Chief Marketing Officer (CMO) of Lundbeck Korea Managing An International Growth Engine 4 Case Study Analysis would produce a new brand image by targeting the younger generation of the specific country. As, particularly cellphones of Samsung are popular amongst the younger demographic.

Pros

1. It is the very best strategy to build Client Life time Value (CLV) by producing a long-term relationship with clients. Build loyalty through providing worth and reap the benefits for long-lasting, as research study has showed it is more affordable to retain present clients than to bring in brand-new ones.
2. Another pro of this alternative is that word of mouth spread more quickly among younger people and which in turn will bring in new clients for my products.

Cons

1. Old clients who were related to Samsung prior to may not like this brand-new image the company is attempting to represent.
2 It will incur further costs to rearrange some products and it might not even bring success as the trends change very quickly amongst the younger group.

Alternative solution 2.

Samsung has made making its core proficiency for the most part of their organisation and due to which its supervisors are not scared to completely step out of their convenience zone. It would be done by organizing training workshops throughout which value of marketing will be taught and numbers will be provided. Failure to get the passing scores will get demoted. Marketing environment should be developed internally initially as real marketing starts inside the corporation.

Pros

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

Cons

2. Its con can produce a really unhealthy environment in the work environment, as individuals often withstand change since they fear it.

Recognize the best option

Very first alternative is the very best as it clearly has more pros because once a Customer Life time Value is built the company will profit from it till that customer is alive and has purchasing power too. Plus, our target customers are the more youthful generation which are bound to live longer than the present aging individuals. However, Samsung's primary goal is to develop loyalty among its consumers and make them repurchase it from them and even purchase their various products as well.

Implementation Plan

• Targeting more youthful generation through social marketing, developing a relate to them like Pepsi finish with music. And set the expectations achievable and sensible.
• A team consisting of finest marketing and sales experts should be put together, and both views should be taken into account before protecting the resources required to implement the plan.
• Thorough interaction of the plan must be done as it is really essential for everyone to be on the exact same page to make it work.
• Jobs and timelines ought to be develop and interacted appropriately to each individual responsible.
• The manager need to 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 manager need to keep an eye on and keep a continuous examine the private and general efficiency.
Due to the fact that any new trend or policy might come in due to which all the things currently prepared have actually to be adjusted, • Everybody must be prepared to adapt midway. It's better to have contingency strategies already prepared.
• At the end of the campaign the manager must interact the results and if successful ought to celebrate with the group.

Spending plan

The M-net program revealed compelling analysis about the low and high growth prospective areas and how much marketing spending plan must be designated accordingly. This modification the spending plan allocation of lots of supervisors and different countries were dissatisfied and argued however the analysis done by the program was precise and showed figures like North America and Russia development potential warranted a 35% allotment while they were getting 45%. Whereas, China and Europe should be getting 42% however were rather offered 31%. It truly assisted to relatively disperse the resources and capture more consumers by investing more on ads on the high growth capacity regions of the world.

Conclusion

Its continuous investment in R&D and ingenious practices have moved them to new heights however for them its' just the start and they desire to be amongst the top 3 brand names in the world. Their marketing efforts should be directed towards more youthful market amidst the internal arguments about marketing and should produce Customer Lifetime Value as it will not just give them advantages now but will continue to reap it till the consumer life time. As the expense of retaining the customer is much more affordable than attracting a new one.