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Lyondell Chemical Company 2 Case Study Solution & Analysis


Introduction

Historically, the business's core clients include the Original Devices Manufacturers (OEMs), which utilized to sell Lyondell Chemical Company 2 Case Study Analysis products withtheir own brand name. Its customer circle includes Original Equipment Manufacturers (OEMs), who utilized to offer Samsung items with their own brand name. He rearranged Samsung as a global brand and informed his divisional supervisors to comprehend marketing and its value.

Problem Declaration

Samsung's shift from an item based to a marketing company is not going as smoothly as planned.Overcoming the reluctance of divisional supervisors to incorporate marketing effectively is still a major challenge. Producing a constant brand identity throughout the entire world and employing marketing techniques that best fits the local culture is no simple task. The M-net program analysis have been actually useful in determining the high and less possible development locations, but allocation of resources accordingly is not well received amongst the managers. There is no agreement amongst the hierarchy relating to the very best suited future technique.

Situational Analysis

Yun had a quite clear photo in his mind about how Lyondell Chemical Company 2 Case Study Analysis can change from a low end to a high end item provider. He knew that change can just be done through placing Samsung as a company providing high-end items and this might just be done through high level of marketing.

In spite of having a clear vision about how to develop Samsung brand, with a possible assistance of its executives, Yun faced a number of marketing challenges in early years of its efforts.

One of 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 products do not required marketing for increasing sales. As their focus towards marketing was rather low in their previous organisation practices, and the existing marketing requirement was excessive high, the space was too larger and to fill this space 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 a challenge to carry out marketing preparation and to develop marketing budgets for existing as well as for brand-new items from the very beginning, and this would take a substantial time.

A substantial shift would be needed in current marketing expenses to develop the Samsung brand. This would result in increased marketing expenditures for Samsung and could disrupt the administration relating to increased costs, as they were hesitant to marketing expenditures previously and an unexpected huge shiftwould make them disrupt.

Internal Analysis
SWOT Analysis
Strengths


Lyondell Chemical Company 2 Case Study Analysis strengths lie in its substantial product portfolio. Samsung has largest number of patents in the industry with overall number of 15499 patents given in United States( USP).

Another strength of Lyondell Chemical Company 2 Case Study Help is its capability to establish ingenious products at a continuous rate. It major shows for the innovation and item designing of Samsung is that the company has actually gotten so many awards for its innovation and product style.

Unlike Apple and other competitors, Samsung is focused on producing devices which can be quickly integrated with any kind of open source Operating System (OS) and software. This offers Samsung an edge over Apple devices.

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

Weaknesses

Samsung's weaknesses are hidden in the company's dependence on outsourcing software for its devices due to company's failure in developing software application, unlike Sony. Lyondell Chemical Company 2 Case Study Analysis likewise has low earnings margins as compare to Apple due to big difference in the prices of Apple and Samsung with a much lower distinction in quality.

Opportunities

Opportunities for Samsung lie in the growing Smartphone market and the company's efficiency in the market. It can increase its market share and earnings from cellular phone as the company is rather effective in mobile phone market. Samsung currently runs in about 80 nations and the company has an opportunity to increase its geographical expansion by moving towards more emerging markets outside Asia. Samsung can move towards acquisitions to obtain patents. It would allow the company to increase its item portfolio with a boost in its wealth.

Risks

The vibrant industry environment of innovation market posture a severe hazard on Samsung's survival and require the business to invest much of its revenues share on R&D in order to survive in the long run. The marketplace saturation in developed nations i.e. saturation of mobile business is likewise a huge hazard for the company's development in the presence of strong rivals like Apple.

4 P's of Marketing

Product

Samsung offers quality items and has a rather rich portfolio which caters to different sectors. LCD and mobile phones are the most significant products of Samsung, whereas DRAM is also not far behind in comparison of them.

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

Price.

Lyondell Chemical Company 2 Case Study Analysis uses both market competitive and market skimming pricing strategies for its wide variety of items. In competitive rates it adjusts the cost according to the competitors in order to gain advantage, whereas, it uses market skimming technique where the product has actually an included worth and by offering a few items it can reach break-even.

Location.

It has among the very best supply chain networks, with retail distributors, their own sole suppliers, E commerce channels like Amazon etc. All its products are timely supplied to the selling location/ delivered to the clients directly in case of online order.

Promotion.

It wasn't a popular business outside of Korea till 1993. However the management initiative taken by their CEO has pushed them to market more effectively outside the borders and now it has actually entered the league of top 25 business worldwide in just 9 years. This is an exceptional achievement regardless of the continuous arguments amongst the managers about embracing marketing practices. It utilizes both offline & online channels of promo to market their items. Paid item advertisements, social promo and digital ads are uses to create awareness about Samsung products.

Value Chain Analysis.

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

Inbound Logistics.

It has one of the most effective and efficient supply chain network and has more than 2700 suppliers throughout numerous industries all over the world. Nearly 80% of which is based in Asia and the remaining worldwide. For its inbound logistics it owns various logistics companies as it subsidiaries. It takes care of its providers and produces an unified relationship with them and even lowered their payment cycles to enhance this relationship further which includes worth to their chain network.

Operations.

Samsung's core proficiency is its mass producing it produces 90% of its items in-house. Divided into 3 different divisions its operations are specifically IT & Mobile Communications, Gadget Solutions and Consumer Electronic Devices. It is maintaining operation hubs worldwide to even more add value to its worth chain network.

Outbound Logistics.

Its outbound logistics system performance is among the primary reasons Lyondell Chemical Company 2 Case Study Analysis has the ability to take on Apple. Samsung's own Electronic Logitec system plays a significant role in the outbound logistics operations. It even carries out the tasks of collection of payment, settling insurance coverage claims, etc. on behalf of Samsung.

Marketing and Sales.

Drawing in target customer attention towards the product is done through marketing and sales to communicate with them the worth and competitive advantage the item uses. Lyondell Chemical Company 2 Case Study Analysis marketing budget plan is continuously increasing considering that they started their repositioning globally and will continue to do so as they are continuously looking to invest and broaden in high possible growth markets. The spending plan is invested in events, print and media advertisements, public relations and so on.

Samsung Service. Samsung put their consumers on top and continuously strive to deliver unmatchable customer service requirements. As after sales service is becoming very important to keep customers pleased and engaged, they even carry out surveys through third parties to learn their customer's feedback and implement it in the favorable method to lower or if possible entirely remove their consumer issues. By adding a direct support line to call them 24 hr they have actually further increased the added value of Lyondell Chemical Company 2 Case Study Analysis service.

Division.

Lyondell Chemical Company 2 Case Study Solution has actually diversified market segmentation, based upon its arrangement of large range of items to a great deal of customers. Samsung target client sectors can be divided into 3 classifications i.e. Lyondell Chemical Company 2 Case Study Help IT and Mobile Communications, Samsung Customer Electronic Devices and Samsung Gadget solutions.

Geographic.

Lyondell Chemical Company 2 Case Study Solution geographical segmentation is based upon 2 criteria i.e. region and density. Samsung serves about 80 nations worldwide with its items offered to Urban as well as Backwoods of the nation. The Samsung is also growing its worldwide presence and the business's versatility in locating its plants encourages international expansion of Samsung.

Demographic.

Samsung produces products that can be used by both males and women. The target customers for Samsung IT and mobile interaction products have an age variety of 18-65 with bulk at a young or freshly 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 segmentation of Lyondell Chemical Company 2 Case Study Solution s based upon the social class and the lifestyle of the customer. Samsung target consumers on the basis of social class are primarily upper middle, middle and working class customers, as Samsung sell items like cell phones not much less expensive i.e. Motorola as well as not much costly i.e. Apple. It supplies quality items to middle level consumers at a somewhat high cost than others targeting the very same segment.

Behavioural.

Lyondell Chemical Company 2 Case Study Help majority target consumers have distinct behavioural attributes. It has consumers with an enthusiastic, fashionable and determined character with moderate level of commitment towards the brand name. Its customers have some degree of shift towards other prominent brand names i.e. Apple. The majority of Samsun clients desire quality in addition to expense control. Due to the fact that of its moderate costs with a degree of quality, they are brought in towards Samsung.

Quantitative analysis.

Sales of Samsung has actually increased astonishingly 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 financial obligation from 15 billion $ to 4.6 billion $. Digital media is the biggest selling category of Samsung with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales. Due to the fact that of the high overhead cost, incomes/ sales are increasing however net profit is not increasing accordingly. New expansions and working with's were the primary factor of the increase in the overhead costs, with china currently not providing any profit to Samsung, however there is so much potential in the present market with 75 % yet to be explored.

Qualitative analysis.

Yes, this choice is based upon the objective of Kim to target the younger audience and produce a worldwide brand name picture of the business. Whereas, the core strength of the business is presently making but long gone are those days when excellent items were offering themselves. In the present age marketing is really important and companies can not prosper without it. Kim has already started to reinforce the marketing activities of Samsung and very soon it will turn into one of its core strength like making if not much better.

VRIO.

Value.

Samsung operates designs, manufactures and offer a vast portfolio of customer electronic devices. It runs in an exceptionally competitive environment and has effectively positioned itself as the maker of quality products. The response is yes.

Rarity.

As, stated previously that Lyondell Chemical Company 2 Case Study Analysis runs in an extremely competitive environment, which implies all the business have comparable products. So, the response for rarity is no.

Imitability.

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

Company.

Chairman Lee has completely turn-around Samsung, from going almost insolvent during the Asian financial crisis of 1997 to the leading 25 business on the planet. Definitely yes there appertains company in the business and the results speak for themselves.

External Ecological Analysis

PESTLE Analysis

Political

Being an international brand name spread nearly in every nation worldwide, bulk of the environments like U.S.A., Europe, China etc., are really conductive for its operations. Nevertheless, it deals with some political pressures in less developed nations where law and order scenario is not good. Latin American, African and some Asian countries fall in this category, where political instability do have a result on Lyondell Chemical Company 2 Case Study Solution operations.

Economic

Purchasing power of consumers is vital for companies like Samsung to succeed and grow. Emerging markets like India, middle-eastern nations and so on offer growth chances, whereas, due to economic crisis even the clients of developed nations suffer severely. It is very crucial for the business to keep an eye on the continuous financial circumstance of the country before going into the market.

Socio-Cultural

International companies have to deal with different social and cultural issues during its operations in a foreign country. Samsung has actually also dealt with numerous problems however have actually adopted to the regional environments of most of the countries incredibly well. It has actually tailored its items, practices, policies and so on appropriately in order to succeed.

Technological

With a yearly expenditure of 2.4 billion dollars in Research study & Development, and with continuous ingenious product launches, Lyondell Chemical Company 2 Case Study Analysis is among the leading ingenious business of the world. With a clear mission to be ahead of the rest when it concerns technological developments, Samsung has increased to the no 25 of the leading effective companies of the world.

Legal

Each country has their own laws and policies, being a multinational business Samsung need to strictly follow those laws in their jurisdictions. Failure to do so, will lead to serious legal effects. So, it has to study or hire a local law expert prior to beginning its operations in a particular country.

Environmental

With the increasing awareness amongst customers about the ethical & ecological offenses of companies, Samsung has to guarantee that it follows all the safety guidelines. Ecological damages, ethical misconducts are not acceptable and in some nations the repercussions can be very serious. On the other hand it has to do some Business Social Responsibility practices to show the locals that it appreciates their environment and individuals.

Porter's 5 Forces

Risk of Alternative

Danger of replacement for Samsung's each item category is quite significant. Factors for high hazard of substitution for Lyondell Chemical Company 2 Case Study Analysis Mobile phone include the existence of high number of providers and Market saturation in industrialized nations, 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 customers towards cloud storage.

Competition Amongst Existing Firms:

The rivaly among Samsung and its close rivals is extreme. The significant reason behind this is the technique of market saturation in numerous number of item categories, requiring Samsung to introduce more innovative functions in existing products and brand-new ingenious products to maintain its growth. The major competitors for Lyondell Chemical Company 2 Case Study Solution samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO etc.

Lyondell Chemical Company 2 Case Study Analysis has a vast supply chain consisting of about 2700 providers across 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 potential size and worth. These huge orders enable Samsung to work out prices with its suppliers. Due to incapability of Samsung to construct its own software application, it has to outsource its software development to Google, which becomes a prospective provider of software for Samsung, resulting in high bargaining power of Google. In most of Lyondell Chemical Company 2 Case Study Analysis has a power to negotiate prices, however it supply substantial costs to its suppliers to build a strong supply chain and to have strong relationships with its providers.

Bargaining Power of Purchasers:

Haggling power of buyers for numerous number of item classifications of Samsung is intense. Among the aspect leading to the intense bargaining power is the accessibility of a great deal of rivals in nearly each item classification i.e. rivals of Samsung Smart device, with a very little distinction. The high accessibility of providers of Smart devices with minimum differentiation, make the changing cost for purchasers nearly zero, hence increasing the bargaining power of buyers. Market saturation in the majority of the item classifications likewise make the bargaining power of buyers more extreme in for Lyondell Chemical Company 2 Case Study Analysis. In spite of igh bargaining power Samsung is quite efficient in selling its products at a greater price than much of its rivals, due to luxury quality product and a reasonable brand image.

Risk of New Entrants:

Danger of brand-new entrants for Samsung is quite low. Among the significant element for low hazard of brand-new entrants is the high competitors in the market. The requirement of substantial quantity of capital to enter in the market is likewise among the prospective barrier to entry. Along with it, requirement of huge know-how and research and development expenditures for survival in the industry likewise make new entrants hesitant to go into in the marketplace. Market saturation is likewise one of the barrier of entry in technology industry. High bargaining power of providers require the players in the industry to charge as low prices as possible and this can only be accomplished by production performance. New companies, in bulk cases, lack the production effectiveness, thus increasing the risks for entryway in the innovation market.

Competitive Analysis

Samsung's high product diversity supplies it differentiation from its competitors. Unlikely to its close competitors including 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, Lyondell Chemical Company 2 Case Study Solution had a big R&D spending on all of its item classifications which enable the business to earn potential revenue from sales of nearly all of its items.

The company ranks first in 4 item classifications i.e. DRAM Chips, LCD Displays, Big Screen TVs and Microwave, in regards to global market share, amongst 8 various item classifications. Samsung was the international leader in making DRAM, SRAM and NAND flash chips. Although, Samsung earnings from chips was less than Intel but its incomes from chips was growing faster than Intel and has grown close to the revenue levels of Intel, as given up the case Exhibit 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 cell phone's sales growth 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 business's high-end quality cellular phone.

Samsung was likewise profiting from increasing market share of high-end LCDs as given up case Exhibit 3. The major factor, making the business allow to avail the opportunity is its mass production at low expense. Sony was the greatest competitor for Lyondell Chemical Company 2 Case Study Solution in LCD market, however, it had also begun joint endeavor with Samsung in 2003 for LCD producing, reducing the competition for Samsung.

Porter's Competitive Method

Low Expense Leadership method of porter is completely implemented by Samsung the way they attain economies of scale by enhancing their core proficiencies of production. Even to the point that their competitor SONY chose to form an alliance with them to manufacture for them, due to the fact that they were unable to take on them on low expense. Differentiation is another technique well implemented by Samsung by continuous investment in the R&D and remaining ahead of the competition. They constantly bring something new and ingenious whether it's a service or a product.

Alternatives

Alternative Solution 1

The Chief Marketing Officer (CMO) of Lyondell Chemical Company 2 Case Study Help would create a brand-new brand image by targeting the more youthful generation of the particular nation. As, particularly cellphones of Samsung are incredibly popular amongst the more youthful market.

Pros

1. It is the best strategy to build Client Lifetime Worth (CLV) by creating a long-term relationship with consumers. Develop loyalty through delivering value and profit for long-term, as research study has actually revealed it is more affordable to retain current customers than to bring in brand-new ones.
2. Another pro of this option is that word of mouth spread quicker amongst more youthful people and which in turn will bring in new consumers for my items.

Cons

1. Old customers who were associated with Samsung before may not like this new image the business is attempting to portray.
2 It will sustain additional expenses to rearrange some items and it might not even bring success as the patterns alter very rapidly among the more youthful group.

Alternative option 2.

Samsung has actually made making its core competency for the most part of their service and due to which its supervisors are not afraid to totally get out of their comfort zone. It would be done by setting up training workshops during which importance of marketing will be taught and numbers will be offered. Failure to get the passing ratings will get benched. Marketing environment need to be created internally initially as real marketing begins inside the corporation.

Pros

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

Cons

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

Recognize the best alternative

Option is the best as it plainly has more pros since when a Client Life time Value is developed the business will benefit from it till that consumer is alive and has buying power. Plus, our target customers are the more youthful generation which are bound to live longer than the current old age individuals. Samsung's main objective is to develop loyalty among its clients and make them repurchase it from them and even buy their different items.

Implementation Strategy

• Targeting more youthful generation through social marketing, producing a link with them like Pepsi do with music. And set the expectations reasonable and attainable.
• A team consisting of finest marketing and sales experts should be assemble, and both views should be taken into account prior to securing the resources required to implement the plan.
• Thorough interaction of the strategy should be done as it is really crucial for everybody to be on the very same page to make it work.
• Jobs and timelines should be develop and interacted appropriately to each person accountable.
• The manager must use a dashboard which reveals the development of all the tasks which have actually been done or about to be done and by whom.
• The supervisor should keep track of and keep a constant examine the specific and general efficiency.
• Everyone need to want to adjust midway since any brand-new pattern or policy may come in due to which all the important things already planned have to be changed. It's better to have contingency plans currently prepared.
• At the end of the campaign the manager must communicate the results and if effective need to commemorate with the team.

Budget

This change the budget allowance of different nations and numerous managers were dissatisfied and argued but the analysis done by the program was accurate and showed figures like North America and Russia development prospective merited a 35% allowance while they were getting 45%. It really assisted to fairly disperse the resources and catch more clients by spending more on advertisements on the high development capacity areas of the world.

Conclusion

Its consistent investment in R&D and ingenious practices have actually moved them to new heights however for them its' just the start and they want to be amongst the top 3 brands in the world. Their marketing efforts should be directed towards younger market amidst the internal arguments about marketing and should create Client Lifetime Worth as it will not only provide them benefits now but will continue to enjoy it till the customer life time. As the expense of maintaining the consumer is much more affordable than bring in a brand-new one.