Nestle A Social Media Nightmare Harvard Case Study Help

Home >> Hrm >> Nestle A Social Media Nightmare

Nestle A Social Media Nightmare Case Study Solution and Analysis


Historically, the business's core clients include the Original Devices Manufacturers (OEMs), which used to sell Nestle A Social Media Nightmare Case Study Help products withtheir own brand name. Its customer circle consists of Original Devices Manufacturers (OEMs), who used to offer Samsung products with their own brand name. He repositioned Samsung as an international brand and informed his divisional managers to comprehend marketing and its importance.

Issue Statement

Samsung's transition from an item based to a marketing company is not going as efficiently as planned.Overcoming the hesitation of divisional managers to integrate marketing efficiently is still a major difficulty. Producing a consistent brand identity throughout the entire world and utilizing marketing methods that finest fits the regional culture is no easy job.

Situational Analysis

Nestle A Social Media Nightmare Case Study Help efforts for developing its trademark name throughout the world was started after introducing the "new management initiative" by Chairman Lee in 1993. The goal was to transform Samsung from a low-cost OEM to a high value-added product service provider. To make the vision of Samsung a truth, Chairman Lee selected Yun as a vice chairman in 1997. Yun had a rather clear photo in his mind about how Samsung can change from a low end to a luxury product company. He understood that transformation can just be done through placing Samsung as a company using high-end items and this could just be done through high level of marketing.

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

One of the marketing challenges for Yun was the perceptions of executives about the value of marketing. They thought about marketing and selling as very same tools and thought that quality products do not needed marketing for increasing sales. As their focus towards marketing was quite low in their previous company practices, and the present marketing requirement was excessive high, the gap was too wider and to fill this space with incorrect perceptions about marketing was quite difficult for Yun.

As specified above, marketing focus was extremely low in previous practices, therefore there were no correct marketing budget plans for each of the item on the portfolio. There was no marketing planning provided for the existing items. Along with it the item variety of the business was increasing with the ripening of new product concepts by the R&D sector of Samsung. Yun had a difficulty to carry out marketing preparation and to develop marketing spending plans for existing as well as for brand-new products from the very start, and this would take a huge time.

A huge shift would be required in existing marketing expenditures to develop the Samsung brand. This would result in increased marketing expenditures for Samsung and might disturb the administration regarding increased expenditures, as they were hesitant to marketing expenses formerly and an abrupt huge shiftwould make them disturb.

Internal Analysis
SWOT Analysis

Nestle A Social Media Nightmare Case Study Solution strengths lie in its big product portfolio. Samsung has biggest number of patents in the industry with total number of 15499 patents given in United States( USP).

Another strength of Nestle A Social Media Nightmare Case Study Help is its ability to develop innovative items at a continuous rate. It significant shows for the innovation and item creating of Samsung is that the company has actually received a lot of awards for its development and product design.

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

Samsung's capability to produce high end items at low expense of production is likewise among the major strength of Samsung as it makes it possible for the company to record more market by supplying quality products with cost control.


Samsung's weaknesses are hidden in the business's dependence on outsourcing software application for its devices due to business's inability in establishing software, unlike Sony. Nestle A Social Media Nightmare Case Study Solution also has low earnings margins as compare to Apple due to huge difference in the prices of Apple and Samsung with a much lesser distinction in quality.


Opportunities for Samsung lie in the growing Smart device market and the company's effectiveness in the market. It can increase its market share and incomes from cellular phone as the company is quite efficient in mobile phone market. Samsung presently runs in about 80 nations and the company has an opportunity to increase its geographical growth by moving towards more emerging markets outside Asia. Samsung can move towards acquisitions to obtain patents. It would make it possible for the company to increase its product portfolio with a boost in its wealth.


The dynamic market environment of technology industry present a serious hazard on Samsung's survival and require the business to spend much of its incomes share on R&D in order to survive in the long run. The market saturation in industrialized countries i.e. saturation of mobile business is also a big risk for the business's development in the existence of strong competitors like Apple.

4 P's of Marketing


Samsung provides quality items and has a quite rich portfolio which caters to different sectors. LCD and mobile phones are the biggest items of Samsung, whereas DRAM is also not far behind in contrast of them.

• Laptops.
• Cellphone.
• Ac system.
• Desktop computer.
• Disk drives.
• Washer.
• Fridges.
• Electronic cameras.
• Microwaves.
• Flash memory.


Nestle A Social Media Nightmare Case Study Solution utilizes both market competitive and market skimming rates techniques for its wide variety of products. In competitive prices it adjusts the price according to the competition in order to gain advantage, whereas, it utilizes market skimming technique where the product has an included worth and by offering a couple of products it can reach break-even.


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


It wasn't a well-known company 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 gotten in the league of top 25 business worldwide in just 9 years. This is an exceptional achievement in spite of the ongoing arguments among the supervisors about adopting marketing practices. It utilizes both offline & online channels of promotion to market their products. Paid product ads, social promo and digital advertisements are uses to create awareness about Samsung products.

Value Chain Analysis.

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

Inbound Logistics.

For its incoming logistics it owns different logistics companies as it subsidiaries. It looks after its providers and produces an unified relationship with them and even decreased their payment cycles to improve this relationship further which adds worth to their chain network.


Samsung's core proficiency is its mass manufacturing it produces 90% of its products in-house. Divided into 3 various divisions its operations are specifically IT & Mobile Communications, Gadget Solutions and Consumer Electronics. It is maintaining operation centers worldwide to further include worth to its value chain network.

Outbound Logistics.

Its outbound logistics system efficiency is one of the main factors Nestle A Social Media Nightmare Case Study Analysis has the ability to take on Apple. Samsung's own Electronic Logitec system plays a major function 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.

Attracting target consumer attention towards the product is done through marketing and sales to interact with them the worth and competitive advantage the product offers. Nestle A Social Media Nightmare Case Study Help advertising budget plan is continually rising because they began their rearranging globally and will continue to do so as they are continuously aiming to broaden and invest in high possible development markets. The budget is spent on occasions, print and media ads, public relations etc.

Samsung put their clients at the top and constantly make every effort to provide unmatchable consumer service requirements. By including a direct assistance line to call them 24 hours they have further increased the included value of Samsung service.


Nestle A Social Media Nightmare Case Study Analysis has diversified market division, based upon its arrangement of wide range of products to a great deal of customers. Samsung target consumer sectors can be divided into 3 categories i.e. Nestle A Social Media Nightmare Case Study Help IT and Mobile Communications, Samsung Customer Electronics and Samsung Device solutions.


Nestle A Social Media Nightmare Case Study Analysis geographical division is based upon 2 criteria i.e. region and density. Samsung serves about 80 nations worldwide with its items offered to Urban along with Backwoods of the nation. The Samsung is likewise growing its worldwide existence and the company's versatility in locating its plants motivates global expansion of Samsung.


The demographic division of Nestle A Social Media Nightmare Case Study Analysis is based upon gender, age, life-cycle phase and occupation. Samsung produces items that can be utilized by both women and males. The target consumers for Samsung IT and mobile communication products have an age series of 18-65 with majority at a young or freshly wed life process stage. They are mainly students, experts and employees. Apart from it, Samsung Customer Electronic devices are targeted to a consumer sector with an age range of 25-65. They are primarily experts and workers. However Nestle A Social Media Nightmare Case Study Help Gadget Solutions are targeted at trainees, staff members and specialists with an age range of 25-65.


The psychographic division of Nestle A Social Media Nightmare 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 clients, as Samsung offer items like cellular phone not much cheaper i.e. Motorola along with very little costly i.e. Apple. It supplies quality items to middle level customers at a somewhat high price than others targeting the very same section.


Nestle A Social Media Nightmare Case Study Analysis bulk target consumers have special behavioural attributes. They are drawn in towards Samsung because of its moderate costs with a degree of quality.

Quantitative analysis.

Sales of Nestle A Social Media Nightmare Case Study Analysis has increased remarkably from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net revenue of.48 billion $ to 5.9 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.

Qualitative analysis.

Whereas, the core strength of the company is presently producing however long gone are those days when good products were selling themselves. Kim has actually already begun to strengthen the marketing activities of Samsung and really quickly it will become one of its core strength like manufacturing if not much better.



Samsung operates styles, makes and offer a huge portfolio of consumer electronics. It runs in a very competitive environment and has effectively placed itself as the maker of quality products. The response is yes.


As, stated previously that Nestle A Social Media Nightmare Case Study Help operates in an extremely competitive environment, which means all the business have similar products. So, the answer for rarity is no.


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


Chairman Lee has totally turn-around Samsung, from going nearly insolvent throughout the Asian financial crisis of 1997 to the top 25 business worldwide. Certainly yes there appertains company in the company and the outcomes speak for themselves.

External Ecological Analysis

PESTLE Analysis


Being a multinational brand spread practically in every country worldwide, bulk of the environments like U.S.A., Europe, China and so on, are very conductive for its operations. However, it deals with some political pressures in less industrialized countries where order situation is bad. Latin American, African and some Asian nations fall in this category, where political instability do have an effect on Nestle A Social Media Nightmare Case Study Help operations.


Purchasing power of consumers is vital for companies like Samsung to succeed and grow. Emerging markets like India, middle-eastern countries etc. provide growth opportunities, whereas, due to economic crisis even the consumers of industrialized countries suffer badly. Hence it is very important for the company to watch on the continuous economic circumstance of the nation prior to getting in the marketplace.


Multinational companies have to deal with different social and cultural issues during its operations in a foreign country. Samsung has also dealt with many concerns however have embraced to the regional environments of the majority of the nations exceptionally well. It has actually customized its products, practices, policies and so on appropriately in order to succeed.


With a yearly expenditure of 2.4 billion dollars in Research & Development, and with constant ingenious item launches, Nestle A Social Media Nightmare Case Study Help is among the leading innovative business of the world. With a clear objective to be ahead of the rest when it concerns technological advancements, Samsung has risen to the no 25 of the top successful companies of the world.


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 major legal effects. It has to study or work with a local law specialist prior to starting its operations in a particular country.


With the increasing awareness amongst consumers about the environmental & ethical offenses of business, Samsung has to guarantee that it follows all the safety standards. Environmental damages, ethical misbehaviors are not acceptable and in some nations the consequences can be extremely extreme. On the other hand it has to do some Corporate Social Responsibility practices to reveal the residents that it appreciates their environment and individuals.

Porter's 5 Forces

Threat of Substitution

Threat of replacement for Samsung's each product classification is quite significant. Running in a very vibrant market lead the company to face a high hazard of substitution. Aspects for high danger of alternative for Nestle A Social Media Nightmare Case Study Solution Smart device include the existence of high variety of providers and Market saturation in developed countries, which make the cost of changing for customers practically zero. Replacement threats for Samsung visual screen lie in the changing lifestyle of consumers. Consumers can switch to seeing visuals in the house towards outside activities. Together with it, Samsung printing solutions items are threatened by the increasing destination of consumers towards cloud storage.

Competition Among Existing Firms:

The rivaly amongst Samsung and its close competitors is extreme. The significant reason behind this is the technique of market saturation in numerous variety of item categories, forcing Samsung to introduce more ingenious functions in existing products and brand-new innovative products to keep its growth. Other element for the intense competition amongst the competitors is the little product distinction among the products. The popular players in the innovation market are rather knowledgeable about the value of R&D costs for their survival and are running into a race of marketing and R&D costs, to capture the marketplace. The major rivals for Nestle A Social Media Nightmare Case Study Help samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO etc. High competition rivalry results in the changing market shares which can be seen in Exhibit F.

Bargaining Power of Suppliers:

Nestle A Social Media Nightmare Case Study Solution has a huge supply chain consisting of about 2700 providers across the world.( Samsung Sustainability Report, 2016) Provider's bargaining power for Samsung is low as Samsung runs economies of scale and its orders are of prospective size and worth. These big orders make it possible for Samsung to negotiate costs with its providers. However, due to incapability of Nestle A Social Media Nightmare Case Study Analysis to develop its own software, it has to outsource its software development to Google, which ends up being a potential provider of software for Samsung, resulting in high bargaining power of Google. In most of Nestle A Social Media Nightmare Case Study Solution has a power to negotiate prices, however it provide substantial costs to its providers to build a strong supply chain and to have strong relationships with its providers.

Bargaining Power of Buyers:

Market saturation in many of the item classifications also make the bargaining power of purchasers more extreme in for Samsung. In spite of igh bargaining power Samsung is rather capable of selling its items at a greater cost than much of its competitors, due to high end quality item and a fair brand name image.

Threat of New Entrants:

Hazard of new entrants for Nestle A Social Media Nightmare Case Study Solution is quite low. Along with it, requirement of huge expertise and research study and development expenditures for survival in the industry likewise make brand-new entrants hesitant to go into in the market. Market saturation is also one of the barrier of entry in innovation market.

Competitive Analysis

Samsung's high item diversification supplies it distinction from its rivals. Unlikely to its close competitors consisting of Sony, Intel and Nokia, who focus bulk on a single item category with Sony focusing on customer electronics, Nokia on cell phones and Intel on chips, Nestle A Social Media Nightmare Case Study Help had a substantial R&D costs on all of its item classifications which make it possible for the business to earn potential earnings from sales of practically all of its items.

The company ranks first in 4 item categories 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 worldwide leader in making DRAM, SRAM and NAND flash chips. Samsung incomes from chips was less than Intel however its earnings from chips was growing much faster than Intel and has grown close to the profits levels of Intel, as provided in the case Exhibition 2.

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

Samsung was likewise profiting from increasing market share of high end LCDs as given up case Exhibition 3. The significant reason, making the company make it possible for to avail the chance is its mass production at low cost. Sony was the biggest competitor for Nestle A Social Media Nightmare Case Study Solution in LCD market, however, it had actually also started joint endeavor with Samsung in 2003 for LCD producing, lessening the competition for Samsung.

Porter's Competitive Technique

Low Cost Leadership strategy of porter is completely implemented by Samsung the way they attain economies of scale by enhancing their core competencies of manufacturing. They always bring something innovative and new whether it's a product or a service.


Alternative Solution 1

The Chief Marketing Officer (CMO) of Nestle A Social Media Nightmare Case Study Analysis would create a new brand image by targeting the more youthful generation of the particular nation. As, especially cellphones of Samsung are incredibly popular among the younger group.


1. It is the best method to develop Consumer Life time Worth (CLV) by developing a long-lasting relationship with customers. Develop loyalty through delivering worth and reap the benefits for long-lasting, as research has showed it is more affordable to retain current clients than to draw in new ones.
2. Another pro of this option is that word of mouth spread faster amongst younger individuals and which in turn will generate brand-new consumers for my items.


1. Old customers who were connected with Samsung before may not like this new image the company is trying to depict.
2 It will sustain additional expenses to rearrange some items and it might not even bring success as the trends alter really rapidly among the more youthful demographic.

Alternative option 2.

It would be done by arranging training workshops throughout which importance of marketing will be taught and numbers will be given. Marketing environment need to be created internally first as genuine marketing begins inside the corporation.


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


2. Its con can produce a very unhealthy environment in the workplace, as people frequently resist modification since they fear it.

Identify the best option

Very first alternative is the best as it clearly has more pros because as soon as a Customer Lifetime Worth is constructed the business will benefit from it till that consumer lives and has buying power also. Plus, our target customers are the more youthful generation which are bound to live longer than the present old age individuals. Samsung's primary goal is to develop loyalty amongst its customers and make them repurchase it from them and even purchase their different items.

Execution Plan

• Targeting younger generation through social marketing, creating a link with them like Pepsi make with music. And set the expectations possible and practical.
• A group including finest marketing and sales experts must be put together, and both views need to be taken into consideration prior to protecting the resources needed to implement the plan.
• Thorough interaction of the plan ought to be done as it is really important for everyone to be on the exact same page to make it work.
• Tasks and timelines need to be construct and interacted appropriately to each individual responsible.
• The manager ought to utilize a dashboard which shows the progress of all the jobs which have been done or about to be done and by whom.
• The manager must monitor and keep a constant look at the overall and specific performance.
• Everybody need to be willing to adjust midway since any new pattern or policy may come in due to which all the things currently prepared have to be changed. It's better to have contingency strategies already prepared.
• At the end of the campaign the supervisor ought to communicate the outcomes and if successful need to celebrate with the group.

Spending plan

The M-net program revealed engaging analysis about the low and high growth prospective locations and just how much advertising spending plan should be designated accordingly. This change the budget allowance of many managers and different nations were unhappy and argued however the analysis done by the program was precise and revealed figures like North America and Russia growth prospective merited a 35% allotment while they were getting 45%. Whereas, China and Europe need to be getting 42% but were instead offered 31%. It truly assisted to relatively distribute the resources and capture more customers by spending more on ads on the high growth potential areas of the world.


Nestle A Social Media Nightmare Case Study Analysis is a top 25 business in the world now and prepares to get ahead of Sony who sits presently at no. 20. Its consistent investment in R&D and innovative practices have actually propelled them to brand-new heights however for them its' only the start and they wish to be amongst the leading 3 brand names worldwide. They completely turn-around from practically going bankrupt throughout the Asian Financial Crisis to a world popular brand, understood for quality and development. Their value chain and their core competency their production ability, along-with global brand image structure have seen their sales go from 16 to 44.6 billion $ from 1997-- 2002. With more growth in China and other emerging markets those numbers will only increase further in the future. Their marketing efforts must be directed towards more youthful group in the middle of the internal arguments about marketing and need to create Client Lifetime Value as it will not just provide benefits now however will continue to enjoy it till the customer lifetime. As the cost of maintaining the consumer is much cheaper than drawing in a new one.