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Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Harvard Case Study Analysis

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Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution and Analysis


Introduction

Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help is a widely known global brand name in technology industry, founded in 1938 by Lee Byung Chul, in South Korea. Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships handle large number of item classifications consisting of Semiconductors, Telecommunications, Digital Media, Digital Appliances and much more other electronic items. Historically, the company's core consumers consist of the Original Equipment Manufacturers (OEMs), which used to offer Org items withtheir own trademark name. Till early 1990s, the core competency of Enterprise depend on its low cost offerings than its competitors by manufacturing existing items at economies of scale. Its client circle consists of Original Devices Manufacturers (OEMs), who used to offer Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Analysis items with their own trademark name. Enterprise was not merely understood outside Korea. There were likewise no or little interest in constructing the trademark name globally. Marketing budget plan was controlled by production department with a focal point on supplying inexpensive products.During the 1997 Asian Financial Crisis the business nearly got insolvent, but with the Vision of Chairman Lee it entirely turn its fortune around and in 2002 was noted the top 25 most valuable business on the planet. When Kim was employed as a Chief Marketing Officer in 2000 the company was not even listed. He rearranged Corp as an international brand and informed his divisional supervisors to understand marketing and its value. Now their objective is to arrive 10 by 2005.

Issue Statement

Company's shift from an item based to a marketing company is not going as smoothly as planned.Overcoming the hesitation of divisional managers to incorporate marketing successfully is still a major obstacle. Producing a consistent brand name identity throughout the entire world and utilizing marketing techniques that best fits the local culture is no simple job. The M-net program analysis have been really useful in figuring out the high and less potential growth areas, but allocation of resources accordingly is not well received among the managers. There is no agreement amongst the hierarchy relating to the best matched future strategy.
Executive Summary
Situational Analysis

Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Analysis efforts for constructing its trademark name throughout the world was started after introducing the "brand-new management effort" by Chairman Lee in 1993. The goal was to transform Org from an inexpensive OEM to a high value-added item service provider. To make the vision of Corp a truth, Chairman Lee designated Yun as a vice chairman in 1997. Yun had a rather clear image in his mind about how Business can change from a low end to a high-end item company. He understood that improvement can only be done through positioning Org as a business using high-end products and this might only be done through high level of marketing.

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

One of the marketing challenges for Yun was the understandings of executives about the worth of marketing. They thought about marketing and selling as same tools and believed 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 present marketing requirement was excessive high, the gap was too broader and to fill this space with incorrect perceptions about marketing was quite tough for Yun.

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

A huge shift would be required in current marketing expenditures to construct the Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help brand name. This would lead to increased marketing expenditures for Business and might disturb the administration concerning increased expenditures, as they hesitated to marketing expenditures previously and an unexpected huge shiftwould make them interrupt. This could result in decreasing executive assistance for international marketing. In this circumstance, Yun faces an obstacle for justifying increased marketing costs by demonstrating the long term worth of huge marketing expenses.

Internal Analysis
SWOT Analysis
Strengths


Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help strengths lie in its huge product portfolio. Company has biggest number of patents in the industry with overall number of 15499 patents granted in United States( USP).

Another strength of Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help is its ability to establish ingenious items at a continuous rate. It major shows for the development and item developing of Organization is that the business has received many awards for its innovation and item design.

Unlike Apple and other rivals, Enterprise is focused on producing devices which can be easily integrated with any type of open source Operating System (OS) and software. This offers Corporation an edge over Apple devices.
Porter's 5 Forces Analysis
Business's ability to produce high end items at low cost of production is likewise among the major strength of Corp as it enables the company to capture more market by offering quality items with expense control.

Weaknesses

Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution weak points are hidden in the business's dependence on outsourcing software application for its gadgets due to company's failure in establishing software application, unlike Sony. Corp likewise has low earnings margins as compare to Apple due to substantial distinction in the costs of Apple and Corporation with a much lower difference in quality. The varied focus of the business due to large number of items in its portfolio, result in the less effective production and make the business not able to charge greater prices like Apple. The business is likewise ineffective in handling its patents and regularly faces the issue of patent violation.

Opportunities

Opportunities for Business depend on the growing Smartphone market and the business's efficiency in the market. It can increase its market share and revenues from cell phone as the company is rather effective in mobile phone market. Corporation presently runs in about 80 nations and the company has an opportunity to increase its geographical expansion by moving towards more emerging markets outside Asia. Company can move towards acquisitions to acquire patents. It would allow the company to increase its item portfolio with a boost in its wealth.

Dangers

The dynamic market environment of innovation market present a serious danger on Business's survival and force the business to spend much of its earnings share on R&D in order to make it through in the long run. The marketplace saturation in industrialized countries i.e. saturation of mobile company is likewise a huge hazard for the business's development in the presence of strong competitors like Apple.

4 P's of Marketing
Swot Analysis
Item

Organization provides quality items and has a quite abundant portfolio which caters to different segments. LCD and mobile phones are the most significant products of Company, whereas DRAM is likewise not far behind in contrast of them.

• LCD/ TV
• Laptops.
• Cellphone.
• Ac system.
• Desktop computer.
• Hard disks.
• Washer.
• Fridges.
• Electronic cameras.
• Microwaves.
• Flash memory.
• DRAM.

Rate.

Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help uses both market competitive and market skimming pricing techniques for its variety of products. In competitive prices it adjusts the cost according to the competitors in order to acquire benefit, whereas, it utilizes market skimming technique where the product has an added worth and by offering a few products it can reach break-even.

Place.

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

Promo.
Vrio Analysis
It wasn't a widely known business outside of Korea till 1993. The management initiative taken by their CEO has actually pressed them to market more efficiently outside the borders and now it has actually entered the league of leading 25 companies in the world in simply 9 years. This is an exceptional achievement despite the continuous arguments among the managers about adopting marketing practices. It utilizes both offline & online channels of promo to market their products. Paid product ads, social promo and digital ads are uses to create awareness about Corp items.

Value Chain Analysis.

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

Inbound Logistics.

It has one of the most efficient and efficient supply chain network and has over 2700 providers throughout numerous markets around the world. Nearly 80% of which is based in Asia and the staying around the world. For its incoming logistics it owns different logistics companies as it subsidiaries. It cares for its providers and develops an unified relationship with them and even minimized their payment cycles to enhance this relationship even more which adds value to their chain network.

Operations.

Venture's core proficiency is its mass manufacturing it produces 90% of its items internal. Divided into 3 different departments its operations are particularly IT & Mobile Communications, Device Solutions and Customer Electronic Devices. It is keeping operation centers worldwide to even more add value to its worth chain network.

Outbound Logistics.

Its outbound logistics system efficiency is one of the primary factors Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Analysis is able to take on Apple. Venture's own Electronic Logitec system plays a major function in the outbound logistics operations. It even carries out the jobs of collection of payment, settling insurance coverage claims, etc. on behalf of Business.

Marketing and Sales.

Drawing in target client attention towards the item is done through marketing and sales to interact with them the value and competitive benefit the product uses. Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Analysis marketing budget is continuously increasing given that they began their repositioning globally and will continue to do so as they are constantly looking to broaden and invest in high prospective development markets. The budget is spent on occasions, print and media advertisements, public relations and so on.

Business put their clients at the top and continually make every effort to deliver unmatchable customer service standards. By including a direct support line to contact them 24 hours they have even more increased the added value of Venture service.

Division.

Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help has actually diversified market division, based upon its provision of large range of products to large number of customers. Organization target customer segments can be divided into 3 categories i.e. Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution IT and Mobile Communications, Business Consumer Electronic Devices and Enterprise Gadget solutions.

Geographic.

Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Analysis geographical segmentation is based upon two requirements i.e. region and density. Org serves about 80 countries worldwide with its products provided to Urban as well as Backwoods of the country. The Corporation is likewise growing its worldwide existence and the business's versatility in locating its plants motivates global growth of Organization.

Demographic.

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

Psychographic.

The psychographic segmentation of Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution s based upon the social class and the life style of the consumer. Corp target customers on the basis of social class are mainly upper middle, middle and working class customers, as Venture offer products like mobile phone not much less expensive i.e. Motorola in addition to very little costly i.e. Apple. It offers quality products to middle level consumers at a somewhat high price than others targeting the exact same section.

Behavioural.

Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Analysis bulk target clients have unique behavioural attributes. They are drawn in towards Corp since of its moderate prices with an extent of quality.

Quantitative analysis.

Sales of Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help has actually 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 biggest selling classification of Enterprise with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales.

Qualitative analysis.

Yes, this choice is based on the mission of Kim to target the more youthful audience and produce an international brand image of the business. Whereas, the core strength of the business is currently producing but long gone are those days when excellent products were selling themselves. In the current age marketing is really essential and business can not be successful without it. Kim has already started to strengthen the marketing activities of Organization and soon it will become one of its core strength like producing if not better.

VRIO.

Value.

Venture operates designs, produces and offer a huge portfolio of consumer electronics. It operates in an incredibly competitive environment and has effectively positioned itself as the maker of quality items. So, the response is yes.

Rarity.

As, stated previously that Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help operates in an extremely competitive environment, which implies all the business have comparable products. The response for rarity is no.

Imitability.

Due to the nature of the market, it is extremely easy for competitors to understand the functionality of the items and easily make their own designs. Yes, Corporation is only behind IBM in signing up new patents annually, but the advantage is extremely short term in this industry.

Company.

Chairman Lee has completely turn-around Venture, from going practically bankrupt throughout the Asian financial crisis of 1997 to the leading 25 company in the world. Definitely yes there is proper organization in the company and the outcomes speak for themselves.

External Ecological Analysis

PESTLE Analysis

Political

Being a multinational brand name spread nearly in every nation worldwide, majority of the environments like U.S.A., Europe, China etc., are really conductive for its operations. It faces some political pressures in less industrialized countries where law and order circumstance is not great. Latin American, African and some Asian countries fall in this category, where political instability do have a result on Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution operations.

Economic

Buying power of customers is important for companies like Company to grow and prosper. Emerging markets like India, middle-eastern nations and so on provide development opportunities, whereas, due to economic crisis even the consumers of industrialized countries suffer severely. Hence it is very important for the business to watch on the continuous financial scenario of the country prior to going into the market.

Socio-Cultural

International business have to deal with different social and cultural issues throughout its operations in a foreign nation. Organization has actually also faced numerous problems however have embraced to the regional environments of the majority of the countries exceptionally well. It has customized its products, practices, policies and so on accordingly in order to be successful.

Technological

With a yearly expense of 2.4 billion dollars in Research study & Development, and with consistent innovative product launches, Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help is one of the leading ingenious companies of the world. With a clear mission to be ahead of the rest when it concerns technological advancements, Corporation has actually risen to the no 25 of the top successful business of the world.

Legal

Each nation has their own laws and policies, being a multinational business Corp need to strictly follow those laws in their jurisdictions. Failure to do so, will lead to major legal consequences. So, it has to study or work with a local law professional prior to beginning its operations in a particular nation.

Environmental

With the increasing awareness among consumers about the ethical & ecological offenses of companies, Company needs to guarantee that it follows all the safety standards. Ecological damages, ethical misconducts are not acceptable and in some countries the effects can be really extreme. On the other hand it has to do some Corporate Social Obligation practices to show the locals that it appreciates their environment and individuals.

Porter's 5 Forces

Hazard of Replacement

Danger of replacement for Corp's each item classification is quite significant. Aspects for high risk of alternative for Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution Smartphone include the presence of high number of suppliers and Market saturation in developed nations, which make the expense of switching for consumers nearly no. Along with it, Enterprise printing services products are threatened by the increasing tourist attraction of consumers towards cloud storage.

Rivalry Among Existing Firms:

The rivaly amongst Org and its close competitors is intense. The major reason behind this is the technique of market saturation in different number of product categories, requiring Company to introduce more innovative features in existing products and new ingenious products to keep its development. The major rivals for Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO etc.

( Company Sustainability Report, 2016) Provider's bargaining power for Organization is low as Corporation runs economies of scale and its orders are of possible size and worth. Due to incapability of Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Analysis to develop its own software, it has to outsource its software application development to Google, which ends up being a potential provider of software application for Venture, resulting in high bargaining power of Google.

Bargaining Power of Purchasers:

Market saturation in most of the item categories likewise make the bargaining power of purchasers more extreme in for Venture. In spite of igh bargaining power Org is rather capable of offering its items at a greater price than much of its competitors, due to high end quality item and a fair brand image.

Risk of New Entrants:

Hazard of brand-new entrants for Company is rather low. Among the major element for low threat of brand-new entrants is the high competitors in the market. The requirement of huge quantity of capital to go into in the marketplace is also one of the potential barrier to entry. Together with it, requirement of substantial competence and research and development expenses for survival in the industry also make brand-new entrants unwilling to enter in the market. Market saturation is likewise one of the barrier of entry in innovation market. High bargaining power of providers force the gamers in the industry to charge as low costs as possible and this can only be attained by production efficiency. New companies, in bulk cases, do not have the production effectiveness, thus increasing the risks for entryway in the technology industry.

Competitive Analysis

Business's high item diversity supplies it distinction from its competitors. Unlikely to its close competitors consisting of Sony, Intel and Nokia, who focus majority on a single item category with Sony focusing on customer electronics, Nokia on cell phones and Intel on chips, Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help had a huge R&D costs on all of its item classifications which make it possible for the business to make prospective income from sales of practically all of its items.

The company ranks initially in 4 item classifications i.e. DRAM Chips, LCD Displays, Big Screen Televisions and Microwave, in terms of global market share, among 8 different item classifications. Organization was the global leader in manufacturing DRAM, SRAM and NAND flash chips. Although, Corp earnings from chips was less than Intel but its earnings from chips was growing faster than Intel and has grown close to the profits levels of Intel, as given up the case Exhibit 2.

In addition to the chips Enterprise mobile market was also flourishing at a high rate than its rivals i.e. Motorola and Nokia. Company's cellular phone's sales development was 51% as compare to Motorola with just 4% and Nokia with zero sales development. The major reson behind Enterprise's high development despite of higher rates than Nokia and Motorola was the business's high-end quality cellular phone.

Org was likewise reaping the benefits from increasing market share of high end LCDs as given up case Exhibition 3. The major reason, making the company make it possible for to get the chance is its mass production at low expense. Sony was the greatest competitor for Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution in LCD market, nevertheless, it had actually likewise started joint endeavor with Organization in 2003 for LCD making, minimizing the competitors for Enterprise.

Porter's Competitive Method

Low Expense Management method of porter is completely implemented by Enterprise the method they accomplish economies of scale by strengthening their core competencies of manufacturing. Even to the point that their rival SONY chose to form an alliance with them to manufacture for them, because they were unable to compete with them on low expense. Differentiation is another technique well implemented by Corporation by constant investment in the R&D and remaining ahead of the competitors. They constantly bring something innovative and new whether it's an item or a service.

Alternatives

Alternative Service 1

The Chief Marketing Officer (CMO) of Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help would create a new brand image by targeting the more youthful generation of the particular country. As, particularly cellphones of Business are popular among the younger demographic.

Pros

1. It is the best strategy to develop Consumer Life time Value (CLV) by producing a long-term relationship with customers. Build commitment through delivering value and reap the benefits for long-lasting, as research study has actually revealed it is much cheaper to keep present consumers than to draw in brand-new ones.
2. Another pro of this alternative is that word of mouth spread faster among more youthful people and which in turn will bring in new clients for my products.

Cons

1. Old consumers who were associated with Org prior to may not like this new image the company is trying to represent.
2 It will sustain additional expenses to reposition some products and it may not even bring success as the patterns change really quickly amongst the more youthful market.

Alternative service 2.

It would be done by organizing training workshops throughout which significance of marketing will be taught and numbers will be provided. Marketing environment ought to be developed internally first as genuine marketing starts inside the corporation.

Pros

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

Cons

2. Its con can produce a very unhealthy environment in the workplace, as individuals typically withstand change due to the fact that they fear it.

Determine the very best alternative

Option is the best as it clearly has more pros since when a Client Lifetime Value is developed the company will benefit from it till that consumer is alive and has buying power. Plus, our target customers are the younger generation which are bound to live longer than the existing old age people. Business's primary goal is to produce commitment amongst its clients and make them bought it from them and even purchase their different items.

Application Strategy

• Targeting younger generation through social marketing, producing a link with them like Pepsi do with music. And set the expectations realistic and achievable.
• A team consisting of finest marketing and sales experts should be put together, and both views must be taken into account prior to securing the resources needed to carry out the plan.
• Thorough communication of the strategy ought to be done as it is extremely important for everyone to be on the very same page to make it work.
• Jobs and timelines ought to be build and communicated appropriately to each individual accountable.
• The supervisor should utilize 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 need to keep an eye on and keep a continuous examine the overall and specific efficiency.
Since any new trend or policy might come in due to which all the things currently planned have to be adjusted, • Everybody must be willing to adapt midway. It's better to have contingency strategies already prepared.
• At the end of the project the manager ought to interact the outcomes and if effective ought to celebrate with the group.

Spending plan

This change the budget allotment of many managers and different countries were dissatisfied and argued however the analysis done by the program was precise and showed figures like North America and Russia growth possible warranted a 35% allotment while they were receiving 45%. It really assisted to fairly disperse the resources and record more clients by investing more on advertisements on the high development potential areas of the world.
Recommendations
Conclusion

Its continuous investment in R&D and ingenious practices have actually moved them to brand-new heights but for them its' only the start and they desire to be amongst the top 3 brands in the world. Their marketing efforts need to be directed towards younger demographic amidst the internal arguments about marketing and must develop Customer Lifetime Value as it will not just provide them advantages now however will continue to enjoy it till the customer lifetime. As the cost of keeping the customer is much cheaper than attracting a new one.