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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 Solution is a widely known worldwide brand in technology market, 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 product categories including Semiconductors, Telecom, Digital Media, Digital Appliances and much more other electronic items. Historically, the business's core consumers include the Original Devices Manufacturers (OEMs), which used to sell Samsung items withtheir own trademark name. Till early 1990s, the core competency of Samsung depend on its low price offerings than its competitors by making existing items at economies of scale. Its consumer circle consists of Original Devices Manufacturers (OEMs), who used to offer Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution items with their own trademark name. Samsung was not simply known outside Korea. There were also no or little interest in constructing the brand internationally. Marketing budget plan was managed by production department with a focal point on supplying inexpensive products.During the 1997 Asian Financial Crisis the company nearly got insolvent, but with the Vision of Chairman Lee it totally turn its fortune around and in 2002 was listed the leading 25 most important business on the planet. When Kim was employed as a Chief Marketing Officer in 2000 the business was not even noted. He repositioned Samsung as an international brand and informed his divisional managers to comprehend marketing and its significance. Now their objective is to reach the top 10 by 2005.

Issue Declaration

Samsung's transition from a product based to a marketing company is not going as efficiently as planned.Overcoming the reluctance of divisional managers to incorporate marketing successfully is still a significant challenge. Creating a consistent brand identity across the whole world and utilizing marketing methods that best fits the regional culture is no easy task.
Executive Summary
Situational Analysis

Yun had a quite clear picture in his mind about how Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution can change from a low end to a high end item supplier. He knew that change can just be done through placing Samsung as a business 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 construct Samsung brand, with a prospective assistance of its executives, Yun faced several marketing obstacles in early years of its efforts.

One of the marketing difficulties for Yun was the understandings of executives about the value of marketing. They considered marketing and selling as same tools and believed that quality items do not required marketing for increasing sales. As their focus towards marketing was quite low in their previous service practices, and the present marketing requirement was excessive high, the gap was too wider and to fill this gap with wrong perceptions about marketing was rather challenging for Yun.

Along with it the item range of the business was increasing with the ripening of brand-new product concepts by the R&D sector of Samsung. Yun had a challenge to perform marketing preparation and to create marketing budget plans for existing as well as for brand-new items from the very beginning, and this would take a huge time.

A big shift would be needed in current marketing expenditures to construct the Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution brand name. This would result in increased marketing expenses for Samsung and might interrupt the administration regarding increased expenses, as they were reluctant to marketing expenses previously and an abrupt big shiftwould make them disturb. This might lead to decreasing executive assistance for worldwide marketing. In this situation, Yun faces an obstacle for validating increased marketing expenses by showing the long term value of huge marketing expenditures.

Internal Analysis
SWOT Analysis
Strengths


Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Analysis strengths lie in its huge item portfolio. Samsung has largest number of patents in the industry with total number of 15499 patents granted in US( USP).

Another strength of Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Analysis is its ability to establish ingenious products at a continuous rate. It major shows for the innovation and item developing of Samsung is that the company has received a lot of awards for its innovation and item design.

Unlike Apple and other rivals, Samsung is focused on producing devices which can be quickly incorporated with any kind of open source Operating System (OS) and software. This supplies Samsung an edge over Apple gadgets.
Porter's 5 Forces Analysis
Samsung's capability to produce high-end products at low cost of production is likewise among the major strength of Samsung as it enables the company to catch more market by offering quality products with cost control.

Weaknesses

Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution weaknesses are hidden in the business's reliance on outsourcing software for its gadgets due to business's inability in developing software application, unlike Sony. Samsung likewise has low earnings margins as compare to Apple due to big difference in the prices of Apple and Samsung with a much lesser difference in quality. The varied focus of the business due to large number of items in its portfolio, lead to the less effective production and make the company unable to charge greater rates like Apple. The business is likewise ineffective in managing its patents and often faces the problem of patent infraction.

Opportunities

Opportunities for Samsung lie in the growing Mobile phone market and the business's effectiveness in the market. It can increase its market share and profits from cellular phone as the company is rather efficient in mobile phone market. Samsung presently runs in about 80 countries 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 acquire patents. It would enable the company to increase its item portfolio with an increase in its wealth.

Dangers

The vibrant market environment of technology market present an extreme risk on Samsung's survival and force 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 company is likewise a huge risk for the business's development in the existence of strong rivals like Apple.

4 P's of Marketing
Swot Analysis
Product

Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Analysis uses quality products and has a rather rich portfolio which accommodates different sections. Most of the products remain in the top three of their respective markets. LCD and cellphones are the greatest items of Samsung, whereas DRAM is also not far behind in comparison of them. Following is the line of product of Samsung:

• LCD/ TELEVISION
• Laptops.
• Cellphone.
• A/c.
• Personal computers.
• Hard disk drives.
• Washing machines.
• Fridges.
• Electronic cameras.
• Microwaves.
• Flash memory.
• DRAM.

Price.

Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution uses both market competitive and market skimming prices strategies for its wide variety of products. In competitive prices it changes the cost according to the competition in order to gain advantage, whereas, it uses market skimming technique where the product has actually an added worth and by selling a couple of products it can reach break-even.

Place.

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

Promo.
Vrio Analysis
It wasn't a popular company beyond Korea until 1993. However the management initiative taken by their CEO has pressed them to market more effectively outside the borders and now it has entered the league of leading 25 business on the planet in just 9 years. This is an impressive accomplishment regardless of the continuous arguments among the supervisors about embracing marketing practices. It utilizes both offline & online channels of promo to market their items. Paid item ads, social promotion and digital advertisements are uses to produce awareness about Samsung products.

Worth Chain Analysis.

It's an analytical framework for recognizing business activities that add worth or competitive advantage for the business.

Inbound Logistics.

For its incoming logistics it owns various logistics firms as it subsidiaries. It looks after its providers and creates an unified relationship with them and even reduced their payment cycles to enhance this relationship even more which adds value to their chain network.

Operations.

Samsung's core competency is its mass manufacturing it produces 90% of its products internal. Divided into 3 various departments its operations are particularly IT & Mobile Communications, Device Solutions and Customer Electronic Devices. It is preserving operation centers worldwide to further add worth to its value chain network.

Outbound Logistics.

Its outbound logistics system performance is one of the main factors Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Analysis has the ability to take on Apple. Samsung's own Electronic Logitec system plays a major function in the outgoing logistics operations. It even performs the jobs of collection of payment, settling insurance claims, etc. on behalf of Samsung.

Marketing and Sales.

Drawing in target customer attention towards the item is done through marketing and sales to interact with them the worth and competitive benefit the item provides. Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help advertising spending plan is continuously on the rise given that they started their rearranging globally and will continue to do so as they are continually looking to broaden and invest in high possible growth markets. The budget plan is spent on occasions, print and media ads, public relations etc.

Samsung Service. Samsung put their clients on top and continuously strive to provide unmatchable customer care requirements. As after sales service is ending up being incredibly crucial to keep customers delighted and engaged, they even perform studies through third parties to find out their customer's feedback and implement it in the positive method to lower or if possible entirely eliminate their client concerns. By adding a direct support line to call them 24 hr they have actually even more increased the included value of Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution service.

Division.

Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution has actually diversified market division, based upon its arrangement of wide variety of items to a great deal of consumers. Samsung target customer segments can be divided into 3 classifications i.e. Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help IT and Mobile Communications, Samsung Customer Electronics and Samsung Device services.

Geographical.

Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help geographic division is based upon 2 criteria i.e. region and density. Samsung serves about 80 countries worldwide with its items offered to Urban in addition to Rural areas of the nation. The Samsung is also growing its global presence and the company's flexibility in locating its plants motivates worldwide expansion of Samsung.

Market.

Samsung produces products that can be utilized 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 newly wed life cycle phase. Apart from it, Samsung Consumer Electronic devices are targeted to a client segment with an age range of 25-65.

Psychographic.

The psychographic division of Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help 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 sell items like cell phones very little less expensive i.e. Motorola in addition to very little expensive i.e. Apple. It provides quality products to middle level customers at a slightly high price than others targeting the same sector.

Behavioural.

Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Analysis majority target customers have unique behavioural qualities. They are brought in towards Samsung since of its moderate prices with a level of quality.

Quantitative analysis.

Sales of Samsung has increased amazingly from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net profit of.48 billion $ to 5.9 billion $. It has actually also minimized its financial obligation from 15 billion $ to 4.6 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. Earnings/ sales are increasing but net profit is not increasing appropriately since of the high overhead expense. New growths and working with's were the main factor of the increase in the overhead costs, with china currently not offering any revenue to Samsung, however there is a lot capacity in the present market with 75 % yet to be explored.

Qualitative analysis.

Yes, this choice is based on the objective of Kim to target the younger audience and create a global brand picture of the company. Whereas, the core strength of the company is presently producing but long gone are those days when excellent items were selling themselves. In the current age marketing is very crucial and companies can not be successful without it. Kim has already started to strengthen the marketing activities of Samsung and very soon it will turn into one of its core strength like making if not better.

VRIO.

Value.

Samsung runs styles, manufactures and offer a large portfolio of consumer electronic devices. It operates in an incredibly competitive environment and has successfully placed itself as the maker of quality products. The response is yes.

Rarity.

As, stated previously that Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution runs in a highly competitive environment, which means all the business have similar items. The answer for rarity is no.

Imitability.

Due to the nature of the industry, it is very easy for rivals to comprehend the performance of the items and easily make their own models. Yes, Samsung is just behind IBM in signing up new patents annually, however the advantage is very short-term in this market.

Company.

Chairman Lee has completely turnaround Samsung, from going practically bankrupt during the Asian monetary crisis of 1997 to the leading 25 business in the world. Certainly 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, bulk of the environments like U.S.A., Europe, China and so on, are really conductive for its operations. However, it faces some political pressures in less developed nations where law and order circumstance is bad. Latin American, African and some Asian countries fall in this classification, where political instability do have an effect on Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Analysis operations.

Economic

Buying power of customers is vital for business like Samsung to grow and succeed. Emerging markets like India, middle-eastern nations etc. provide growth opportunities, whereas, due to economic crisis even the customers of developed nations suffer severely. For this reason it is very important for the business to keep an eye on the ongoing financial scenario of the nation prior to entering the marketplace.

Socio-Cultural

Multinational companies need to face various social and cultural concerns throughout its operations in a foreign country. Samsung has also dealt with lots of problems however have adopted to the regional environments of most of the nations remarkably well. It has tailored its items, practices, policies and so on accordingly in order to achieve success.

Technological

With an annual expenditure of 2.4 billion dollars in Research & Development, and with constant ingenious product launches, Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution is one of the top ingenious companies of the world. With a clear mission to be ahead of the rest when it comes to technological developments, Samsung has risen to the no 25 of the top 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 result in major legal consequences. It has to study or hire a local law expert before beginning its operations in a specific nation.

Environmental

With the increasing awareness among consumers about the ethical & ecological violations of business, Samsung needs to ensure that it follows all the security standards. Environmental 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 Business Social Responsibility practices to show the locals that it cares about their environment and people.

Porter's 5 Forces

Hazard of Substitution

Risk of alternative for Samsung's each item classification is quite substantial. Aspects for high threat of replacement for Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Analysis Smart device include the existence of high number of providers and Market saturation in industrialized countries, which make the cost of changing for consumers nearly absolutely no. Along with it, Samsung printing solutions products are threatened by the increasing tourist attraction of clients towards cloud storage.

Rivalry Amongst Existing Companies:

The rivaly amongst Samsung and its close competitors is extreme. The significant factor behind this is the method of market saturation in various number of product categories, forcing Samsung to present more ingenious functions in existing products and new innovative items to preserve its growth. The significant rivals for Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO etc.

Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Analysis has a huge supply chain consisting of about 2700 suppliers throughout the world.( Samsung Sustainability Report, 2016) Supplier's bargaining power for Samsung is low as Samsung runs economies of scale and its orders are of potential size and worth. These huge orders allow Samsung to negotiate costs with its providers. Due to incapability of Samsung to develop its own software, it has to outsource its software advancement to Google, which becomes a potential provider of software for Samsung, resulting in high bargaining power of Google. In most of Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution has a power to work out prices, but it offer significant costs to its providers to develop a strong supply chain and to have strong relationships with its providers.

Bargaining Power of Purchasers:

Market saturation in most of the item classifications likewise make the bargaining power of purchasers more extreme in for Samsung. In spite of igh bargaining power Samsung is quite capable of selling its products at a higher cost than much of its competitors, due to high end quality item and a reasonable brand image.

Danger of New Entrants:

Danger of new entrants for Samsung is quite low. Among the major factor for low danger of brand-new entrants is the high competitors in the market. The requirement of substantial quantity of capital to go into in the marketplace is likewise among the possible barrier to entry. Together with it, requirement of substantial expertise and research and development expenditures for survival in the market also make new entrants hesitant to go into in the market. Market saturation is also among the barrier of entry in technology market. High bargaining power of providers require the players in the market to charge as low costs as possible and this can just be achieved by production effectiveness. New companies, in bulk cases, do not have the production efficiency, thus increasing the threats for entrance in the technology market.

Competitive Analysis

Samsung's high item diversification supplies it differentiation from its competitors. Unlikely to its close competitors consisting of Sony, Intel and Nokia, who focus bulk on a single item classification with Sony focusing on customer electronics, Nokia on cell phones and Intel on chips, Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help had a substantial R&D spending on all of its item categories which make it possible for the company to earn possible income from sales of nearly all of its items.

The business ranks initially in 4 product classifications i.e. DRAM Chips, LCD Displays, Big Screen TVs and Microwave ovens, in terms of global market share, amongst 8 various product classifications. Samsung was the worldwide leader in manufacturing DRAM, SRAM and NAND flash chips. Samsung earnings from chips was less than Intel but its earnings from chips was growing faster than Intel and has actually grown close to the income levels of Intel, as provided in the case Exhibit 2.

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

Samsung was likewise reaping the benefits from increasing market share of luxury LCDs as given in case Exhibit 3. The significant factor, making the company allow to obtain the chance is its mass production at low cost. Sony was the biggest rival for Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution in LCD market, however, it had likewise begun joint endeavor with Samsung in 2003 for LCD making, minimizing the competition for Samsung.

Porter's Competitive Technique

Low Cost Leadership technique of porter is completely implemented by Samsung the method they achieve economies of scale by enhancing their core proficiencies of manufacturing. Even to the point that their rival SONY decided to form an alliance with them to manufacture for them, since they were unable to compete with them on low expense. Differentiation is another strategy well carried out by Samsung by constant investment in the R&D and staying ahead of the competition. They constantly bring something new and ingenious whether it's a service or an item.

Alternatives

Alternative Option 1

The Chief Marketing Officer (CMO) of Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Solution would develop a brand-new brand image by targeting the younger generation of the specific country. As, especially smart phones of Samsung are popular among the more youthful group.

Pros

1. It is the best method to develop Customer Lifetime Worth (CLV) by creating a long-lasting relationship with customers. Develop loyalty through providing worth and reap the benefits for long-lasting, as research has actually revealed it is much cheaper to maintain existing customers than to draw in brand-new ones.
2. Another pro of this alternative is that word of mouth spread faster amongst more youthful people and which in turn will generate new consumers for my products.

Cons

1. Old clients who were connected with Samsung prior to might not like this new image the business is attempting to portray.
2 It will sustain more costs to reposition some products and it may not even bring success as the trends change really rapidly among the younger market.

Alternative service 2.

It would be done by organizing training workshops during which importance of marketing will be taught and numbers will be offered. Marketing environment ought to be created internally initially as genuine marketing starts inside the corporation.

Pros

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

Cons

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

Recognize the best alternative

Very first option is the very best as it clearly has more pros due to the fact that as soon as a Customer Lifetime Worth is developed the company will profit from it till that client is alive and has buying power also. Plus, our target customers are the younger generation which are bound to live longer than the present old age individuals. Samsung's primary goal is to develop commitment amongst its customers and make them repurchase it from them and even buy their different items.

Implementation Plan

• Targeting more youthful generation through social marketing, producing a link with them like Pepsi make with music. And set the expectations sensible and achievable.
• A team including finest marketing and sales specialists must be put together, and both views need to be taken into account prior to protecting the resources needed to carry out the plan.
• Thorough interaction of the strategy need to be done as it is very essential for everybody to be on the exact same page to make it work.
• Jobs and timelines need to be build and interacted accordingly to each person accountable.
• The manager need 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 supervisor need to monitor and keep a consistent look at the specific and general efficiency.
• Everyone ought to want to adapt midway because any brand-new pattern or policy may can be found in due to which all the things currently prepared have to be adjusted. It's much better to have contingency strategies currently prepared.
• At the end of the project the manager must communicate the results and if successful need to commemorate with the team.

Spending plan

The M-net program exposed compelling analysis about the low and high growth potential areas and just how much marketing budget plan should be designated accordingly. This change the budget plan allocation of numerous supervisors and different countries were unhappy and argued however the analysis done by the program was accurate and revealed figures like The United States and Canada and Russia development possible warranted a 35% allocation while they were receiving 45%. Whereas, China and Europe must be getting 42% however were instead provided 31%. It really helped to relatively disperse the resources and record more customers by investing more on advertisements on the high growth capacity regions of the world.
Recommendations
Conclusion

Orange Groups Open Seamless Alliance Organizational Innovation For Value Creating Partnerships Case Study Help is a top 25 company worldwide now and prepares to get ahead of Sony who sits presently at no. 20. Its constant financial investment in R&D and ingenious practices have actually propelled them to new heights but for them its' only the start and they wish to be among the leading 3 brand names worldwide. They entirely turn-around from practically declaring bankruptcy during the Asian Financial Crisis to a world renowned brand, known for quality and innovation. Their worth chain and their core proficiency their production ability, along-with global brand name image building have seen their sales go from 16 to 44.6 billion $ from 1997-- 2002. With more expansion in China and other emerging markets those numbers will just increase even more in the future. Their marketing efforts need to be directed towards younger demographic amid the internal arguments about marketing and should produce Client Life time Worth as it will not only give them benefits now however will continue to reap it till the consumer life time. As the expense of keeping the consumer is more affordable than drawing in a brand-new one.