Menu

Pepsicos Turning Point Establishing A Role In Sustainable Society Harvard Case Study Help

Home >> Hrm >> Pepsicos Turning Point Establishing A Role In Sustainable Society

Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Solution and Analysis


Introduction

Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Help is a widely known global brand name in innovation market, founded in 1938 by Lee Byung Chul, in South Korea. Pepsicos Turning Point Establishing A Role In Sustainable Society deals in a great deal of item classifications including Semiconductors, Telecommunications, Digital Media, Digital Appliances and a lot more other electronic products. Historically, the company's core consumers include the Original Equipment Manufacturers (OEMs), which utilized to offer Samsung products withtheir own brand. Till early 1990s, the core proficiency of Samsung lie in its low price offerings than its rivals by producing existing items at economies of scale. Its client circle includes Original Equipment Manufacturers (OEMs), who utilized to sell Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Analysis items with their own trademark name. Samsung was not simply understood outside Korea. There were likewise no or little interest in building the brand name internationally. Marketing spending plan was controlled by production department with a focal point on supplying inexpensive products.During the 1997 Asian Financial Crisis the business almost got bankrupt, but with the Vision of Chairman Lee it entirely turn its fortune around and in 2002 was noted the top 25 most important business worldwide. When Kim was hired as a Chief Marketing Officer in 2000 the business was not even listed. He rearranged Samsung as an international brand and educated his divisional supervisors to comprehend marketing and its value. Now their objective is to arrive 10 by 2005.

Issue Statement

Samsung's transition from an item based to a marketing company is not going as smoothly as planned.Overcoming the unwillingness of divisional managers to incorporate marketing efficiently is still a significant difficulty. Producing a consistent brand identity throughout the whole world and employing marketing strategies that finest fits the regional culture is no easy task.

Situational Analysis

Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Help efforts for constructing its brand name across the world was started after introducing the "new management effort" by Chairman Lee in 1993. The goal was to transform Samsung from a cheap OEM to a high value-added product provider. To make the vision of Samsung a reality, Chairman Lee appointed Yun as a vice chairman in 1997. Yun had a quite clear photo in his mind about how Samsung can transform from a low end to a high-end product supplier. He understood that improvement can just be done through placing Samsung as a business offering 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 name, with a potential assistance of its executives, Yun dealt with several marketing difficulties in early years of its efforts.

Among the marketing challenges for Yun was the understandings of executives about the worth of marketing. They considered marketing and selling as very same tools and thought that quality items do not required marketing for increasing sales. As their focus towards marketing was rather low in their previous organisation practices, and the current marketing requirement was excessive high, the space was too wider and to fill this gap with incorrect perceptions about marketing was quite tough for Yun.

As stated above, marketing focus was extremely low in previous practices, therefore there were no proper marketing budgets for each of the item on the portfolio. There was no marketing preparation done for the existing products. Along with it the product range of the company was increasing with the ripening of brand-new product ideas by the R&D sector of Samsung. Yun had a difficulty to carry out marketing preparation and to produce marketing spending plans for existing in addition to for brand-new products from the very start, and this would take a big time.

A huge shift would be needed in present marketing expenses to build the Samsung brand. This would result in increased marketing expenses for Samsung and might interrupt the administration relating to increased expenses, as they were hesitant to marketing expenditures previously and an unexpected huge shiftwould make them disrupt.

Internal Analysis
SWOT Analysis
Strengths


Samsung strengths lie in its huge product portfolio. Samsung has biggest number of patents in the industry with total number of 15499 patents given in US( USP). Large amount of R&D costs has made it possible for the business to grow its item portfolio at a higher rate than its competitors. Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Analysis spent about $13.079 billion on its R&D sector in 2016, which is 7.3% of its overall profits.

Another strength of Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Help is its capability to establish ingenious items at a continuous rate. It significant proves for the development and product designing of Samsung is that the company has actually received so many awards for its development and item style.

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

Samsung's ability to produce luxury items at low cost of production is likewise one of the significant strength of Samsung as it makes it possible for the business to capture more market by supplying quality items with cost control.

Weaknesses

Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Help weak points are hidden in the business's dependence on outsourcing software application for its devices due to company's inability in developing software application, unlike Sony. Samsung likewise has low revenue margins as compare to Apple due to substantial difference in the costs of Apple and Samsung with a much lesser difference in quality. The diverse focus of the company due to a great deal of items in its portfolio, lead to the less efficient production and make the business not able to charge higher prices like Apple. The business is likewise ineffective in managing its patents and frequently deals with the issue of patent offense.

Opportunities

Opportunities for Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Solution lie in the growing Smartphone market and the company's effectiveness in the market. Samsung presently runs in about 80 countries and the business has a chance to increase its geographical growth by moving towards more emerging markets outside Asia.

Hazards

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

4 P's of Marketing

Product

Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Help offers quality items and has a rather abundant portfolio which accommodates various sectors. Most of the products remain in the top three of their respective markets. LCD and cellphones are the biggest 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 drives.
• Washer.
• Refrigerators.
• Electronic cameras.
• Microwaves.
• Flash memory.
• DRAM.

Price.

Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Solution utilizes both market competitive and market skimming prices strategies for its variety of items. In competitive prices it adjusts the rate according to the competition in order to get advantage, whereas, it uses market skimming strategy where the product has actually an included value and by selling a few items it can reach break-even.

Place.

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

Promo.

It utilizes both offline & online channels of promotion to market their products. Paid item advertisements, social promotion and digital advertisements are uses to create awareness about Samsung products.

Worth Chain Analysis.

It's an analytical framework for recognizing organisation activities that include worth or competitive advantage for the company.

Incoming Logistics.

It has one of the most effective and effective supply chain network and has more than 2700 providers throughout various industries all over the world. Nearly 80% of which is based in Asia and the remaining all over the world. For its incoming logistics it owns numerous logistics companies as it subsidiaries. It cares for its providers and develops an unified relationship with them and even decreased their payment cycles to increase this relationship further which includes value to their chain network.

Operations.

Samsung's core competency is its mass manufacturing it produces 90% of its items internal. Divided into three different departments its operations are specifically IT & Mobile Communications, Device Solutions and Customer Electronics. It is maintaining operation hubs worldwide to even more include value to its worth chain network.

Outbound Logistics.

Its outbound logistics system efficiency is one of the main reasons Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Solution has the ability to take on Apple. Samsung's own Electronic Logitec system plays a significant role in the outgoing logistics operations. It even carries out the jobs of collection of payment, settling insurance claims, etc. on behalf of Samsung.

Marketing and Sales.

Drawing in target consumer attention towards the product is done through marketing and sales to communicate with them the value and competitive benefit the item offers. Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Solution advertising budget plan is continually growing given that they started their rearranging worldwide and will continue to do so as they are constantly looking to invest and expand in high potential growth markets. The spending plan is spent on events, print and media ads, public relations etc.

Samsung put their clients at the leading and continuously aim to deliver unmatchable client service standards. By adding a direct support line to contact them 24 hours they have actually even more increased the added worth of Samsung service.

Segmentation.

Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Analysis has diversified market division, based upon its provision of vast array of items to a great deal of consumers. Samsung target consumer segments can be divided into 3 categories i.e. Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Help IT and Mobile Communications, Samsung Consumer Electronics and Samsung Gadget solutions.

Geographical.

Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Analysis geographic segmentation 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 Backwoods of the country. The Samsung is also growing its global presence and the company's versatility in finding its plants encourages global expansion of Samsung.

Market.

Samsung produces products that can be utilized by both women and males. The target clients for Samsung IT and mobile communication items have an age range of 18-65 with bulk at a young or newly wed life cycle phase. Apart from it, Samsung Customer Electronic devices are targeted to a consumer section with an age variety of 25-65.

Psychographic.

The psychographic division of Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Help s based upon the social class and the life style of the consumer. Samsung target customers on the basis of social class are mainly upper middle, middle and working class customers, as Samsung sell products like mobile phone very little more affordable i.e. Motorola along with not much costly i.e. Apple. It offers quality products to middle level consumers at a somewhat high price than others targeting the very same section.

Behavioural.

Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Analysis bulk target consumers have special behavioural qualities. They are drawn in towards Samsung because of its moderate rates with a degree of quality.

Quantitative analysis.

Sales of Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Solution has actually increased remarkably from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net profit of.48 billion $ to 5.9 billion $. Digital media is the largest selling category of Samsung with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales.

Qualitative analysis.

Yes, this choice is based upon the objective of Kim to target the younger audience and develop a worldwide brand name image of the business. Whereas, the core strength of the company is presently making but long gone are those days when great products were offering themselves. In the current age marketing is very important and companies can not succeed without it. Kim has already begun to strengthen the marketing activities of Samsung and soon it will become one of its core strength like producing if not better.

VRIO.

Value.

Samsung operates designs, produces and offer a huge portfolio of customer electronic devices. It runs in an exceptionally competitive environment and has actually successfully positioned itself as the maker of quality items. So, the response is yes.

Rarity.

As, said earlier that Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Solution operates in a highly competitive environment, which means all the companies have similar products. The response for rarity is no.

Imitability.

Due to the nature of the industry, it is extremely simple for rivals to understand the performance of the items and quickly make their own models. Yes, Samsung is only behind IBM in registering new patents yearly, but the benefit is extremely short term in this market.

Organization.

Chairman Lee has completely turn-around Samsung, from going nearly bankrupt during the Asian financial crisis of 1997 to the leading 25 company 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 an international brand name spread nearly in every country 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 order scenario is not good. Latin American, African and some Asian countries fall in this classification, where political instability do have a result on Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Analysis operations.

Economic

Purchasing power of consumers is crucial for business like Samsung to succeed and grow. Emerging markets like India, middle-eastern countries etc. supply growth chances, whereas, due to economic crisis even the consumers of developed nations suffer severely. It is very crucial for the company to keep an eye on the ongoing economic situation of the nation before entering the market.

Socio-Cultural

International companies have to deal with numerous social and cultural issues throughout its operations in a foreign country. Samsung has likewise dealt with lots of concerns however have embraced to the local environments of most of the nations incredibly well. It has actually customized its items, practices, policies etc. appropriately in order to be successful.

Technological

With a yearly expense of 2.4 billion dollars in Research & Development, and with consistent ingenious item launches, Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Analysis is one of the leading innovative business of the world. With a clear objective to be ahead of the rest when it comes to technological advancements, Samsung has actually risen to the no 25 of the top successful business of the world.

Legal

Each country has their own laws and policies, being a multinational company Samsung need to strictly follow those laws in their jurisdictions. Failure to do so, will lead to major legal consequences. It has to study or work with a regional law professional prior to starting its operations in a specific nation.

Environmental

With the increasing awareness amongst consumers about the environmental & ethical violations of business, Samsung has to guarantee that it follows all the safety standards. Environmental damages, ethical misbehaviors are not appropriate and in some countries the repercussions can be very severe. On the other hand it needs to do some Business Social Obligation practices to show the locals that it appreciates their environment and individuals.

Porter's 5 Forces

Danger of Alternative

Threat of replacement for Samsung's each item classification is rather considerable. Factors for high danger of replacement for Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Solution Mobile phone include the presence of high number of suppliers and Market saturation in developed countries, which make the cost of changing for customers almost absolutely no. Along with it, Samsung printing services products are threatened by the increasing destination of clients towards cloud storage.

Rivalry Amongst Existing Firms:

The rivaly among Samsung and its close competitors is intense. The significant factor behind this is the method of market saturation in numerous number of product categories, requiring Samsung to present more ingenious features in existing products and brand-new innovative items to keep its development. The major rivals for Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Help samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO etc.

( Samsung Sustainability Report, 2016) Supplier's bargaining power for Samsung is low as Samsung runs economies of scale and its orders are of possible size and worth. Due to incapability of Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Analysis to build its own software application, it has to outsource its software development to Google, which becomes a potential provider of software application for Samsung, resulting in high bargaining power of Google.

Bargaining Power of Buyers:

Market saturation in many of the product categories 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 items at a higher rate than much of its competitors, due to high end quality product and a reasonable brand image.

Danger of New Entrants:

Hazard of brand-new entrants for Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Help is quite low. Along with it, requirement of substantial proficiency and research and advancement expenditures for survival in the industry also make brand-new entrants hesitant to enter in the market. Market saturation is also one of the barrier of entry in technology market.

Competitive Analysis

Samsung's high product diversification offers it differentiation from its rivals. Unlikely to its close rivals including Sony, Intel and Nokia, who focus bulk on a single product classification with Sony focusing on customer electronic devices, Nokia on cell phones and Intel on chips, Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Solution had a huge R&D spending on all of its item classifications which make it possible for the company to make potential earnings from sales of almost all of its items.

The company ranks initially in 4 product classifications i.e. DRAM Chips, LCD Displays, Cinema TVs and Microwave, in regards to worldwide market share, among 8 different product classifications. Samsung was the global leader in manufacturing DRAM, SRAM and NAND flash chips. Although, Samsung revenues from chips was less than Intel but its revenues from chips was growing much faster than Intel and has grown near the income levels of Intel, as given in the case Display 2.

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

Samsung was also profiting from increasing market share of high end LCDs as given in case Display 3. The major factor, making the company make it possible for to obtain the chance is its mass production at low expense. Sony was the biggest rival for Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Solution in LCD market, nevertheless, it had also started joint venture with Samsung in 2003 for LCD manufacturing, decreasing the competition for Samsung.

Porter's Competitive Method

Low Cost Leadership method of porter is completely executed by Samsung the method they achieve economies of scale by enhancing their core proficiencies of production. They always bring something ingenious and new whether it's a service or a product.

Alternatives

Alternative Service 1

The Chief Marketing Officer (CMO) of Pepsicos Turning Point Establishing A Role In Sustainable Society Case Study Analysis would create a new brand name image by targeting the younger generation of the specific nation. As, specifically mobile phones of Samsung are very popular amongst the younger group.

Pros

1. It is the best method to develop Customer Life time Value (CLV) by developing a long-lasting relationship with clients. Construct loyalty through providing worth and reap the benefits for long-lasting, as research study has actually showed it is much cheaper to retain existing customers than to bring in brand-new ones.
2. Another pro of this option is that word of mouth spread faster among younger people and which in turn will generate brand-new clients for my products.

Cons

1. Old clients who were related to Samsung before might not like this brand-new image the company is trying to portray.
2 It will sustain more costs to rearrange some products and it might not even bring success as the patterns change really quickly among the more youthful market.

Alternative option 2.

Samsung has actually made producing its core competency for the a lot of part of their business and due to which its supervisors are not scared to totally step out of their comfort zone. It would be done by setting up training workshops throughout which significance of marketing will be taught and numbers will be offered. Failure to get the passing scores will get demoted. Marketing environment must be produced internally first as real marketing starts inside the corporation.

Pros

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

Cons

2. Its con can produce a really unhealthy environment in the work environment, as individuals often resist modification due to the fact that they fear it.

Identify the best option

Alternative is the best as it plainly has more pros because as soon as a Customer Lifetime Worth is built the business will benefit from it till that client is alive and has acquiring power. Plus, our target consumers are the younger generation which are bound to live longer than the current old age people. Samsung's primary objective is to produce commitment among its clients and make them bought it from them and even purchase their different products.

Implementation Strategy

• Targeting younger generation through social marketing, creating a relate to them like Pepsi do with music. And set the expectations sensible and achievable.
• A group consisting of finest marketing and sales specialists should be put together, and both views must be taken into account prior to protecting the resources required to execute the strategy.
• Thorough interaction of the plan must be done as it is extremely essential for everyone to be on the exact same page to make it work.
• Tasks and timelines should be construct and communicated appropriately to each person accountable.
• The manager ought to utilize a control panel which shows the progress of all the jobs which have been done or about to be done and by whom.
• The supervisor must keep an eye on and keep a constant examine the overall and specific efficiency.
• Everyone must be willing to adapt midway because any new trend or policy may can be found in due to which all the important things already prepared have to be changed. It's much better to have contingency plans already prepared.
• At the end of the project the manager should interact the outcomes and if successful need to celebrate with the team.

Spending plan

The M-net program revealed compelling analysis about the low and high growth possible locations and how much advertising budget plan ought to be designated accordingly. This change the budget allowance of various nations and lots of supervisors were unhappy and argued however the analysis done by the program was accurate and showed figures like North America and Russia growth possible merited a 35% allocation while they were getting 45%. Whereas, China and Europe need to be receiving 42% but were rather provided 31%. It actually assisted to fairly distribute the resources and catch more clients by investing more on ads on the high growth capacity regions of the world.

Conclusion

Its constant financial investment in R&D and ingenious practices have propelled them to new heights but for them its' just the start and they desire to be amongst the top 3 brand names in the world. Their marketing efforts ought to be directed towards more youthful group in the middle of the internal arguments about marketing and need to develop Customer Life time Value as it will not just provide them benefits now but will continue to gain it till the customer life time. As the cost of keeping the consumer is much more affordable than drawing in a brand-new one.