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Supply Chain Restructuring At Portugal Telecom B Harvard Case Study Solution

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Supply Chain Restructuring At Portugal Telecom B Case Study Solution and Analysis


Introduction

Supply Chain Restructuring At Portugal Telecom B Case Study Help is a well-known international brand name in innovation market, founded in 1938 by Lee Byung Chul, in South Korea. Supply Chain Restructuring At Portugal Telecom B handle large number of product categories consisting of Semiconductors, Telecom, Digital Media, Digital Appliances and many more other electronic items. Historically, the company's core consumers include the Original Equipment Manufacturers (OEMs), which used to sell Samsung items 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 consumer circle consists of Original Equipment Manufacturers (OEMs), who used to sell Supply Chain Restructuring At Portugal Telecom B Case Study Help items with their own brand. Samsung was not merely understood outside Korea. There were also no or little interest in developing the trademark name worldwide. Marketing spending plan was managed by production department with a focal point on providing low-cost products.During the 1997 Asian Financial Crisis the business almost got insolvent, however with the Vision of Chairman Lee it totally turn its fortune around and in 2002 was noted the top 25 most important company on the planet. When Kim was employed as a Chief Marketing Officer in 2000 the company was not even listed. He repositioned Samsung as a worldwide brand name and informed his divisional supervisors to understand marketing and its importance. Now their goal is to reach the top 10 by 2005.

Problem Declaration

Samsung's transition from an item based to a marketing business is not going as smoothly as planned.Overcoming the hesitation of divisional supervisors to include marketing successfully is still a major obstacle. Creating a constant brand identity throughout the entire world and utilizing marketing strategies that finest fits the regional culture is no simple job. The M-net program analysis have actually been truly handy in determining the high and less potential development locations, however allocation of resources accordingly is not well gotten among the supervisors. There is no agreement among the hierarchy relating to the very best matched future method.

Situational Analysis

Supply Chain Restructuring At Portugal Telecom B Case Study Help efforts for constructing its brand across the world was begun after presenting the "brand-new management initiative" by Chairman Lee in 1993. The goal was to change Samsung from a cheap OEM to a high value-added product provider. To make the vision of Samsung a truth, Chairman Lee selected Yun as a vice chairman in 1997. Yun had a rather clear picture in his mind about how Samsung can change from a low end to a high end product provider. He understood that transformation can only be done through placing Samsung as a business using high-end products 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 assistance of its executives, Yun faced numerous 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 exact same tools and believed that quality items do not required marketing for increasing sales. As their focus towards marketing was rather low in their previous service practices, and the existing marketing requirement was excessive high, the space was too wider and to fill this gap with wrong understandings about marketing was rather tough for Yun.

As specified above, marketing focus was extremely low in previous practices, therefore there were no proper marketing budget plans for each of the product on the portfolio. There was no marketing planning done for the existing products. Along with it the product range of the company was increasing with the ripening of new item 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 as well as for new items from the very beginning, and this would take a substantial time.

A huge shift would be needed in existing marketing expenses to construct the Supply Chain Restructuring At Portugal Telecom B Case Study Analysis brand name. This would result in increased marketing expenditures for Samsung and might interrupt the administration concerning increased costs, as they hesitated to marketing expenditures previously and a sudden big shiftwould make them disrupt. This could result in decreasing executive support for worldwide marketing. In this circumstance, Yun deals with a challenge for justifying increased marketing expenses by showing the long term worth of substantial marketing expenses.

Internal Analysis
SWOT Analysis
Strengths


Supply Chain Restructuring At Portugal Telecom B Case Study Help strengths lie in its substantial item portfolio. Samsung has largest number of patents in the market with total number of 15499 patents given in US( USP).

Another strength of Supply Chain Restructuring At Portugal Telecom B Case Study Help is its ability to establish innovative products at a constant rate. It major shows for the development and product developing of Samsung is that the company has gotten a lot of awards for its innovation and product design.

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

Samsung's capability to produce high-end items at low cost of production is likewise one of the major strength of Samsung as it allows the company to catch more market by supplying quality products with expense control.

Weaknesses

Samsung's weak points are hidden in the company's reliance on outsourcing software application for its gadgets due to business's failure in establishing software application, unlike Sony. Supply Chain Restructuring At Portugal Telecom B Case Study Help also has low earnings margins as compare to Apple due to substantial distinction in the rates of Apple and Samsung with a much lower difference in quality.

Opportunities

Opportunities for Samsung lie in the growing Smartphone market and the business's efficiency in the market. It can increase its market share and revenues from cellular phone as the business is quite effective in cellular phone market. Samsung currently runs in about 80 countries and the business has an opportunity to increase its geographical expansion by moving towards more emerging markets outside Asia. Samsung can move towards acquisitions to get patents. It would make it possible for the company to increase its item portfolio with a boost in its wealth.

Threats

The vibrant market environment of innovation market position a severe threat 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 company is likewise a huge danger for the business's growth in the existence of strong rivals like Apple.

4 P's of Marketing

Item

Samsung uses quality products and has a rather rich portfolio which caters to various segments. LCD and mobile phones are the greatest products of Samsung, whereas DRAM is likewise not far behind in comparison of them.

• LCD/ TV
• Laptops.
• Smart phone.
• Air conditioning system.
• Personal computers.
• Hard disk drives.
• Washing machines.
• Fridges.
• Video cameras.
• Microwaves.
• Flash memory.
• DRAM.

Price.

Supply Chain Restructuring At Portugal Telecom B Case Study Solution utilizes both market competitive and market skimming rates methods for its wide variety of items. In competitive rates it changes the price according to the competition in order to get advantage, whereas, it utilizes market skimming method where the item has actually an included value and by offering a few products it can reach break-even.

Place.

It has among the best supply chain networks, with retail distributors, their own sole distributors, E commerce channels like Amazon etc. All its items are prompt supplied to the selling location/ provided to the customers directly in case of online order.

Promo.

It utilizes both offline & online channels of promo to market their items. Paid product advertisements, social promo and digital advertisements are uses to develop awareness about Samsung products.

Value Chain Analysis.

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

Incoming Logistics.

It has one of the most efficient and efficient supply chain network and has over 2700 providers throughout numerous industries around the globe. Almost 80% of which is based in Asia and the staying around the globe. 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 reduced their payment cycles to improve this relationship further which includes value to their chain network.

Operations.

Samsung's core competency is its mass producing it produces 90% of its products internal. Divided into 3 different departments its operations are particularly IT & Mobile Communications, Device Solutions and Customer Electronic Devices. It is maintaining operation hubs worldwide to even more include value to its worth chain network.

Outbound Logistics.

Its outgoing logistics system performance is among the primary factors Supply Chain Restructuring At Portugal Telecom B Case Study Solution has the ability to compete with Apple. Samsung's own Electronic Logitec system plays a significant function 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.

Attracting target consumer attention towards the item is done through marketing and sales to interact with them the value and competitive benefit the product uses. Supply Chain Restructuring At Portugal Telecom B Case Study Solution marketing spending plan is continuously on the rise because they began their repositioning worldwide and will continue to do so as they are continuously seeking to expand and invest in high possible development markets. The budget plan is invested in occasions, print and media ads, public relations etc.

Samsung put their customers at the leading and continuously make every effort to provide unmatchable consumer service requirements. By including a direct support line to call them 24 hours they have actually further increased the added value of Samsung service.

Division.

Supply Chain Restructuring At Portugal Telecom B Case Study Help has diversified market division, based upon its provision of wide variety of items to large number of customers. Samsung target consumer sections can be divided into 3 categories i.e. Supply Chain Restructuring At Portugal Telecom B Case Study Help IT and Mobile Communications, Samsung Consumer Electronics and Samsung Gadget services.

Geographic.

Supply Chain Restructuring At Portugal Telecom B Case Study Help geographic segmentation is based upon 2 criteria i.e. region and density. Samsung serves about 80 countries worldwide with its items provided to Urban in addition to Rural areas of the nation. The Samsung is also growing its worldwide existence and the business's flexibility in finding its plants encourages worldwide growth of Samsung.

Demographic.

Samsung produces items that can be used by both males and females. The target consumers for Samsung IT and mobile communication products have an age range of 18-65 with bulk at a young or recently married life cycle stage. Apart from it, Samsung Consumer Electronic devices are targeted to a customer sector with an age variety of 25-65.

Psychographic.

The psychographic division of Supply Chain Restructuring At Portugal Telecom B Case Study Solution s based upon the social class and the lifestyle of the consumer. Samsung target consumers on the basis of social class are primarily upper middle, middle and working class consumers, as Samsung offer products like mobile phone not much cheaper i.e. Motorola along with not much costly i.e. Apple. It supplies quality products to middle level consumers at a slightly high price than others targeting the same section.

Behavioural.

Supply Chain Restructuring At Portugal Telecom B Case Study Analysis bulk target customers have unique behavioural attributes. They are drawn in towards Samsung due to the fact that of its moderate costs with a degree of quality.

Quantitative analysis.

Sales of Supply Chain Restructuring At Portugal Telecom B Case Study Help has increased amazingly 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.

Yes, this choice is based on the mission of Kim to target the more youthful audience and develop a global brand name picture of the company. Whereas, the core strength of the company is presently manufacturing but long gone are those days when good products were selling themselves. In the present age marketing is really essential and companies can not prosper without it. Kim has already begun to strengthen the marketing activities of Samsung and soon it will turn into one of its core strength like producing if not better.

VRIO.

Value.

Samsung runs designs, produces and sell a large portfolio of consumer electronics. It operates in a very competitive environment and has successfully placed itself as the maker of quality items. The answer is yes.

Rarity.

As, stated previously that Supply Chain Restructuring At Portugal Telecom B Case Study Solution runs in an extremely competitive environment, which suggests all the business have similar items. The answer for rarity is no.

Imitability.

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

Company.

Chairman Lee has totally turn-around Samsung, from going practically bankrupt during the Asian monetary crisis of 1997 to the top 25 business worldwide. Absolutely yes there appertains company in the business and the outcomes promote themselves.

External Environmental Analysis

PESTLE Analysis

Political

Being a multinational brand spread nearly in every country worldwide, bulk of the environments like USA, Europe, China and so on, are very conductive for its operations. It deals with some political pressures in less developed countries where law and order situation is not great. Latin American, African and some Asian nations fall in this category, where political instability do have an effect on Supply Chain Restructuring At Portugal Telecom B Case Study Analysis operations.

Economic

Purchasing power of customers is crucial for companies like Samsung to succeed and grow. Emerging markets like India, middle-eastern countries and so on offer development opportunities, whereas, due to economic crisis even the consumers of industrialized countries suffer terribly. It is very crucial for the company to keep an eye on the continuous financial scenario of the nation prior to entering the market.

Socio-Cultural

Multinational business have to deal with various social and cultural issues throughout its operations in a foreign country. Samsung has likewise faced numerous problems however have embraced to the regional environments of most of the countries exceptionally well. It has actually tailored its products, practices, policies etc. appropriately in order to succeed.

Technological

With an annual expenditure of 2.4 billion dollars in Research study & Development, and with constant ingenious item launches, Supply Chain Restructuring At Portugal Telecom B Case Study Solution is among the leading innovative business of the world. With a clear mission to be ahead of the rest when it concerns technological advancements, Samsung has 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 business Samsung need to strictly follow those laws in their jurisdictions. Failure to do so, will lead to serious legal repercussions. So, it has to study or work with a local law professional before beginning its operations in a specific country.

Environmental

With the increasing awareness amongst customers about the ecological & ethical offenses of business, Samsung has to ensure that it follows all the safety standards. Environmental damages, ethical misbehaviors are not appropriate and in some countries the repercussions can be really serious. On the other hand it needs to do some Business Social Responsibility practices to show the residents that it appreciates their environment and people.

Porter's 5 Forces

Danger of Alternative

Threat of alternative for Samsung's each product category is quite substantial. Elements for high threat of substitution for Supply Chain Restructuring At Portugal Telecom B Case Study Solution Mobile phone consist of the existence of high number of providers and Market saturation in developed nations, which make the expense of switching for customers practically no. Along with it, Samsung printing solutions items are threatened by the increasing attraction of consumers towards cloud storage.

Competition Among Existing Companies:

The rivaly among Samsung and its close rivals is intense. The significant reason behind this is the approach of market saturation in various number of product classifications, forcing Samsung to introduce more innovative features in existing products and new innovative items to keep its development. The significant competitors for Supply Chain Restructuring At Portugal Telecom B Case Study Help samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO and so on.

Supply Chain Restructuring At Portugal Telecom B Case Study Analysis has a vast supply chain including about 2700 providers throughout 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 allow Samsung to work out rates with its providers. Due to incapability of Samsung to construct its own software application, it has to outsource its software application development to Google, which becomes a prospective provider of software application for Samsung, resulting in high bargaining power of Google. In many of Supply Chain Restructuring At Portugal Telecom B Case Study Analysis has a power to work out costs, however it provide substantial costs to its suppliers to build a strong supply chain and to have strong relationships with its suppliers.

Bargaining Power of Buyers:

Market saturation in most of the product categories likewise make the bargaining power of buyers more extreme in for Samsung. In spite of igh bargaining power Samsung is quite capable of selling its products at a greater rate than much of its competitors, due to high end quality item and a fair brand image.

Threat of New Entrants:

Risk of new entrants for Samsung is rather low. One of the major aspect for low risk of new entrants is the high competitors in the industry. The requirement of substantial amount of capital to go into in the market is also among the potential barrier to entry. Along with it, requirement of substantial competence and research and advancement expenses for survival in the industry also make new entrants hesitant to go into in the marketplace. Market saturation is also one of the barrier of entry in technology industry. High bargaining power of providers require the gamers in the market to charge as low prices as possible and this can only be achieved by production performance. Brand-new companies, in bulk cases, lack the production effectiveness, hence increasing the threats for entryway in the technology market.

Competitive Analysis

Samsung's high product diversity provides it differentiation from its competitors. It is one of the three top brands by market share. Unlikely to its close competitors consisting of Sony, Intel and Nokia, who focus bulk on a single item category with Sony concentrating on customer electronic devices, Nokia on cell phones and Intel on chips, Samsung had a huge R&D costs on all of its item categories which make it possible for the business to make prospective income from sales of almost all of its items. (See Exhibit) However, due to the broad product range the business faces high variety of competitors.

The company ranks first in 4 product categories i.e. DRAM Chips, LCD Displays, Cinema Televisions and Microwave, in terms of international market share, amongst 8 different product categories. Samsung was the worldwide leader in making DRAM, SRAM and NAND flash chips. Although, Samsung revenues from chips was less than Intel however its earnings from chips was growing faster than Intel and has grown close to the revenue levels of Intel, as given in the case Display 2.

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

Samsung was likewise profiting from increasing market share of luxury LCDs as given up case Exhibition 3. The major reason, making the business allow to avail the chance is its mass production at low cost. Sony was the biggest rival for Supply Chain Restructuring At Portugal Telecom B Case Study Analysis in LCD market, however, it had actually likewise begun joint venture with Samsung in 2003 for LCD making, lessening the competitors for Samsung.

Porter's Competitive Technique

Low Cost Leadership method of porter is completely implemented by Samsung the way they achieve economies of scale by strengthening their core competencies of production. They always bring something new and innovative whether it's a service or an item.

Alternatives

Alternative Option 1

The Chief Marketing Officer (CMO) of Supply Chain Restructuring At Portugal Telecom B Case Study Help would develop a brand-new brand image by targeting the more youthful generation of the particular country. As, particularly smart phones of Samsung are very popular amongst the younger demographic.

Pros

1. It is the best method to develop Consumer Life time Value (CLV) by developing a long-lasting relationship with customers. Build commitment through delivering value and reap the benefits for long-term, as research has revealed it is more affordable to keep existing customers than to bring 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 brand-new consumers for my products.

Cons

1. Old clients who were related to Samsung before may not like this new image the company is attempting to represent.
2 It will sustain more expenses to reposition some items and it might not even bring success as the trends alter really quickly amongst the more youthful group.

Alternative solution 2.

Samsung has actually made making its core proficiency for the most part of their service and due to which its supervisors are not scared to fully get out of their convenience zone. It would be done by setting up training workshops during which importance of marketing will be taught and numbers will be provided. Failure to get the passing scores will get benched. Marketing environment should be created internally initially as genuine marketing begins inside the corporation.

Pros

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

Cons

2. Its con can create an extremely unhealthy environment in the workplace, as people typically withstand change due to the fact that they fear it.

Identify the best option

Option is the finest as it clearly has more pros due to the fact that when a Client Lifetime Worth is built the company will benefit from it till that consumer is alive and has acquiring power. Plus, our target customers are the younger generation which are bound to live longer than the present old age people. Samsung's main objective is to create loyalty amongst its consumers and make them repurchase it from them and even buy their various products.

Application Plan

• Targeting more youthful generation through social marketing, creating a link with them like Pepsi make with music. And set the expectations practical and achievable.
• A team including best marketing and sales specialists need to be put together, and both views ought to be considered prior to securing the resources needed to carry out the strategy.
• Thorough interaction of the plan should be done as it is very essential for everybody to be on the very same page to make it work.
• Tasks and timelines must be build and interacted accordingly to each person responsible.
• The supervisor need to use a dashboard which shows the progress of all the jobs which have actually been done or about to be done and by whom.
• The supervisor must keep track of and keep a continuous look at the total and specific efficiency.
• Everyone should want to adapt midway since any brand-new pattern or policy might be available in due to which all the important things currently prepared have to be adjusted. It's better to have contingency plans currently prepared.
• At the end of the campaign the supervisor ought to communicate the outcomes and if effective need to commemorate with the team.

Budget plan

The M-net program exposed compelling analysis about the low and high growth prospective areas and just how much advertising spending plan must be designated accordingly. This change the budget plan allowance of lots of managers and different countries were dissatisfied and argued but the analysis done by the program was precise and revealed figures like The United States and Canada and Russia growth potential warranted a 35% allocation while they were getting 45%. Whereas, China and Europe should be getting 42% however were instead offered 31%. It truly helped to relatively distribute the resources and record more consumers by investing more on ads on the high development potential areas of the world.

Conclusion

Supply Chain Restructuring At Portugal Telecom B Case Study Help is a top 25 business in the world now and prepares to get ahead of Sony who sits presently at no. 20. Its continuous financial investment in R&D and ingenious practices have propelled them to brand-new heights but for them its' only the start and they want to be amongst the top 3 brand names on the planet. They entirely turn-around from practically going bankrupt throughout the Asian Financial Crisis to a world prominent brand name, understood for quality and innovation. Their value chain and their core competency their production ability, along-with international brand name image structure have actually seen their sales go from 16 to 44.6 billion $ from 1997-- 2002. With additional expansion in China and other emerging markets those numbers will only increase further in the future. Their marketing efforts must be directed towards younger demographic amid the internal arguments about marketing and must develop Client Life time Worth as it will not just provide benefits now however will continue to gain it till the consumer lifetime. As the expense of maintaining the client is more affordable than attracting a new one.