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Under Armour And The Sports Apparel And Footwear Industry In 2008 Harvard Case Study Analysis

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Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution & Analysis


Introduction

Historically, the company's core clients include the Original Devices Manufacturers (OEMs), which used to offer Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help products withtheir own brand name. Its client circle consists of Original Equipment Manufacturers (OEMs), who utilized to sell Samsung products with their own brand name. He repositioned Samsung as an international brand name and educated his divisional supervisors to comprehend marketing and its importance.

Problem Declaration

Samsung's shift from an item based to a marketing business is not going as efficiently as planned.Overcoming the hesitation of divisional managers to include marketing efficiently is still a major difficulty. Producing a constant brand identity throughout the entire world and using marketing techniques that best fits the local culture is no easy job. The M-net program analysis have actually been truly helpful in identifying the high and less potential development areas, however allocation of resources appropriately is not well gotten amongst the supervisors. There is no agreement amongst the hierarchy regarding the best fit future method.

Situational Analysis

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help efforts for constructing its brand name across the world was started 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 supplier. To make the vision of Samsung a truth, 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 company. He understood that transformation can just be done through placing Samsung as a company providing high-end products 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 possible support of its executives, Yun dealt with several marketing difficulties in early years of its efforts.

Among the marketing difficulties for Yun was the perceptions of executives about the worth of marketing. They considered marketing and selling as same tools and believed that quality products do not needed marketing for increasing sales. As their focus towards marketing was rather low in their previous service practices, and the existing marketing requirement was too much high, the gap was too larger and to fill this gap with wrong understandings about marketing was rather difficult for Yun.

As stated above, marketing focus was very low in previous practices, for that reason there were no correct marketing budget plans for each of the product on the portfolio. There was no marketing planning provided for the existing products. In addition to it the product variety of the company was increasing with the ripening of new product ideas by the R&D sector of Samsung. Yun had a challenge to perform marketing preparation and to produce marketing spending plans for existing along with for new items from the very start, and this would take a substantial time.

A big shift would be required in present marketing expenses to develop the Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help brand. This would lead to increased marketing expenditures for Samsung and might interrupt the administration relating to increased expenses, as they were reluctant to marketing expenditures previously and an abrupt big shiftwould make them disturb. This could lead to declining executive support for global marketing. In this scenario, Yun faces a challenge for justifying increased marketing costs by demonstrating the long term value of huge marketing expenditures.

Internal Analysis
SWOT Analysis
Strengths


Samsung strengths lie in its huge product portfolio. Samsung has largest number of patents in the industry with overall number of 15499 patents approved in US( USP). Big quantity of R&D costs has allowed the company to grow its product portfolio at a greater rate than its competitors. Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution spent about $13.079 billion on its R&D sector in 2016, which is 7.3% of its total earnings.

Another strength of Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution is its capability to develop innovative products at a continuous rate. It significant shows for the development and product creating of Samsung is that the business has actually received so many awards for its innovation and item design.

Unlike Apple and other competitors, Samsung is concentrated on producing devices which can be easily integrated with any type of open source Operating System (OS) and software. This provides Samsung an edge over Apple gadgets.

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

Weak points

Samsung's weak points are concealed in the company's reliance on outsourcing software for its devices due to company's inability in developing software application, unlike Sony. Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis likewise has low revenue margins as compare to Apple due to huge difference in the rates of Apple and Samsung with a much lesser difference in quality.

Opportunities

Opportunities for Samsung lie in the growing Smart device market and the business's performance in the market. It can increase its market share and revenues from cell phone as the business is rather effective in cell 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 get patents. It would allow the company to increase its product portfolio with a boost in its wealth.

Hazards

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

4 P's of Marketing

Item

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help provides quality products and has a quite rich portfolio which caters to different sectors. The majority of the products are in the top three of their respective industries. LCD and cellphones are the biggest products of Samsung, whereas DRAM is also not far behind in comparison of them. Following is the product line of Samsung:

• LCD/ TV
• Laptops.
• Smart phone.
• Air conditioning unit.
• Personal computers.
• Hard drives.
• Washer.
• Fridges.
• Cameras.
• Microwaves.
• Flash memory.
• DRAM.

Cost.

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution uses both market competitive and market skimming prices strategies for its wide range of items. In competitive rates it adjusts the price according to the competitors in order to acquire benefit, whereas, it utilizes market skimming strategy where the item has an included value and by offering a few products it can reach break-even.

Location.

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

Promo.

It wasn't a popular company beyond Korea up until 1993. However the management effort taken by their CEO has pushed them to market more efficiently outside the borders and now it has actually entered the league of top 25 business in the world in simply 9 years. This is an amazing achievement despite the ongoing arguments among the supervisors about embracing marketing practices. It utilizes both offline & online channels of promotion to market their items. Paid item advertisements, social promotion and digital ads are utilizes to create awareness about Samsung items.

Value Chain Analysis.

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

Inbound Logistics.

It has among the most efficient and effective supply chain network and has more than 2700 suppliers throughout various industries around the globe. Nearly 80% of which is based in Asia and the staying around the globe. For its incoming logistics it owns different logistics firms as it subsidiaries. It cares for its providers and produces a harmonious relationship with them and even decreased their payment cycles to enhance this relationship even more which adds worth to their chain network.

Operations.

Samsung's core proficiency is its mass making it produces 90% of its items internal. Divided into three different divisions its operations are particularly IT & Mobile Communications, Gadget Solutions and Consumer Electronic Devices. It is preserving operation centers worldwide to even more add worth to its worth chain network.

Outbound Logistics.

Its outgoing logistics system performance is among the main reasons Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution is able to take on Apple. Samsung's own Electronic Logitec system plays a major role in the outgoing logistics operations. It even carries out the tasks of collection of payment, settling insurance coverage claims, etc. on behalf of Samsung.

Marketing and Sales.

Attracting target consumer attention towards the item is done through marketing and sales to communicate with them the value and competitive benefit the product uses. Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help marketing budget is constantly increasing since they started their repositioning internationally and will continue to do so as they are continuously wanting to expand and invest in high possible development markets. The budget plan is spent on occasions, print and media ads, public relations and so on.

Samsung put their customers at the top and continually strive to deliver unmatchable consumer service standards. By adding a direct assistance line to call them 24 hours they have actually even more increased the included worth of Samsung service.

Segmentation.

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution has diversified market division, based upon its provision of wide range of products to large number of customers. Samsung target consumer segments can be divided into 3 classifications i.e. Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis IT and Mobile Communications, Samsung Customer Electronic Devices and Samsung Device options.

Geographic.

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution geographical segmentation is based upon 2 requirements i.e. area and density. Samsung serves about 80 countries worldwide with its items supplied to Urban as well as Rural areas of the country. The Samsung is likewise growing its global existence and the business's versatility in locating its plants motivates international growth of Samsung.

Demographic.

The demographic division of Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help is based upon gender, age, life-cycle phase and profession. Samsung produces items that can be utilized by both females and males. The target customers for Samsung IT and mobile interaction products have an age variety of 18-65 with majority at a young or freshly wed life cycle phase. They are mainly trainees, staff members and professionals. Apart from it, Samsung Customer Electronic devices are targeted to a customer segment with an age series of 25-65. They are primarily staff members and professionals. Samsung Gadget Solutions are targeted at students, workers and experts with an age range of 25-65.

Psychographic.

The psychographic segmentation of Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help s based upon the social class and the life style of the customer. Samsung target customers on the basis of social class are primarily upper middle, middle and working class clients, as Samsung offer products like mobile phone very little cheaper i.e. Motorola along with not much costly i.e. Apple. It supplies quality items to middle level customers at a somewhat high rate than others targeting the exact same sector.

Behavioural.

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis bulk target customers have distinct behavioural qualities. They are attracted towards Samsung because of its moderate costs with a degree of quality.

Quantitative analysis.

Sales of Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis has actually increased astonishingly 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 classification 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 produce a worldwide brand name image of the company. Whereas, the core strength of the company is currently producing but long gone are those days when good products were selling themselves. In the present age marketing is extremely essential and business can not be successful without it. Kim has actually already begun to reinforce 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 sell a huge portfolio of customer electronic devices. It runs in a very competitive environment and has effectively placed itself as the maker of quality items. So, the response is yes.

Rarity.

As, stated earlier that Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution runs in a highly competitive environment, which suggests all the companies have similar products. The answer for rarity is no.

Imitability.

Due to the nature of the industry, it is really simple for competitors to comprehend the performance of the products and quickly make their own models. Yes, Samsung is only behind IBM in registering brand-new patents yearly, however the advantage is really short-term in this industry.

Organization.

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

External Ecological Analysis

PESTLE Analysis

Political

Being a multinational brand spread nearly in every nation worldwide, majority of the environments like U.S.A., Europe, China etc., are extremely conductive for its operations. However, it deals with some political pressures in less industrialized nations where law and order situation is not good. Latin American, African and some Asian nations fall in this category, where political instability do have a result on Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help operations.

Economic

Purchasing power of clients is essential for companies like Samsung to be successful and grow. Emerging markets like India, middle-eastern countries and so on offer development chances, whereas, due to economic crisis even the customers of industrialized countries suffer severely. It is really important for the business to keep an eye on the continuous financial scenario of the nation before getting in the market.

Socio-Cultural

International business have to deal with various social and cultural issues throughout its operations in a foreign nation. Samsung has also faced many problems however have actually embraced to the regional environments of most of the countries incredibly well. It has tailored its products, practices, policies etc. appropriately in order to be successful.

Technological

With a yearly expenditure of 2.4 billion dollars in Research study & Development, and with continuous innovative product launches, Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution is among the top innovative business of the world. With a clear objective to be ahead of the rest when it comes to technological improvements, Samsung has risen to the no 25 of the leading effective companies of the world.

Legal

Each country has their own laws and policies, being an international company Samsung have to strictly follow those laws in their jurisdictions. Failure to do so, will lead to severe legal repercussions. So, it has to study or employ a local law expert prior to beginning its operations in a particular nation.

Environmental

With the rising awareness among customers about the ecological & ethical offenses of business, Samsung needs to guarantee that it follows all the security standards. Ecological damages, ethical misconducts are not appropriate and in some countries the consequences can be extremely extreme. On the other hand it needs to do some Business Social Responsibility practices to reveal the residents that it cares about their environment and individuals.

Porter's Five Forces

Hazard of Substitution

Danger of alternative for Samsung's each product classification is quite significant. Elements for high risk of alternative for Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis Mobile phone consist of the presence of high number of providers and Market saturation in industrialized nations, which make the cost of changing for customers nearly zero. Along with it, Samsung printing options items are threatened by the increasing attraction of customers towards cloud storage.

Competition Among Existing Companies:

The rivaly among Samsung and its close competitors is extreme. The major reason behind this is the approach of market saturation in various number of item categories, requiring Samsung to present more ingenious features in existing items and brand-new innovative products to preserve its development. Other factor for the extreme rivalry amongst the competitors is the little product distinction amongst the products. The prominent gamers in the innovation market are rather familiar with the value of R&D spending for their survival and are running into a race of marketing and R&D spending, to capture the market. The major competitors for Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO and so on. High competition rivalry results in the varying market shares which can be seen in Exhibition F.

Bargaining Power of Providers:

( Samsung Sustainability Report, 2016) Provider's bargaining power for Samsung is low as Samsung runs economies of scale and its orders are of potential size and worth. Due to incapability of Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help to construct its own software application, 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.

Bargaining Power of Purchasers:

Haggling power of buyers for various variety of item classifications of Samsung is intense. One of the element causing the intense bargaining power is the availability of a great deal of competitors in almost each item classification i.e. rivals of Samsung Smart device, with a really little distinction. The high schedule of providers of Mobile phones with minimum distinction, make the changing cost for buyers practically zero, thus increasing the bargaining power of buyers. Market saturation in most of the item classifications likewise make the bargaining power of purchasers more intense in for Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution. In spite of igh bargaining power Samsung is rather capable of offering its products at a greater cost than much of its competitors, due to high end quality item and a reasonable brand image.

Threat of New Entrants:

Danger of new entrants for Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution is rather low. Along with it, requirement of substantial proficiency and research study and development expenditures for survival in the market likewise make brand-new entrants hesitant to go into in the market. Market saturation is also one of the barrier of entry in technology market.

Competitive Analysis

Samsung's high product diversification provides it distinction from its rivals. Unlikely to its close rivals consisting of Sony, Intel and Nokia, who focus bulk on a single product classification with Sony focusing on consumer electronics, Nokia on cell phones and Intel on chips, Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help had a substantial R&D spending on all of its product categories which make it possible for the business to make possible revenue from sales of nearly all of its items.

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

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

Samsung was likewise profiting from increasing market share of high-end LCDs as given up case Exhibit 3. The significant reason, making the business enable to get the chance is its mass production at low cost. Sony was the biggest rival for Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help in LCD market, however, it had actually also begun joint endeavor with Samsung in 2003 for LCD manufacturing, reducing the competitors for Samsung.

Porter's Competitive Technique

Low Expense Leadership strategy of porter is totally carried out by Samsung the method they attain economies of scale by reinforcing their core proficiencies of production. They constantly bring something ingenious and new whether it's a product or a service.

Alternatives

Alternative Option 1

The Chief Marketing Officer (CMO) of Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help would produce a new brand name image by targeting the more youthful generation of the specific country. As, specifically cellphones of Samsung are very popular amongst the younger demographic.

Pros

1. It is the best technique to construct Consumer Life time Worth (CLV) by developing a long-term relationship with customers. Construct commitment through delivering worth and profit for long-lasting, as research has revealed it is more affordable to retain existing customers than to attract new ones.
2. Another pro of this option is that word of mouth spread quicker amongst more youthful individuals and which in turn will bring in brand-new customers for my items.

Cons

1. Old customers who were connected with Samsung prior to may not like this brand-new image the business is trying to represent.
2 It will sustain further expenditures to reposition some items and it might not even bring success as the patterns alter extremely rapidly amongst the more youthful market.

Alternative solution 2.

Samsung has actually made making its core proficiency for the most part of their organisation and due to which its managers are not scared to completely get out of their comfort zone. It would be done by arranging training workshops during which importance of marketing will be taught and numbers will be offered. Failure to get the passing scores will get demoted. Marketing environment must be developed internally initially as real marketing begins inside the corporation.

Pros

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

Cons

2. Its con can develop an extremely unhealthy environment in the workplace, as people frequently resist modification since they fear it.

Identify the very best alternative

Option is the best as it clearly has more pros due to the fact that when a Customer Lifetime Value is developed the business will benefit from it till that client is alive and has purchasing power. Plus, our target clients are the more youthful generation which are bound to live longer than the existing old age individuals. Samsung's primary goal is to create loyalty amongst its customers and make them repurchase it from them and even buy their different products.

Implementation Plan

• Targeting more youthful generation through social marketing, creating a link with them like Pepsi finish with music. And set the expectations realistic and attainable.
• A group consisting of finest marketing and sales experts must be assemble, and both views ought to be considered before securing the resources needed to execute the strategy.
• Thorough communication of the strategy should be done as it is very crucial for everyone to be on the exact same page to make it work.
• Jobs and timelines should be construct and interacted appropriately to each individual responsible.
• The manager must utilize a dashboard which shows the progress of all the tasks which have actually been done or about to be done and by whom.
• The manager must keep track of and keep a consistent look at the specific and total performance.
• Everyone must want to adapt midway due to the fact that any brand-new trend or policy might come in due to which all the important things already planned need to be adjusted. It's better to have contingency strategies already prepared.
• At the end of the campaign the manager ought to communicate the results and if effective must celebrate with the team.

Budget

The M-net program revealed compelling analysis about the low and high development prospective areas and how much marketing spending plan should be allocated appropriately. This change the budget plan allowance of lots of supervisors and various nations were unhappy and argued but the analysis done by the program was accurate and revealed figures like The United States and Canada and Russia growth prospective merited a 35% allowance while they were getting 45%. Whereas, China and Europe should be getting 42% however were rather given 31%. It actually helped to fairly disperse the resources and catch more clients by investing more on advertisements on the high growth potential regions of the world.

Conclusion

Its consistent investment in R&D and ingenious practices have actually propelled them to brand-new heights however for them its' only the start and they want to be among the top 3 brands in the world. Their marketing efforts must be directed towards younger market amidst the internal arguments about marketing and should create Consumer Lifetime Worth as it will not only provide them benefits now however will continue to enjoy it till the client life time. As the expense of retaining the customer is much cheaper than attracting a brand-new one.