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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


Intro

Historically, the company's core consumers consist of the Original Devices Manufacturers (OEMs), which utilized to sell Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help items withtheir own brand name. Its customer circle includes Original Devices Manufacturers (OEMs), who utilized to offer Samsung products with their own brand name. He rearranged Samsung as a global brand name and educated his divisional managers to understand marketing and its significance.

Problem Declaration

Samsung's shift from an item based to a marketing business is not going as smoothly as planned.Overcoming the hesitation of divisional supervisors to incorporate marketing effectively is still a major challenge. Creating a consistent brand name identity across the whole world and using marketing methods that finest fits the regional culture is no simple task. The M-net program analysis have been truly practical in figuring out the high and less potential development areas, but allowance of resources accordingly is not well gotten among the managers. There is no consensus among the hierarchy regarding the best fit future technique.
Executive Summary
Situational Analysis

Yun had a quite clear image in his mind about how Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help can change from a low end to a high end item company. He knew that transformation can just be done through positioning Samsung as a company offering high-end items and this could only be done through high level of marketing.

In spite of having a clear vision about how to construct Samsung brand name, with a potential support of its executives, Yun dealt with numerous marketing difficulties in early years of its efforts.

Among the marketing obstacles for Yun was the perceptions of executives about the worth of marketing. They thought about marketing and selling as exact same tools and thought 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 current marketing requirement was excessive high, the gap was too broader and to fill this space with wrong perceptions about marketing was rather difficult for Yun.

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

A big shift would be required in existing marketing expenditures to develop the Samsung brand. This would result in increased marketing expenses for Samsung and could disturb the administration concerning increased costs, as they were unwilling to marketing expenses formerly and a sudden huge shiftwould make them disrupt.

Internal Analysis
SWOT Analysis
Strengths


Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution 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 Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis is its capability to establish innovative items at a constant rate. It significant shows for the development and item developing of Samsung is that the company has gotten so many awards for its innovation and item design.

Unlike Apple and other rivals, Samsung is focused on producing gadgets which can be quickly integrated with any type of open source Os (OS) and software. This supplies Samsung an edge over Apple devices.
Porter's 5 Forces Analysis
Samsung's ability to produce luxury products at low cost of production is likewise one of the major strength of Samsung as it enables the company to record more market by providing quality items with cost control.

Weaknesses

Samsung's weaknesses are hidden in the company's reliance on outsourcing software application for its devices due to business's failure in developing software application, unlike Sony. Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help likewise has low earnings margins as compare to Apple due to big distinction in the rates of Apple and Samsung with a much lower distinction in quality.

Opportunities

Opportunities for Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution lie in the growing Mobile phone market and the business's efficiency in the market. Samsung presently runs in about 80 countries and the business has an opportunity to increase its geographical growth by moving towards more emerging markets outside Asia.

Risks

The vibrant industry environment of innovation market posture an extreme risk on Samsung's survival and force the business to invest much of its profits share on R&D in order to survive in the long run. The marketplace saturation in developed countries i.e. saturation of mobile business is likewise a huge threat for the business's growth in the presence of strong rivals like Apple.

4 P's of Marketing
Swot Analysis
Item

Samsung uses quality products and has a quite rich portfolio which caters to different segments. LCD and mobile phones are the biggest products of Samsung, whereas DRAM is likewise not far behind in contrast of them.

• LCD/ TELEVISION
• Laptops.
• Cellphone.
• Air conditioning unit.
• Computer.
• Hard disks.
• Washer.
• Refrigerators.
• Video cameras.
• Microwaves.
• Flash memory.
• DRAM.

Cost.

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis uses both market competitive and market skimming pricing methods for its variety of items. In competitive prices it adjusts the rate according to the competition in order to get benefit, whereas, it utilizes market skimming method where the item has an added worth and by selling a few items it can reach break-even.

Place.

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

Promotion.
Vrio Analysis
It wasn't a widely known company beyond Korea up until 1993. The management initiative taken by their CEO has actually pushed them to market more effectively outside the borders and now it has gone into the league of leading 25 companies in the world in just 9 years. This is an impressive achievement despite the ongoing arguments among the supervisors about adopting marketing practices. It uses 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.

Worth Chain Analysis.

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

Inbound Logistics.

For its inbound logistics it owns different logistics firms as it subsidiaries. It looks after its suppliers and creates an unified relationship with them and even reduced their payment cycles to increase 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 items in-house. Divided into three different departments its operations are specifically IT & Mobile Communications, Device Solutions and Consumer Electronics. It is preserving operation hubs worldwide to even more include worth to its value chain network.

Outbound Logistics.

Its outgoing logistics system efficiency is among the main reasons Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help 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 tasks of collection of payment, settling insurance coverage claims, etc. on behalf of Samsung.

Marketing and Sales.

Drawing in target client attention towards the item is done through marketing and sales to interact with them the value and competitive advantage the product offers. Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution advertising budget is continually rising since they started their rearranging internationally and will continue to do so as they are constantly seeking to invest and broaden in high prospective development markets. The spending plan is spent on events, print and media advertisements, public relations and so on.

Samsung put their consumers at the top and continually strive to deliver unmatchable client service requirements. By adding a direct assistance line to contact 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 Help has diversified market division, based upon its arrangement of large range of items to large number of consumers. Samsung target consumer sectors 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 Consumer Electronic Devices and Samsung Device solutions.

Geographical.

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help geographical division is based upon 2 criteria i.e. region and density. Samsung serves about 80 nations worldwide with its items supplied to Urban along with Backwoods of the country. The Samsung is likewise growing its international existence and the business's flexibility in finding its plants motivates worldwide expansion of Samsung.

Group.

Samsung produces items that can be used by both males and women. The target clients for Samsung IT and mobile interaction products have an age range of 18-65 with bulk at a young or freshly married life cycle phase. Apart from it, Samsung Consumer Electronics are targeted to a client sector with an age variety of 25-65.

Psychographic.

The psychographic division of Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution s based upon the social class and the life style of the consumer. Samsung target clients on the basis of social class are primarily upper middle, middle and working class clients, as Samsung offer items like cell phones not much less expensive i.e. Motorola in addition to not much pricey i.e. Apple. It supplies quality products to middle level consumers at a somewhat high price than others targeting the same sector.

Behavioural.

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help bulk target clients have distinct behavioural qualities. They are attracted towards Samsung since of its moderate rates with a degree of quality.

Quantitative analysis.

Sales of Samsung has increased astonishingly from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net profit of.48 billion $ to 5.9 billion $. It has also lowered its financial obligation from 15 billion $ to 4.6 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. Earnings/ sales are increasing however net revenue is not increasing accordingly due to the fact that of the high overhead cost. New growths and employing's were the main factor of the increase in the overhead expenses, with china currently not providing any profit to Samsung, but there is a lot potential in the current market with 75 % yet to be checked out.

Qualitative analysis.

Whereas, the core strength of the company is presently making however long gone are those days when good items were selling themselves. Kim has already started to enhance the marketing activities of Samsung and very soon it will end up being one of its core strength like producing if not much better.

VRIO.

Value.

Samsung runs designs, manufactures and sell a vast portfolio of consumer electronics. It runs in an exceptionally competitive environment and has successfully positioned itself as the maker of quality products. The response is yes.

Rarity.

As, said earlier that Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help runs in an extremely competitive environment, which suggests all the companies have similar items. The response for rarity is no.

Imitability.

Due to the nature of the market, it is extremely simple for competitors to comprehend the performance of the products and easily make their own models. Yes, Samsung is just behind IBM in registering brand-new patents annually, but the advantage is very short term in this market.

Organization.

Chairman Lee has entirely turnaround Samsung, from going almost insolvent during the Asian monetary crisis of 1997 to the top 25 business on the planet. Definitely yes there appertains organization in the business and the results promote themselves.

External Ecological Analysis

PESTLE Analysis

Political

Being an international brand name spread almost in every nation worldwide, bulk of the environments like U.S.A., Europe, China and so on, are extremely conductive for its operations. However, it faces some political pressures in less industrialized countries where law and order circumstance is not good. Latin American, African and some Asian nations fall in this category, where political instability do have an impact on Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help operations.

Economic

Buying power of clients is important for business like Samsung to succeed and grow. Emerging markets like India, middle-eastern countries and so on supply development opportunities, whereas, due to recession even the consumers of developed countries suffer badly. It is really essential for the business to keep an eye on the continuous financial circumstance of the country prior to getting in the market.

Socio-Cultural

Multinational business need to deal with numerous social and cultural problems during its operations in a foreign country. Samsung has actually likewise faced numerous concerns however have actually adopted to the regional environments of most of the nations extremely well. It has tailored its items, practices, policies etc. accordingly in order to be successful.

Technological

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

Legal

Each country has their own laws and policies, being an international business Samsung need to strictly follow those laws in their jurisdictions. Failure to do so, will result in severe legal repercussions. It has to study or employ a regional law expert before beginning its operations in a particular country.

Environmental

With the rising awareness amongst customers about the ethical & environmental infractions of companies, Samsung needs to guarantee that it follows all the security guidelines. Environmental damages, ethical misconducts are not appropriate and in some countries the consequences can be really extreme. On the other hand it has to do some Business Social Obligation practices to reveal the residents that it cares about their environment and people.

Porter's 5 Forces

Risk of Alternative

Threat of replacement for Samsung's each product classification is quite significant. Running in an exceptionally dynamic market lead the business to face a high hazard of replacement. Aspects for high threat of alternative for Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis Smartphone include the existence of high number of suppliers and Market saturation in developed countries, which make the expense of changing for customers practically zero. Alternative dangers for Samsung visual display screen lie in the changing lifestyle of clients. Clients can switch to viewing visuals in your home towards outdoor activities. Together with it, Samsung printing services items are threatened by the increasing tourist attraction of customers towards cloud storage.

Competition Among Existing Companies:

The rivaly amongst Samsung and its close rivals is extreme. The significant reason behind this is the technique of market saturation in various number of item classifications, requiring Samsung to introduce more ingenious functions in existing products and brand-new innovative products to preserve its growth. Other element for the extreme rivalry among the rivals is the little product differentiation amongst the products. The prominent gamers in the technology industry are quite aware of the significance of R&D costs for their survival and are running into a race of marketing and R&D costs, to record the market. The major competitors for Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO and so on. High competition rivalry results in the changing market shares which can be seen in Exhibit F.

Bargaining Power of Providers:

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis has a large supply chain including 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 possible size and worth. These big orders enable Samsung to work out 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 possible provider of software for Samsung, resulting in high bargaining power of Google. Although, in most of cases Samsung has a power to work out costs, but it offer substantial costs to its suppliers to build a strong supply chain and to have strong relationships with its suppliers.

Bargaining Power of Buyers:

Negotiating power of purchasers for different number of item categories of Samsung is extreme. One of the aspect resulting in the extreme bargaining power is the availability of large number of competitors in practically each product category i.e. competitors of Samsung Smart device, with a very little differentiation. The high accessibility of suppliers of Smartphones with minimum distinction, make the changing expense for buyers nearly absolutely no, for this reason increasing the bargaining power of buyers. Market saturation in most of the product classifications also 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 quite capable of selling its items at a higher rate than much of its competitors, due to high end quality item and a reasonable brand image.

Risk of New Entrants:

Danger of brand-new entrants for Samsung is quite low. One of the significant factor for low risk of new entrants is the high competition in the industry. The requirement of huge quantity of capital to enter in the marketplace is also among the possible barrier to entry. Together with it, requirement of substantial expertise and research study and development expenditures for survival in the market likewise make brand-new entrants reluctant to go into in the market. Market saturation is also among the barrier of entry in technology industry. High bargaining power of suppliers force the players in the industry to charge as low costs as possible and this can only be accomplished by production effectiveness. New firms, in majority cases, lack the production efficiency, hence increasing the threats for entrance in the technology market.

Competitive Analysis

Samsung's high item diversity supplies it distinction from its rivals. Unlikely to its close rivals including Sony, Intel and Nokia, who focus bulk on a single item classification with Sony focusing on customer electronic devices, Nokia on cell phones and Intel on chips, Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis had a big R&D spending on all of its item categories which allow the business to earn potential revenue from sales of practically all of its products.

The business ranks initially in 4 item categories i.e. DRAM Chips, LCD Displays, Cinema Televisions and Microwave, in terms of international market share, amongst 8 various product categories. Samsung was the international leader in producing DRAM, SRAM and NAND flash chips. Although, Samsung earnings from chips was less than Intel but its profits from chips was growing much faster than Intel and has actually grown near to the profits levels of Intel, as given in the case Display 2.

Together with the chips Samsung mobile market was likewise growing at a high rate than its rivals i.e. Motorola and Nokia. Samsung's cell phone's sales development was 51% as compare to Motorola with just 4% and Nokia with absolutely no sales development. The significant reson behind Samsung's high growth despite of higher costs than Nokia and Motorola was the company's high-end quality cell phones.

Samsung was also profiting from increasing market share of high-end LCDs as given in case Display 3. The significant factor, making the company allow to get the opportunity is its mass production at low cost. Sony was the biggest competitor for Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution in LCD market, nevertheless, it had actually likewise started joint endeavor with Samsung in 2003 for LCD making, decreasing the competition for Samsung.

Porter's Competitive Strategy

Low Cost Leadership technique of porter is fully implemented by Samsung the way they accomplish economies of scale by reinforcing their core competencies of manufacturing. Even to the point that their rival SONY chose to form an alliance with them to produce for them, because they were unable to compete with them on low expense. Distinction is another method well carried out by Samsung by continuous investment in the R&D and remaining ahead of the competition. They always bring something new and ingenious whether it's an item or a service.

Alternatives

Alternative Service 1

The Chief Marketing Officer (CMO) of Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis would produce a brand-new brand image by targeting the more youthful generation of the particular nation. As, specifically smart phones of Samsung are preferred among the younger market.

Pros

1. It is the best technique to develop Consumer Lifetime Value (CLV) by developing a long-term relationship with consumers. Construct loyalty through providing value and reap the benefits for long-term, as research has actually revealed it is much cheaper to retain present customers than to bring in new ones.
2. Another pro of this alternative is that word of mouth spread quicker among younger people and which in turn will generate brand-new consumers for my products.

Cons

1. Old consumers who were related to Samsung prior to may not like this brand-new image the company is attempting to represent.
2 It will sustain more expenses to rearrange some products and it may not even bring success as the patterns change really quickly amongst the more youthful demographic.

Alternative service 2.

Samsung has made producing its core proficiency for the most part of their service and due to which its supervisors are not scared to completely get out of their comfort zone. It would be done by arranging training workshops during which significance of marketing will be taught and numbers will be given. Failure to get the passing scores will get demoted. Marketing environment must be produced internally initially as real marketing starts inside the corporation.

Pros

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

Cons

2. Its con can create an extremely unhealthy environment in the work environment, as individuals typically withstand change because they fear it.

Identify the best alternative

Option is the finest as it clearly has more pros since once a Consumer Lifetime Value is developed the company will benefit from it till that customer is alive and has purchasing power. Plus, our target clients are the more youthful generation which are bound to live longer than the current old age individuals. However, Samsung's primary objective is to create loyalty among its customers and make them repurchase it from them and even purchase their different items also.

Implementation Plan

• Targeting younger generation through social marketing, creating a link with them like Pepsi finish with music. And set the expectations attainable and realistic.
• A group including best marketing and sales experts should be put together, and both views must be taken into account before protecting the resources required to execute the plan.
• Thorough interaction of the strategy must be done as it is very crucial for everybody to be on the exact same page to make it work.
• Tasks and timelines must be construct and interacted appropriately to each person accountable.
• The supervisor should 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 need to keep track of and keep a constant examine the total and private efficiency.
• Everyone need to want to adapt midway because any brand-new trend or policy might can be found in due to which all the important things currently planned need to be changed. It's much better to have contingency strategies already prepared.
• At the end of the project the supervisor need to communicate the results and if effective need to celebrate with the team.

Budget

This change the budget plan allocation of numerous managers and various countries were unhappy and argued however the analysis done by the program was precise and revealed figures like North America and Russia growth potential merited a 35% allowance while they were getting 45%. It really assisted to relatively distribute the resources and catch more customers by investing more on advertisements on the high growth capacity regions of the world.
Recommendations
Conclusion

Its continuous investment in R&D and innovative practices have actually moved them to brand-new heights but for them its' only the start and they want to be among the leading 3 brands in the world. Their marketing efforts need to be directed towards younger demographic in the middle of the internal arguments about marketing and ought to create Consumer Lifetime Worth as it will not just give them advantages now but will continue to reap it till the consumer life time. As the cost of keeping the customer is much less expensive than attracting a brand-new one.