Menu

Valuation Project Harvard Case Study Solution

Home >> Hrm >> Valuation Project

Valuation Project Case Study Solution and Analysis


Intro

Historically, the company's core clients include the Original Equipment Manufacturers (OEMs), which used to sell Valuation Project Case Study Analysis products withtheir own brand name. Its client circle consists of Original Devices Manufacturers (OEMs), who used to sell Samsung products with their own brand name. He repositioned Samsung as an international brand and informed his divisional managers to comprehend marketing and its value.

Problem Declaration

Samsung's shift from a product based to a marketing business is not going as smoothly as planned.Overcoming the unwillingness of divisional managers to incorporate marketing efficiently is still a significant challenge. Producing a constant brand name identity throughout the entire world and utilizing marketing strategies that best fits the regional culture is no easy task.

Situational Analysis

Valuation Project Case Study Solution efforts for building its brand name throughout the world was begun after introducing the "new management initiative" by Chairman Lee in 1993. The goal was to change Samsung from a low-cost OEM to a high value-added item service provider. To make the vision of Samsung a reality, Chairman Lee appointed Yun as a vice chairman in 1997. Yun had a rather clear picture in his mind about how Samsung can transform from a low end to a high-end item provider. He knew that transformation can only be done through placing Samsung as a business providing high-end products and this might 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 a number of marketing obstacles in early years of its efforts.

Among the marketing obstacles for Yun was the understandings of executives about the value of marketing. They thought about marketing and selling as very same tools and believed that quality items do not needed marketing for increasing sales. As their focus towards marketing was rather low in their previous business practices, and the current marketing requirement was excessive high, the gap was too wider and to fill this space with wrong understandings about marketing was quite challenging for Yun.

Along with it the item 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 carry out marketing planning and to produce marketing spending plans for existing as well as for brand-new products from the very beginning, and this would take a huge time.

A huge shift would be needed in current marketing expenses to construct the Samsung brand name. This would result in increased marketing expenses for Samsung and could disturb the administration relating to increased costs, as they were reluctant to marketing expenses formerly and an unexpected huge shiftwould make them disturb.

Internal Analysis
SWOT Analysis
Strengths


Samsung strengths lie in its big item portfolio. Samsung has largest number of patents in the market with overall variety of 15499 patents granted in United States( USP). Big amount of R&D spending has actually made it possible for the business to grow its item portfolio at a greater rate than its rivals. Valuation Project 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 Valuation Project Case Study Help is its capability to establish ingenious products at a continuous rate. It major shows for the development and product creating of Samsung is that the company has actually gotten so many awards for its innovation and product design.

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

Samsung's ability to produce luxury items at low expense of production is also among the significant strength of Samsung as it allows the company to catch more market by providing quality products with cost control.

Weak points

Valuation Project Case Study Analysis weak points are hidden in the business's reliance on outsourcing software for its gadgets due to business's failure in developing software application, unlike Sony. Samsung also has low profit margins as compare to Apple due to substantial difference in the prices of Apple and Samsung with a much lower difference in quality. The diverse focus of the business due to a great deal of items in its portfolio, lead to the less effective production and make the business unable to charge higher prices like Apple. The company is also inefficient in handling its patents and often faces the issue of patent offense.

Opportunities

Opportunities for Valuation Project Case Study Help lie in the growing Mobile phone market and the company's effectiveness in the market. Samsung currently runs in about 80 nations and the company has an opportunity to increase its geographical growth by moving towards more emerging markets outside Asia.

Threats

The vibrant market environment of technology market position a serious threat on Samsung's survival and require the company to invest much of its incomes share on R&D in order to endure in the long run. The marketplace saturation in developed countries i.e. saturation of mobile company is likewise a big danger for the company's development in the presence of strong competitors like Apple.

4 P's of Marketing

Item

Valuation Project Case Study Analysis uses quality products and has a rather abundant portfolio which caters to various sectors. The majority of the items remain in the top three of their particular industries. LCD and cellphones are the greatest products of Samsung, whereas DRAM is likewise not far behind in contrast of them. Following is the product line of Samsung:

• LCD/ TV
• Laptops.
• Cellphone.
• Air conditioning unit.
• Personal computers.
• Hard disks.
• Washing machines.
• Fridges.
• Video cameras.
• Microwaves.
• Flash memory.
• DRAM.

Price.

Valuation Project Case Study Analysis utilizes both market competitive and market skimming pricing methods for its wide variety of items. In competitive pricing it changes the price according to the competition in order to get benefit, whereas, it utilizes market skimming technique where the product has an added worth and by selling a couple of items it can reach break-even.

Location.

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

Promotion.

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

Worth Chain Analysis.

It's an analytical framework for identifying business activities that include value or competitive advantage for the business.

Inbound Logistics.

For its incoming logistics it owns numerous logistics firms as it subsidiaries. It looks after its providers and develops an unified relationship with them and even decreased their payment cycles to enhance this relationship further which adds worth to their chain network.

Operations.

Samsung's core competency is its mass producing it produces 90% of its items internal. Divided into three various departments its operations are namely IT & Mobile Communications, Device Solutions and Customer Electronics. It is preserving operation hubs worldwide to further add value to its value chain network.

Outbound Logistics.

Its outgoing logistics system efficiency is one of the main reasons Valuation Project Case Study Solution has the ability to compete with 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 claims, etc. on behalf of Samsung.

Marketing and Sales.

Drawing in target consumer attention towards the item is done through marketing and sales to communicate with them the worth and competitive benefit the item uses. Valuation Project Case Study Solution marketing spending plan is continually rising because they began their rearranging internationally and will continue to do so as they are continuously looking to invest and broaden in high prospective growth markets. The budget plan is spent on occasions, print and media advertisements, public relations etc.

Samsung Service. Samsung put their consumers on top and continuously aim to deliver unmatchable customer service standards. As after sales service is ending up being very crucial to keep consumers delighted and engaged, they even conduct surveys through third parties to discover their consumer's feedback and execute it in the positive way to reduce or if possible entirely eliminate their customer concerns. By including a direct support line to call them 24 hr they have further increased the included worth of Valuation Project Case Study Solution service.

Segmentation.

Valuation Project Case Study Analysis has actually diversified market segmentation, based upon its provision of vast array of products to large number of customers. Samsung target consumer sectors can be divided into 3 categories i.e. Valuation Project Case Study Help IT and Mobile Communications, Samsung Customer Electronic Devices and Samsung Device solutions.

Geographical.

Valuation Project Case Study Solution geographic division is based upon two requirements i.e. area and density. Samsung serves about 80 nations worldwide with its items offered to Urban as well as Backwoods of the country. The Samsung is likewise growing its worldwide presence and the business's flexibility in finding its plants encourages global expansion of Samsung.

Group.

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

Psychographic.

The psychographic segmentation of Valuation Project Case Study Solution s based upon the social class and the life style of the consumer. Samsung target consumers on the basis of social class are mainly upper middle, middle and working class clients, as Samsung offer products like mobile phone not much cheaper i.e. Motorola in addition to not much costly i.e. Apple. It supplies quality items to middle level customers at a somewhat high price than others targeting the same section.

Behavioural.

Valuation Project Case Study Solution majority target customers have distinct behavioural attributes. They are attracted towards Samsung due to the fact that of its moderate prices with an extent of quality.

Quantitative analysis.

Sales of Valuation Project Case Study Analysis has actually increased astonishingly from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net earnings of.48 billion $ to 5.9 billion $. Digital media is the largest selling classification of Samsung with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales.

Qualitative analysis.

Yes, this choice is based upon the objective of Kim to target the younger audience and produce an international brand picture of the company. Whereas, the core strength of the company is currently manufacturing however long gone are those days when excellent products were offering themselves. In the present age marketing is extremely crucial and companies can not prosper without it. Kim has already begun to strengthen the marketing activities of Samsung and very soon it will turn into one of its core strength like making if not much better.

VRIO.

Value.

Samsung operates styles, manufactures and sell a large portfolio of consumer electronics. It operates in an extremely competitive environment and has effectively positioned itself as the maker of quality products. So, the answer is yes.

Rarity.

As, said earlier that Valuation Project Case Study Solution runs in a highly competitive environment, which indicates all the companies have similar items. The answer for rarity is no.

Imitability.

Due to the nature of the industry, it is very simple for competitors to comprehend the performance of the products and quickly make their own designs. Yes, Samsung is just behind IBM in registering brand-new patents annually, but the benefit is really short-term in this industry.

Company.

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

External Ecological Analysis

PESTLE Analysis

Political

Being a multinational brand spread nearly in every country worldwide, bulk of the environments like U.S.A., Europe, China and so on, are really conductive for its operations. It deals with some political pressures in less developed countries where law and order scenario is not excellent. Latin American, African and some Asian countries fall in this classification, where political instability do have an impact on Valuation Project Case Study Help operations.

Economic

Purchasing power of clients is vital for business like Samsung to grow and be successful. Emerging markets like India, middle-eastern countries and so on offer growth opportunities, whereas, due to economic crisis even the clients of industrialized nations suffer terribly. Thus it is really important for the business to watch on the continuous economic scenario of the country prior to going into the marketplace.

Socio-Cultural

Multinational business have to deal with various social and cultural concerns during its operations in a foreign nation. Samsung has actually likewise faced many concerns however have adopted to the regional environments of most of the countries incredibly well. It has actually tailored its items, practices, policies etc. appropriately in order to be successful.

Technological

With an annual expense of 2.4 billion dollars in Research study & Advancement, and with continuous ingenious item launches, Valuation Project Case Study Solution is among the top ingenious 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 effective business of the world.

Legal

Each nation 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 result in severe legal repercussions. So, it has to study or employ a local law expert prior to starting its operations in a specific country.

Environmental

With the increasing awareness amongst consumers about the ethical & environmental infractions of companies, Samsung needs to guarantee that it follows all the security standards. Environmental damages, ethical misbehaviors are not appropriate and in some countries the consequences can be really 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 people.

Porter's 5 Forces

Danger of Substitution

Risk of replacement for Samsung's each product category is quite significant. Running in a very dynamic industry lead the company to deal with a high threat of alternative. Factors for high danger of replacement for Valuation Project Case Study Help Smart device include the existence of high variety of providers and Market saturation in developed nations, which make the cost of changing for consumers almost no. Alternative risks for Samsung visual display screen lie in the changing life style of clients. Consumers can switch to seeing visuals in the house towards outdoor activities. Together with it, Samsung printing options items are threatened by the increasing tourist attraction of customers towards cloud storage.

Rivalry Amongst Existing Companies:

The rivaly among Samsung and its close rivals is intense. The major factor behind this is the approach of market saturation in different variety of product classifications, forcing Samsung to present more ingenious functions in existing items and brand-new ingenious items to maintain its development. Other factor for the intense rivalry amongst the competitors is the little product distinction amongst the products. The prominent gamers in the innovation market are quite aware of the significance 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 Valuation Project Case Study Solution samrtphones include Apple, Motorola, LG, Nokia, Huawei, OPPO etc. High competition rivalry leads to 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 prospective size and worth. Due to incapability of Valuation Project Case Study Analysis to construct its own software application, it has to outsource its software advancement to Google, which becomes a potential supplier of software application for Samsung, resulting in high bargaining power of Google.

Bargaining Power of Purchasers:

Market saturation in many of the item classifications also make the bargaining power of buyers more extreme in for Samsung. In spite of igh bargaining power Samsung is rather capable of offering its products at a greater cost than much of its rivals, due to high end quality item and a fair brand name image.

Risk of New Entrants:

Hazard of brand-new entrants for Samsung is quite low. One of the major element for low hazard of new entrants is the high competitors in the industry. The requirement of substantial quantity of capital to go into in the marketplace is also one of the possible barrier to entry. In addition to it, requirement of big expertise and research and advancement expenses for survival in the industry also make brand-new entrants reluctant to go into in the market. Market saturation is likewise one of the barrier of entry in innovation market. High bargaining power of suppliers require the gamers in the industry to charge as low rates as possible and this can only be achieved by production performance. Brand-new firms, in bulk cases, lack the production performance, hence increasing the dangers for entryway in the technology market.

Competitive Analysis

Samsung's high product diversity supplies it differentiation from its competitors. Unlikely to its close rivals including 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, Valuation Project Case Study Analysis had a substantial R&D spending on all of its product classifications which allow the company to earn possible profits from sales of almost all of its items.

The company ranks first in 4 item classifications i.e. DRAM Chips, LCD Displays, Big Screen TVs and Microwave ovens, in regards to international market share, among 8 different item classifications. Samsung was the global leader in producing DRAM, SRAM and NAND flash chips. Samsung earnings from chips was less than Intel but its earnings from chips was growing faster than Intel and has grown close to the income levels of Intel, as offered 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 growth. The major reson behind Samsung's high growth despite of greater rates than Nokia and Motorola was the company's high-end quality cellular phone.

Samsung was likewise reaping the benefits from increasing market share of high end LCDs as given in case Display 3. The significant reason, making the business allow to get the chance is its mass production at low expense. Sony was the greatest competitor for Valuation Project Case Study Analysis in LCD market, however, it had also begun joint venture with Samsung in 2003 for LCD making, reducing the competitors for Samsung.

Porter's Competitive Strategy

Low Expense Leadership strategy of porter is completely carried out by Samsung the way they achieve economies of scale by enhancing their core competencies of production. Even to the point that their competitor SONY chose to form an alliance with them to manufacture for them, since they were not able to compete with them on low cost. Differentiation is another strategy well implemented by Samsung by constant investment in the R&D and remaining ahead of the competition. They always bring something brand-new and innovative whether it's a service or an item.

Alternatives

Alternative Service 1

The Chief Marketing Officer (CMO) of Valuation Project Case Study Analysis would create a brand-new brand image by targeting the more youthful generation of the particular nation. As, especially cellphones of Samsung are popular among the more youthful market.

Pros

1. It is the very best strategy to develop Consumer Life time Worth (CLV) by developing a long-lasting relationship with consumers. Build loyalty through providing worth and reap the benefits for long-term, as research study has showed it is much cheaper to retain present consumers than to bring in new ones.
2. Another pro of this option is that word of mouth spread faster amongst more youthful individuals and which in turn will generate brand-new customers for my items.

Cons

1. Old clients who were associated with Samsung before may not like this new image the business is attempting to represent.
2 It will sustain more expenses to rearrange some products and it may not even bring success as the trends change extremely rapidly among the more youthful market.

Alternative service 2.

Samsung has actually made making its core proficiency for the many part of their organisation and due to which its managers are not afraid to totally step out of their comfort zone. It would be done by organizing training workshops throughout which importance of marketing will be taught and numbers will be given. Failure to get the passing scores will get demoted. Marketing environment should be developed internally first as genuine marketing begins inside the corporation.

Pros

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

Cons

2. Its con can create an extremely unhealthy environment in the office, as people frequently resist modification due to the fact that they fear it.

Determine the very best option

Very first option is the very best as it plainly has more pros due to the fact that once a Customer Life time Worth is developed the company will profit from it till that client lives and has acquiring power too. Plus, our target customers are the more youthful generation which are bound to live longer than the existing old age individuals. Samsung's main goal is to produce loyalty amongst its customers and make them redeemed it from them and even buy their different items.

Execution Plan

• Targeting younger generation through social marketing, developing a relate to them like Pepsi make with music. And set the expectations sensible and achievable.
• A group including best marketing and sales experts must be assemble, and both views must be taken into account before securing the resources needed to implement the strategy.
• Thorough interaction of the strategy ought to be done as it is extremely important for everyone to be on the same page to make it work.
• Jobs and timelines need to be develop and interacted appropriately to each individual responsible.
• The supervisor must use a dashboard which reveals the progress of all the tasks which have been done or about to be done and by whom.
• The manager need to keep track of and keep a continuous examine the overall and individual efficiency.
• Everyone should be willing to adapt midway because any brand-new pattern or policy might be available in due to which all the things already prepared need to be adjusted. It's much better to have contingency plans currently prepared.
• At the end of the campaign the supervisor must communicate the outcomes and if effective should celebrate with the team.

Budget

This change the spending plan allocation of many managers and different countries were dissatisfied and argued however the analysis done by the program was precise and revealed figures like North America and Russia development possible merited a 35% allocation while they were receiving 45%. It truly helped to fairly disperse the resources and record more clients by spending more on ads on the high development capacity areas of the world.

Conclusion

Its consistent financial investment in R&D and ingenious practices have propelled them to brand-new heights but for them its' just the start and they want to be amongst the leading 3 brand names in the world. Their marketing efforts ought to be directed towards younger market amidst the internal arguments about marketing and need to develop Customer Lifetime Worth as it will not only offer them benefits now however will continue to gain it till the client life time. As the cost of retaining the consumer is much more affordable than bring in a brand-new one.