Samsung Electronics Global Marketing - Case Study Example

 Problem Statement: In the context of globalization and increased competition among the multinational companies, the fight for market share both in domestic as well as in international markets is very intense. Identifying the opportunities is the key to success. The “New Management Initiative” started by then president Lee has helped Samsung to perform well during the Asian Crisis. Corporate restructuring, major resizing of the organization increased emphasis on manufacturing through vertical integration, technological leadership in consumer electronic goods is the key strategy framework that helped Samsung to increase the sales revenue and profitability of the organization. Reinvestment of profits in R&D, manufacturing and supplying chain activities are clear winning strategies to compete with companies like Sony, GE, and Intel etc. Being a quality player as well as introducing innovative products without losing cost effectiveness is prime focus for most companies. The brand image of Samsung is not well known in international markets. Increasing the brand visibility and strength in technology products will help Samsung to be top in the market place. Global marketing and building the brand in the international market place is one of the main challenges a Chief Marketing Office. As a path to achieve high profitability and be one of the top players in the international consumer goods market Samsung has to develop strategies regarding efficient market planning and attract several consumer segments. In this context we need to discuss issues relating to i ) SEC’s turnaround strategy during the Asian Financial Crisis and implications of those strategies to the Marketing Department both domestic as well as International. ii ) Strength of the Samsung brand in international market place as technology as well as consumer goods manufacturer. How Samsung can surpass top brands like Sony in international markets? iii ) Explain the role of Chief Marketing Officer in promoting Samsung as a global brand and how he has developed his influence in doing so? Recommendations 1. SEC’s turnaround strategy during the Asian Crisis has really helped to change the way the business operated before. The crisis has pushed SEC to change its business model and develop a system that will be resilient to competition and sudden changes in future. This has made SEC to distinguish from its competitors. The “New management Initiative” by then president is intended to put SEC as a global business leader. This initiative has included some key strategies like Downsizing the workforce, Selling some of the assets to be in the market place. These are some of the at the time decisions during the crisis. The restructuring strategies are followed by investing in manufacturing and developing innovation in SEC. From a cheap OEM product manufacturer to producing a high level customized and value added products, the strategy that has been followed through the new management initiative. In the high technological innovation and rapidly changing world, consumer’s preferences often lead companies to refresh their product line. Very less product life cycles of several products also required to refresh the product line very often. All these are taken care of the new management imitative. Vertical integration of manufacturing and focus on the technology products are some of the key implications of the marketing department after the crisis. Hard ware focus and “open architecture”, increasing the product breadth as well as reducing the product commercialization have been achieved after the crisis with proper marketing activities. 2. After the crisis SEC has strongly came up from an OEM producer to highly profitable and value added product producer. Building a brand name has been one of the key strategies of the management to be in the market place. To increase the strength of the SEC brand the focus been shifted to technology products and are highly profitable. This has helped to catch the customer focus as a quality and technology player. Brand name has been increased with the introduction of LCD and other products that stood out of competition. Focus on investing in innovation and manufacturing has really helped to beat the top players in the market. Facing stiff competition in the consumer goods and other products has led SEC to change its product strategy. It has shifted producing more commodity products to value added premium technology products. This strategy can help SEC to beat Sony and Intel in the future. 3. As a Chief Marketing Officer Kim has the responsibility of global marketing and building the brand for SEC. Kim has to build the brand from being a defragmented to a solid quality and technology player. He has to reposition SEC in the market place. He has the responsibility to build corporate brand image as well in 200 and more counties and 17 product based business units. Kim believes brand as a strategic asset. So he has try hard to build internal education about brand. He has asked every business unit to build some of the pillar products which can be highly technological and sophisticated. These products have successfully earned many accolades from the market. That has earned enough brand image as a technology player for SEC. Promoting the brand along with “The Matrix” and sponsoring The Olympic Games and Winter Games also increased the brand visibility of SEC. Justification for recommendations: I. The strategy of being vertically integrated in the manufacturing and focus on technology products has helped SEC to meet the changing the customer preferences. The decision to reinvest the profits in the manufacturing and innovation has provided SEC with products that can standout in the competition. SEC has correctly grafted the strategies that can build strengths and reduce weaknesses. These strengths are leveraged to catch the future opportunities and reduce the threats form changing world as well as from the competition [Appendix 1, TOWS matrix]. Reinvestment in R&D and innovation as well as corporate restructuring has provided to produce products like LCD TV’s that can beat out the competition. II. Building the brand was the prime motive for the “New Management Initiative”. Likewise SEC has developed products that can give a brand image of a quality and technology player. “DigitAll” campaign has portrayed the Samsung brand being a technology player. This continuous improvements in the product quality and bringing innovative products like LCD TV’s and other pillar products really helped to sustain the brand. This portrayal has strongly positioned in developed and developing markets as well. [Appendix 2, STV triangle analysis] In order to surpass the competitors in the market, Samsung has to continuously bring newer technologies to the market to outpace the competition. Continuous improvements in the marketing strategies and focus on the consumer preferences will keep SEC ahead of the competition. Identifying changing customer preferences and catching the right opportunities at the right time are required to beat the competition continuously.[Appendix 3] III. Samsung’s GMO has responsibility in the marketing strategy team, the regional strategy team and the product strategy team. Eric Kim has successfully implemented his division and transformed the marketing department into a core competence of Samsung. Furthermore, Eric Kim has reached by efficiently communicating to its target market (the “vanguard consumers” - young opinion leaders around the world) the values of the company. Finally, Eric Kim has influenced the company by re-connecting Customers-Employees and Shareholders thus, maximizing value for all stakeholders and foster a long term success.[Appendix 4] Supporting Analysis: Appendix (1): Samsung TOWS Matrix: External opportunities 1. Large market potential for technologically advanced products 2. Ability to adapt to any software vendor 3. Access to low cost human capital and investments External Threats 1. Very low product life cycles for technological products 2. Need to continuously upgrade technology 3. Competition from companies like Sony, Apple, Intel Internal Strengths 1. Vertical integration 2. Manufacturing as core operation 3. Good team management 4. Strength in markets e.g. China and Korea 5. Experience and leadership in domestic markets Strengths vs. Opportunities 1. Adapt to local conditions and develop brand loyalty among the consumers 2. Join alliances with software vendors to increase the product visibility 3. Properly utilizing the human capital in India and other resources for innovation Strengths vs. Threats 1. Use international product life cycles to market the products 2. Increase investments in innovation and R&D to provide new products to the markets 3. Build on the experience, quality and cost to compete competition Internal Weakness 1. No proper brand image 2. Less in-depth of the product line (no support from software) 3. Less brand loyalty 4. Less motivation in the organization towards the brand Weakness vs. Opportunities 1. Increase the brand loyalty through the retail chains and experience stores 2. Joint ventures with software vendors can increase the product line 3. Provide sub brands to capture the market segments Weakness vs. Threat 1. Use strong manufacturing base to increase the product line 2. Learn from competitors to upgrade the technology Appendix 2 STV Triangle - Architecture Source: Adapted from Rethinking Marketing, Philip Kotler Appendix 3: http://infoproc.blogspot.com/2005/03/more-sony-vs-samsung.html Appendix 4: http://infoproc.blogspot.com/2005/03/more-sony-vs-samsung.html References: [1] [Appendix 3,4] "More Sony Vs Samsung." Information Processing. 09 Mar. 2005. . [2] McGovern, Gail, and John A. Quelch. "The Fall and Rise of the CMO." Strategy+Business. 2004. 14 May 2008 . [3] Quelch, John, and Anna Harrington. "Samsung Electronics Company: Global Marketing Operation." Harvard Business School (2008): 1-32 Read More