Samsung has also redesigned its management structure to make it more open for young designers to come up with new ideas, concepts and innovations and take these ideas to the ultimate decision makers (Cravens & Piercy, 2009: 535). This enables them to take research findings and create new concepts with the possibility that the concepts would be created.
- DESCRIBE AND EVALUATE SAMSUNG’S INITIATIVES FOR DESIGNING LEADING EDGE NEW PRODUCTS
To keep products at the leading edge, Samsung brought changes to the entire company system, moving emphasis from cost-saving to designing.
Collaborating with outside design firms such as IDEO and other consultancies has given them a leading edge in designs as well as an “outside” view to the market (Cravens & Piercy, 2009: 534).
Recruiting promising designers and enrolling them into Samsung’s Innovative Design Lab to study under top designers has helped Samsung to obtain promising designers. These designers tour prominent landmarks and museums throughout the world to give them insight into the different cultures and into different concepts of art (Cravens & Piercy, 2009: 534).
Confucian hierarchies are being done away with in the design departments, giving designers the freedom to challenge managers on new ideas and concepts, and to take ideas to top management. Designers also work in teams of three to five persons from various specialty areas and levels of seniority (Cravens & Piercy, 2009: 534-535). This gives designers freedom to pursue their unique designs without fear of “stepping out of line”.
Samsung has design centres in its most important markets (London, Los Angeles, San Francisco, Tokyo and Shanghai) to keep track of emerging trends (Cravens & Piercy, 2009: 534 - 535). This also enables them to study the local culture and how people live their daily lives with regards to Samsung products.
With this in mind, a usability lab was opened in Seoul where customers and engineers alike can test products. This enables Samsung not only to design sleek, modern and aesthetically pleasing products, but also improve user interface –the future life-line of the company (Cravens & Piercy, 2009: 536).
- EXAMINE AND EVALUATE THE EXTENT OF CENTRALIZATION OF NEW PRODUCT DECISION MAKING AT SAMSUNG
Samsung has a unique way of inventing new products. Managment sets a goal, and then does all it can to accomplish this goal. In order to make this happen, Samsung’s chief executive, Yun Jong Yong, set up the Value Innovation Program.
The Value Innovation Program (VIP) is a facility at Suwon. This is where specialists from all departments gets “locked up” for a couple of weeks to work on a project. These specialists brainstorm, design, argue, do the maths and finally create new products of value for Samsung and its customers. The teams work against a deadline, which ensures that they make difficult decisions in a timely manner as not to hinder product launch dates (Cravens & Piercy, 2009: 537- 538).
- DESCRIBE HOW SAMSUNG HAS SUCCESSFULLY BUILT UP A GLOBALLY RECOGNISED BRAND BY REFERRING TO OTHER SOURCES
Over recent years, Samsung has grown to become one of the leading home appliance suppliers. In 2009, the company’s third-quarter profit doubled the total of its nine Japanese competitors combined (Samsung Electronics’ Success, 2009).
In 2010, the Financial Times (January, 2010) stated that Samsung Electronics has overtaken Hewlett-Packard as the world’s biggest technology company in sales. However, the Financial Times also note that Samsung won ground over other Japanese companies because of the weaker Won (currency), not necessarily for innovative products. According to the Korea Herold (March, 2010) “Samsung is now the world`s top maker of TVs and the No. 2 handset vendor. It also is the top maker of memory chips and LCD panels.”
The table below (derived from statistics given by Ranking the Brand, 2011) shows the overall brand growth or decline in the various brand sectors:
(Author’s own construction, compiled from information taken
from Ranking the Brand)
As can be seen, overall the brand has improved from 2010 to 2011. However, a sector in which it fell drastically was in the category “The World’s most Innovative Company”, where it fell seven positions. This can negatively impact the company as a whole, since it wants to be a trend setter, and not just a “me-too” company (Cravens & Piercy, 2009: 533). To achieve the status of trend-setter, a company must innovate.
In conclusion, Samsung has achieved success in its brand image by becoming a world-known brand.
- HOW IMPORTANT ARE COMPETITIVE THREATS FROM OTHER ASIAN COMPANIES TO SAMSUNG?
Asian companies, like LG, are major threats to Samsung. Even though most of these companies do not pose an immediate threat, Samsung should be weary since technology changes at such a rapid pace that new innovation from up-coming Asian companies could topple the scale. In fact, LG is a fellow Korean company that Samsung needs to keep an eye on.
In 2007, LG’s share of the USA jumped to 9 %, making it the No. 4 USA appliance maker (with Samsung being No. 1). This is mainly because of new innovations headed by LG that the market finds appealing. Samsung is racing to keep ahead of LG with new technological advances (Kharif, O. January 2011).
- WHY SHOULD ESTABLISHED KOREAN MANUFACTURERS LIKE SAMSUNG IN GENERAL, WORRY ABOUT CHINA WHEN THEY HAVE SURVIVED AND SUCCESSFULLY CONQUERED COMPETITION FROM JAPAN?
Korean manufacturers should be weary of China for multiple reasons such as:
- Its ability to cheaply manufacture products due to its large labour force
- It’s government policy that any foreign businesses bidding for Chinese government contracts need to share existing know-how and conduct any new R&D work in China (Robinson, M., 2010), giving the country a competitive edge while detrimental to the bidding company.
- China has taken over Japan to become the world’s second largest economy, preceded only by the United States economy (Mindful Money, 2011). This shows adequate growth potential. An increase in foreign investments will boost China’s economy to further develop industries, thereby increasing the threat of competition.
China has also recently been ridding itself of the stigma of poor quality goods, and regulatory bodies (such as the PROQC) are available to check the quality of various products and manufacturing facilities in China. Since China shows such a potential for growth and is receiving better reviews by customers, companies from other countries will have to keep an eye on the rising industries.
REFERENCE
Samsung's History, 2011. Samsung. [Online] Available at http://www.samsung.com/africa_en/aboutsamsung/corporateprofile/history.html (accessed 18 October 2011)
Samsung Electronics’ Success, 2009. Korean Times. [Online] Available at (accessed 19 October 2011)
The Korea Harold, March 2010. From Obscure Company to Electronics Giant. [Online] Available at (accessed 19 October 2011)
The Financial Times, January 2010. Samsung beats HP to Pole PositionI. [Online] Available at (accessed 19 October 2011)
Ranking the Brand, 2011. Rankings per Brand, Samsung. [Online] Available at (accessed 19 October 2011)
Olga Kharif, January 2011. Samsung, LG take Aim at Whirlpool with Smart Appliances. Business Week. [Online] available at (accessed 19 October 2011)
Michael Robinson, August 2010. China’s new industrial revolution. BBC News [Online] Available at (accessed 19 October 2011)
Mindful Money, February 2011. Is China still an Emerging Market? [Online] Available at (accessed 19 October 2011)
Cravens, D. & Piercy, N., 2009. Strategic Marketing (9th ed.) Singapore: McGraw Hill
