2. Samsung – Next Is Now
• One of the world’s leading providers of digital
convergence technologies and digital media.
• Founded in 1938 by Lee Byung-Chull as a trading
company.
• Headquartered in Seoul, South Korea; operates in 80
countries with over 307,000 Employee’s Aprox
• Increased globalization of activities since 1990 with
mobiles and semiconductors becoming major source of
income.
• Strong brand equity and involvement in CSR (Corporate
Social Responsibility) business activity, which initiates
to benefit the society.
• Diversified product portfolio with constant focus on
Research & Development.
5. Current Operations Strategy
• R&D – Samsung invests around 9% of its revenue on R&D, in comparison to Apple’s which is
2.4% of its revenue on the same. More than a quarter of all Samsung employee – 42000 FTEs
– Work everyday in R&D to forge new market trends and set new standards for excellence.
• Procurement – Samsung outsources its major production into China which gives them the
benefit of spending lower and earning higher. It gives them an edge on in the market to be
competitive in terms of cost and sell.
• Manufacturing - Samsung has cultivated an ability to quickly understand the functions and
imitate and where possible given its strength, improve, on competitors product. Because it
has the ability to manufacture products quickly as a contract manufacturer, it has the skill, to
produce incremental product improvements quickly.
• Logistics – Equip deliveries personnel and vehicles with mobile solutions in order to establish
their location at all times, optimize routes and efficiently distribute schedules and work
orders. Samsung is using location based technology to track materials, parts and products as
they travel through the entire supply chain.
• Sales – By 2020 Samsung is focusing to achieve USD 400 billion annual sales while placing
Samsung electronics overall brand value among the global top 5.
• After Service – Samsung’s biggest strength is customer-centricity and continuously
innovating to meet the requirements of its customers. The launch of the innovative customer
service plazas and its strong customer service network is testimony of our commitment to
the customers. Their innovative service delivery model will enable them to deliver customer
delight at each step and further drive brand loyalty.
7. Effectiveness of Current Strategy
• Samsung enjoyed phenomenal success with the S2, S3 & S4 but the S5 & S6
did not match expectations and as a result, their market share was affected in
2015.
• Could not keep up at the high-end of the market after the arrival of iPhone 6
and 6 Plus. Suffered at the low-end too at the hands of upstart Chinese
manufacturers like Xiaomi and OnePlus.
• Robust demand for memory chips with an increase in profitability.
8. Recommendations - The future
• Focus less on variety, more on quality
• Strengthen its technology with regard to
software and features
• Launch sub-brands to the company with new
and improved strategies
• Expand the number of stores to establish
footprint on a wider horizon
• Step ahead of competitors in terms of
innovation and unique functions
9. Tools to improve operational
efficiency
• Failure Mode and Effects
Analysis (FMEA)
– Helps identify the root cause
– Structure approach to assess
all possible failure modes of
product/process in terms of
manpower, management,
materials, methods etc
– These modes are ranked
based on probability and are
given a risk prioirty number
(RPN) to help prioritize and
plan in advance
10. Tools to improve operational
efficiency
Control Chart
– Most common statistical process control (SPC) technique
– Visual tool to monitor a process to see whether it performs as expected
– Using the recorded data, upper and lower control limits are calculated
and plotted on the control chart
– Upon comparing with additional measurements, any measurements
falling outside the limit may require action to be taken
11. Scope for future sustainability
• Create their own software and reduce
outsourcing
• Expand the memory chip division as it
maintains the firm at an advantage
• Innovative product design along with value
added features
• Lead rather than follow competitors
• Enter newly emerging markets like Bangladesh
& Africa.
