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Samsung Electronics Presentation

Samsung has a vision to develop innovative technologies that enrich people's lives and continue making Samsung a digital leader. Their mission is to create superior products and services that contribute to a better global society. Unlike Porter's value chain model, Samsung's primary activities are basic research, product development, and design. Samsung has a global value chain with activities spread across many countries. Key rivals in the smartphone industry include Apple, Nokia, Blackberry, HTC, and Microsoft. The smartphone industry is nearing the mature stage of its life cycle, requiring differentiation through hardware and standing out in a wide market. Samsung has strengths in engineering, innovation, and production but also faces threats from patent infringement and saturated markets.

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Alok Goel
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968 views

Samsung Electronics Presentation

Samsung has a vision to develop innovative technologies that enrich people's lives and continue making Samsung a digital leader. Their mission is to create superior products and services that contribute to a better global society. Unlike Porter's value chain model, Samsung's primary activities are basic research, product development, and design. Samsung has a global value chain with activities spread across many countries. Key rivals in the smartphone industry include Apple, Nokia, Blackberry, HTC, and Microsoft. The smartphone industry is nearing the mature stage of its life cycle, requiring differentiation through hardware and standing out in a wide market. Samsung has strengths in engineering, innovation, and production but also faces threats from patent infringement and saturated markets.

Uploaded by

Alok Goel
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Samsung Electronics

Team 3:
Matthew Kollinger
Qiao Li
Ryan Campbell
Staton Standridge

Vision, Mission, and Value Chain


Analysis
Vision: Samsung is dedicated to developing innovative technologies and
efficient processes that create new markets, enrich people's lives and continue
to make Samsung a digital leader.
Mission: 'We will devote our human resources and technology to create
superior products and services, thereby contributing to a better global
society.
For Samsung, basic research, product development and design
are primary activities, unlike porters original value chain
model.
Through Samsungs value chain, there is also spatial
dimension because these activities do not take place in the
same place, but across the entire globe, concentrated heavily
in Korea, China, and Vietnam
Primary Activities Include: Technology and product planning,
design and engineering, procurement, inbound logistics,
manufacturing, distribution planning and forecasting,
outbound logistics, marketing, sales, and service.

5-Forces Model (Smartphone Industry),


Key Rivals
Threat of New Entrants (Low):High capital required,
necessity for product differentiation, have to spend a
lot of time on branding and customer knowledge.
Bargaining Power of Buyers (High): Buyers can easily
switch with increased choices in mobile devices with
relatively no switching cost. Buyers will switch based
on features and cost.
Threat of Substitutes (Low): While there are still some
options for buyers in the tablet market, there is still no
other substitute and the majority of the population will
opt for a mobile device.
Bargaining Power of Suppliers (Low): There are many
suppliers for the mobile phone industry. Many different
components with suppliers all over the world so
competition between suppliers is high while the
bargaining power of these suppliers to the mobile
phone companies is low.
Competitive Rivalry (Very High): The threat of rivalry is
the biggest threat to Samsung because of the low
switching cost and the vast amount of competition

Key Rivals: Apple, Nokia,


Blackberry, HTC, and
Microsoft

Stage of Industry Life


Cycle( Smartphone),
External Environment
The Smartphone industry is currently towards the end of the growth stage and
should reach the mature stage in the industry life cycle in the next five years.
Companies and their products are facing the necessity to differentiate in
hardware because of the competition between similar operating systems.
Products need to stand out in a wide array of choices in the smartphone market,
having an android operating system (such as Samsung) will not be sustainable
in the future as more companies switch to this platform. Apple continues to be
differentiated because of their own OS and hardware.
Economic: The economy of a country can be a huge determinate of whether a
company enters a market. Samsung does a wide array of demographic analytics
before entering a new market.
Political and Legal: Samsung has recently violated Apple patents and has engaged in
willful infringement.
Environmental: Samsung is developing an environment-friendly products by driving
eco-design and LCA,
structuring an environment supply chain management and plan for hazardous

Financial Analysis
2010

2011

2012

ROA

13.1%

9.5%

14.2%

ROE

19.9%

14.4%

21.4%

Debt/EBI
TDA

0.38

0.50

0.34

45

76

2010

2011

2012

10.4

8.3

11.9

1.25

1.14

1.19

1.52

1.52

1.51

154%

161%

186%

50%

53%

49%

12%

14%

12%

- 13%

- 12%

- 19%

EBITDA/I
nterest
48
Expenses
2010

2011

2012

Revenue

154,630

165,002

201,104

Gross profit

51,964

52,857

74,452

Operating
Profit

17,297

15,644

29,049

Profit before
Income Tax

19,329

17,192

29,915

Net Profit

16,147

13,759

23,845

In KRW (Korean
Won)*

Net Margin
(%)
Asset
Turnover
Financial
Leverage
Current ratio
(%)
Liability/Equit
y (%)
Debt/Equity
(%)
Net
debt/Equity
(%)

SWOT Analysis
Samsung SWOT analysis 2013
Strengths

Weaknesses

1. Hardware integration with many open


source OS and software
2. Excellence in engineering and
producing hardware parts and consumer
electronics
3. Innovation and design
4. Focus on environment
5. Low production costs
6. Largest share in mobile phones and 2
place in smartphones sales
7. Ability to market the brand
Opportunities

1. Patent infringement
2. Too low profit margin
3. Main competitors are also largest
buyers
4. Lack its own OS and software
5. Focus on too many products

1. Growing Indias smartphone market


2. Growing mobile advertising industry
3.Growing demand for quality application
processors
4. Growth of tablets market
5. Obtaining patents through acquisitions

1. Saturated smartphone markets in


developed countries
2. Rapid technological change
3. Declining margins on hardware
production
4. Breached patents
5. Apples iTV launch
6. Price wars

Threats

VRIO Analysis

Resources/Capab
ility
Valuable? Rare?
Tech & Prod.
Line Capabilities
Y
Y

Difficult of
Imitate

Exploited by
the Firm

Brand Value

Quality

Brand Value
Product Mix &
Customization
Fabrication
Capacity
R & D Prod.
Facility @ Same
Loc.
Partners &
Customers

Competitve
Implications
Sustained Comp.
Advantage
Sustained Comp.
Advantage
Sustained Comp.
Advantage
Sustained Comp.
Advantage
Temporary Comp.
Advantage
Temporary Comp.
Advantage
Parity
Temporary Comp.
Advantage

Samsungs Strategy
Samsung:
Samsung uses a diversification strategy to maintain its competitive
advantage.
Because Samsung uses a huge portion of their revenue towards research
and development, Samsung diversifies its products. The company currently
uses 5.7% of revenue towards research while their competitor Apple only
uses 2.4%.
Samsung is so much more than a smartphone-maker. It is a conglomerate,
a manufacturer, and the world's largest chip-maker. It makes many of the
components that go into its smartphones giving it a cost advantage and
allowing it to be much more flexible in terms of what it produces and
when.
Apple:
Apple, though it has a diverse, well-managed, and futuristic supply chain,
relies on external partners, which can lead to delays and difficulties.

Strategic Recommendation
Samsung currently does not own any software development companies
Allocate a larger portion of Samsung's revenue to the acquisition of software
companies
Because software is not the companies strong suite, these software
developments can create huge value and better experiences for consumers
that Samsung is currently lacking.

Questions?

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