Samsung company knowledge management, innovation and corporate social responsibility

1.0 Executive Summery Samsung has made them noticeable as one of the most innovative and quality brands in the electronics industry. Samsung strives to be sustainable and achieve competitive advantage by remaining at the forefront of the digital market. Samsung policy is "We will devote out human resources and technologies to create superior products and services thereby contributing to a better global society”. At this assignment we tried to describe its business strategy with their external and internal analysis. In today’s digital era, speed is the essential competitive as new technologies constantly introduced to the market. Thus, Samsung spend lots of effort in expanding their R&D center. Samsung Corporation has become one of the world's leading memory producers in all types of PCs, digital cameras, game players, and other electronics products. Samsung has introduced many products with low price and high technology. Although Samsung has been very successful, they have a few issues that need to be looked at in order for them to stay up to date and maintain long term profits. Problems that have been identified with Samsung are; increased competition means decrease in Samsung's profits and market share because it generates oversupply and decrease in sales. Competition affects Samsung's market share because new entrants will segregate the market by offering lower cost products with a variety of functions. There are many competitors that produce similar products as Samsung; Samsung has to deal with competitors in different industries. They are doing this by differentiating their products and adding different features into their products. The two questions for the assignment are 1) what key global market strategy has Samsung Electronics implemented to achieve international competitiveness and global market leadership? 2) What criteria should Samsung Electronics apply to ensure that it selects appropriate joint venture partners? In order for Samsung to be successful they need to go Global. This solution offers a physical presence and greater opportunity for talent buildup, and brand name establishment in foreign markets. The Global solution has many advantages in developing growth, pressure on competition, and international development.

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1.1 Introduction Samsung, or “Three Stars” in Korean, was first founded in 1938 by Byung-Chull Lee. The company splits its history into 7 eras of major accomplishments. From the beginning, the primary focus of the business was trade export of products such as dried fish, vegetables and fruit to other parts of Asia. In the 10 years following its debut, Samsung expanded to produce flour and confectionary and founded its own manufacturing and sales operations. Several acquisitions were made by Samsung between 1938 and 1969, which are now all subsidiaries of Samsung Corporation, namely Samsung Life Insurance, Samsung Everland, and Samsung Fire & Marine Insurance. From 1970 to 1979, Samsung developed its growth strategies for the future, investing heavily in raw materials and manufacturing processes. Samsung used the advantages of this strategy to increase its market share in the electronics business, which was mostly TVs at that time, by beginning to export outside its countries borders. In the early 1990's, Samsung refocused its business strategies again to better respond to international demand. During this period Samsung created the first-ever DVD recorder, developed their mobile telecommunications systems and handsets, and made more acquisitions on an international scale. Following these major developments, Samsung stepped up their game and released 17 different electronics products that would rank within the top-five for global market share. Despite the 1997 financial crisis that affected nearly all Korean businesses, Samsung was one of few companies that continued growing, thanks to its leadership in digital and network technologies and its steady concentration on electronics, finances and related services. Samsung's current era, which began in 2000 is named "Pioneering the Digital Age". Samsung at present Samsung Electronics Co., Ltd. is a multinational electronics and information technology company headquartered in Suwon and the flagship company of the Samsung Group. Samsung Electronics is the world's largest information technology company measured by 2011 revenues. Its products include air conditioners, computers, digital televisions, liquid crystal 2

displays (including thin film transistors (TFTs) and active-matrix organic light-emitting diodes (AMOLEDs)), mobile phones, monitors, printers, refrigerators, semiconductors and telecoms networking equipment. It is the world's largest mobile phone maker by unit sales in the first quarter of 2012, with a global market share of 25.4%. It is also the world's secondlargest semiconductor maker by 2011 revenues (after Intel) Samsung produces a wide range of printers for both consumers and business use, including mono-laser printers, color laser printers, multifunction printers, and enterprise-use high-speed digital multifunction printer models. The company introduced a number of energy efficient products, including the premium laptop, the world's-smallest mono-laser printer, hard disk drive, MP3 player and color laser multifunction printer. Samsung has introduced several models of digital cameras and camcorders.

1.2 Samsung’s Turnover Target and its Aim Target and its Aim

Korean electronics major Samsung is targeting to garner 50 percent in the overall mobile market in the country. Samsung Electronics Co. has reported, on April 27, the potential revenue stream for the first quarter ended March 31, 2012. The company has reported revenue of 45.27 trillion Korean won on a consolidated basis. This is about 22% increase on the annual basis and has beaten the expectations. The company has reported that the increase in profitability of display panels and mobile phones have compensated for the decrease in the sales of semiconductor chips and TVs. IT & Mobile Communications (IM) segment. Samsung’s mobile sales increased 86% over the yearago quarter to 18.9 trillion won. The company is aiming to double its products sales unit. Like last 27th February 2012 at a conference they declared that, they are targeting to sell 380 million handsets and also to double the sales of its smartphones this year. Also taking aim at its Japanese rivals with an Android-powered digital camera that allows users to swiftly and wirelessly upload pictures to social networking sites.

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Major customers Samsung's largest clients ( 2011) Rank/company

3 Dell 4 Hewlett-Packard Verizon

Communications 6 AT&T Inc.

sales

1.28

3.7

0.9

2.6

0.87

2.5

0.76

2.2

Handsets, etc...

0.5

1.3

Handsets, etc...

0.5

1.3

etc... AP (mobile processor), DRAM, NAND

2 Apple Inc.

Percent of total

(trillion KRW

DRAM, NAND flash, LCD panels,

1 Sony

5

Buying

Part description

flash, etc... DRAM, flat-panels,

lithium-ion

batteries, etc... DRAM, flat-panels,

lithium-ion

batteries, etc...

2.0 External Analysis 2.1 Political/ Legal Environments Over the past several years, there has seen a plethora of patent lawsuits within the smart phone industry. In the highly competitive environment, manufacturers of handsets have been aggressive in protecting their intellectual properties by suing competitors by claiming infringements on patents. For example, in March 2010, Apple sued HTC for allegedly infringing on 20 Apple patents. Apple also sued Nokia in 2010 for similar patent infringements. However, in April 2011 the International Trade Commission recommended that neither HTC or Nokia should be found liable for any infringements. Further Microsoft reached a licensing agreement in April 2010 with HTC to pay royalties on Android based handsets. More recently, Apple launched a lawsuit against Samsung in April 2011 claiming Samsung copied design features of the iPhone in its Galaxy line of Android phones.

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2.2 Samsung wins over Apple in Japan patent case Aug 31, 2012 - A Tokyo court ruled that Samsung Electronics' mobile devices did not violate an Apple Inc patent, awarding the South Korean firm a victory a week after it lost a landmark patent case in the United States. The Tokyo District Court's ruling on an Apple patent dealing with transferring media content between devices comes after a U.S. federal jury found that Apple did not infringe on any of Samsung's patents, while the South Korean firm had copied key features of the popular iPhone. The U.S. jury awarded Apple $1.05 billion in damages and it is now seeking speedy bans on the sale of eight Samsung phones in the U.S. market.

2.3 Economic Environment The North American economy is still recovering from the financial crisis of 2008. The high unemployment rate in the US and Canada has been negatively impacting consumer confidence and has resulted in a decrease in consumer spending. Bloomberg reports consumer spending dropped 0.2% in June 2011 which provides evidence the decrease in hiring and wage increases below the inflation rate are affecting consumer spending. Consumer spending accounts for 70% of the US economy; any fluctuation in this area will have a significant impact on the overall economy. In Canada, the opposite is true. Consumer spending increased by 3.8% from 1st quarter 2010 to the end of 1st quarter 2011 ("Canadian Consumer Spending"). Consumer confidence is Canada seems to be higher than the US likely resulting from lower unemployment rates and Canada's faster paced recovery from the global financial crisis.

2.4 Social-cultural Environment

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The rise of the information age has made electronic devices more important for both business and pleasure. It is important to determine how receptive a society is to new advancements in technology and their adoption. By measuring adoption by age demographics, there is a competition of who can gain the primary target groups. Insights into how different groups of electronic devices users use their devices can provide insights into new features or improvements in established features. 2.5 Technological Environment Technological environment is continuously changing. Because of the extreme rivalry there is always a competition in between the major competitors to bring something innovative in the market. Consumers also so much demanding and they always appreciate new ideas by any company. Samsung faced lots of challenges in recent years because other major companies like Apple, Sony etc bringing lots of new product or new model of existing product in the market. To compete with and retain market share, Samsung is always on their way to being more and more innovative and give customers new experiences.

2.6 Porter’s Five Force Analysis 2.6.1 The threat of potential new entrants (Low) High capital is required to enter into this industry, where Samsung electronics’ 7 kinds of its products have taken the largest share in the world market. More over, It is difficult to start up in an industry where the existing firms already operate on cost and differentiation strategies. However, with the commoditization of parts, finding vanilla solutions for a simple alternative product might be possible. Differentiation, however, is another story. New entrants would have issues with overcoming patent issues if they didn’t plan on investing in their own R&D to create a unique product. These things together would require a new entrant to establish a competitive brand name while achieving economies of scale via investments in a supply chain process and developing a distribution infrastructure to remain competitive. The costs of accomplishing these things make a very strong barrier to entry. Even then, overcoming issues such as customer loyalty and switching costs would be another large barrier to entry. 6

2.6.2 The threat of substitutes (Low) Substitutes in the consumer electronics industry are many and the different companies competing in this industry must apply many strategies in order to compete and make profits. For Samsung, almost any device that performs the same functions as a Samsung phone could be considered a substitute. Although there is an increased popularity of Tablets, they are generally too bulky to be considered as straight substitutes. They don’t offer traditional mobile phone capabilities, which makes them inadequate. Laptops have the same problem. HD TV- Television have recently become very popular with the new HD technology. The substitutes for TV's are computers, laptops, I pods. Because of the limited availability and space on IPods and the smaller size of a laptop screen, TV’s will still stay popular and be high in demand. In the digital camera industry cell phone cameras don't provide the same quality and storage as digital cameras. So finally we can say the threat of substitute is low. 2.6.3 The bargaining power of buyers (High) Buyers have good leverage when it comes to bargaining because of their access to information and how competitive the industry is. With so many similar products from other carriers, buyers have several points on which they can bargain. Buyers easily switch cost with the increased of choices of companies and furthermore their products are quite similar to one another; they will switch to those who have better features or price points. Switching costs, however, can be very high in some cases. Most of the electronic entertainment products are created from wants, not needs, therefore the customer does not have to buy the product to survive. Thus companies’ have to keep the buyer in mind and listen to what they want. So, bargaining power of buyer is high. 2.6.4 The bargaining power of suppliers (Low) In Samsung’s case, the bargaining power of suppliers is low because Samsung is its own supplier of most components. Samsung also happens to be its own supplier for raw materials. In the industry, however, A mobile phone manufacturer could always integrate forward into the industry without the middlemen. So the bargaining power of suppliers is low.

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2.6.5 The intensity of competitive rivalry (High) The threat of rivalry in the consumer electronic market is very high. Not only does a company have to compete on a level of technology and price, but they also have to keep track of what the competition is doing. There is a high intensity and constant competition in the electronics industry and usually the main competitors come up with new products very often. If a company does not keep up with trends and new products, they will lose their customers and profits. Like the smart phone industry has many competitors that are equally balanced, and thus rivalry is high. The market for smart phones has slowed in growth since its boom, so pressure to take customers from competitors is also high. Differentiation in the smart phone industry is also at a point where it is very short-lived. If a company decided to compete in this industry, they have to compete with intense price rivalry. So the rivalry among competitors is very high.

3.0 Internal Analysis 3.1 Core Competences Core competencies are those capabilities that are critical to a business achieving competitive advantage. The starting point for analyzing core competencies is recognizing that competition between businesses is as much a race for competence mastery as it is for market position and market power. The basic factors that make the Samsung world wide recognized are manufacturing, product development, research and development. So from that factors we can find out the core values of Samsung and these are: (1) Technology Leadership (2) Innovative culture through R&D and (3) Brand image in the Industry. These are discussed below: 3.2 Technology Leadership Samsung has a long history in the electronics industry and they have a wide product range. They have so many types of products like TV, Fridge, Ac, Cell phone etc. No other company in the market has a wide product range like Samsung. Because of that they are in the 8

leadership position and it becomes one of their core competences. Samsung is capable to satisfy customers to any technological demand. As they are the suppliers of the other competitors Samsung has the knowledge of the upcoming technology. More over due to their own efficient highly qualified employees and technological advancement, it iss easy for them to maintain the leadership and be competitive in the market. 3.3 Innovative culture through R&D Another core competency of Samsung is their innovative culture through research and development. Their R&D department is very aggressive and always try to bring new ideas and products in the market. They are very much careful about what are the new products or model are introduced by competitors and their R&D department aggressively try to give a counter attack to retain their market share. The ability of being so innovative to compete successfully in the market is the core competency that helps Samsung to attain competitive advantage. 3.4 Brand image in the Industry. Samsung is one of the most well reputed banks in the world and has a strong brand image in the mind of general people. In consumer mind, Samsung is the name of trust and worthy. So it is become on of the most impressive core competencies for the Bank. Samsung build that brand image by serving consistently from a longer period of time and it can not be easily copied by other electronics company. This brand image helps Samsung to build a strong customer base. Strong brand image and customer base helps Samsung to build a long term relationship with customers and to attain a competitive advantage to successfully survive in the market in the long run.

3.5 SWOT Analysis STRENGTHS •

Strong Brand Image

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Existing knowledge and experience of electronics market 9

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Strong global presence with strong brand and customer base.

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Well diversified and differentiated product line, to meet changing customer needs.

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Design with an attractive styling that catching the pulse of customer, as the result of the development of Samsung‘s new products that involve team of product designers.

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Technology With an excellent research and development capabilities, they spend a high percentage of revenue on R&D. It resulted in global leadership in the television segment, and in improving its position from the third to second player in mobile phones with their innovative products.

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High Market share that continue to grow ( Mobile Phones, Memory chips and LCD).

WEAKNESS •

Customer perception of weak product attributes like Durability

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Not pro-active coming out with unique and leading model

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Focus on mass market instead of niche market

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Huge investment on Research & Development

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Increasing Competition

OPPORTUNITIES •

Increasing on electronics consumer market

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Strong customer demand for innovative products & value-added features

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High % of Younger population, which can be expand a new market now and in the future

THREATS •

Economic slowdown weakens the demand for electronic products.

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Low cost Chinese producers eroding profitability 10

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Increasing competition for all electronic products

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New nanotechnology may replace Samsung’s DRAM technological advantages.

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External changes like government, politics, taxes, etc

4.0 Corporate Social Responsibilities of Samsung: Samsung takes its role as a "good corporate citizen" very seriously and stands firmly be- hind its commitment to making a lasting social contribution to the community. Through numerous initiatives, donations, sponsorships, and voluntary activities, Samsung honors its obligations to society in creating a better and more prosperous tomorrow for all. 4.1 Social Welfare Programs: The Samsung Welfare Foundation and Samsung's affiliates serve the community and help children and young adults develop into healthy, productive members of society through a wide variety of programs. Since 1999, Samsung has donated 10 billion Korean Won in grants to the Community Chest in Korea to assist with social welfare programs. 4.2 Animal Welfare Programs: Samsung's philosophy is that the relationship between people and pets, especially dogs, makes for a better and less self-centered world. Samsung believes that in our new millennium of technology and fast-paced business environments, interaction with animals introduces a calmer, sensitive and more holistic dimension to our world. Samsung runs a Pet Ownership Program, where Samsung employees can adopt lovingly reared dogs. Positive pet caring and handling are taught to families, and in doing so, contribute to creating a world that is less selffocused and cares more about animals in general. All service dogs in Samsung's programs are cared for in their old age when they are no longer able to function in their field. Guide dogs, search and rescue dogs, therapy dogs and hearing dogs are all guaranteed safe and comfortable geriatric years either with volunteer families who wish to take care of them or at our centers where they can be monitored constantly. 4.3 Cultural and Arts Programs: 11

Cultural and arts programs provide diverse support for the preservation and exhibition of Korean and other ethnic heritages. Samsung has contributed greatly to numerous museums, galleries and exhibits in Korea and around the world, including: Samsung also sponsors talented young musicians of the International Sejong Soloists (ISS), a New York-based string ensemble created in 1995 under the musical direction of Hyo Kang, a renowned violin professor at the Juilliard School. To develop children's creativity and promote artistic expression, Samsung's affiliates host and support various events such as the annual Bichumi Painting Festival, the Glass Modeling Academy and the Kenox Photo gallery. 4.4 Academic and Educational Programs: Samsung's academic and educational programs in Korea and around the world include direct assistance to universities, international exchange programs, support of Korean studies departments overseas, scholarships, donating computers to elementary schools and supplies to develop schools in third world countries. Since 1990, Samsung's Ho-Am Foundation has been awarding the Ho-Am Prize, Korea's version of the Nobel Prize, which recognizes outstanding contributions to society or exceptional results in research in six areas that further the welfare of humanity. In July 2002, the Samsung Kun-Hee Lee Scholarship Foundation was established to provide funds for young Koreans to study overseas in liberal arts, social studies, science and especially technology and engineering. 4.5 Environmental Preservation Programs: Environmental preservation programs exist at every Samsung operation around the world. In 1993, the Samsung Global Environment Research Center was established to study policies and strategies related to environmental issues. Today, Samsung is actively involved in ecological preservation through the development of environmentally friendly products and related technologies. Samsung Electronics' Kiheung site and Samsung Petrochemical's Ulsan site were designated Korea's first "environmentally friendly companies" by the Korean government, assuming environmental responsibility for process improvement, toxic material replacement and pollutant minimization. More recently, Samsung Corning in Malaysia received the Prime Minister's Hibiscus Award, the first private sector award that recognizes exemplary commitment by industries to the environment. Volunteer efforts are also a core 12

element of Samsung's commitment to a clean environment, as demonstrated by the employee "Adopt a River" and "Adopt a Mountain" clean-up campaigns. These efforts have spread to 450 companies and institutions in Korea, and have also had a great impact overseas, including tropical forest preservation in Malaysia, the "One Company, One Park" program in China, and a beach-cleaning project in Mexico. Samsung's affiliated companies also run painting contests and education programs for children to learn about the importance of environmental preservation. 4.6 Employee Volunteer Programs: Samsung employees are active in a wide spectrum of social improvement projects, from environmental cleanup and disaster relief to housekeeping help for the elderly and mentoring orphans and young parents. More than 50 percent of all Samsung employees world-wide are currently involved in volunteer programs, sharing their time and talent for worthy causes. The Washington D.C. based Points of Light Foundation (POLF) has recognized these cumulative volunteer efforts. In 1998, POLF selected Samsung among all international corporations for its prestigious Award for Excellence in Corporate Community Service. In awarding Samsung this honor, POLF noted Samsung's achievements in establishing effective systems to support employee volunteer activities, to develop and maintain systematic volunteer programs, to leverage technological and human resources, and to serve local needs.

Q1) what key global market strategy has Samsung Electronics implemented to achieve international competitiveness and global market leadership? Answer: Samsung has implemented number of Global Market strategy to achieve international competitiveness and following are some: 1) For any company to be successful, most important is to set goals, objectives and have confidence level. In the article we have seen that Samsung Electronics have strong Vision and Mission. 13

a) Vision statement charts long term direction of a firm including its core values and purpose. If we analyze their vision statement “Lead the Digital technologies to enrich the lives of people, develop new markets and ensure that company remains a trusted market leader”, we can see that Samsung Electronics want to lead the Digital technologies and that is not easy having some many good competitors. They are not only interested in local market but also develop new market along the globe and finally they will ensure their products offers safety, longevity in order to remain trusted market leader. All this wishes are not easy and therefore, their main key global success I think is the desire to take tough challenges. b) Mission statement explains the main reason for firm existence and provide strategic planning guidelines. From this article we can see Samsung Mission statement is “Best digital e-company by creating industry leading technology products and services, adopting the most up to date efficient management and production procedures, maintain a strong focus on strengthening the company, being a leader in global technology, and being a trusted responsible company”. This mission statement also indicate they want to introduce quality products so that have quality control sector, they also have research and development sector so they can adopt most up to date efficient management and production procedures. All this indicate they have strong confidence and resources to deliver the best and this what I think gave them the competitiveness and global market leadership. Without goal everything is useless. c) Finally they have strong objective, which is “to become number one in its industry throughout the world, and Korea`s first great global company”. They objective need to be achieved by research, development and quality control; advertising, innovation and all this are forced by the objective of the company. 2) Good governance and transparency: In order to be successful in global market and achieve international competitiveness, another key thing is to have good governance and 14

transparency. Samsung is successful in operating within the framework of good governance and transparency to protect their corporate image and reputation and market share and retain strategic partners. There is saying that it takes years to build up image but one minute to spoil it. Samsung has independent board of director, which governs the company and always maintains transparency with its shareholders. Samsung Board of director consists of nine members of whom two are Samsung executive directors and seven external appointees. Four committees also establish within the board to fast track the deliberations and decision making process of board members. They also have management committee, audit committee the outside director recommendation committee and also internal transaction committee. Moreover their governance is also strengthened through its global code of conduct, which sets companies values and principle. Because of having good company image, keeping shareholder satisfied and future more having transparency in reports Samsung achieved international competiveness and recognition. Since shareholders are happy and feel safe to invest, they agree to buy Samsung Shares even at higher price which Samsung value high and also give global market leadership from their competitor who fails to do similar. 3) Culture: Samsung Electronics is committed to creating knowledge based corporate culture that encourages all of its employee to institute changes, innovation, creative methods and process which cannot be achieved or replicated by its competitors. Values are the basic concepts and beliefs of an organization and in essence are the core corporate culture and it provide employee with a sense of common direction and standards for their everyday behaviors and form the basis of the firms philosophy for achieving successful outcome. Its also important for Samsung to often change their predominantly national culture to one which is more international in outdoor which means they must respect other people culture and avoid using things that has adverse meaning in different culture. Like V sign in USA means victory but in UK, Ireland, Africa the same V sign means insult. 4) Knowledge and Management: Samsung Electronics is a learning organization and is skilled in adapting to changing market conditions and addressing business needs. Samsung conduct regular benchmark meaning identifying firms that are doing something 15

best and learning how to do it. They benchmark their competitors, supplier, joint venture and trading partners. Doing so they keep up their technology with others. In some cases if they find lack of knowledge among management or employee, they gather knowledge from seminars, engaging consultancy assistance or by reading books. All this makes them up to date with latest technology advances and their brand customers gets latest products so no need for shifting to other brands. Samsung also constantly monitor and reduce cost of production and try to reduce price for end products so that customers can enjoy advance product with less price. Samsung also recognize bringing latest technology in advance so they spend high on research and development department. 5) Partners increase: Samsung always seek to increase strategic alliances meaning corporative partnership arrangement between firms whereby they agree to work together for mutual gain. This not only help them to increase review but more importantly they share knowledge, increase efficiency and reduce cost of production. 6) Corporate social responsibility: Samsung in order to protect their corporate image and brands consider corporate social responsibility. They seek for global talents and then support them by providing resources to provide and produce which will enrich peoples live. They also spend a lot on eco-friendly products. It also aims to have greenhouse gas emissions by 2013. In short they contribute for the society from their profit to benefit the society and also maintain their brand name and image. This will cost them at the initial stage but will bring higher return for future. Above are the points those clearly state why Samsung Electronic achieve international competitiveness and global market leadership. above key global strategies was not implemented in years. It takes time and they will continue implementing more new key global strategies to strength their position, profit, image and products. Q2 ) What criteria should Samsung Electronics apply to ensure that it selects appropriate joint venture partners? Answer: Strategic alliances is corporate partnership agreement between firms whereby they agree to work together for mutual gain. The definite clearly explain the whole scenario, where 16

business A and B joint together although they retain separate business identities and seek to learn from each other and exchange knowledge, technology, products and skills which would not otherwise be available if they operate alone. Samsung Electronics is a global company operating in many different countries. It will be relatively difficult to operate in all this countries alone. Secondly, they have many different products sectors like electronics, petrochemicals, heavy machinery, ship building, advertising and insurance. They can share different types of products production with different companies based on the skills and productivity ratio. For example some can create the same product at lower cost than others. They can also use unutilized space of another establish company by reducing fixed cost and so on. Following are some point Samsung Electronics may apply to ensure that it selects appropriate joint venture partners: 1) It’s never easy to make friend especially in the corporate level. Every firm is interest in self benefit. So the first thing to keep in mind while making joint venture partners is to clearly identify benefits from venture of all partners involved. All benefits should be states before sitting in the bargaining table. Both party should clearly understand each benefit from joining. 2) They should clearly mention how the partnership will and in what level they should exchange their knowledge, technology, products and skill and then each partner should measure the degree of difference between the advantages and disadvantage of such share. 3) Either partner or all partners involve should ensure that all should be able to adapt changing environmental and market condition. Also they need to feel comfortable that they will be able to develop prosperous relationship between partners and ability to solve problems and settle difference.

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4) They should check their size and capabilities, operating strategies, respective corporate cultures, management practice, policies, philosophies and organization structures. They should also check their safety and political stability and so on. 5) They should try to build partnership with large firms rather than small farms as large firms will offer them more benefits than small firms but partnership with large firms will be more costly and time consuming than of small firms. 6) They should seek for diversification of production to reduce production cost. They should seek for firms producing required product at cheaper price maintain same quality so that Samsung can reduce production cost. Same way they should focus more on producing products they can product in cheaper price than other. 7) Most importantly they should have good papers and documents of the partner agreement contract in order to protect them from fraud or hazards situation in future. 8) Always maintain transparency and be open minded with your partners in order to avoid conflict.

5.0 Recommendation for Samsung Electronic:

Samsung Electronics is doing pretty well over the decade. Starting in 1969 in South Korea and now operating in more 24 research and development centers around the world. Also Samsung become the highest selling mobile phone company overtook Nokia selling more than 93.5 Million units. Despite all success they also have some drawbacks like law suit by Apple recently for copying their design. Since Samsung is now one of many among the largest company in the world, other will try to fight back and win the top position. I have some recommendation for Samsung Electronics given below:

1) They are currently dominating some of the popular electronic sectors like Mobile, TV, LCD, and Chipset and so on. Already there are big players involved in those sectors like Sony, Apple, Intel 18

and they definitely regard Samsung as biggest threat. Having so many bigger threats, Samsung has to be innovating in product design and introducing and therefore they need to invest lots of capital in Research and development sector and higher talents before it competitors does. So my first suggestion will be to make more friends and reduce number of threat either by being more innovative or by joining as corporate partners with competitors. 2) Law suite cost money and also damage image of the corporation. Samsung already learned their lesson from Apple and now they should test market analysis and hire experts to analyses product copywriter and design uniqueness before releasing product to the market to avoid future lawsuit. 3) Samsung should provide advance knowledge to its current employee and hire new talents from the market to be more productive, innovation and unique design. 4) Samsung should invest more on Research and development sector so that they can introduce constant new products ahead of its competitors to attract customers and more importantly satisfy shareholders. 5) Samsung is doing well in conducting Social responsibility. They should continue doing so and if possible increase level to impress people around the global and enhance corporate image. 6) In this digital world, most important is advertising to promote branding. They should sponsor big events, increase advertising and offer seasonal discount to keep customer busy with Samsung products. 7) Samsung should constantly monitor Management teams and employee member in the management from external shareholder to bring hope and faith on the existing and new shareholder. They should be as more possible transparent in accounting and documentation to be more specific to customer and shareholder. 8) Samsung should try to find partners for diversifying production design and production based of economic of scale in order to reduce production cost and that will reduce the final price of the product and easier for customer to purchase. This will also give comparative advantage over its competitors. 9) Samsung should enter more country as possible to increase market sector around the globe. They should respect other culture while doing so. They can enter other countries either by fresh investment or through existing firms by selling right to use brand name or design or chipset or even as franchise. They should also ensure quality control in all essence. 10) China is getting expensive this day for production hub. They should try to find alternative options if in future China becomes expense country for production before its competitors. They can do so now as experiment for future. They should always maintain 19

low price with similar or better quality products for its customer. This can only be done when cost of product is low.

Bibliography 1. Huvard, Sky, Rodrigo Salcedo, Lateshia Tuppince, Matt Wentz, and Lindsay Zolad. Vodafone Air Touch: The Acquisition of Mannesmann. Rep. May 2006. Web. 5 Oct. 2011. 2. Chan, Joshua, Zhisui Chen, Irene Cormane, Nou Her, and Renie Thomas. Cell Phone Industry Analysis. Rep. 12 May 2006. Web. 5 Oct. 2011. 3. http://www.csus.edu/indiv/h/hattonl/industryanalysis.doc >. 4. http://gigaom.com/mobile/why-samsung-is-about-to-become-the-smartphone-king/ 5.http://www.cybozone.com/vcu/Vodafone_Air_Touch__The_Acquisition_of_Mannesmann. pdf.

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