Analysis of Business Strategy in an Organization
Business strategy is a business tool used by the management to attain its goals and objectives. It assists business in planning and decision making for making the business successful in the competitive market environment. The business strategy is a key function performed by top level executives for the benefit of the company. This further help the organization in attaining business goals smoothly which further aid in enhancing productivity and profitability of the organization (Kourdi, 2010). However, there are different types of business strategy like, growth, market entry, diversification etc which can be selected by the marketing manager as per the current needs and scenarios. In the present research report, different aspects of business strategy will be studied. In order to facilitate the study Samsung has been selected.
Samsung is a conglomerate which deals in clothing, electronics, telecommunications, and electronic components, digital and other electrical equipment. The company has reached its target customers with the help of wide range of own dedicated stores. Presently, Samsung has diversified its operations in different areas like, insurance, financial services, advertising, entertainment; hospitality etc, In addition to this, company is also providing retail, information and ship building services.
Further, in this report, implication of mission, vision and objectives in making business strategy will be described. Thereafter, the impact of external and internal environment on business operations of the company will be illustrated. Further, a new strategy will be planned to enhance market share, reputation and profitability of the organization in global and domestic market. Thereafter, SMART objectives will be devised for Samsung to implement the strategy to attain business goals.
The vision of company is to provide superior quality services and products to its target customers. Thereafter, Samsung vision is to become highly valued company in the society in which it serves. The vision statement of company reflects the desire of the organization to have constant growth and development in the field of technology. Further, Samsung is perceived as modern and innovative organization in market. Company further wants to expand its business operations in every possible location of the globe.
The core purpose of mission statement of Samsung is to enhance wealth and profitability of its shareholders. Thereafter, company is to provide unique, innovative and highly valued products and services to customer with combined efforts of its committed and loyal staff (About us, 2015).
The main objective of the company is to provide ethical products to its target customers. Desire of the organization is to attain core competence in its business by designing unique products. The key objective of Samsung is to inspire communities in which they serve by focusing on its core strength, technology, innovation and creative solution.
The core competencies help Samsung to stay a step ahead of its rivals. The major core strength of company is to be creative and competent staff. Thereafter, technology leadership helps in creating superior quality products. In addition to this, company has competence to produce different types of products with various configurations. Thereafter, global brand image and companies strength in building value to customers and innovative culture within organization are some core competence of Samsung.
Strategic planning is important function that helps Samsung in designing effective and best suited business strategy. Strategic planning refers to well defined procedures which are used for developing strategies that further give overall direction to the company (Ferrel, 2012). This further help in attaining set goals and objectives aligned with the vision and mission of Samsung. However, there are certain internal and external factors which impact the strategic planning of the company. They are described as follows:
It is significant for Samsung to maintain inventory of competent and qualified personnel within the organization. In order to ensure success of strategy it is important for the company to ensure engagement of all level of staff throughout the enterprise. It is the responsibility of employee to implement strategy within organization so that they must be involved in the strategic decision making (Factors affecting strategic planning, 2014). However, the skills, knowledge, potential etc of workforce is also an important role in formulating strategy.
The positive working environment within Samsung is very crucial for facing different business challenges, adapting changes and attains the goals and objectives of organization. Therefore, the culture is significant factor which facilitate in formulating strategy and implementation.
The strategies are developed at different levels; business, corporate and functional. The top level executives formulate corporate strategy while middle level managers design business strategy (Reich and Benbasat, 2013). Thereafter, supervisors or line managers formulate functional level strategy. Therefore, for effective formulation of strategy at various levels it is important for Samsung to have well defined organization structure.
With the fast changing technology it is crucial for Samsung to upgrade its current technology. There are various strategic plans which involve designing new product, adding new attributes in existing product etc where technologies act as a key factor. Therefore, to formulate such kinds of strategy it is important for company to upgrade its technology and do market research to find innovative techniques (Lafley and Martin, 2013).
The ability of the company to perform in market also depends upon the extent of market rivalry. Therefore, while developing new strategy it is important for Samsung to consider strategy of market rivals. This will also assist the organization in sustaining intense market competition.
Samsung uses different tools and techniques for developing business plan. To ensure success in strategic planning and formulation the company uses various tools such as, SWOT analysis, competitor and Pestle analysis. They are further explained as follows:
SWOT stands for strength, weakness, opportunity or threat. It is important tool which is used by Samsung to understand its capabilities, drawbacks. Further, company utilizes its strengths to take benefit of future coming opportunities (Andersson, 2011). It also helps in identifying the way in which company uses its strengths in overcoming its weaknesses. Thereafter, company use SWOT analysis to identify future threats and take measures to minimize their adverse impact. Therefore, on the basis of this analysis strategic formulation is done, business decisions are taken etc.
PESTEL analysis is important tool used by the company to study the impact of political, economical, social, technological, environmental and legal factors on the operations of Samsung in different markets. This analysis further helps the organization in making important decision. Further, it assists the company in taking action which is important for the survival of business. These evaluation further aids in taking measures that determine future success of the organization (Muller, 2011).
Competitor’s analysis is important tool used to identify strength and weakness of target rivals. This evaluation further assist in making competitive business strategy that help Samsung in enhancing productivity and profitability in the market.
Organizational audit is important tool used by Samsung to determine the impact of internal factors on operation of the company. The organizational audit helps company in enhancing its strategic position in the market (Joseph and Eshun, 2009). The main aim of organization audit is to help company in aligning its internal structure, processes, resources and system with strategy while fulfilling requirements of external environment. Therefore, with the help of SWOT and product positioning Samsung can conduct business audit that is described below:
Further, with the aid of SWOT analysis, Samsung can make best use of its strength to overcome its weakness (Bohm, 2009). Thereafter, company can use strength to take maximum advantage of the upcoming opportunities.
It is a process that helps in building strong reputation in the minds of customers. Samsung uses this aspect to develop distinct image in market as compared to its rivals. It further helps in attracting customers to make purchase. The different strategies used by the company in this aspect are explained as follows:
It refers to varied range of products and services offered by company. Thereafter, it also involves quality of products offered by the company. For example, Samsung is offering superior quality products and services at affordable price by using functional positioning strategy. The company focuses on quality of its wide range of product while doing marketing (Lafley and Martin, 2013). This helps Samsung in attracting more customers.
It refers to ethical values, beliefs, demand and preferences of target customers. The company uses symbolic positioning while designing products. For instance, while manufacturing electronic products company use symbolic positioning.
This positioning strategy play an important role in determining market position of Samsung (Sekhar, 2009). The company uses price positioning to attract customers of different class. Further, this strategy is applied by the company in its telecommunication and digital products such as, cell phones, laptops, televisions, etc.
Environmental audit is important technique used by the company in determining impact of external factors on its strategic positioning and business operations. For environment audit, Samsung can use PESTEL analysis which is described below:
It refers to impact of political factors on operations of Samsung. Being a global brand, company is required to consider laws and regulations laid by different countries. For this aspect, it is mandatory for Samsung to consider, tax rate, legal policies, laws and regulations of foreign country where it is operating. The company also faces adverse impact of political instability in the country (Montgomery, 2011). In this aspect, company has suffered a lot due to tension in Korea. Thereafter, company faces political pressure in different countries like, America, Africa etc. Therefore, it is important for Samsung to consider political laws and regulations to avoid political action. The company has faced political action in the form of suit and penalty for copying some features of Apple.
The economics factors impact the economic policies, conditions and constraints like, GDP, disposable income, recession, unemployment etc on the functioning of company. For instance, the reduction in disposable income of population of UK may result into decline in demand of high priced products (Teece, 2010). Thereafter, the recession in a particular country can affect sales of Samsung products. In this aspect, the recession of America in year 2007 led to reduction in sales of cell phones. Further, the fluctuation in currency can also impact the sales of wide range of Samsung products in the market.
It refers to changing trends, population, cultural and health aspects of country which can impact product demand of the company. For instance, the increasing trend of using gadgets, mobile phones, laptops etc for personal and corporate purpose has led to increase in demand of large range of products of Samsung (Wankel, 2008). Further, the prevalent trend of online shopping has stimulated company to provide its product through online stores.
It represents the technical factors, processes and functions that determine success of Samsung in the market. With the rapid changes in technology it is important for company to upgrade its present technology. Samsung is already recognized for providing innovative and unique products. For instance, Samsung is using its upgraded technology to make continuous improvements and adding new products in its Galaxy mobile range. This further helped in increasing productivity and profitability of company in the market.
With the growing concern about environment and business ethics among customers, it is important for Samsung to develop ethical products without damaging environment. For adhering with the business ethics, it is important for company to give fair wages, proper working conditions etc to employees.
It is important for Samsung to consider legal policies while making important business decision. Failure of the company to follow legal rules and regulations can cause law suits, actions against company. In this aspect, Samsung have to pay huge penalties for imitating Apple Company’s product. This also causes negative impact on reputation of brand.
Stakeholders refer to those groups and individual which can impact or are affected by the operations of Samsung. The stakeholders can impact strategy of company therefore, it is important for the organization to consider their interest while formulating strategy. This can be further detailed out with the help of key stakeholders which are as follows:
They play a crucial role in determining market position of Samsung. Further, they determine legal framework within Samsung will perform its operations. Thereafter, it is significant for the company to consider policies framed by different governments where it is operating its business. It includes, tax policy, labor laws, employment and competition policy etc. Therefore, to prevent the legal consequences it is important for Samsung to consider these policies (Yousif and Hassan, 2013).
They help in implementing framed strategy within the organization therefore, it is important for Samsung to consider interest of employees while framing business strategy. Therefore, the major concern of employee is regarding safe working conditions, fair pay, job security and respect etc.
They play a vital role in the success of business enterprise in the market. The major concern of customers is about quality, price, professional assistance and customer care services etc (Reich and Benbasat, 2013). Thereafter, Samsung should consider needs, preferences and demand of customers while developing products. This will also help in increasing satisfaction level among customers.
The goods and services provided by suppliers is important input for manufacturing products of Samsung (Wickramasinghe and Jayaweera, 2011). Therefore, it is important for the company to consider interest of suppliers while making important business decisions. The major concern of suppliers is regarding timely payment, good term with company and profitable business opportunities. Therefore, to avoid the monopoly of suppliers it is significant for the company to maintain good relation and involve suppliers in specific strategic decisions.
For continuous progress and growth in competitive market environment it is important for the corporate to frame new strategy from time to time. This will also help the company in ensuring profitability in long run. Thereafter, with this aspect company can maintain its market position. Samsung is ranked at first number for its android applications and smart phone market. Therefore, to ensure growth and development in it operations new strategy is designed which is as follows:
This strategy refers to introducing a brand new product in the market or adding unique attributes to its existing products. Thereafter, Samsung can increase its product line to compete with the rivals and meet the expectations of its customers. At present, the company is perceived as most innovative company who always come up with new products and services (Zachariassen, 2008). Therefore, to maintain reputation, company can modify its product line. This will also prevent its customers from shifting to another brand. However, for this aspect it is important for Samsung to do intense market research and identify new technology and processes that will assist the organization in developing new product or service. Thereafter, the biggest competitor Apple is continuously adding new technology and new features in its product. Therefore, to match the competition it becomes more crucial for the organization to grow by developing new products and attributes. Further, various ways which can be used by company for implementing growth strategy are explained as follows:
Samsung enjoys global brand image which can be used by company in growing in its existing product line of, smart phone, tablets etc. di. It is growing and it will generate huge profit, therefore it is feasible for company to grow in this product line. The company can use online medium to distribute its products in countries where its presence and sales is still low. At present, the company launched its new product, Samsung Note 3 + Gear which is attracting more people. Therefore, company can distribute it with the help of online portals in different countries (Mehrjerdi, 2013). Presently, Samsung is having its presence in 80 countries therefore company can use its broad market share to distribute its new product. . Further, new attributes and applications can be designed for its existing cellular product range, smart phones, tablets etc.
Samsung can expand in new product line by developing new range of products for its domestic and international market. Presently, the company has diversified into insurance, chemicals, semiconductor, ships and medical equipment (Mason and Herman, 2003). The company also have theme park in South Korea. Therefore, Samsung can use its global image to grow in hospitality industry and can develop new hotels and restaurants in its brand name. Further, hospitality segment is not explored by brand therefore company has large number of opportunities to increase its profitability.
Apart from the aforementioned strategies, there are different strategies that can be adopted by Samsung for increasing its market share, reputation and profitability. These are as follows:
With the help of this strategy, Samsung can make an entry into new geographical regions. The de-regulation will also assist the company in entering into new market. It has been identified that company is working in 80 countries therefore, apart from these countries Samsung can enter into rest of the nations. The company can use export, import and licensing to enter into new products (Wickramasinghe, 2011). Samsung can also use online portals to distribute its wide range of products and services. However, it is important for the organization to carry out the intense market research, identify need and demands of prospective customers and their capacity to pay while making market entry. Further, stakeholders should be involved while making market entry decision.
Samsung can cut down its operational size to reduce future losses and rectify unfruitful business decisions taken in the past. This will also help company in ensuring economic stability. Presently, the some cellular products of Samsung's Galaxy range are going into loss like S5 and S6 are drastically failed in some market. There sales is continuously dropping and they are still unsold in some warehouses. Therefore, it is significant for Samsung to remove these products from sale recall and introduce it after adding more features (Products of Samsung, 2013). However, the major reason for the failure of these products was due to failure of its camera. Therefore, company is required to consider this aspect while launching new cellular equipment. This will prevent the firm from future loss and will reduce the chances of negative impact on market image of the Samsung.
It is effective strategy that assists the company in modifying its current product range. This further involves launching new product in new market or adding more features in the existing product (Sekhar, 2009). Presently, Samsung's Note 4 is not doing well in market therefore, company can add new features, upgrade the software etc to boost future sales of the product. However, it is important for the company to promote its modified product through online and offline portals to increase its sales.
From the aforementioned strategy, the marketing manager of Samsung can chose a strategy that will help the organization in increasing its productivity and profitability. Specifically, company can chose market entry strategy. With this aspect, company can enter into foreign market. It is justified for Samsung to enter into foreign market as they more economically viable and provide more growth opportunities. However, before market entry, it is important for Samsung to analyze various aspects like, choosing right product for right market, method of promotion, pricing and distribution (Raymond and Croteau, 2009). For instance, the company can use consumer electrical products for entering into emerging markets. Therefore, there are varied categories like, LCD, LED, refrigerators, music system etc. The demand of electrical products is more in emerging markets therefore; company can enter into such markets and get bulk orders. The entry into emerging market will help the organization in increasing its market share and targeting more customers. Further, to ensure satisfaction among customers, Samsung should identify needs, preference and demand of prospective customers. However, it is important for Samsung to use pricing strategy for successful market entry (Seel, 2006).
With the cost based leadership, company can easily enter into new markets. Therefore, company can cut unwanted cost involved in production process and reduce prices of product. However, Samsung should maintain its quality standards while reducing cost. Further, by maintaining low prices, company can attract more customers and turn into more feasible brand for customers. Thereafter, company can provide its product through own dedicated stores and set up customer care service unit for providing services. Apart from setting manufacturing plant and blocking huge capital, company can chose to export its product to its foreign nation. With this aspect, the firm can easily enter into new market and enhance its productivity and profitability (Passerini, 2013). Therefore, company can acquire existing company who is providing consumer electrical and can give it own brand name and use its plan, technology and other resources. Thereafter, Samsung can use licensing to enter into new market. For instance, Samsung have entered into cross licensing agreement with Google where both the company uses each other’s patents. Therefore, with this aspect the firm has gained synergy effect and brand has become more powerful. Hence, it is feasible for Samsung to enter into new market and gain fruitful outcomes.
To ensure successful and effective implementation of devised strategy, it is important for Samsung to define clear roles and responsibilities. This will also avoid competition among organizational members and will further assist in attaining overall goals and objective of the company. Thereafter, the management should ensure that employees are aware of framed strategies so that they can put their efforts in right directions and assist the company in effective strategy implementation (Parnell, 2010). The lack of knowledge among employees regarding strategy can put adverse impact on overall performance of Samsung and lead to failure of strategy. Further, company should ensure proper coordination among members to perform task in a proper way. The lack of coordination can impact the strategy implementation. Therefore, management of Samsung should pay more emphasis on strategy implementation. In order to define clear roles and responsibility, company can use responsibility charting.
Further, the organization structure also plays an important role in strategy implementation. However, there are different strategies which are developed at various levels like, corporate strategy and are framed by top level. In addition to this aspect, business and functional strategy are formulated by middle and lower level. Therefore, implementation is also done by different level. For instance, corporate strategy is implemented by middle level with the efforts of functional level. However, top level controls the execution and monitors the strategy (Melville, 2010). The contribution of all the levels is necessary for effective strategy implementation. The top level executives of Samsung can conduct strategic mapping and identify key points which can impact the strategic implementation. Further, it will help in communicating vision, mission and objectives of Samsung for attaining goals effectively. The person in charge of strategy implementation should bring innovation in implemented strategy to get competitive benefits. Thereafter, designed strategy should be communicated at all levels so the employee knows their responsibility. The resources should be allocated for strategy implementation.
In order to ensure successful implementation of strategy, it is crucial for Samsung to allocate resources which will be required. Therefore manager should ensure there is adequate availability of resources. Further, the required resources are as follows:
For effective implementation of strategy, there must be adequate financial resources within Samsung. For instance, for entering into new market, it requires large fund as company have to invest in production, promotion and research and development. Therefore, company should ensure that they have proper funds to invest in different operations (Keim and Hillman, 2008). Further, company should identify different financial options that can be used to avail finance. Therefore, experts are hired to prepare profit generating strategy therefore they should be paid well which again requires more fund. Further, to avail funds manager should focus on external and internal funding. The financial resources can be further used in promotion, infrastructure development and other functional areas.
Samsung requires proper inventory of human resources that will help company in implementing framed strategy. Therefore, company requires marketing executives and more sales personnel that will help company in promoting its product in new market. Therefore, to do intense market research, experts are required. Therefore while framing strategy, management of Samsung should plan and check it have proper human resources. The company can recruit local staff while entering into new geographical location to have proper knowledge about market and customers (Mason and Herman, 2003).
Hence, it can be concluded that with proper focus of the resources, Samsung can reduce obstacles in successful implementation of strategy.
Samsung can use SMART objectives to facilitate accomplishment of its goal of higher growth and success. These objectives will help the company in setting benchmark for its performance. The SMART objective refers to specific, measurable, attainable, and realistic as well as time bound goals. They further support the strategic implementation and monitoring. Samsung can evaluate the success ratio of implementation of strategy with the help of SMART objective. For instance, the SMART objective of Samsung is to increase sales of its smart phones by 25% by the end of year 2015. To support this strategy, company can use year ending sales as promotional tool. Thereafter, to determine the success ratio, Samsung can compare sales of 2015 with last year’s sale (Parnell, 2010). Therefore, company can measure the effectiveness of SMART objectives for the company. Thereafter, management can determine various risks that affect overall performance of Samsung.
In a nutshell, it can be concluded that business strategy plays an important role in the success of operations of Samsung. The SWOT analysis helps in identifying strength of company can use them in overcoming weaknesses. Further, from PESTEL analysis it is concluded that legal and political factors are causing adverse impact on performance of Samsung. The growth strategy will help the company in increasing its market share and profitability. Planning of human and financial resources will facilitate strategy implementation. The SMART objectives further help in enhancing overall performance of Samsung.
It’s time to turn to our experts for assignment writing service.