Samsung Electronics, one of the largest semiconductor manufacturers. It is also South Korea’s top electronic company.
It makes many kinds of consumer devices, including DVD players, digital TVs, and digital still cameras; computers, color monitors, LCD panels, and printers; semiconductors such as DRAMs, static RAMs, flash memory, and display drivers; and communications devices ranging from wireless handsets and smartphones to networking gear.
The company, which is the flagship member of Samsung Group, also makes microwave ovens, refrigerators, air conditioners, and washing machines. Nearly half of sales come from the Asia/Pacific region.
II. Situational Analysis (TOWS)
Threats 1) Relentless deflation 2) Rivals can buy similar technologies from other vendors without tying up capital or making long term commitments.
3) Chinese companies keep driving prices ever lower, leveraging super cheap wages and engineering talent. 4) Direct and strong Competitors (Apple Computer Inc., Motorola Inc., Sony Corp., Nokia, etc.) in a tough environment 5) Korea’s slumping economy─ and in China and other Asian countries struck by SARS epidemic.| Opportunities 1) Venture into new markets 2) Proliferate production outputs 3) Increase capitalization| Weaknesses 1) Too many diversified products 2) Inevitability to decrease price 3) Life cycle of hardware goods is brutally short and subject to relentless commoditization.| Strengths 1) Using the latest and high-end technologies in manufacturing and creating new products (CDMA, DRAM, DLP and NAND) 2) Excellent R&D capabilities 3) Fewer layer of bureaucracy 4) Vertically Integrated 5) Diversified product lines 6) Competent employees|
III. Hierarchy of Objectives
IV. Hierarchy of Problems
V. Analytical Tool: TOWS Matrix
Internal External| Strengths 1) Using the latest and high-end technologies in manufacturing and creating new products (CDMA, DRAM, DLP and NAND) 2) Excellent R&D capabilities 3) Fewer layer of bureaucracy 4) Vertically integrated 5) Diversified product lines 6) Competent employees| Weaknesses 1) Too many diversified products 2) Inevitability to decrease price 3) Life cycle of hardware goods is brutally short and subject to relentless commoditization.| Opportunities 1) Venture into new markets 2) Proliferate production outputs 3) Increase capitalization| S-O * Entering into the software business (S1, S2, S5, O1) * Outsource manufacturing (O2) * Attract more investors (S1, S2, S3, O3) * Exploratory technology development strategy, specifically with respect to the engineering design and prototyping effort (S1, S2, S5, S6, O1 ) * improve the control of cost, quality and delivery times of inputs in order to master vertical integration (S3, S4, O2)| W-O * Continuously tap into and augment existing technologies and quick application as soon as new
concepts are realized (W1, W3, O1, O3) * To keep sales growing by adding new features, targeting additional segments and adjusting prices (W1, W2, W3, O1, O3)| Threats 1) Relentless deflation 2) Rivals can buy similar technologies from other vendors without tying up capital or making long term commitments. 3) Chinese companies keep driving prices ever lower, leveraging super cheap wages and engineering talent. 4) Direct and strong Competitors (Apple Computer Inc., Motorola Inc., Sony Corp., Nokia, etc.) in a tough environment 5) Korea’s slumping economy─ and in China and other Asian countries struck by SARS epidemic.| S-T * Motivate employees through incentives and by offering better compensation packages. (S5, T4) * Leveraging core competencies (S1, S2, S4, T2, T4) * Initiate CSR (Corporate Social Responsibility) programs. (S5, T5) * Focus on Vertical Integration and hardware (S1, S4, S5, T2, T3, T4)| W-T * Aggressive marketing efforts (Advertisements) to create customer awareness (W1, W2, W3, T2, T3, T4, T5 ) * Clear differentiation and value added pricing (W1, W2, W3, T4) * Realistic profit-based pricing (W2, T3, T4)|
VI. Alternative Courses of Action
Alternative Coursesof Actions| Description| Pros| Cons| 1. Improve profits to keep up with sales| * adding new features, targeting additional segments and adjusting prices * to intensify marketing efforts| * greater market share * increase in profit * improve brand awareness * threatens competitors| * Increase marketing expenses * Opportunity costs financially in the other functional areas.| 2. Venturing into the software business| * aside selling hardware, Samsung could also develop proprietary software (applications, games and other multimedia)| * Higher margins * Long lead time over rivals * Thriving into a new market segment| * Copyright infringement that can stain Samsung’s brand * Additional capital outlay * High barrier to entry| 3.Aggressive marketing efforts (Advertisements) to create customer awareness| * Aggressive marketing is the back bone of any company to grow. As a matter of fact what determines performance of any company, organization is their MARKETING method.| * Increase consumer awareness globally * Increase in sales * Larger market share * Attracts/Rise in profits * Improve long-term profits * Could gain competitive advantage over competitors *
helps in improvement of the quality of the goods * information of products are readily available| * Increasing advertising increases the costs of doing business and cuts into your bottom line. * might jeopardize short-term revenues|
VII. Chosen Alternatives
* Aggressive marketing efforts (Advertisements) to create customer awareness
VIII. Implementation/Action Plan
Activities| OVI| Means of Verification| Person- in-Charge(Division, Department, Agency)| Resource Requirement| 1. Meeting with top-level managers on coming up with an excellent marketing proposal| * Approved new marketing proposals| * Minutes of the meeting| * Yun, CEO; BOD’s and executive officers| * HR * Time| 2. Department heads will meet and inform their subordinates (especially the R&D and Marketing Dept.) on the changes| * Acceptance and participation of Department heads and subordinates| * Memorandum, a written document signed by the top-level committees| * Department heads and their respective subordinates| * HR * Time| 3. Marketing department will implement the new and approved proposal| * Increased product exposure | * Marketing paraphernalia (Printed ads. And materials)| * Marketing Department| * Financial * Marketing materials| 4. Monitor and evaluate results through sales and profits| * Financial Analysis| * Financial statements, account records| * Both Marketing and Finance department| * Book of Accounts * Time * HR * Information System|