Samsung uses their products and often supply their electrical components to the likes of Apple (e.g. Samsung to supply 50% of DRAM chips for their iPhone 6) (Hall 2015). Samsung generally uses this as a competitive advantage to dominate the mobile industries by controlling the supplies to their competitors. For example, the launch of HTC Desire with AMOLED screen was initially supplied by Samsung. Upon knowing that HTC Desire gain popularity and profit. Samsung decided to stop supplying the screens to HTC which caused a huge trouble to HTC (Epstein 2013). SECTION 2: VRIO Framework & Analysis Capabilities Value Rarity Inimitable Organization Page | 6
Support Product Brand Yes Yes Yes Yes Supply Chain Management Yes No Yes Yes Technological Advancement Yes Yes Yes Yes International Marketing and Sales Yes No No Yes Product Brand Samsung as a brand is one of the leading smart phones and electronics brand ahead of their competitors such as Apple according to the Interbrain’s 2013 brand Index (Shaughnessy 2014). Their products are of high value and rare in design. Supply Chain Management In supply chain management, Samsung manufacture their own electronic components for their smart phones (Bossio 2015). Samsung’s supply chain management is not a rare thing as many organizations are able to imitate their supply chain management’s concept. Technological Advancement: Samsung are known as one of the leading innovators in their smart phone industries as they roll out the most innovative products for their customers. The value and rarity of their products are highly recognized by consumers and are Page | 7
often unable to imitate due to patent protections. They received high support from the organization to boost their smart phones sales from time to time as well. International Marketing and Sales: To boost their marketing and sales, Samsung dominated the marketing industries worldwide not only to gain profit but to spread brand awareness to all around the world where Samsung cooperates in the market. This is not a rare sight as competitors are doing similar steps to boost their markets. SECTION 3: PESTLE Framework Analysis PESTLE framework analysis is used to determine the key environmental and the surrounding factors of an organization which emphasizes on six key points namely political, economic, social, technological, legal and environmental Page | 8
& ecological (Johnson, Whittington and Scholes et al. 2014). Below is the list of PESTLE analysis on Samsung Group. Political Factor: i. Political tension between the South Korea and North Korea, affecting the marketing of Samsung. ii. Government and political stability varies significantly across counties involved in Samsung’s operation. iii. Receive full support from home country as Samsung generates the economic value of South Korea.
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- Management, Samsung Group