II.

SamSung’s business strategy

1. Vision and Mission
a. Vision

"Inspiring globally with our breakthrough tech gadgets, products, and innovation
that improve people's lives by building a new time," Samsung's business goal states. This
vision statement guides the company's technological business activities, which contribute
to the betterment of people's lives.

Samsung regularly uses the phrase "Ambition 2020: Inspire the World, Create the
Future" to describe its business vision. This statement is widely implemented throughout
the activities of the company's subsidiaries in the consumer electronics, computing
technology, and semiconductors industries. Samsung's vision statement includes the
following elements:

 Innovation based on global inspiration

 Bettering people's lives and ensuring future social prosperity
b. Mission

"We will commit our people resources and technology to develop quality effective
goods and services, therefore contributing to a better global community," says Samsung's
mission statement.

2. External and Internal Analyzing

a. External analysis
II.1.PESTLE Macroenvironment
II.1.1. Political factors
 Geopolitical tensions: Fluctuations in geopolitical relations can impact Samsung
Electronics’s supply chain and market access through foreign trade agreements and
import – export policies among nations around the world. For example, China has
imposed heavy tax on American import goods because of the political tension between
U.S. and China.
 Government support policies: In countries with strong support for foreign firms,
Samsung can leverage these incentives and infrastructure to expand its market share
and reduce costs. For instance, Samsung has been applied a corporate income tax rate
just 10% during the project implementation process. Along with that, the first 4 years
are tax-free and the next 9 years are reduced by 50% of corporate income tax when
implementing FDI in Vietnam.
II.1.2. Economic factors
 Global economic fluctuations: Economic downturns and recoveries affect
consumer purchasing power and demand for Samsung products.
 Currency exchange rates: Fluctuations can impact Samsung’s profitability and
pricing strategies in international markets.
 Market dynamics: Competition and market saturation in the smartphone and
consumer electronics sectors could influence Samsung Electronics’s business
strategies.
 Emerging markets: Economic growth in new markets presents opportunities for
expansion and diversification such as Asean countries with many preferential
policies for foreign investment and large market share.
II.1.3. Social factors
 Consumer preferences: The trend of increasing mobile users and demand for high-
quality electronics guide Samsung Electronics’s product development.
 Demographic shifts: Aging populations or youth bulges in different regions affect
directly to Samsung customer group based on demography factors in each area.
 Culture and Religions: Local cultural factors can influence product acceptance and
require tailored marketing approaches. For instance, most of the Vietnamese use
Facebook app (89,7% of total social media Vietnamese users), so it could be a
potential marketing channel for Samsung.
II.1.4. Technological factors
  Innovation pace: Rapid technological advancements in the world offer Samsung
Electronics’s opportunities for leadership in emerging tech areas like 5G, AI, and
IoT by leveraging their huge capital capacity and vast relationships.
 Cybersecurity: Increasing digital product integration raises the importance of
robust cybersecurity measures to advoid missing private and individual
information. It is important for Samsung Electronics’s devices because of its open
ecosystem
 Digital transformation: The accelerating shift towards digital services and products
opens new avenues for expanding Samsung’s portfolio.
II.1.5. Legal factors
 Intellectual property rights: Protecting patents and trademarks is critical in a highly
competitive tech landscape which could be easily copy by many brands from China
– already well known with lower price, high tech and diversity products.
 Antitrust issues: Compliance with antitrust and competition laws is essential for
Samsung’s operations in various jurisdictions.
II.1.6. Environment factors
 Environmental solutions: Growing consumer demand for sustainable and eco-
friendly products influences Samsung’s design and manufacturing. For example,
Samsung Electronics operates Eco-Life Laboratory to analyze Health and Hygiene
Related Factors from their products

II.2. Five Force Microenvironment

II.2.1. Threat of New Entrants

Samsung is one of the world's leading consumer electronics companies. The

technology industry is highly competitive and requires a company to innovate
continuously to survive. These innovations require a huge amount of capital investment
that is an enormous challenge for other small to medium companies such as OnePlus and
Lenovo. Therefore, it is very difficult for loyal customers of Samsung or another famous
brands such as Apple and Huawei to buy electronic devices from other brand - the threat
of new entrants will be low for Samsung.

II.2.2. Threat of Substitutes

With the appearance of many huge electronic organizations from Western

countries to Asian countries, it will bring a large number of alternative products to
compete with Samsung Electronic’s devices. Therefore, Samsung needs to carefully
decide the appropriate marketing strategy to attract users. For example, Samsung
Electronics usually uses Segment pricing methods to focus audiances in each income
segmentation, so that they could partly avoid competition about pricing with other low-
price brands. In the high-end class, Samsung has to face up with LG and Apple. More
specifically, Intel is the main competitor of the only alternative product manufactured by
Samsung. In 2022, Intel's promotion plans surpassed Samsung's, so Samsung will release
a plan to produce two-nanometer chips in 2025. This is an effectivestrategy because it
will make customers find that their products are unique, and it is not easy totransfer to
these unique alternative products

II.2.3. Bargaining Power of Customers

Bargaining power of customers can be set to moderate. Because Samsung is a

business-to-consumer corporation, no single client has a significant effect on Samsung's
revenues. As a result, clients' individual bargaining power is limited. On the other hand,
customers have much collective bargaining power, as they have many selections in terms
of brands and items accessible on the market. Furthermore, consumers can also compare
figures to make suitable selection rather than relying just on brand reputation.

II.2.4. Bargaining Power of Suppliers

Bargaining power of suppliers in the case of Samsung is low. Samsung has a large
number of vendors to collaborate from across the world, including the US, China, and
Japan. Many of the vendors rely on Samsung for a large portion of their revenue. Thus,
they cannot risk up setting Samsung. Furthermore, because Samsung's switching costs for
its suppliers are low, it is largely immune to any supplier ceasing to provide the raw
material or if their prices are too high. Samsung produces chips, processors, and
displaysand thus can work as a supplier for many of its products. This reduces its
dependency on anyother external supplier.

II.2.5. Competitive Rivalry

Many tech rivals can compete directly with Samsung’s hardware and software
such as Apple and Google which produce high-end hardware, whereas Xiaomi and
Huawei provide equivalent capabilities at a reduced cost in the mobile phone market.
Customers could try different devices because switching costs are low; thus, brand
loyalty is rarely seen in the mobile phone market. On its home appliance front,
companies as Whirlpool and Voltas are giving a high competition as they sell almost
similar products at a similar price range. They spend lots of money on R&D and are
always coming up with new and inventive items. They may also spend these capital to
perform many promotions for their items. These appliances' life is high; thus, getting a
customer from the competitor is tough.

b. Internal Analysis (VRIO)

1. Valuable

Competencies that are valuable help the Samsung Electronics in exploiting the
opportunities available and in neutralizing the threats from the internal and external
environment. These competencies allow a business to grow, develop, and expand further.

1.1. Brand image in terms of social responsibility

 The Samsung Electronics has a defined corporate social responsibility function in
each particular nations such as a huge investor into GDP of Vietnam
 The Samsung Electronics regularly engages in social responsibility actions, and
makes them transparent
 All stakeholders are acknowledged about the company’s activities, and social
responsibility actions through official documents including the annual report, and
website
 Engagement in CSR activities allows Samsung Electronics to build non-
substitutable competency - as engagement and strategies for CSR are integrated
with the broader business goals and developed strategically.
1.2. Brand image
 The Samsung Electronics brand image is unique and contains high brand integrity
which has been developed in long term, and through continuous effort and high
quality product offering.
 The brand image is a source of competency because it is unique to the Samsung
Electronics, and cannot be imitated by other players, or be substituted.
1.3. Relationship with suppliers
 The Samsung Electronics is valued globally for its distribution system.
 The company’s relation with dealers and suppliers is particularly string and based
on strictly followed standards and criteria.
 This is a valuable resource for the company that allows the Samsung Electronics to
exploit further opportunities in different foreign regions and countries.
1.4. Ability to raise capital
 The Samsung Electronics is large conglomerate, so it is able to raise equity
through internal source
 This ability has also allowed the company to engage in mergers and acquisitions,
and thereby reduce the market competition, easily penatrate into other
international markets, and take advantage of potential opportunities

2. Rare
 Competencies that are rare in nature are possessed and developed by only a
handful of firms in the industry, and help in building competitive advantage for the
Samsung Electronics.

2.1. International presence

 The Samsung Electronics has a global presence, and operates in multiple countries
and regions which has allowed the company to build an expanded consumer base
and earn revenue through multiple regions
 This has given the company not only higher financial strength but also higher
cultural exposure and international recognition. Especially, the global heritage and
experience that are rare resource of Samsung Electronics to enhance and improve
the company.

2.2. Problem solving skills

 The Samsung Electronics fosters an organizational culture of problem solving

amongst its employees and management that allows higher teamwork, creativity and
innovation in the company

2.3. Risk taking characteristics

 The Samsung Electronics shows high propensity towards taking calculated and
guided risks which is important for a company to be able to grow and expand –
especially in unknown regions and countries.
 In addition, the Samsung Electronics’s risk assessment function is also strong that
helps the company to identify potential opportunities to take benefit
 The ability to take risks is thus an important aspect and competency for business
growth for the Samsung Electronics.

3. Inimitable
 These inimitable competencies help in adding value to the competitive advantage,
and long term sustainability for Samsung Electronics which are hard and costly to imitate
by the rivals

3.1. Quality product

 The Samsung Electronics offers high quality products to consumers

 This is an inimitable resource for the company as the high quality, and specific of
prediction are known internally to the top management of the company only.

3.2. Location of the stores/ placement in stores

 The Samsung Electronics operates through multiple stores in different countries

and regions, it helps to be more easily accessible, and provide higher visibility to
Samsung

4. Organization

Financial strength and Technological integration and advancement

 Samsung Electronics owns substantial financial strength and advanced

technologies to strenthen its brand awareness, and supports the company in
exploring opportunities for new product developments and launches. Additionally,
it offers to the company’s vast and well managed system - internally as well as
externally
 It has also been a source of value for the company in helping it focus on
innovation in product offerings, and maintaining consistent quality thought out
different countries where it operates
 The technological advancements and systematic integration is a competency that
allows the Samsung Electronics to build long term competitive advantage over
competition.
 3. Business Strategy of Samsung Electronics (1)

3.1. Globalization strategy

Global standardization strategy is a competitive strategy to increase profits on the

basis of cost reduction on a global scale. This is a common strategy for businesses that
trade standardized products, competing mainly on cost - price such as electronic
components, semiconductors, semi-finished products, etc. Businesses pursuing a global
strategy often launch similar products and use the same marketing strategy in all markets.

The cost savings allow Samsung Electronics to sell products at competitive prices
campaigned with competitors. From there, Samsung can expand their share in targeting
markets. Moreover, this Global standardization strategy is also suitable for Samsung in
nations where there is high pressure for cost reduction and low local responsiveness.

However, the main disadvantage of the global strategy is that it makes businesses
ignore the differences in both formal and informal institutions in each different markets.
The global strategy does not allow businesses to change their products, except for
insignificant changes in appearance such as color, packaging. This can create an
opportunity for competitors to step in and fill the void in consumer demand, creating a
new market. This strategy is not appropriate where local adaptation is required.

It is undeniable that Samsung Electronics is a multinational corporation with

subsidiaries in almost every country in the world. Each subsidiary of Samsung is
responsible for providing services or products to customers at targeted markets. Samsung
Electronics has adopted this strategy to focus on economic efficiency through engaging in
various types of businesses and standardizing products with the aim of achieving the
lowest production cost and standardizing the quality of output products worldwide. The
proof of Samsung’s global strategy is in its flagship smartphone, the “Galaxy”. The
Galaxy is available in most countries with identical specifications and features, regardless
of the country’s needs. This is followed by the Galaxy S and Galaxy Note. These are the
phone lines that are considered the first anchors for the rest of Samsung Electronics’
product lines.

In addition, in Samsung's fiercely competitive advertising activities, although it is

not possible to fully identify the smartphone lines, they are sure that the flagship phone
line will always contain all the features presented in the advertisement; therefore,
customers can have an overview of the product. This is the strength of Samsung's global
strategy.

3.2. Transnational strategy

Reasons

As Samsung Electronics is a large corporation specializing in electronics and

semiconductors, the pressure to reduce costs is extremely large when it is difficult to
reduce production costs while having to continuously improve product quality over the
years to attract customers and compete directly with competitors such as Apple and Sony.

In terms of Sony, they are in the process of using robots to install production lines
without operators. This is expected to help Sony cut costs by 70% at Sony's main TV
factory in Malaysia by 2023 compared to 2018. For Apple, they are trying to keep
production costs as low as possible while gradually switching from Taiwanese suppliers
to Chinese suppliers to reduce production costs.

In addition, the pressure to localize is also increasing due to the differences in

preferences of each person in many countries. Understanding this, Samsung Electronics
has built the Life Research Lab – a core department of the Product Innovation group to
evaluate customer changes and improve product quality. The evidence is that in the
process of researching and analyzing consumers in Southeast Asia about washing
machines, Samsung realized that many people want to add clothes to the washing
machine after the machine has started washing, so they have specially developed a
product line called Samsung Addwash washing machine to meet the consumer
preferences of users. Addwash has been equipped with an additional small door on the
main door, allowing users to easily add a laundry item while the machine is still
operating.

Operation

Enterprises pursuing a transnational strategy will focus more on adapting to the

markets they enter, and that is the fundamental difference between a transnational
strategy and a global standardization strategy.

Therefore, although Samsung mostly pursues a global standardization strategy for

products in the high-end segment with the Samsung Z Fold 4 and Samsung Z Flip 4
product lines launched on August 10, 2022 - with a high level of standardization,
Samsung still mainly focuses on applying a transnational strategy which focuses more on
developing economic efficiency based on the scale and business environment in the local
market. This enables enterprises to develop different capabilities and skills, and
systematically learn, understand and perceive different environments. From there, they
can connect and share these acquired knowledge across the entire global system of the
enterprise.

A specific example demonstrates that the transnational strategy is the main

strategy is Samsung focuses on developing the Galaxy A smartphone line - that is not
available in the United States because the average income of the American is quite high,
while this product line is a low-cost product line - targeting customers with low to
average income. As a result, the Galaxy A product line can only be sold in countries
outside the United States at an affordable price. This strategy allows Samsung to expand
its customer segmentation. Consequently, Samsung has repeatedly achieved success
compared to its competitors.

Another example of this is the launch of the Note product line, which changed the
game in the smartphone race of two technology giants: Apple and Samsung. Through
market research, Samsung realized that Asian speakers especially wanted a device that
they could handwrite on, as Asians are more accustomed to writing and they all feel more
comfortable if they can write down with a pen. Because of this timely discovery, in 2011,
Samsung launched the first Galaxy Note with a stylus on a 5.3-inch capacitive touch
screen and most notably, an S pen - a Stylus. This was completely opposite to the path
that the iPhone had laid out with a 3.5-inch screen and eliminated the stylus "touch pen",
capacitive touch screen.

Immediately, the Galaxy Note proved its success with more than 10 million
Galaxy Notes sold until the launch of the second Note. The Galaxy Note then exploded
not only in Asia but also around the world with its unique features. Although Steve Jobs,
when witnessing the Galaxy Note launch on the market, once declared that he hated the
stylus "bút cảm ứng", a while later, the Apple Pencil was still born. The Apple Pencil can
only be used on the iPad, but clearly everyone knows who came up with the idea for a
pressure-sensitive stylus on a mobile device.