INTERNATIONAL

BUSINESS
Samsung Smartphones
Contents
Abstract ......................................................................................................................................................... 2
1. International business Environment ..................................................................................................... 3
a) Technological .................................................................................................................................... 3
b) Threats & Opportunities for Samsung .............................................................................................. 5
Recommendation...................................................................................................................................... 5
2. Global Supply Chain Management (SCM) ............................................................................................. 6
1) Supply chain management of Samsung ............................................................................................ 6
2) Weaknesses in SCM of Samsung ....................................................................................................... 7
3) Role of SCM in competitive advantage of Samsung ......................................................................... 8
3. Corporate Social Responsibility (CSR) ................................................................................................... 8
a) Samsung CSR plans and programs .................................................................................................... 9
3.1. Supplier Treatment ....................................................................................................................... 9
3.1. Waste Management ..................................................................................................................... 9
3.2. Ethics ........................................................................................................................................... 10
b) Impact of Samsung CSR policies on stakeholders of Samsung ....................................................... 10
Conclusion ................................................................................................................................................... 11
References .................................................................................................................................................. 13

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Abstract
The report has discussed in detail technological aspect, supply chain management and corporate
social responsibility initiatives taken by Samsung. Samsung is a market leader in smartphone
industry. It has been providing latest models since invention of smartphones. The business
strategy adopted by the company is based on several factors such as socio-economic, legal,
technological and political. The report has discussed the role of global supply chain management
of company in its competitive advantage in market. The functioning and efficiency level of
supply chain management of Samsung involves a simple chain of suppliers, company’s
procurement department, distributors and end customers. The CSR initiatives of the company
include ethics, supplier treatment and waste management initiatives.

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 1. International business Environment
Multinational companies are required to employ global business strategies in order to attract and
retain customers from all over the world. Customers from different regions of world have
different needs and demand as per their educational background, qualifications and cultural
norms (Mohamed, 2015).

Samsung is a market leader in smartphone industry. It has been providing latest models since
invention of smartphones. The company was established 70 years back headquartered in Korea.
Samsung was established as conglomerate initially. Later due to effective strategies adopted by
the company, it grew as a multinational company due to its advanced technologies, constant
innovation and competitive products (Haroun, 2016). The business strategy adopted by the
company is based on several factors such as socio-economic, legal, technological and political.
The technological factors of the company are major constraints in meeting needs and demands of
customers.

a) Technological
The international business strategy adopted by Samsung should take into account several
technological factors. In order to address changing needs and demands of customers in global
market, it is necessary to offer technologically latest smart phones. These factors include

Power of technology in global market

Due to intense competition in market by major rivals of Samsung i.e. Apple Inc. and Huawei, the
company is bound to offer latest mobile phones. Due to advancement of information technology,
innovative mobile phones have been launched in global market. In order to deal with intense
competition, Samsung is required to invest huge funds in research and development department.
It will help in generating new and innovative features which are not offered by rivals (Symeou,
2014). Samsung should follow the strategy used by Google for hiring human resource of the
company. The human resource of the company should also be hired on the basis of their potential
for innovation. The experts should be hired through Head hunting from big technology
companies worldwide to offer different products to customers.

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Innovation curve

In the battle of intense competition in any industry, innovation is the weapon for survival.
Employees are required to be motivated for generation of new and innovative ideas. The
innovative curve of a company plays a significant role in fulfilling its technological regime. New
ideas and product designs should be taken from each member of production team irrespective of
hierarchy (Carayannis, 2012). Talent hunt is required for maintenance of innovation factor in
Samsung. The company should take practical steps to maintain innovation curve of the company.

Customer demands

The international business strategy of Samsung should incorporate the changing customer
demands. Customers from different market segments and different age groups require different
features. Due to brands operating on cost differentiation like Huawei the expectations of
customers have gone quiet up (Cecere, 2015). It has created an intense situation for leading smart
phone companies like IPhone and Samsung. Samsung should offer different mobile models
meeting demands of customers belonging to different age groups. The international strategy of
Samsung should incorporate changing business demands of customers to keep them satisfied in
long term.

Competitor moves

Smartphone companies continuously adopt latest technology and display innovative ideas. They
strive hard to manage novelty of products to maintain competitive advantage in market. The
business strategy should take into account the latest technology introduced by those. To maintain
competitive advantage, it is necessary to keep track of innovative ideas generated by rival
companies. It is also to take into account the research and development budget allocated by a
company. Due to this analysis, in 2017 Samsung has offered more research and development
budget than Apple Inc (Kraaijenzank, 2013). It will help the company in long term to offer latest
models to customers through major investment in new and innovative ideas of product designs
and models.

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 b) Threats & Opportunities for Samsung
The SWOT analysis of Samsung have shown that the company has several potential threats and
opportunities in global market. The threats faced by the company are majorly due to the intense
competition in market (Nyakang, 2017). Huawei is operating on cost leadership basis which is
contributing in declining the market share of the company. The major threats and opportunities
of Samsung in several markets worldwide include:

Opportunities

Samsung is a market leader in smartphone industry. It has a positive goodwill and brand name in
market. The company has made investment of $12.7 billion in research department. It will help
the company in developing new features and offering innovative designs to customers. The
company has entered into several partnerships resulting in acquisition of patent rights
(Dudovskiy, 2017). It has helped the company to overcome the threats of legal action against
patent or copy right breaches. The company can also target niche markets by devising market
segmentation strategies to offer multiple smartphones to customers.

Threats

There are several threats and risks faced by Samsung in global market. The company is facing
technological drawbacks resulting in disasters like Galaxy Note 7. Due to technological
drawbacks the company’s smartphone market has gone saturated (Dudovskiy, 2017). Due to this
factor the prospective sales of company are expected to decline leading to low profits. The
company has been acting as market leader but due to cost leadership of Huawei and
differentiation strategy of Apple Inc. the company is facing major threats due to huge price war.
It is also possible that due to these factors the market share of company decline in global
industry.

Recommendation
In order to overcome threats and risks attributed with operations of Samsung, it is necessary to
devise suitable strategies (Carayannis, 2012). The company should offer market segmentation
strategy to cope up with customer demands. The technological loopholes should be overcome
through investment in research and development.

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 2. Global Supply Chain Management (SCM)
For successful functioning of a business it is necessary to maintain a strong system of supply
chain. The supply chain involves flow of goods from supplier to final consumer. Different
companies have different supply chains. Suppliers of a company have primary role in flow of
goods and services. The companies which operate on international level have global supply chain
network (Connelly, 2013). This global supply chain requires distribution of goods and services
worldwide. Samsung supply chain management is an integral factor in its success. The
functioning and efficiency level of supply chain management of Samsung involves a simple
chain of suppliers, company’s procurement department, distributors and end customers. In some
countries the company offers direct sales to customers overpassing distributors.

1) Supply chain management of Samsung

The supply chain management of Samsung have been playing a major role in its competitive
advantage in international market. The company has devised a suitable and efficient supply chain
network which has helped in its effective functioning worldwide. The major factors which have
contributed in effective functioning of supply chain of Samsung include:

Six sigma framework

Samsung has made a collaboration between its supply chain management and six sigma to offer
a quick and proficient supply chain for its clients. The center requirements of six sigma show
incorporate venture train, managing comes about, entrenched HR structure and quantitative
quality (Faraoni, 2009). These all variables have in total contributed in powerful working of its
store network. The systemization of supply chain has additionally contributed in its viable
execution.

Effective strategies

The procedures conceived for smooth and successful SCM contributed in its powerful working
in short and long haul. The characterized destinations and key execution pointers of SCM of the
organization brought about change of its operations. The Six sigma utilized for successful
working of SCM helped in expanding the believability of the organization through opportune
conveyances of items (Prasad, 2003).

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Risk management approach

Distinctive business bargains confront diverse sort of dangers. The supply chain management of
Samsung is exceptionally receptive to various sort of business chances (Hunbiased, 2015). The
hazard administration approach of Samsung has been assuming a noteworthy part in its
successful commitment towards upper hand of the organization.

HR structure

The staff individuals from acquirement division of Samsung are master enough to manage any
deadline. The representatives are prepared to chase dependable and put stock in commendable
suppliers. Because of help of solid suppliers, the organization has kept up a force of expedient
working of SCM around the world (Buist, 2016).

Supplier reliability

The chief factor which has been contributing as a center factor in accomplishment of supply
chain management of Samsung is supplier reliability (Connelly, 2013). It is conceivable because
of opportune conveyance from its providers. Samsung has contracted an aggressive and solid
chain of providers which has empowered the organization to meet its request due dates
legitimately.

2) Weaknesses in SCM of Samsung

The supply chain management has been significantly depending on its suppliers around the
world. The organization has set up an effective system of suppliers. Still finished dependence
suppliers may prompt significant calamity (Buist, 2016). The organization should utilize a
protected reinforcement design. Outsourcing save parts from suppliers may prompt a noteworthy
downside. Samsung ought to put resources into backups to fabricate its extra parts also.

The quality control of extensive system of suppliers must be considered to guarantee that no such
disasters occur in future. The debacle recuperating plans presented by the organization appeared
to be imperfect and brought about loss of billions for the organization (Buist, 2016). The quality
control of suppliers ought to be tended to appropriately utilizing a few checks to guarantee that
clients are offered imperfection less telephones and different items.

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 3) Role of SCM in competitive advantage of Samsung
The supply chain management of Samsung has been contributing a noteworthy part in its
successful working and increasing wide piece of the pie around the world. The SCM of the
organization has a few highlights which have empowered it to pick up and hold upper hand in
short and long haul (Connelly, 2013). It has been contributing in improved showcasing, appeal
fulfillment and expanded market reaction capacity.

Quick system administration

It helps continuously data sharing among suppliers, clients and representatives of the
organization. It likewise helps in quick reaction towards worldwide business condition changes.
Because of compelling working of ERP of Samsung, the profoundly creative smart phone ideas
are produced. It prompts increment sought after of the organization's items in advertise
(Hunbiased, 2015). It has brought about expanding the upper hand of organization in showcase.

Cost decrease

Samsung GSCM has been assuming a noteworthy part in cost decrease. The organization has
utilized viable inventory network procedures which have prompted diminishment in costs
engaged with generation and circulation (Kelly and McAllister, 2016). Because of low
generation and dispersion costs, the organization is putting forth low costs to clients prompting
its cost administration in worldwide market.

Economies of scale

Samsung has enlisted dependable suppliers who guarantee auspicious conveyance for assembling
forms. Because of opportune conveyance from suppliers, the generation lines of organization are
working successfully (Connelly, 2013). These all components nearby SCM of Samsung have
assumed a noteworthy part in upper hand of the organization in showcase

3. Corporate Social Responsibility (CSR)

It is necessary for all companies to establish and acknowledge their responsibility towards
stakeholders. The stakeholders of a company are directly concerned with its operations and
decision making process. Corporate social responsibility is the initiative which is taken by a
company to ensure its safe practices and harmless impacts on society (Tuan, 2012). CSR

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framework has not implemented in several countries of world legally. Still companies which
need a goodwill in society do their best to offer CSR initiatives to keep their stakeholders
satisfied. Samsung being the market leader has been offering several welfare programs and
activities to facilitate its stakeholders and customers.

a) Samsung CSR plans and programs

Samsung has under taken hundreds of programs and initiatives to ensure that stakeholders are
facilitated. The programs offered by Samsung include

3.1. Supplier Treatment

Samsung has managed a reliable network of supply chain and distribution. The company has
setup supplier consulting team comprising of rosters of 100 directors. These directors belong to
different departments including manufacturing, production, quality control, procurement and
development (Ellett, 2013). The company has also introduced a funding program worth 1 trillion
to aid suppliers for secure funding purpose. This program is termed as shared growth fund. In
2010 the management of Samsung started seven shared growth implementation plan. The
purpose of this plan was to maintain a win-win partnership relationship with suppliers. Samsung
management has also established win-win partnership academy. The objectives of this academy
include assistance to suppliers for improvement in business strategy.

3.1. Waste Management

Samsung management has taken strict measures to ensure safe disposal and recycling of waste
material. Since Samsung is a manufacturing company, it is necessary that chemicals, plastics and
other harmful products should be disposed-off safely. For this purpose several programs have
been initiated by the company which have helped in reduction of carbon emission. The company
has disposed-off safely 2.26 million tons of waste material (Ellett, 2013). The estimated waste
material till 2020 is 3.8 million tones including plastic, chemicals and several by products. The
company also produces monitors, machines, vacuums, refrigerators, printer and several other
electronic items. The production of these items involve use of plastic. Due to harmful impact of
plastic on healthy of workers, the company has ensured safety measures to protect their health.

Samsung is also contributing actively to start eco-friendly activities by promoting green

communication. The company has started a program named Samsung green management which

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has several sub-programs under it. These programs aim at reducing the impact of greenhouse gas
emission and safe removal of stinging and pollution waste water from factories. From 2009-
2015, Samsung has reduced project of 156 million tons greenhouse gas. The company has also
devise suitable strategy for safe water consumptions to ensure least wastage of water.

3.2. Ethics
For ethical purpose, Samsung has introduced several charity programs. The company has also
adopted acts and frameworks to ensure safe organizational practices to provide quality
environment for all stakeholders. Samsung has introduced disabled employment program to hire
disable workers. In 2013 1.6%, in 2014 1.68% and in 2015 1.7% employment rate has been
associated with disabled employees (Ellett, 2013). The female ratio of the company has also
improved during these three years. The ratio of female staff in different departments of Samsung
is shown as follows:

Source: (Ellett, 2013)

b) Impact of Samsung CSR policies on stakeholders of Samsung

The CSR initiatives taken by Samsung have directly impacted the stakeholders of the company.
Samsung has always been concerned about interests and benefits of its stakeholders including its
employees, customers, investors etc. Stakeholders of a company has major concerns for decision
making processes. These decisions directly impact their share and interest in Samsung. Each
CSR initiative have a direct effect on commitment and dedication level of stakeholders of the

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company (Tuan, 2012). The major impacts of CSR policies of Samsung on its stakeholders
include:

Higher confidence

Stakeholders of Samsung have gained higher confidence due to its active contribution in welfare
activities. Due to active programs, it is believed that Samsung is pursuing a mission of welfare
organization for the benefit of all of its stakeholders (Tuan, 2012). Due to higher confidence, the
company is getting higher grounds in its global market.

Trust building

Due to CSR initiatives, the stakeholders of Samsung have improved their level of trust on
company practices. The directors and executives of the company are appreciated and encouraged
by stakeholders due to their healthy decisions (Ellett, 2013). The trust building process of
stakeholders is directly contributing towards goodwill improvement of the company.

Long term commitment

Due to high confidence and strong trust level on company practices, the stakeholders of Samsung
have been showing long term commitment (Ellett, 2013). The loyalty level of company have
improved to a great extent. Long term commitment and higher dedication of customers empower
the company with stability in its operations.

Future investments

Companies continuously search for prospective investors who can fund the new ideas and
projects (Tuan, 2012). Due to long term commitments of stakeholders influenced by CSR
activities of Samsung, the company hunt reliable and long term investors easily. The company
has also maintained a reliable network of suppliers due to their confidence and trust on company
policies and procedures.

Conclusion
Multinational companies are required to employ global business strategies in order to attract and
retain customers from all over the world. The report has discussed in detail technological aspect,
supply chain management and corporate social responsibility initiatives taken by Samsung.

11
Samsung is a market leader in smartphone industry. It has been providing latest models since
invention of smartphones. The business strategy adopted by the company is based on several
factors such as socio-economic, legal, technological and political.

The report has discussed the role of global supply chain management of company in its
competitive advantage in market. The functioning and efficiency level of supply chain
management of Samsung involves a simple chain of suppliers, company’s procurement
department, distributors and end customers. Samsung supply chain management is an integral
factor in its success. Samsung has made a collaboration between its supply chain management
and six sigma to offer a quick and proficient supply chain for its clients.

Samsung being the market leader has been offering several welfare programs and activities to
facilitate its stakeholders and customers. The CSR initiatives of the company include ethics,
supplier treatment and waste management initiatives. Samsung has managed a reliable network
of supply chain and distribution. Samsung management has taken strict measures to ensure safe
disposal and recycling of waste material.

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References
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Cecere, G., 2015. Innovation and competition in the smartphone industry: Is there a dominant design?.
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Connelly, B. L., 2013. Global Supply Chain Management: Toward a Theoretically Driven Research
Agenda. Global Strategy Journal, 3(3), pp. 227-243.

Dudovskiy, J., 2017. Samsung SWOT Analysis: Strong Financial Position and Leadership in Global Display
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Available at: https://research-methodology.net/samsung-swot-analysis/
[Accessed 8 Dec 2017].

Ellett, J., 2013. 3 Keys To Samsung's Latest CSR Initiative. [Online]

Available at: https://www.forbes.com/sites/johnellett/2013/04/24/3-keys-to-samsungs-latest-csr-
initiative/#31a919522770
[Accessed 8 Dec 2017].

Faraoni, M., 2009. Market Driven Management and Global Supply Chain. Symphonya. Emerging Issues in
Management, Issue 2, pp. 33-34.

Haroun, I. M., 2016. Exploring Corporate Strategic Management and Global Expansion on the Case study
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Hunbiased, 2015. Samsung has unbeatable supply chain management, it is incredibly good in everything
which is consumer hardware, but vulnerability remains in software and M&A. [Online]
Available at: https://lazure2.wordpress.com/2013/11/11/samsung-has-unbeatable-supply-chain-
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[Accessed 8 Dec 2017].

Kraaijenzank, S. B., 2013. Innovation Without Patents? Evidence from the Smartphone App Markets.
SSRN Electronic Journal, Volume 1, pp. 22-23.

Mohamed, A., 2015. The international business environment: a proposed analytical framework.
International Journal of Business Environment, 2(7), pp. 168-169.

Nyakang, E., 2017. SWOT and PEST analysis of Samsung. [Online]

Available at: http://kenyayote.com/swot-and-pest-analysis-of-samsung/
[Accessed 9 Dec 2017].

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Prasad, S., 2003. Factors influencing global supply chain efficiency: implications for information systems.
Supply Chain Management: An International Journal, 3(8), pp. 241-250.

Symeou, P. C., 2014. Fixed voice telephony in economies of different sizes: When industry policy meets
technological change. Technological Forecasting and Social Change, 86(1), pp. 273-286.

Tuan, L. T., 2012. Corporate social responsibility, ethics, and corporate governance. Social Responsibility
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