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Module Human Resources Development

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Date of Submission 16 September 2021

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 TABLE OF CONTENTS
Question 1.........................................................................................................................3
1.1 Demonstrate an in-depth understanding of what a learning organization is.................3
1.2 Examine the context of the evolving global market.......................................................4
1.3 Evaluate the reasons for the transition.........................................................................5
1.4 Demonstrate a link between the reasons and the advent of 4IR technologies................6
Question2..........................................................................................................................8
2.1 Demonstrate sound knowledge and understanding of change management theories....8
2.2 Evaluate three (3) different change management models in detail................................9
2.2.1 Lewin’s Model...........................................................................................................9
2.2.2 Kotter’s Model.........................................................................................................10
2.2.3 Shield’s Model.........................................................................................................11
2.3 Examine the transition to a learning organization and which model will be most
effective...........................................................................................................................12
2.3.1 Lewin’s Change Model in Learning Organization...................................................13
2.4 Demonstrate a clear reasoning as to why the model was chosen over models..............14
Question 3.......................................................................................................................16
3.1 Demonstrate an understanding of SHRM...................................................................16
3.2 Evaluate the characteristics of SHRM and learnings organizations............................17
3.2.1 Theoretical Background of Strategic HRM Approach.............................................17
3.2.2 Organizational Learning.........................................................................................18
3.2.3 Strategic HRM as a Factor for Enhancing Organizational Performance.................18
3.3 Examine the alignment of the key factors...................................................................18
3.4 Distinct application from case studies must be demonstrated......................................19
3.4.1 Create knowledge....................................................................................................19
3.4.2 Retain the knowledge..............................................................................................20
3.4.3 Transfer the knowledge...........................................................................................20
References:......................................................................................................................21
Strategic Management Project

Organization: Samsung Electronics Company

Question 1 (10)

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1.1 Current Business Situation

1.1.1 Understanding of an organization

Samsung Electronic Company (SEC), founded in 1969, has reigned as not only the largest manu- facturing
company in Korea, but also one of the leading global competitors worldwide. SEC can be considered as
one of very few companies that “manage to go beyond mere imitation of global competitors, leverage
resources, accelerate the pace of organizational learning and manage to at- tain seemingly impossible
goals” ( Hamel and Prahalad, 1989), that is to become a global market leader.

Samsung is one of the leading companies in the consumer electronics industry. The firm has been focusing
on the most appropriate initiatives that can deliver positive results. For instance, innovation is taken
seriously to produce superior devices and appliances that can compete successfully in the global market.
The company’s R&D department embraces various procedures and strategies depending on the changing
needs of the global consumer (Hadjikhani, Lee, & Park, 2016). The strategy formulation and planning
phase is executed by the needs of the consumers. The strategic formulation phase is characterized by
specific actions such as evaluation of the global business environment, identification of targets, and
analysis of past performance (Hadjikhani et al., 2016).

1.1.2 Vision
Samsung's vision is to "inspire the world with our innovative technologies, products, and designs that
enrich people's lives and contribute to social well-being by creating a new future." The company follows
this vision to maintain profitable technological processes that improve people's lives. Samsung regularly
refers to a shortened version of this corporate vision: "Vision 2020: Inspiring the World, Shaping the
Future" (Samsung, 2020). The company fully implements this affirmation in its electronics, computer, and
semiconductor activities. The following is included in the Samsung Vision Statement:
 World inspiration
 Innovation
 Improvement of life and future social well-being.

1.1.3 Mission
Samsung's mission is: "We will use our human resources and technology to create superior products and
services, and thus a better global society" (Samsung, 2020). This corporate mission was released in the
1990s when the company experienced a rapid global expansion in various semiconductors, electronics, and
related technologies markets. Samsung is focusing on the following elements of its corporate mission due
to its business activities and its current international positioning in the industry:
 People and technological resources.
 The superiority of products and services.
 Improve global society

1.1.4 Leadership
According to Kangis and Lee-Kelley (2000), leadership is a relationship through which one person
influences the behaviour of other people. Leaders must not only be able to define departmental, unit or
organisational missions, but they must also be able to coordinate the activities of others and motivate them
to meet mission requirements (Ngwenya, 2013). Contemporary organisations have to be innovative and
constantly develop new products to remain competitive in the markets of their presence (Farid et al., 2017).
Leadership encouragement has a potential to increase the pace of new product development, improve
information-sharing processes and strengthen employee morale (Ren et al., 2015).

For instance, Samsung’s top leadership is involved in the corporate NPD activities all the departments
(Shaughnessy, 2013). The firm encourages its employees to develop innovative products that are viable
and demanded in the potential outlet markets through their C-Lab programme. Under the C-Lab initiative,
all organisational stakeholders can share suggestions regarding R&D that can be further converted into
new products for different divisions of Samsung. Those teams who manage to design breakthrough
concepts and prototypes receive managerial support and are provided with resources to streamline new

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product promotion. An open and participative leadership style adopted by Samsung has encouraged the
product innovation at this company and helped it stay ahead of such competitors as Apple.

Question 2 (15)

2.1 Competitor Analysis

2.1.1 Demonstrate an in-depth understanding of Competitor’s position

The electronics industry is experiencing fierce competition on the back of the large number of big players
with similar size and financial strength. Across all Company’s segments, there are huge competitors
fighting for market share, some of these competitors are: Apple, Sony, Huawei, Intel, and Asus. These
large players are well-known brands with an established brand image, so the technological innovation
becomes the primary differentiating factor. Overall, the level of competitive rivalry in the electronics
industry is very high (Medeiros, 2020). A firm’s competitors are all of those firms which compete for its
customers’ spending power. And competitor analysis is about sizing up the competition to give a business
owner a more realistic view of the market and the company’s position in it. Yet not every competitor
warrants the same level of attention in the strategic plan. Kotler and Armstrong (2009) suggest that there
are four types of competitors: Brand competitors: These are the most obvious competitors. They are firms
which are similar in size to the focal firm and who offer similar products to similar customers. Form
competitors offer products or services which fulfill the same customer needs as the focal firm even though
the products or services are very different in form or technology.

Managers need competitive information to understand the industry and its competitors and to identify areas
in which the competitors are weak and to evaluate the impact of strategic action on competitors (David,
2011). Studying the actions and behavior of close competitors is essential. Unless a company pays
attention to what competitors are doing, it ends up ‘flying blind’ into battle. A firm cannot outmaneuver its
rivals without monitoring their actions and anticipating what moves they are likely to make next. The
strategies rivals are using and the actions they are likely to take next have direct bearing on what a
company’s own best strategic moves are, whether it will need to defend against rivals’ actions or whether
rivals’ moves provide an opening for a new offensive thrust. To predict a competitor’s next moves, an
analyst must get a good ‘feel’ for the rival’s situation, how its managers think, and what its options are.
The detective work can be tedious and time-consuming since the information comes in bits and pieces
from many sources. But it is a task worth doing well because the information gives managers more time to
prepare countermoves and a chance to beat rivals to the punch b moving first. Competitor analysis begins
with identifying present as well as potential competitors. It portrays an essential appendage to conduct an
industry analysis (Nyarko et al., 2016).

Competition is one of the most inevitable forces in today’s business world. No matter what a firm is, big or
small, it has competitors in the industry and the strategies of these competitors affect the process of
formulating strategic plans. Competition is an accepted feature of corporate life for profit-driven
organizations. Analyzing organization’s competitors helps to discover its weaknesses as well as identify
opportunities and threats from the industrial environment. While formulating an organization’s strategy,
managers must consider the strategies of the organization’s competitors. Competitor analysis is a driver of
an organization’s strategy and affects how firms act or react in their industries. The organization does a
competitor analysis to measure and or assess its standing amongst competitors (Som et al., 2016).
Whilst competitor analysis is a bit narrower term of competitive analysis, the two strategic management
terms are often used as synonyms. Zahra and Chaples (1993) define competitive analysis as “the process
by which a company attempts to define and understand its industry, identify its competitors, determine the
strengths and weaknesses of its rivals, and anticipate their moves”.

2.1.2 Product line

Today's globally competitive environment is characterized by globalization, rapid technology changes, and
high customer expectations. This according to Su, Shi, and Lai, (2008) means firms writhed hard to win
the competition which is a function of the firm's own capability. Again, many companies find it difficult to
justify the cost of quality within their product line and could not identify the cost associated with varying
quality levels of their products. In order to create a quality product, which is one of the determinants of

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firm's success, the company must address all aspects of product assortment decisions including product
line optimization (Franca, Jones, Richards and Carlson, 2010).

Samsung is the leading smartphone vendor worldwide. In 2020, Samsung's market share of the global
smartphone market was at around 21 percent with Apple and Huawei as its closest competitor. In 2020
alone, the South Korean company sold more than 267 million smartphones worldwide. The Galaxy family
is Samsung’s most famous line of smartphone products, with the Galaxy S line being the most prominent.
The Galaxy S series is Samsung’s high-end smartphone line and is therefore in direct competition with the
Apple iPhone. It has become a consumer favorite over the years, rocking shipments in dozens of millions
(Statista, 2020).

2.1.3 Unique Capabilities

Samsung, the world’s largest smartphone and memory-chip maker, acts as an industry bellwether because
it is intricately knitted into the global marketplace as both manufacturer and supplier (WSJ, 2020)

Strong table and smartwatch player

Samsung also holds a sizeable position in the tablet computer market with the Android-powered Samsung
Galaxy Tab, falling behind the Apple iPad. In 2020, Samsung held the leading android tablet manufacturer
position, commanding around 19 percent of the market share in the fourth quarter of 2020. Like the tablet
market, the smartwatch market also sees Samsung as the strongest contender to Apple, albeit at a greater
distance – Samsung has a share of around 14 percent compared to Apple’s over 50 percent.

Towering presence in display and semiconductor market

Apart from enjoying great success in the mobile market, Samsung also has a strong presence in the display,
TV, and semiconductors industry. Samsung has been the world's largest television manufacturer since
2008, when the company held a 20 percent share of the global LCD TV market. The South Korean giant is
also one of the leading semiconductor vendors, having toppled the long-time market leader Intel in 2017
and 2018 to become the market number one. It dominates the global NAND Flash memory market with a
share of over 30 percent (Statista, 2020).

2.1.4 Competitor Brand/ Branding

It designs not only to create unique and intelligent products, but also to engage and interact with users.
Samsung recognizes the power of brands and branding. Samsung maximizes long-term growth by
launching new products and entering new markets (Jung, 2014). A firm’s competitors are all of those firms
which compete for its customers’ spending power. And competitor analysis is about sizing up the
competition to give a business owner a more realistic view of the market and the company’s position in it.
Yet not every competitor warrants the same level of attention in the strategic plan. Kotler and Armstrong
(2009) suggest that there are four types of competitors and one of them is called Brand competitors: These
are the most obvious competitors. They are firms which are similar in size to the focal firm and who offer
similar products to similar customers (Adom et al., 2019).

Brands should play an important role in selecting and maintaining a strategic direction for a company. A
brand can serve as a reference point for making choices in the area of business development by actualising
(effecting) a dynamic fit between the company's capabilities and the changing environment. Brands are
shared property of both the seller and the buyer and embody the relationship between the company and the
environment (Mosmans and Van Der Vorst, 1998). Marketing and branding strategies of Samsung have
played a critical role in its success. One way to understand why Samsung is so successful is to evaluate the
brand and its marketing strategies in terms of six marketing imperatives. These six imperatives, I believe,
are critical for marketing success in the 21st century.
First, Samsung has developed a strong customer-focus which emphasizes on understanding the needs and
wants of customers, and future needs. Samsung has done this with a global perspective in mind. Second,
Samsung recognizes the power of well- designed products and services. Through design, Samsung
provides functional and emotional benefits. Third, Samsung has a strong design philosophy, which is

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simple and intuitive, efficient and adaptive. It want to come up with eco-friendly designs, not just good
looking products. Fourth, It tries to create designs that can reflect users' lifestyles and interact with them.

2.1.5 Market Share

Samsung has seen its popularity steadily increase since it held just a 4.3 percent of the smartphone vendor
market at the beginning of 2010. However, Samsung’s share in the overall mobile phone market, has
fluctuated in the last four years and dropped significantly in the fourth quarter of 2020. Apple remains the
second most popular smartphone vendor based on shipments, despite its share falling from 18.7 percent in
2012 to 13.9 in 2019. In 2020 they recovered two percentage points and held 15.9 percent of the market.
Apple’s smartphone sales are relatively cyclical and peak at the fourth quarter each year. In the fourth
quarter of 2020, 23.4 percent of all smartphones new smartphones sold were iPhones. Sales of the iPhone
peaked and reached close to 80 million units purchased in the fourth quarter of 2020 and almost 200
million units were sold in the full year of 2020. The iPhone generated considerable revenue for Apple with
sales of the device amounting to just under 138 billion U.S. dollars in 2020. The iPhone therefore accounts
for around 50 percent on average of Apple’s total global revenue (Statista, 2021).

2.2 Relevant Strategies used by Company to succeed in Marketplace.

Variations in the promotional strategies are critical in the development and creation of brand awareness as
well as product differentiation (Kotler & Keller, 2012). Samsung spread information concerning its
Smartphones to target customers through the application of both digital and mass media. For instance, the
firm has currently invested heavily in the advertisement for its new model series of Smartphones.
Generally, most firms in the industry are producing and distributing similar products. As such, the product
differentiation strategy that targets quality and unique features would be critical in attracting the target
clients (Armstrong & Kotler, 2011).
Market information is critical in establishing what the client need and value. The market information is
used to create products with differentiated value, which in turn increases the competitive advantage to the
firm (Armstrong & Kotler, 2011).

Question 3 (45)

3.1 Analysis of the competitive situation

3.1.1 Demonstrate an in-depth understanding of the Strategy frameworks

Good business strategy is linked to good organisational performance, which warrants an investigation into
bases of strategic choices and strategic decisions. Young, Wang, Lui and Austrom (2014) distinguish
between the institution-based view strategy (figure 1) and a resource-based view strategy (RBV). The
institution – based view strategy pays attention to aspects such as “firm – specific resources and capability”
and it also relates to the size of the company. Sarac et al. (2014) found that the size of the organisation had
no effect on their business performance or market share. This finding shows that when top management
make strategic decisions, they should have a holistic view in singling out specific aspects in the strategy
tripod depicted in figure 1. In contrast, other scholars argue that an increase in customer satisfaction
(industry-based competition) improves market share (Rego, Morgan and Fornell, 2013) which is one leg of
the tripod.
In the figure below, strategy is depicted as dependent on industry-based competition; the organisation’s
internal resources and competencies; and internal changes in the organisation. These three dependencies
form the strategy tripod that informs company strategy to results in the overall good or bad performance.
Babatunde and Adebisi (2012) argue that understanding strategy requires a firm grip of the internal
challenges and opportunities an organisation faces. Balas, Gokus and Colakoglu (2014) tested the theory of
environment-strategy-performance focusing on the service sector, in particular finance, insurance,
accommodation and transportation. They found that:
1. The external environment does influence the organisation’s strategic focus,
2. When organisations are faced with sudden or regular change in customer
preferences they tend to increase their prospector focus (new customers),
3. When there is an influx of change in customer preferences, they tend to increase
their defender focus (defensive strategies).

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Figure 1: The strategy tripod (Young et al., 2014)

Gamble, Thompson and Peteraf (2018) refer to the components of an organisation’s external environment
that impacts its internal environment. These include technology, population growth, customer preferences
and competitive pressure from rivals. These components may by illustrated in Figure 2 below.

Figure 2: The Components of an organisation’s Macro-Environment (Thompson et al., 2018)

These findings re-affirm that organisations need to constantly scan their internal and external business
environment in an effort to examine their performance. The external environment is beyond the control of
the organisation, however the internal environment is where strategic decisions are formulated depending
on resources, structure, culture and policies (Maier and Zenovia, 2012). Organisations can however use
strategy as a mechanism of adjustment, by aligning internal and external environmental factors for their
business success, optimizing internal strengths and reducing internal weaknesses to overcome external
threats to take advantage of external opportunities (Dragnic, 2014). Both environments are crucial to
business strategy. However, it is not clear which environment takes priority in strategy formulation (Balas
et al. 2014; Maier and Zenovia, 2012; Dragnic, 2014). Summarizing literature has found that business
performance dependents not only on organisational strategies, but on their formulation and
implementation.

It can be described, on the one hand, as a high rate of global integration and cost efficiencies and on the
other hand as quite a low responsiveness and differentiation (Raisch, 2014). These attributes are
accompanied by benefits and challenges. First of all, SE makes economies by location choice. Indeed, the
company builds manufactures and R&D centers in ideal places of each continent depending on local costs.
China and Vietnam are used as cheap labor cost suppliers for the Asian market. In 2013, Samsung started
the construction of the world's largest mobile phone plant in the Thai Nguyen, Vietnam. For the European
market SE manufactures its electronic products in Poland where there is a good compromise between labor
costs and sufficient knowhow. For R&D centers SE uses the high competencies of local employees but
also economies of tax. When the company opened a center in the Silicon Valley, the Californian
government granted a tax discount to attract the SE. "Here's a case where government and business work
together—and everyone benefits." California Governor Jerry Brown, in a statement. (Forbes, Nov 2013),
When the “Chaebol” keeps its HQ in Suwon, it is also because the Korean government gives huge tax
discounts compared to other foreign companies such as Apple. Thus, it allows SE to reduce tax and
delivery costs. Keeping manufacturing, R&D and administration in specific spots, SE uses plenty of the
advantages of a global strategy.
Secondly, the Korean company develops experience curve economies using its experience from its
different activities. Moreover, it learns from difficulties in some markets to apply the solutions found on
the next challenge. For instance, the company had difficulties implementing the A/C machine business in
Australia where SE did not have strong brand recognition. Marketing division used this experience to build
the same business in Thailand.

Finally, SE does massive economies of scale with standardized products. Regarding its activities, the
“Chaebol” has the possibility to sell its product in every market with no modifications. For instance, chip
and memory are standard for all its corporate clients. The products for end customers must have a
minimum of local differentiations. With few investments SE ensures its presence everywhere. Differences
in consumer tastes and preferences are very important if a company wants to reach customers. Yet it is
very costly and unnecessary in industries such as the techno-electronics. Indeed, SE standardizes most of
its end customer products to fit most countries. As a hardware supplier, SE works with global companies
that sell electronic products which are also standardized. In fact, one of the main challenges is to reach
local customer needs with minimum modifications and minimum costs (Simonin, 2014).

3.1.2 Evaluate Tools

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To effectively carry out strategic planning, different analytical tools can be used. These include strengths,
weaknesses, opportunities, threats (SWOT) analysis, Porter’s five forces industry analysis, McKinsey 7S
model, and BCG Growth matrix. The rationale of using these tools is to ensure that an organisation adopts
the strategic planning process to guide its formal planning and practices. From this background, this study
is intended to generate a comparison and contrasting of the nature and practice of the strategic plan in two
organisations operating in a distinct business environment (Shamout and Elayan, 2020).

As most managers acknowledge the importance of understanding their industry and competitors, there is a
growing interest to use various competitive analysis techniques to help formulate and implement strategy
(Prescott and Grant, 1988). Some of these popular techniques include: SWOT analysis, Boston Consulting
Group (BCG) approach, General Electric Stoplight Strategy, McKinsey’s Industry Strength Matrix,
Porter’s Five Forces model and Value Chain Analysis, SPACE matrix, External Factor Evaluation matrix
(EFE), Internal Factor Evaluation matrix (IFE), PESTEL analysis, Competitive Profile Matrix (CPM),
among others (Porter, 2000; Bygrave and Zacharakis, 2011). As strategic analysis and planning tools, these
conventional matrices provide valuable insight about competitive scenario to help managers plan the
organization’s future competitive position (Capps III and Glissmeyer, 2012).

3.1.2.1 SWOT
The component of strategic thinking requires the generation of a series of strategic alternatives, or choices
of future strategies to pursue, given the company’s internal strengths and weaknesses and its external
opportunities and threats. The comparison of strengths, weaknesses, opportunities, and threats is normally
referred to as a SWOT analysis. Its central purpose is to identify the strategies that will create a company-
specific business model that will best align, fit, or match a company’s resources and capabilities to the
demands of the environment in which it operates. Managers compare and contrast the various alternative
possible strategies against each other with respect to their ability to achieve a competitive advantage.
Thinking strategically requires managers to identify the set of strategies that will create and sustain a
competitive advantage (Hill and Jones, 2011).

Competitor analysis links with the traditional strengths, weaknesses, opportunities and threats (SWOT)
analysis for handling both business opportunities and threats. This benefit comes from expanded dialogue
within the development team, and with other units in the company, about what competitive data means to
strategic direction. Such dialogue can open up new opportunities and options that would not otherwise
have been considered. Competitors may be taking various approaches to reaching the customer base, so
multiple possibilities exist. In this situation, a completely novel approach might be best, since no standard
is emerging. Value-chain analysis is also helpful since it helps a company to understand where and how it
adds value. It helps the company to determine its own sources of competitive advantage, and it can then
dissect strategically relevant activities so as to understand the sources of competitive advantage through
cost leadership or product specialization. Similarly, in an environment of rapid change, intellectual capital
represents a primary value creation asset of the organization (Saint-Onge, 1996). According to Porter and
Teisberg (2004), in healthy competition, ongoing improvements in processes and methods drive down
costs; product/service quality improves; innovation leads to improvements which are quickly adopted;
uncompetitive producers go out of business; value-adjusted prices fall; and the market expands.
Companies try to identify their competitors’ strengths when choosing competition methods, either by
cutting the product price to exercise cost leadership or by launching a new product or service to achieve
product specialization. Companies practicing competitor analysis should also carry out competitive
position monitoring. Through this they analyze competitor positions within the industry by assessing and
monitoring trends in competitor sales. In addition, companies should conduct industry profitability
analysis. This provides them with a gauge for the nature and intensity of competition. Competitive
advantage requires different positioning strategies through strategically choosing a different mix of value
chain activities in order to deliver a unique value at a competitive price (Porter, 1996).

According to Gürel and Tat (2017), the SWOT analysis is identified as an analysis approach applied in
evaluating the strengths, weaknesses, opportunities, and threats as a strategic planning practice. In this
case, the Huawei and Samsung SWOT analyses are used in exploring their strengths and weaknesses.
Also, this tool is used to explore the opportunities of the organizations in their exploration of full potential
faced.

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a.Strengths
Samsung's intense research and development strengths have enabled it to achieve the most robust patent
portfolios among technology companies." A method of payment with functions of payment that are similar
to Apple’s payment method is Samsung pay. This was developed and launched within the same six months
following Apple’s launch of this service. The company’s application was capable of performing various
functions on Apple Inc. mobile phones and the Android mobile operating system replicated by Google
Inc." (Smith-Ditizio& Smith, 2019).
Everyone knows that a technology company needs to succeed and excel, innovate, and respond to the
needs of the market: the more a company invests in research and development, the more innovations it
creates was the second largest technology company, just behind Amazon.com, which allowed them to
develop their competitors' most extensive patent portfolio, and will be innovation over the competition.
"Samsung's patent portfolio is currently one of the largest is highlighted by the enormous awards Samsung
has received over the years and has been honored with the CES Award for 13 consecutive years.
Huawei has joined more than 170 countries and regions in a relatively short time, serving more than 3
billion people worldwide. It is a global provider of ICT infrastructures and smart devices. Cell phones,
laptops, tablets, mobile devices, smart homes, mobile broadband, cloud computing, web security, and
mobile device management are some of Huawei's most popular products and services (Chandrasapth et al.,
2019).
Huawei products are trendy all over the world. In particular, smartphones are known worldwide. The
company offers high-end and low-end phones. Mate 20 Pro is one of the best smartphones in the world
with an attractive design, a high screen, and a smart screen (De Cremer & Tao, 2015). In the first quarter
of 2019, Huawei held 19% of the global smartphone market, second only to Samsung (Jiang & Gong,
2019). It should be noted that Huawei is China's market leader in its local market.
One of the essential resources of Huawei products is the combination of high quality and affordable prices.
Huawei is one of the cheapest smartphone manufacturers in the market. Their laptops and tablets are also
less expensive than most competitors. Another essential point is ownership of a business. Huawei is a
private company owned exclusively by its employees. No external organization or agency has its shares
(Albalawi, Naugton, Elayan&Sleimi, 2019;De Cremer & Tao, 2015).
Huawei is very involved in research and innovation. Every year, it invests 10% of its annual turnover in
research and development (research and development). The long-term commitment to innovation is
reflected in the subdivision of innovation into three types: innovative applications, product innovation, and
fundamental technological innovation (Jiang & Gong, 2019). The great efforts of change are widely
recognized, leading to numerous awards and accolades over the years, including prestigious awards such as
"Best Innovation in Telecommunications Services" and "Leadership in IoT," for which they received the
TechXLK8 Asia Awards 2018 in Singapore.

b. Weaknesses
An Immense Amount of Reliance on the American Market: both Samsung and Apple retail almost all of
their products primarily to the North American market. While Samsung possesses a highly diverse range of
resources and has it operates in nations such as Asia, Samsung continues to rely on the North American
market for much of its income and revenue. The region going through a renewed and unpredictable
recession may be disastrous for a company such as Samsung, as this could potentially ruin its overall flow
of taxes, thus costing the company millions. Hence, the company needs to rely on the markets of Europe
and Asia to ensure that it avoids possible ruin and maintains a stable income and revenue flow all around
the world rather than relying on a single market.
Smartphone sales in decline: Companies such as Samsung have seen their overall sales of smartphones
decline in recent years. This is primarily due to the launch of much more affordable and cheaper
smartphones able to perform tasks similar to those which Samsung and Apple offer. Notable examples
would be companies such as Huawei. Additionally, the company has been forced to launch its products in
the subcontinent market to reduce expenses, which harms its overall sales revenue. Whilst the company
has made various attempts at improving its overall direction in these markets, it has not seen tremendous
success. Most individuals consider Huawei as a provider of economic techniques and services. This
perception did not make sense for the company. It was also accused of spying for the Chinese government.
It was also charged with violating various intellectual property laws. These allegations have harmed the
brand image, despite Huawei's refusal
Huawei is undoubtedly the market leader for smartphones in China and other countries. In many states,
however, the performance is deficient. For example, the mobile device market share in the UK in

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September 2019 was 9.24%, which is low compared to 48.71% for Apple and 29% for Samsung.
Similarly, its market share in India is 2.83%, compared to 6.41% in Canada (Kang (2015).

c. Opportunities
Recently, the company launched its proposal of Triple Protection, a consumer-centered protection system
that protects products from lightning, electrical surges, and humidity. This proposal is guaranteed to
provide the company with more customers and improved loyalty from its consumers. Additionally, the
company can attain considerable outcomes by investing in the management of human resources. This
would not only be a good option from the standpoint of sales but also the perspective of competition.
Moreover, the company can use its brand to attract and retain highly skilled and qualified individuals to
enhance the overall productivity and performance of its staff. The company needs to continue to also
diversify its market through acquisitions and expansions. Huawei should take this opportunity to increase
its market share of smartphones in countries such as India, the UK, Canada, France, Germany, South
Korea, and some other countries of the world. In many states, the demand for other technical products such
as tablets, mobile devices, mobile broadband, cloud computing, and web security is also high. This has
been an opportunity for Huawei's growth.
This is because the company depends heavily on markets such as the North American market, which, if in
economic disarray, may ruin the company itself. This also entails a considerable amount of unnecessary
polarization of politics as well as an immense impact from negative publicity. Therefore, the organization
has to move to various markets such as those in Europe and Asia. In addition to this, the company moves
to these markets to increase its overall base of consumers and power over the market. This objective can
only be accomplished by acquiring other organizations and diversifying its brand. As the company is
already a famous brand within most markets, most notably for its television sets and phablets, the company
needs to continue to stabilize its situation in terms of finance. As Huawei is a research and development-
driven company, there are likely to be many new opportunities over time. In particular, 5G technology and
artificial intelligence (AI) offer opportunities for business growth. The company now supports 2/3rds of
commercial networks of 5G and is separate from China, including countries such as Finland, the UK,
Switzerland, Germany, and South Korea.

d. Threats
Conflicts: the company has been involved in constant conflict or competition, with its primary rival,
Apple. Apple had sued the company for infringing on one of its patents. This lawsuit impacted the
company for seven years until a final agreement was arrived upon. Conversely, the company faced various
outcomes when the court decided that the company had infringed on a patent and thus was required to pay
its competition one hundred billion dollars. This not only led to financial damage but also a loss in sales
and reputation for Samsung.
High Amount of Competition: The primary competitors in the smartphone markets are, for example,
Samsung, Apple, Xiaomi, OPPO, Vivo, Sony, OnePlus, Lenovo, and LG. The primary tablet market
competitors include Lenovo and Microsoft, Amazon, Samsung, and Apple. The ban on Huawei in some
countries poses a significant threat to society. For example, from May 2019 in countries such as the United
States. The US, Australia, New Zealand, Japan, and Taiwan have decided to ban and dispose of the
company's products on their mobile networks (Tao, De Cremer &Chunbo (2016). Similarly, some
countries have already decided to restrict Huawei's activities. Such prohibitions and restrictions can
damage the company's finances and brand worldwide.
Regulatory and Legal Issues: Similar to other markets, the market of consumer electronics is filled to the
brim with organizations and companies. Whether these be Samsung, Huawei, Apple, or Xiaomi, every
technological organization excels and surpasses themselves rather than becoming the most successful
organization within the market. Thus, the company has a considerable burden placed on it in terms of
finance and competition. As globalization and digitalization of the world have amplified, governmental
organizations have started to publish their strategies and regulations to reduce the regulatory and legal
issues that they may face in any part of the world. The company is not exempt from this rule. Laws vary
depending on the market, and these oppressive rules hinder operations. The infringement could even cause
a full stoppage of the respective markets, which may spell ruin for the company.

3.1.2.2 PESTLE

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The scanning for Political, Economic, Sociocultural, Technological, Ecological, and Legal forces is called
PESTLE analysis (Hunger, 2020). Characterized by an ever-changing environment, Our Current society
differs in many ways from What it was before. Adapting to the changing and competitive environment has
now become a necessity for any manager wanting to keep their business afloat and prosper in the coming
years. The environment (macroeconomic dimension) has actually proved itself to be a source of both
opportunities and threats for any company on the market, regardless of their industry sector. Therefore, a
confirmed anticipation of the lambda macroeconomic phenomenon Will soon provides a direct competitive
advantage for the executive if this allows them to react efficiently before their competitors. On the other
hand, if a manager underestimates a momentous event in the market, they Will quickly find themselves
struggling against competitors whose forecasts are more complete, as they Will have to face their
competitive and aggressive strategies. For example, companies that did not anticipate the expansion and
opportunities offered by the internet in time had a bitter experience at the beginning of the century. As the
ability to predict certain future events seems to be the key to the success, good development and even, in
some cases, the survival of a company, there are always people who claim, after a change in the
environment, that the indicators were inevitably moving in that direction anyway. Yet anticipating these
indicators is far from easy, and not everybody possesses Cassandra’s skills in predicting the futureIt is in
this context of uncertainty that the PESTLE analysis appeared (Perera, 2017).

The diversity and the complexity of political frameworks may appear as a threat and even a risk concealed
for the companies concerned. It provides, paradoxically, strategic opportunities and investment
opportunities. It must, however, ensure the content and quality framework. Consequently, the constant
yield investment risk is a function of local, national, which may threaten the company. Corruption is a
phenomenon rooted in practices and non-rational thoughts and immoral agents to obtain a truthful
implementation of an economic transaction in a framework where there is the lack of trust between public
and private sector.
The existence of corruption is not limited to a particular country or a specific region, it has become a
global phenomenon. The only difference is the political regime, the institutional and regulatory framework
of each country or region as well as its degree of development. Most definitions related to the emergence
of corruption are attributed to the weakness of political, social, legal and economic.
The actions of a corruption are quite different and take different extents, the most important are: the tax
exemption, preferential treatment in employment or for billing, changes in free zones, the excessive use of
non-renewable resources, the conquest of new markets, ownership of investment projects.
The domestic and foreign firms, should be aware of and comply with regulations of each national or
regional framework and adapt their compatibility with the new rules of international trade, to avoid over or
under invoicing.
Issues of corruption are not limited to a simple relationship between two agents, seeking to satisfy his
every need so illegal and immoral. These practices are not limited to only limited public sphere.
Corruption is also a common practice in the private sector. In the case of a widespread and systematic
corruption, The report corrupter-corrupt becomes more important, leading to a misallocation resources and
therefore lower growth (Janet, 2013). The findings reveal that Samsung electronic uses a number of the
generic value chain model in creating a shared vision, establishing a performance-based personnel
management system, technology development, logistics, marketing and sales, and cost control procedures.
The success of the company's change effort is largely attributed to leadership, standardization of
management systems, commitment to innovative strategies and training, and partnership with value chain
experts.

3.1.2.3 VALUE CHAIN

The value chain is a systematic approach to examining the development of competitive advantage. The
chain consists of a series of activities that create and build value. Value chain analysis refers to a structured
method of analyzing the effects of all core activities on cost and/or differentiation of the value chain.With
the growing division of labour and the global dispersion of the production ofcomponents, systemic
competitiveness and so value chain analysis have become increasingly important (Kirli and Gümüş, 2011).

According to Porter (1985), the value chain is a concept from business management for creating and
sustaining Superior Performance.
 A Value Chain is a chain of activities for a firm operating in a specific industry.

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  Products pass through all activities of the chain in order and at each activity the product gains
some value.
 The chain of activities gives the products more added value than the sum of the independent
activities value.

The findings reveal that Samsung electronic uses a number of the generic value chain model in creating a
shared vision, establishing a performance-based personnel management system, technology development,
logistics, marketing and sales, and cost control procedures. The success of the company's change effort is
largely attributed to leadership, standardization of management systems, commitment to innovative
strategies and training, and partnership with value chain experts (Jung, 2014).

3.1.3 Critical appraisal in the context using Porter’s Five Forces

3.1.3.1 Existing Industry Rivalry

The rationale of using Porter’s five force analysis is to identify o the concept of competition level in the
Huawei and Samsung market (Perera, 2017). For instance, the industry has 968 million customers
worldwide. The sector registers global growth of 28-30 percent and in India of 168.8 percent. It should be
noted that the major players in the industry are supported by technology giants whose revenue (2013) is
listed. This means that every contractor has a serious competitor. Also, all suppliers are technology
conglomerates with a considerable amount of competitiveness in the technological markets. Therefore, one
can state that the competition in the industry of smartphones is intense. Samsung has been the lead actor
for four years.
Additionally, the industry is increasing globally from twenty-eight percent to thirty percent and in UAE by
one hundred and sixty-eight percent. The best players in the smartphone market are LG, Xiaomi, Lenovo,
Huawei, Samsung, and Apple (MarketWatch, 2020). With a market share of nearly twenty percent in the
second quarter of 2014, the company acts as a leading brand within the market of smartphones. This share
increased by 32.2 percent compared to the previous year. Apple lost two percent year-over-year to eleven
percent in the second quarter of 2014 (New York Times, 2016). In contrast, Xiaomi has grown from 1.8
percent to 5.10 percent in just one year, becoming a new player in the smartphone market. The analysis
shows that Samsung and Apple have a declining market share, that fewer and fewer players have a
differing share of the market, a considerable differentiation of production, and an increasing demand,
particularly in UAE and around the globe.
One can say that the industry has neither strong nor weak competition, but rather a moderate amount of
competition. However, the competitiveness of the smartphone industry is rigid. The goal is to provide
standard features such as software and security, cameras, screens, and touchscreen quality. These features
are comparatively easy to reproduce; it is easier for competitors to provide customers with similar products
at lower prices to attain an advantage over their competition.

3.1.3.2 Power of Suppliers

As noted in Bobbert (2015), the power of suppliers identifies the capacity of bargaining on the power and
capability to exert pressure and to encourage organizations to increasethe pricing of the products and
services. The price increase leads to accruing on revenues and suppliers being advantaged. In the industry
where Huawei and Samsung have ventured, Apple has managed a complex distribution chain that is
distributed in several countries around the globe, including Brazil, the US, Mexico, Japan, China, and other
nations. This high amount restricts the power of bargaining that suppliers have over companies such as
Apple. Apple has considerable influence over its suppliers. The expenses incurred by the Huawei and
Samsung competitors is minimal. This is despite the suppliers lacking the will of loosing on the company
business and, as such, progressively act in tandem with their design. Simultaneously, theirminimal
possibility for downstream integration of suppliers to the advantage of Samsung and Huawei.
For the Samsung company, they have a high-level power of bargaining as opposed to the suppliers mainly
relying on the number and the types of the suppliers, which is contrary to the one, they usually rely on.
Manufacturers include the primary suppliers in the phone industry (Chimhundu, 2018; Shamout,2020a).
The amount of power of bargaining that suppliers have relies mostly on the number and type of supplier
that Samsung has under its control or relies on. Manufacturers are the leading suppliers in this industry.
These are primarily SOC manufacturers. For instance, there are over eighty SOC manufacturers, including
AMD, Samsung, NVIDIA, Intel, Qualcomm, etc... There is intense rivalry amongst Smartphone providers,
which is why vendors' bargaining power is weak (Shamout, 2020b)

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For the context of Huawei,in total, the company possesses well over five hundred and seventy-nine
suppliers around the world and its chain of supply (Huawei, 2020). This number is inclusive of more than
two thousand seven hundred suppliers in several sectors across the globe. In general, because of the several
hundreds and thousands of suppliers with whom Samsung and Huawei deal with daily, those suppliers
offering merely components of products as well as parts possess very little power to bargain with the
company or negotiate expenses with the company. Conversely, Google, as the provider of the Android
platform, has considerable bargaining power as there are no alternative platforms for Samsung (Kabeyi,
2018).For this reason, smartphone makers have the most suppliers, but the software used by Microsoft and
Google has an advantage. This illustrates that not every manufacturer or distributor or company within this
market possesses the same power as software smartphone makers who have more influence over
smartphone makers than component smartphone makers. Recently Huawei has intended to break this link
by introducing its own operating system that is used in the operation of its phones.

3.1.3.3 Buyer’s Purchasing Power

As noted in the Kabeyi (2018), the purchasing power of buyers identify the capacity of buyers to exert on
the pressure actively or directly influence their industry competitors. This has a positive impact on the
reduction of the profits, improved quality and services at the expense of their competitors. For enhancing
the buyer's purchasing power, Samsung demands its clients with interests in products and competitive
processes. This grants the smartphone consumers an increased to moderate strength of the bargaining
power in the actual production of their smartphones. As noted by Wulff et al. (2019), consumer demands
are flexible and very price-conscious. Therefore, smartphone makers need to develop affordable, versatile,
and accessible phones to manage purchasing power.
As a consequence, this base of consumers is not focused and, therefore, cannot pose a threat to industry
agencies. Additionally, there are many alternatives for consumers such as Tablets, Phones, among others,
with many of these devices are generally available at costs and expenses that are the same as those of the
smartphones. From this perspective, one can state that the buyer’s power of bargaining is moderate.

3.1.3.4 Substitutes
According to Dobbs (2014), the threats of substitutes identify the extent to which different products and
services are actively exchanged with other products and services in a competitive market. For both Huawei
and Samsung, there are various alternatives for their clients, which include tablets, mini-laptops, flip-
phones, phablets, among others. These substitutes are evident since the products are availed in prices that
are equal to those of smartphones, with clients having volition to charge their devices based on their
wishes. In this perspective, one can state that the consumer has a considerable amount of power in terms of
bargaining, which thus feeds into the possibility of substitutions.Phablets' involvement in the smartphone
industry is increasing, with users having the freedom to switch to phablet usage. Also, Gatner's (2014)
report points out that the tablet industry grew 233 million units sold in 2013, up 36 percent from the
average annual growth rate.
The industry threatens phablet and tablets. This does not always have to be the case as history shows that
consumer electronics products are extremely fragile and continue to innovate. Hence, it is possible that
suddenly a new device means of communication, product among others, and can appear and threaten every
single company operating with the industry of consumer electronics.
As noted in Porter and Heppelmann (2014), possible substitutes’ threats relate to the level at which
services and products can be interchanged or substituted with other possible services and products within
the same market. While smartphones may seem to be highly unique, they function and act like small
computers. Thus they can be replaced by-products that are similar to theirs, such as tablets or laptops,
which offer the same functionality, interfaces, and applications. Conversely, smartphones can be of great
interest to a more significant number of consumers because they have similar features in shape, size, and
unique features.

3.1.3.5 Threat of New Entrants

According to Kabeyi (2018), the new entrants have a direct influence on the profitability levels and the
attractiveness of an industry with a varying barrier on new entrants. Nevertheless, in this context, the new
participant does not have to be a new company; it can be a consolidated company that enters into a new
company. There are established players in the smartphone industry, such as Lenovo, Huawei, Apple,
Samsung, LG, and Xiaomi. New competitors need enough technology and patents to survive in the
industry. New entrants must also have a brand value to fight with established companies. As a result, the

13
threat of newcomers to the smartphone industry is relatively high.The new participants will influence the
profitability and attractiveness of the sector and identify six obstacles for new competitors. The acquisition
expenses for smartphone makers are immensely high, and the threat to competitors is low as access is
made more difficult. However, there are very few participants in the industry, especially for middle- and
lower-class consumers.

Question 4(30)

4.1 Generic Strategies used by the company and any gaps there on.

4.1.1 Evaluate the Generic Strategy/Strategies used by the company.

According to Porter (1985: 13), the key of competitive advantage is the ability to set the position of the
business against the competition in the market. There have been many researches on competition and
competitive advantage and many different views about them. Strategy is a plan of action that channels an
organization’s resources so that it can effectively differentiate itself from competitors and accomplish
unique and viable goals (Çavuşgil, Knight & Riesenberger, 2008: 312).

4.1.1.1 Cost Leadership:

Cost leadership is the strategy of leading on the basis of lower costs. However, Samsung does not rely
entirely on this strategy but uses it only to a limited extent in its business model to grow sales. It constantly
focuses on innovation to achieve cost efficiency and create products that are efficient and yet competitively
priced. Cost leadership is the secondary generic strategy used by Samsung and in various product segments
including smartphones and home appliances, it has also brought a large range of products that are priced
competitively.
The smartphone industry has grown highly competitive and there are several influential brands that are
competing for market share there. To beat the competitive pressure, apart from its higher-priced Galaxy
smartphones, the company has brought a large range of other smartphones that are priced affordably.
Unlike Apple, which relies exclusively on its range of premium iPhones, Samsung has brought a wider
mix with products in varying price ranges and catering to the different needs and preferences of a wide
segment of consumers (Pratap, 2020).

4.1.1.2 Differentiation:

Samsung applies the broad differentiation generic competitive strategy. Based on Michael E. Porter’s
competitive strategy model, the strategic objective of broad differentiation is to maintain competitive
advantage by providing unique (or differentiated) products targeting a wide market, which in this case is
industry-wide, involving practically every person or group that buys smartphones, laptops, and other
equipment. To achieve Samsung’s strategic plans for growth and expansion in the global market, this
generic strategy requires the application of product development as a main intensive growth strategy to
compete against technology firms like Apple, Google, Sony, and LG (Martin, 2019). Innovation is one
main source of competitive advantage for Samsung which is among the leading investors in research and
development in the entire industry. In the smartphone industry mainly due to the overcrowding of brands,
achieving differentiation has become difficult. However, Samsung and its flagship product, Galaxy
smartphone stand out easily from among the crowd. In several other product categories too including
televisions, the company has achieved strong differentiation through technological innovation.
While product innovation is the main source of differentiation for the company, it has also focused on
marketing and promotions to build a differentiated image and create a unique identity in the market. In this
way, product quality and marketing both have helped the company differentiate itself from the other
brands in the market. However, the most important thing is that the level of competition in the smartphone
as well as the home appliances industry has grown too high. So, companies like Samsung have to invest a
large sum each year in R&D to maintain their competitive edge (Pratap, 2020).

4.1.2 Demonstrate an in-depth understanding Generic Strategies used in this context

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4.1.2.1 Cost Leadership Strategy:

Cost leadership strategy is expressed as cost advantage reflecting selling the goods and services at a lower
cost than competitors in terms of design and production (Wheelen & Hunger, 2002: 120). Cost leadership
strategy aims to gain competitive advantage by reducing the costs of R&D, service, sales and marketing
activities (Rugman & Hodgetts, 2000: 135). Companies can get competitive advantage in scale of
economics by using effective systems to reduce the cost of human resources and minimizing the costs with
cheaper raw material, mass production and distribution (Eraslan, 2008: 77). Cost leadership provides
competitive advantage in the markets in which the consumers are sensitive to the prices. Firms conducting
this strategy aim to reduce all cost in the value chain (Thompson & Strictland, 1996: 228).
The basic principle is to reduce the costs of all actions. By this way, the gap between the prices at the
market and costs will be longer and a firm will get a competitive advantage by gaining a high income and
profit.
The strategic logic of cost leadership usually requires that a firm be the cost leader, not one of the several
firms vying for this position. Many firms have made strategic errors by failing to recognize this. When
there is more than one aspiring cost leader, rivalry among them is usually fierce because every point of
market share is viewed as crucial (Porter, 1985: 21).

4.1.2.2 Differentiation Strategy

Second generic business strategy is differentiation. In this strategy, a firm aims to be unique in its sector
with some characteristics valued by most buyers. It chooses one or more specific characteristics and it
positions itself to meet these needs. In the situations where standard goods and services don’t meet
customer needs, firms have to find different solutions to customers’ specific needs. This is another way to
compete in the market. The basic principle of the differentiation strategy is channeling the customer
choices to its goods and services by doing different things from every rival does (Bal, 2011: 81).
Approaches for differentiation can be composed of elements such as brand name, technology, customer
services, sales network and other dimensions. The ideal approach is firm’s differentiating itself in several
dimensions (Porter, 1985: 12).

4.1.3 Critical application in this context

Cost leadership strategy is significantly and positively correlated with the eight Total Quality Management
Applications and financial performance of the firm. Generally, in the literature, the relationship between
TQM applications and performance or the relationship between strategies with the performance of a firm
are tested and results are evaluated. But in this study, cost leadership strategy is the independent variable
and TQM applications are the mediator and financial performance is the dependent variable. Especially
managers who place cost leadership strategy at the starting point can utilize this study. Because our study
supported the hypothesis that cost leadership study is strongly related to the financial performance of the
firm. Another important result of our study is that the hypothesis “Cost leadership strategy is positively
related to financial performance with TQM practices as the mediator.” is supported. That means that TQM
applications have formed a complete mediator effect in the relationship between the cost leadership
strategy and financial performance (Kurt and Zehir, 2016).

Kodrat (2009) defined differentiation strategy focused more on customers than on costs. The
differentiation strategy is the company's ability to effectively distinguish itself from its competitors by
providing more value to its customers. The differentiation strategy is an organizational strategy that aims
to produce a
product or service that is different from the product or service from another company. Competitive
strategy basically followed the fundamental strategy of (Porter, 1980), and the differentiation strategy was
classified into innovation differentiation and marketing differentiation (Son et al., 1993). In the context of
Samsung, the relationship between cooperative relationship and competitive strategy, in the case of the
intensity of cooperation as the behavioral aspect of cooperation, only technology-led cooperation had a
positive effect on differentiation strategy (Lee et al., 2015). While on the other hand, does the value of
differentiation strategy can be perceived by the target market and does the characteristics of the product
itself can be delivered to the target consumers while the product itself depending only on the

15
differentiation and uncertainly to give pleasure to them. Smartphone plays an important role in this fast era
of globalization and to our daily activities. The smartphone is defined as a powerful calculating device,
providing traditional wireless voice services with the capability to connect to and run internet-based
services such as social networking and emailing services (Kenny and Pon, 2011).

Question 5 (10)

5.1 Recommendations as a Strategy Consultant.

According to the above analysis, Samsung has been facing competition from many companies. Some of
these companies include ‘Apple, Xiaomi and HUAWEI. It is also notable that the firm operates in different
market segments thus attracting more competitors.
The existence of competition is something that forces Samsung Group to focus on the most appropriate
business approaches and practices. Such actions are undertaken in order to achieve its business potentials.
This issue explains why Samsung Group has been undertaking numerous researches from the market. Such
researches mainly focus ‘on the changing consumer preferences, competitive strengths of different
companies, changing demographics, and emerging markets’.

Key factors contribute to success in Samsung Electronics and mobile phone industry show that product
affordability, product features, and product quality are the main requirements to achieve critical success.
To achieve this, the following are the key:
 Availability of talent (scientists and designers)
 High investment in R&D
 Investment in production facilities
 Low cost of production (for contract manufacturing only)
 Product differentiation

The last recommendation is for the Samsung Electronics parent group which has succeeded in different
unrelated businesess to have a reflection on the strengths of forecasting the future market potential. Apart
from this, it is required for Samsung’s investents in a large scale manner to leverage on the large-scale
modern manufacturing plants. This is for CE, IT, and mobile means which leads to high production
volumes essential for attaining a high-level economies of scale (Shamout and Elayan, 2020)

5.1.1 Demonstrate an in-depth understanding of the entire situation

The US market is a key market for SEC’s products. Apart from smartphones, it is a key market for other
SEC’s products as well. However, that also leaves Samsung dependent on the US economy to a very large
extent and any kind of economic instability (US trade war against China) or uncertainty in the US politics
instability will have a severe impact on the overall market position of Samsung and its revenue, which in
2019 accounted for 32% of revenues. Not having their own Operational System makes SEC dependable on
Android Operational System. Thus, all the development and future path are not decided by SEC.
Moreover, the switching cost for SEC’s products are practically nil except for Apple’s products. This can
lead the consumer’s perception that Android products are inferior to IOS (Apple’s Operating System)
(Medeiros, 2020).

The competition in the smartphone and consumer electronics, as well as the semiconductor industry is
currently high. Apart from Huawei and other Chinese brands, Apple is a leading competitor of Samsung in
the global smartphone market. After having retained a top position in the semiconductor industry,
Samsung lost its leadership position to Intel in 2019. The growing competition also causes pressure in the
operating costs since the Company may have to adjust the pricing and spend more on R&D and marketing
to retain its market position. The coronavirus has impacted negatively the global economy, with an
unexpected and massive negative proportion from the production to sales. Apart from the disrupted supply
chain in various regions of the world, the virus may also affect the suply of products worldwide (Tucker,
2020).

5.1.2 Evaluate the entire situation by using appropriate tools

16
By applying one of Porter’s Five Tools, Bargaining Power of Buyers tool, we come to understand that the
overall bargaining power of customers is moderate. The reason behind this is that the switching costs are
very low for the customers (except for Apple products in IM and CE segments), and they can easily switch
to any of the competing brands given the operationally of the products are often the same between brands,
especially in IM and CE segments. So, the customers can easily compare brands’ products by searching
about the brand’s feedback. To avoid that, SEC invests heavily in R&D and Marketing & Advertising to
attract and retain customers (Medeiros, 2020).

The COVID-19 pandemic is assumed to have affected consumer behavior worldwide, impacting local and
global economies. Studies have shown that consumer behavior has changed in response to the pandemic.
Thus, many companies are (have) innovating (innovated) to adapt to the new circumstances. Notably,
technology has become more influential in the daily lives of consumers and businesses. Studies show that
COVID-19 has negatively impacted worldwide economies, disrupting both supply chains and sales
channels. The results of this study show that, for the 2 years covered, Iraqi consumers’ online-shopping
rate increased alongside the rise in global and Iraqi COVID-19 cases. This may point to a correlation,
which should be the focus of additional studies, wherein a larger scope might be incorporated into a
thorough regression analysis of coherent variables, both in Iraq and worldwide (Ali, 2020).

5.1.3 Develop feasible/appropriate recommendations in the context of the

entirety of the situation

Samsung also faces big challenges due to its international presence. Firstly, SE must be able to be global
and standardized to reach benefits of economies of scales but also to be local to reach local needs. SE
works in an efficient manner. Indeed, from the moments which SE analyses the market until the product is
out of the factory, the time is very short. Thanks to a strong R&D
department, SE can fulfil the needs faster than its competitors. It allows SE to have a high degree of local
responsiveness in most of the countries. Clearly, the company chooses product lines which need quite a
low degree of adaptation and a high expected payoff. For SE they are the most attractive products (Gupta
and Govindarajan, 2000). Anyhow, in the techno industry costs of distance are low given the high product
standardization.

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