Intro to management

Assignment no. 1

Submitted to:

Prof. Ehsaan ul Hassan

Submitted by

Sarmad Sohail
257931
BESE-9B

Date: 6-Nov-2020
Preamble:
Samsung Group is a South Korea based conglomerate company which is globally recognized
electronics production company. Samsung Electronics has its specialty in manufacturing diverse
industry & consumer electronic devices, which includes appliances, integrated systems etc. It
emerges as popular company in electronic & technology world and generates about 17% GDP of
South Korea.

Samsung Electronics was founded by Lee Byung-Chull in 1938. He established his business in
Korea, Taegu, exporting noodles & other stuff that was manufactured in the city and trading
them to China.

In 1970 firm extended its processes of textile production to the its apex. After that subsidiaries
like Samsung Shipbuilding, Samsung Heavy-industries, and SPC were initiated. Moreover, in the
same period, SE began to invest and focus in the chemical and heavy industries, to put the firm
on a growth track.

In 1969, company initially stepped into the industry of electronics with various electronic
division their initial focus was on B&W TVs. In 1970 Samsung started trading home products to
other countries. Samsung was already a massive producer in South Korea that time, and had
accompanied a fifty percent share in South Korea semiconductors.

In the year of 1990 SE proceeded its extension in the international markets. Regardless its
success, scandals that affected the company were also witnesses by those years, which inludes
patent-infringement suits & multiple bribery cases. Nonetheless, company consistently advances
in the technology and product-quality, with a numerable products —ranging from LCD screens
to semiconductors and computer-monitor and—reached in the first five positions of the
international market share. 2000s brought the all-rounder series of Samsung, the Galaxy series
and it swiftly proved itself the SE’s most-admired devices but also nailed the yearly reports of
international smartphone sales.

Business Strategy:

Samsung Electronics (SE) adopted a global strategy. It can be described as the two faces of the
coin one as cost efficiencies and on the other side a bit low differentiation & responsiveness.
These are acquired by challenges & benefits.

At First SE generate economy by choosing an appropriate location. No doubt, SE constructs

Research and Development centers and manufactures in perfect locations of every continent
considering geolocational costs. Vietnam & China provides economical labor cost suppliers for
the Asia & middle East market. SE initiated the establishment of the globally largest smartphone
plant in Vietnam in the year of 2013. Samsung Electronics produces its devices in Poland for
European markets because there is a best compromise exists in sufficient knowhow and labor
costs. For Research and Development centers Samsung Electronics uses the local employees’
competencies. When the company established a center in the Silicon Valley, the government of
California granted a tax discount to attract the Samsung Electronics. "Here's a case where
government and business work together—and everyone benefits." in a statement says Jerry
Brown, the California Governor. When conglomerates keep its Head Quarter in Suwon, it was
because South Korea’s government granted great tax flexibility relative to other exotic
corporations like Apple. Hence, it permits Samsung Electronics to cut down delivery and tax
costs. Keeping Research and Development, manufacturing and administration in certain places,
Samsung Electronics enjoys the perks of a international strategy.
Lastly, Samsung Electronics does major economies of certain scale with quality and standardized
devices. Considering its initiative, the conglomerates has the chance and choice to send and sell
its devices in many markets with no alteration. For example, for its corporate clients, memory &
chips are sort of a standard. Due to economical investments Samsung Electronics insures its
position everywhere.
Challenges and Recovery:
Explosive Galaxy Note 7:
In August, Galaxy Note 7 grapple with its nemesis Apple’s iPhone 7 Plus. With
fascinating feedback coming from critics, smartphone was on very high-demand, in
South Korea its grinding pre-launch-order records. However, on its launch, complains
swiftly started to revolve around Note 7 lit up in fire. Videos started flowing across the
network, revealing new Galaxy Note 7 smartphones melting & exploding in user’s
possession. From alone US, Samsung got almost ninety reports about overheating of
batteries, causing twenty-six reports of burns. In order to handle the increasing loss,
Samsung Electronics attempted an international recall of the Galaxy Note 7 in start of
September, and completely stopped the manufacturing on 11 October. In this way they
limit the damage of that challenging time and respond to the financial & reputational
crisis.
Malfunctioned Washing Machine
Company was wrestling with the surge of its chaos caused by Note 7 fiasco, the
company’s unfortune remains persistent in month of November, it was compelled to
recall its 2.8m washing-machines on reports of catching fire. The faulty devices caused
customers certain injuries, which includes damaged shoulder, a pulled jaw, and other
drastic burns, with Samsung Electronics eventually getting more than 730 complains of
model’s explosions. They were very challenging moments for the company to not only
recover from the financial crisis but also to repair its reputation, more importantly. They
made significant reforms in their testing units and management to get the efficient results.
Trembled by those drastic recalls, Samsung Electronics’ recent release proves a do or die
choice for company. In April, Samsung launched its new smartphone, its launch has
fortified Samsung’s impact on the market, entering in a new realm for the conglomerates
after the Galaxy Note 7 debacle. However, with Samsung Galaxy S8 release, Samsung
Electronics is attempting to recover the loss to its image rather more than to its financial
state. Noticeably, the company get out unstained from its certain devices’ failures, with
market shares increasing constantly in the last twelve months.

Recovery Methodologies adopted by CEO Yun Jong Yong:

 The management team of Yong and he decided to take bold steps in order to push SE out
of its critical financial position. That’s why, he structured the company by lay-off 30,000
workers which covers a third of its whole workforce. This major cost scrutiny step was
done, so they could extract their debt. The management team of Yong and he decided to
shut down various Samsung firms for 2 months so they could lay-off their massive stock
that wasn’t selling. Yong and his team take major steps after selling 2bn dollars’ cost of
businesses, such as electric-coffeemaker and pagers, which were conceived to be
worthful importance for the future of firm. Such alterations assist the company to recover
from the damages that was a huge financial and structural nee of the company.
Yong aimed execute a program that would part SE from their rivals. That’s why he
enforced the company to produce its own devices instead of copying from other
companies. Yong enforces the production of devices that would influence the users with
fascinating designs, shapes and technology.
Another initiative that Yong execute was the hiring of new engineers and managers,
many of them got impressive experience in US. That executive recruitment of engineers
and managers had a major turnabout because it permitted them to produce their own
innovative devices.
One more initiative taken by the management was that seniority-based system was
replaced by the merit-based system in order to achieve advancements on the behalf of
performance of employees. Their new & innovative ideas lead the company achieve its
ambitions with the experience and knowledge that they’ll be regarded for. Management
moved fifty-five different agencies around the globe to one place. This initiative was to
create the persistent international image for Samsung’s devices.

References:
1. SYED MOSA RAZA ZAIDI Charles Darwin University, Sydney, Australia
https://www.academia.edu/26007095/Challenges_to_Business_Success_an_Operations_
Management_Focus_on_SAMSUNG
2. Peter Bondarenko Former assistant editor, economics, Encyclopædia Britannica.
https://www.britannica.com/topic/Samsung-Electronics
3. By Emily Cashen | Tuesday, June 6th, 2017
https://www.theneweconomy.com/business/samsung-survives-exploding-phones-and-
allegations-of-bribery-to-start-2017-strongly
4. UKEssays. (November 2018). Samsung Electronics' Management Style. Retrieved from
https://www.ukessays.com/essays/management/management-strategy-of-samsung-
electronics-management-essay.php?vref=1