BSc (Hons) Business Management Top up

 BMP6002

Strategic Management

Strategy Evaluation

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 Table of Contents

Introduction................................................................................................................................1

Task 1.........................................................................................................................................1

Critically evaluate the value of clear Purpose, Vision, Mission and Objectives in setting the
strategic direction of organisations........................................................................................1

Task 2.........................................................................................................................................3

Assess the competitive advantage of the selected company, using the VRIO framework....3

Task 3.........................................................................................................................................5

Using PESTLE framework analyse the external environment of the business you selected.5

Task 4.........................................................................................................................................7

Apply the Porter’s Five Forces Model for the selected organisation.....................................7

Task 5.........................................................................................................................................9

Review of the organisation’s strategy....................................................................................9

Conclusion................................................................................................................................10

References................................................................................................................................11
Introduction
Strategic analysis is highly significant in the overall operation of the organisation as it shapes
the organisation s managerial and operational activities as per the need of the contemporary
situation. This report has been a detailed analysis of the strategic management perspective of
the organisation . At first, a critical evaluation of the organisation purpose, vision, mission
objective and relation to strategic planning has been established. After that several strategic
analysis models; PESTEL, VIRO, Porter’s 5 forces model has been analysed in the
organisation al context. Finally, a review of the overall strategic planning of the organisation
has been developed.

Task 1
Critically evaluate the value of clear Purpose, Vision, Mission and Objectives in setting the
strategic direction of organisations
The strategic plan is developed to get a competitive advantage in the market over the
competitors. Broadly a business strategy is the collaboration of business plan, managerial and
leadership activity to achieve the business goals and objective aggressively and more
efficiently. Through strategic planning is developed to get the competitive edge in the market
but the long-term perspective the approach is to help the company achieving its mission and
vision statement more efficiently (Kim, 2012). The vision is the long-term goal of the
company that it wants to achieve in future. The mission is the goal set by the organisation
depending on the present condition of the company to support the organisation to achieve its
actual vision. The chosen organisation is Samsung UK. Samsung has been a leading
organisation in the technology industry for years. The vision of Samsung is, "to develop the
world with our imaginative advancements, items, and plan that advance individuals' lives and
add to social flourishing by making a better future”. The mission of Samsung is to give away
the human resource and technology of the organisation to create advanced technology and
superior innovation to advance society.

The organisation is a combination of several elements. The link among all the elements is
based on the purpose which will eventually support the company’s vision and mission.
Strategic planning the linker among the organisation mission, vision, and purpose. The
vision is a state which the founder dreamt of. It is something that is not meant for achieving
for real. This is the ultimate goal that works as a guideline for the organisation . On the other
mission is developed as per the practical state and it can be changed as per the situation
(Vision statement, 2013). The mission is attainable. On the other hand, the purpose is several
short-term goals that combinedly support the mission statement. Strategy is the overall plan
that helps the organisation to organize the resources in order to achieve its purpose
efficiently. So, for this reason, there can be seen a keen relation of strategy among the
mission, vision, and purpose of the organisation .

Even if the company has a clear vision and mission statement the strategic planning helps the
organisation to revise them as per the present condition. Also, strategic planning keeps all
the level of management aware of the ultimate goal of the company or what it wants to
achieve in the long term. Also, strategic planning makes the new members of the organisation
get to know the mission and vision of the organisation and shape their efficiency as per it.

The vision of Samsung is to uphold technological innovation to create a better future where it
will be served through information technology. As has been discussed earlier the vision of
Samsung is something abstract which is the ultimate goal of the organisation . The company
does not know either the vision they want to achieve can be achieved as the future is
uncertain. So, depending on the present condition of the organisation the mission statement
has been developed where the goal of the company is to produce superior products and
services to contribute to a better global society (Oliver, 2001). This is something that can be
achieved as per the present global technological condition. Depending on the mission
Samsung will create several short-term projects which will serve the mission purpose. But
several other competitors are also marketing in the same industry. Here comes the strategic
planning which will shape the overall managerial and leadership operation of the organisation
in a way that it can be more efficient than its competitors and achieve the overall purpose,
mission and vision.
Task 2
Assess the competitive advantage of the selected company, using the VRIO framework
Competitive advantage can only be gained when all the managerial and operational function
of the organisation works simultaneously depending on the internal strength of the
organisation . The internal strength depends on organisation resources (Choi and Park,
2020). To understand either the internal strength of the organisation is capable enough to
provide value for the organisation so that it can gain the expected competitive advantage a
model is analyse d which named the VRIO framework. VRIO analyses the organisation al
resources to find out if those are strategically capable to bring competitive value to the
organisation . The VRIO constitutes; Value, Rarity, Inimitability, and Organisation of the
resources. Let’s run a VRIO analysis of Samsung UK resources-

Figure-1 VRIO Framework Model (Choi and Park, 2020)

Valuable: The financial resource of Samsung UK is highly valuable as it helps the

organisation to invest in new sectors and run continuous research and development process.
The flagship devices of the company are valuable as they can be differentiated from the rest
of the products and also it has a great customer demand in the market (Jung, 2018). The
human resource of Samsung UK is a great source of value for the organisation as they are
highly capable and efficient. The patents of Samsung hold significant ground in its overall
value proposition. That because the patents help the organisation to sell its products without
any sort of legal barriers. The cost structure of Samsung UK does not seem very much
valuable as it makes the prices high because of great investment in research and development.
Rare: The financial resource of Samsung UK is a rare element. The company is gigantic in
size and the market leader in the technology industry. There are only a few organisation s that
hold a such number of financial resources like Samsung. The products of Samsung are not
that much rare. Because most of the competitors in the market can provide the same
specification. But the brand value of Samsung is rare without any doubt (Kim, 2019). The
human resource of Samsung is considered rare because it is because of the skilled labour
force who have brought so much innovation to the product line of the company. Another rare
resource of the company is its distribution network which is highly efficient and has been
able to bring great market value for the company.

Imitable: The financial resources of Samsung UK hard to imitate. It is not easy to develop
several financial resources like Samsung which has been build through several years of
market operation and risk-taking investment. The products of Samsung are imitable as most
the competitors sooner or later have been bringing similar offering products in the market.
The employees are also imitable (Min et al., 2016). All the organisation tends to recruit and
develop their human resource to get a competitive advantage. The patents of Samsung are not
imitable at all. These have been legally licensed and if any company copies Samsung’s
innovation they have to pass a complicated legal barrier.

Organize: The financial resource of Samsun UK is highly organized. Because of the gigantic
size and multiple numbers of investments, the organisation can't maintain operational
efficiency if its financial resources are not organized. The patents of Samsung UK are also
highly organized (Nam and Yi, 2020). The patents give them the leverage of running the
innovation process and marketing process of the innovated product without and legal
complications from the competitors. The human resource of the company is also organized so
that their overall operation can add value to project.
Task 3
Using PESTLE framework analyse the external environment of the business you selected.
Apart from the internal strength or weakness, or even external opportunities and threats, there
are some other elements those works in a broader perspective. These are the macro elements
on which the organisation do not have any control but the overall operation of the
organisation is integrated with the change in those elements (Moro Visconti, 2014). PETEL
is an efficient tool to analyse the impact of macroelements on an organisation . PESTEL
analyses the impact of political, economic, sociological, technological, legal, environment on
the organisation . Let’s analyse the PESTEL model in the context of Samsung UK-

Figure-2 PESTEL Model (Moro Visconti, 2014)

Political: Being a multinational company Samsung’s operational efficiency depends greatly

on the political effects of the market. Political stability affects the overall operation of the
company (Achinas, Horjus, Achinas and Euverink, 2019). That’s because political stability
not only impacts the internal affair of the nation but also in the international trade relations
between the countries. Previously Samsung had a bad history of loss because of political
instability between North Korea and South Korea.

Economic: Being a business organisation it is not possible for Samsung to ignore the impact
of the economy in its business operation. Samsung is one of the market leaders in the
technology industry (Gheibi, Karrabi, Mohammadi and Dadvar, 2018). They create massive
employment opportunity in which market they operate. Also, the company pays a huge tax to
the government. The economic condition of a country directly affects the buying behaviour of
the customers. Although Samsung targets customers from all price segments in the economy
the main target market is where it sells its flagship devices. If the economic condition face
downsizing the sales of the products will decrease and so the revenue flow of the company.

Sociological: The sociological factors include the cultures and values of the country,
changing buying behaviour of the customers, etc. Samsung focuses heavily on the marketing
of its product (Pathak, 2017). While developing a marketing strategy the company has to
keep in concern the cultural integrity of the market. The buying behaviour of the country also
roams around its social values and taste. So, the changing buying behaviour also affects the
organisation operation.

Technological: Samsung itself is a technology company. In many cases, the company has
been the pioneer in the technological movement of the market. It has introduced and
constantly making development in the existing technology (Zahari and Romli, 2019). For this
reason, any change in the technological trend in the market directly affects the operation of
Samsung.

Legal: Being a gigantic company Samsung always has to be concern about legal barriers. In
the technological industry, patent holds a great ground of significance in the legal
environment of the organisation (Kaneshamoorthy, 2020). Samsung holds the maximum
patent of the technology they use. Previously Samsung has been fined by the authorities for
breaching other technologies without consent.

Environmental: Environment focus is now a day holds a great ground of significance in the
CSR of every organisation . Because of the green energy, a major portion of the customers
are supporting the organisation s using green energy (Atighechian, Maleki, Aryankhesal and
Jahangiri, 2016). Samsung has been concerned about their power consumption and
established several solar energy plants to power the entire office. Recently 5g in Samsung
smartphones has been accused of causing harm to the biodiversity of the environment.
Task 4
Apply the Porter’s Five Forces Model for the selected organisation.
Porter’s Five Forces is a strategic analysis model which states the effect of industrial
competition on the overall operation of the organisation (Choi and Park, 2020). For a
gigantic organisation like Samsung which is always in constant competition with its rivals
within the industry analyzing the effect of the competition holds a great ground of
significance in developing strategic planning for the company. Let’s analyse the Porter’s Five
Forces model in the context of Samsung Inc-

Figure-3 Five Forces Analysis Model (Choi and Park, 2020)

Industry competition: The technology industry has been highly competitive from the very
beginning of it. Samsung has been a market leader in the industry for many years. The
company’s brand value is around 9.2 Billion USD. The company has been a major player in
the smartphone industry with 21% of the market share. The company gets 18% of its revenue
from Europe (Kim, 2019). The major competition Samsung faces are from; Apple, Sony, LG.
Xiaomi. Huawei, Asus, etc. Because of such a reputed name in the list of Samsun competitors
the organisation had to be highly strategic in its operation from the beginning. In such a
competitive industry constant innovation as per the market demand and taste of the customers
are needed to cope in contemporary situations.
Bargaining power of the buyers: In a competitive industry such as technology the buyers
have high bargaining power. There are multiple organisation s that are more or less offering
the same products with the same facilities. Also, the cost of switching from one organisation
to another brand is also less (Min et al., 2016). As a fact, the buyer or the customers holds a
great ground of bargaining power in the technology industry. Samsung has taken the concern
seriously in all of its business operations and has been constantly providing values to the
market as per its needs and demand while maintaining the innovative trait of the company.

Bargaining power of the suppliers: The suppliers have a moderate level of bargaining
power in the technology industry. In the tech industry, suppliers and tech giants like Samsung
work together to bring innovation to the market (Jung, 2018). The suppliers cannot operate in
the market without the tech giants. On the other hand, a company like Samsung has been
producing most of its raw materials within the company and also has been operating as a
supplier to several other competitors of the company. As a fact, the suppliers do not possess
high bargaining power as the customers.

Threats of new entrants: The threats of new entrants in the technology industry are quite
moderate but it has been increasing day by day. Modern days' customers are getting smarter
and they are choosing a value for money more rather than just the brand value (Migowski,
2019). This has opened the door for new companies to thrive in the market as such offering is
quite easy for them. Though it requires heavy investment to capture a good amount of market
share in the consumer goods industry Samsung has a moderate level of threats of new
entrants.

Threats of substitute: The threats of substitute are extremely high in the technology
industry. The technological device is a combination of hardware and software. The industry
is also a constantly changing one (Nguyen, 2017). As a fact the companies have to maintain
constant improvement and innovation to their products in order the maintain customer
interest. There are a lot of alternative companies offering similar facilities so the cost of
substituting is also low from the customer point of view.
Task 5
Review of the organisation’s strategy.
From the overall analysis of the strategic perspective of Samsung UK, it can be stated the
company has a well detailed and analysed strategic plan for itself. The strategy of the
organisation can support the company in any contemporary situation as it has been keeping
the company strategically capable enough to adapt to several changes and developments in its
organisation al structure (Kim, 2012). Samsung has been one of the market leaders in the
technology industry for years. The tech industry is a constantly developing and changing one.
Following this Samsung has been constantly keeping the strategic development of the
organisation . Previously several strategic analysis models; PESTEL, VRIO, Porter’s 5 forces
model has been used for the strategic analysis of Samsung.

PESTEL is analysed to find out the impact of the macro-environment in the operation of the
business and this also gives the organisation scope to make itself strategically capable. From
the analysis, it can be seen that the international trade policy of Samsung depends greatly on
the political relationship between the two countries (Choi and Park, 2020). Though Samsung
targets all the price segments the economical condition of a nation affects the sale of its
luxurious products. Similarly, other macro elements which are not in the control of the
organisation affects its business operation.

The VRIO analysis is run to find out if the internal resources of the organisation are
providing value or not. The financial, human resource, patents, are a great source of value
addition to Samsung. The financial and patents of Samsung is not imitable on the other hand
the human resource, products can be imitable (Moro Visconti, 2014). The financial resources
are a rare resource as it is not easy to develop by any new entrants. The organisational
structure of Samsung is a great source of value addition as it helps to run the company
efficiently.

From the analysis of Porter’s Five forces, it can be seen the industry rivalry is very high for
Samsung. In the tech industry, the customers hold a great bargaining power as there are
several alternatives. On the other hand, the suppliers have a moderate amount of bargaining
power (Oliver, 2001). The company faces a moderate amount of threat from new entrants
because of its brand value and gigantic size but the company faces a threat of substitute
because of the competition in the market.

Let’s analyse all the strategic operation taken by Samsung UK in the balanced scorecard-
 Vision To inspire the world with our innovative technologies, products, and
design that enrich people’s lives and contribute to social prosperity by
creating a new future.
Mission We will devote our human resources and technology to create superior
products and services, thereby contributing to a better global society.
Objective Measures Target Initiative
Financial Wealth Return on 20% increase Developing
maximization Investment efficient
portfolios
Customer Retaining Providing value 15% increase Being as cost-
customers for money effective as
possible in the
business
operation.
Internal Employee Employee Keeping the Educational
business engagement development same workshops,
and growth seminar.
opportunity
Learning and Upholding Investment in 3 new products Bringing 3 new
Growth innovative research and facilities in the
technology development upcoming
products to cope
with the
changing
market.

Conclusion
The strategic analysis holds a great ground of significance in the overall operation of the
business as it establishes the link between the organisation al purpose, mission, vision and
keeps the organisation strategically capable to achieve those. To make the organisation
strategically capable a manager should analyse several strategic management models and
matrices to find out the capability of the organisation and create a strategic plan as per it.
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Choi, Y. and Park, H., 2020. Analysis of Core Capacity of POSCO Smart Factory: Focusing
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References

Choi, Y. and Park, H., 2020. Analysis of Core Capacity of POSCO Smart Factory: Focusing
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Jung, S., 2018. Comparative Analysis of Strategies Samsung vs. Xiaomi (Focused on
Industrial Attractiveness and VRIO Analysis). The SIJ Transactions on Advances in Space
Research & Earth Exploration, 6(2), pp.1-4.

Kim, E., 2019. An Analysis on the Core Competence Through the VRIO Model of CJ
CGV. Journal of the Korea Entertainment Industry Association, 13(3), pp.333-342.

Migowski, S., 2019. Hospitals Involved in Mergers and Acquisitions: The VRIO Model. JOJ
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Min, B., Min, J., Jang, W., Han, S. and Kang, S., 2016. VRIO Model Based Enterprise
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