How Global Trends Influence the Strategies Used by Samsung in the Communications Market Essay

As global trends shape the business landscape, they will certainly influence competition among companies; and just as companies frequently fail to examine global trends in details, they can also fall short in their analysis of the competitive factors those trends create. Czinkota, Ronkainen,and Kotabe, (2010) carried out a survey that showed that â€Å"competition is becoming more intense: 85% of them [executives] describe the business environment of their companies as more competitive. † As such organizations to include the owners and staff have to continually make changes to supplement the ever changing demands of their target market as well as the total market. Samsung has felt the negative effects associated with changes in global trends and as such have developed strategies to compliment those changes in the communication market. Overview of Samsung In the present unpredictable business trade, marketing plays a fundamental and considerable role and it is a course of action or means to create, deliver, exchange and communicate with customers and clients which is now more pronounce because of globalization. Globalization according to Hamilton (2009) is not a new phenomenon. Nonetheless, within the last few decades, the improvements in technology, international trade and communication have rocketed. However, before we move on to discuss this great phenomenon, it is imperative that we define the terms globalization and marketing. Bilton, Bonnett, and Jones, et al. (1996) argued that globalization can be defined as â€Å"the process whereby political, social, economic and cultural relations increasingly take on a global scale, and which has profound consequences for individuals’ local experiences and everyday lives. † Hamilton (2009), in view of some of these profound consequences of globalization aptly states, â€Å"International trade through globalization can have many benefits. Trade helps increase economic wealth and establishes good political relationships with trading partners. Globalization also promotes free trade and competition between corporations which in turn gives consumers throughout the world more options and cheaper products from which to choose. † Therefore, the increase in trade, as well as technological communication and transportation advancements have allowed societies to become more connected. The term globalization signifies the combination of the marketing process with global business requirements. The globalization of marketing has made marketing processes more intricate, unwieldy and costly to deal with. Ferrell (2011) postulates that marketing may be defined as â€Å"an organizational function and a set of processes for creating, communicating, and delivering values to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. † Global sourcing and hostile global competition, pooled with growing customer demand, are drastically affecting the supply chain. To battle these new globalization challenges, many companies are moving away from a â€Å"push† supply chain model to a demand-driven, customer focus model. The desire to become demand-driven requires sophisticated, flexible responsiveness at every point along the supply chain, from sourcing and obtaining to use. One such company is Samsung; founded in 1938. From its foundation as a petite export company in Taegu, Korea, Samsung has developed into one of the world’s top electronics companies, specializing in digital appliances and media, semiconductors, memory, and system integration. For over three decades Samsung has defended developments in the business and played a fundamental part in the advancement of the mobile telecom sector. Their powerful past performance in invention and manufacturing is in line with a history of financial stability, and an extensive globally distributed, skilled employee base. This combination of factors has lead to Samsung being the favored partner of top-tier operators around the world. In 1980, Samsung joined the telecommunications hardware industry with the purchase of Hanguk Jenja Tongsin. Originally building telephone switchboards, Samsung expanded in to telephone and fax systems which ultimately moved to mobile phone manufacturing. The mobile phone business was grouped together with Samsung Electronics (Burris, 2013). Kumar (2004) opines that in the contemporary information age, mobile communications has enabled us to use laptop personal computers linked to the internet without a ‘wired’ local area network (LAN). Simply put, if the internet gave us the ability to access any web address on a desktop, mobiles have given us the access at any time and from anywhere. This capability, derived from modern telecommunication technology, is crucial in conducting international business operations. Samsung Telecommunications is one of five business units within Samsung Electronics. This unit has been influenced by global trends, causing the company to use marketing strategies in order to stay on top in the communications market. Samsung’s Marketing Strategy Developing a clear and profitable strategy relies on balancing the business’ competencies and abilities against the market opportunities into the future. The marketing strategy of a business includes a definition of the business, a description of the products or services, an outline of the target market, and defines the business’ role in relationship to the competition. In other words, marketing strategy is a synopsis of the business’ products and position in relation to the competition; the sales and marketing plans are the exact actions the business will assume to attain the goals of the marketing strategy. According to Materson and Pickton (2010), constructing and using a marketing strategy has a strong positive impact on profitability. This is because companies that utilize a marketing strategy tend to focus on their customers and markets, integrate their marketing responses and work out in advance where their profits will come from. Operating a flourishing business can be challenging; business operators can build a business but they might not materialize. Marketing is all about informing the public about the product or service the business offers, and influencing them to purchase or use it. Thus, Samsung zoomed in on strategies that will improve the company’s communication market. The company also used SWOT analysis in order to keep up with the global trends in the communication market. Like every other businesses, Samsung is very much aware that information is an important resource essential just like money, machinery and manpower. Information is considered one of the most fundamental necessities for the continued existence of the organization. In the past, before the computer era, it was not easy for the businesses to gather, store, maintain, organize and distribute enormous volumes of information and data. Nowadays, managers are competent in getting contemporary information at the required time in a precise manner. Consequently, as a powerful business leader, Samsung accepted the fact and had given precedence to the process of information throughout the organization at every stage. â€Å"To gain from its Managing Information System and Information Technology, Samsung addressed information needs not only in its environment but also in their relationships with customers, suppliers, trade partners, production systems, work processes, skills and labor requirement. These advancements of Samsung have created huge and complex processes and information systems, thereby creating a requirement to align them to have a universal overview of the complete information system setting it as a strategic tool† (Unknown). Ultimately, a manager evaluates the information gathered for accuracy. Evaluating this information enabled Samsung to identify potential threats and opportunities linked to environmental changes, which bring us to another market strategy, the market environment. Understanding the present state of the market environment and recognizing threats and opportunities that might arises from changes within it helped Samsung to assess the performance of their present marketing efforts and develop future marketing strategies (Pride & Ferrell, 2012). This is so because the global marketing environment is becoming increasingly competitive to an extent that requires companies to target their products and services at markets regardless of national boundaries (Hassan & Erdener, 1994). SWOT Analysis Samsung’s SWOT analysis was used to examine the strengths and weaknesses of the business, determining the long term objectives of the business and aid in the design of the new strategies to assist in the process of achieving targets set by the organization. The SWOT analysis also include the processes to determine the investment direction, the business markets to be addressed, extension of the operations of the business and limitations faced by the business in order to undertake the business activities. In essence, Samsung used SWOT to help identify possible strategies by building on strengths, resolving weaknesses, exploiting opportunities and avoiding threats. An opportunity is a major favorable situation in a firm’s environment. Key trends are one source of opportunities. An evaluation needs to be completed drawing conclusions about how the opportunities may affect the firm whether positive or negative. However, changes in competitive situations, technological changes and improve buyer or supplier relationships could symbolize positive opportunities for businesses. In this case, Samsung capitalized on their opportunities by designing new technology, sponsoring the 2012 Olympics, offered more models with stylish and individuality and giving the consumer real entertainment for their money; offering plenty opportunity to get more sales. Threat refers to challenges posed by an unfavorable trend or development that could lead to deterioration in profits or sales, in absence of a defensive marketing action. Threats are the main obstructions to the business’ existing or preferred position. Changes in technology, decrease in market growth, increase in bargaining power of suppliers and buyers, new or revised regulation could pose threats to the achievement of businesses. From the information gathered and evaluated, Samsung recognized that there is new and existing competition, price volatility, economic recession, and extremely huge competition for customers and resources. The internal analysis of strengths and weaknesses focuses on internal factors that give businesses certain advantages and disadvantages in meeting the requirements of its intended market. Strengths refer to core capabilities that give the business an advantage in meeting the requirements of its intended markets. Any analysis of company strengths should be market oriented and customer focused because strengths are only meaningful when they assist the business in meeting customer needs. Weaknesses refer to any limitations a company faces in developing or implementing a strategy. Weaknesses should also be examined from a customer perspective because customers often perceive weaknesses that a company cannot see. Being market focused when analyzing strengths and weaknesses does not mean that non-market oriented strengths and weaknesses should be forgotten. Rather, it suggests that all businesses should bind their strengths and weaknesses to customer requirements. Samsung’s strengths: 1. Strong international experiences 2. Strong global business network 3. Vast credibility of brand name 4. International documented accomplishments (awards received and nominated for) Samsung’s weaknesses: 1. Perception of high prices 2. Loss of customers’ interest in products 3. Buyer sophistication and knowledge 4. Substitute products or technologies and limited availability of 3D viewing Conclusion Marketing has changed in focus over the past twenty years. Nowadays, marketing stresses value and customer relationships (Ferrell, 2011). However, it is imperative to note that marketing is parallel to other business functions such as production, research, management, human resources, and accounting. The fundamental function of marketing is to connect the company to its customers. As such it shapes the objectives of companies to include Samsung, through which it is able to delivery top of the line communications while superbly satisfying the market. 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