BM627-Managing Inovation in Business of Samsung

University: Bucks new university

  • Unit No: N/A
  • Level: High school
  • Pages: 9 / Words 2307
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Organization Selected : Samsung
Question :
These following questions will analyse the innovation audit of chosen business organisation which are illustrated below:
  • Apply the approach to the range of business data, information source and methodologies in order to analyse the drivers of innovation within the business.
  • Analyse how the company and their leaders can successfully plan and make for innovation.
  • Critically analyse the significance of organisational knowledge and cross functional co-operations in order to analyse and assess the innovation capability.
  • Identify the new products or services for chosen business and identify the key activities needed for successful business.
  • Perform the innovation development audit for the launch of new products or service.
Answer :


Innovation is determined as the practical application of improved solutions that fulfil new requirements, existing market needs, unarticulated needs, etc. It refers to something first and much effective or result, which creates value into the market (Andersson, Forsgren and Holm, 2015). Samsung which is a South Korean company deals in consumer electronics, semi conductors, smartphones, apparel and home, appliances, etc. has been taken in this report for study. Organisation history is described in this project with PESTLE analysis. Further, SWOT analysis of company to identify external factors is also explained. Along with this, Porter's five forces of model to identify market threats is also mentioned.

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Organisation and industry overview

Samsung which is a South Korean company established on 1 March 1938 and its head office is in Samsung Town Seoul. It deals in apparel, electric components, semi conductors, DRAM, automotive chemicals, telecommunications equipments, consumer electronics and home appliances.

Organisation and innovation history

Innovation can be merely defined as inventive thoughts, new ideas, imaginations in device form or method. It refers to the process of converting an idea or creativity into a product or service which creates worth or for which consumers pay. Innovation create large opportunities and are instant for the aliveness, economic growth and prosperity of company.

PESTLE analysis of Samsung:- PESTLE is a strategical logical tool which is used to evaluate the impact of extrinsic factors on business organisation (Carlborg, Kindstrouml;m and Kowalkowski, 2014). In other words, it is used by the organisations to determine macro factors in the environment which affects a business in both positive and negative way. SAMSUNG used critical analytic thinking of political, technological, economic, environmental, legal and social factors to innovate and launch new products in their history.

Political:- Political factors involves ndash; government policies, power centralization, political violence, powerful foreign relationships, etc. As it is a South Korean company then it should have appropriate measures for confidence building with North Korea. Having good foreign relations and political intent for economical reforms in past years helped Samsung in launching new products. As , it established electronics and its semiconductors in 1970's.

Economical:- Economic factors involves powerful export department, imports low level, competitive tax policy, implementing free trade agreements, liberalized service sector, nuclear crisis, etc. The company had created and launched new products as it has successful economic reforms. Further, decreasing foreign direct investment level was one of the challenge for the Samsung.

Social:- Social factors includes various strengths and challenges for the company (Cheng, Yang and Sheu, 2014). Some strengths for the company were ndash; highly educated employees, high wages, fast urbanisation, etc. And some challenges are ndash; ageing society, low social well-being spending, etc. having effective and qualified workforce Samsung had improved its performance and increased its brand image in the past years. With the help of talented employees as an example it had created an aerospace division in 1978.

Technological:- Technological factors involves presence of high world and domestic players, robust telecom sector, government policies encouraging Ramp;D, innovative ideas commercialisation, etc. With the assistance of policies provided by government in research and development Samsung had invented new products in the industry. Further utilising new ideas and thoughts it introduced its Galaxy smartphones in 2000.

Environmental:- Environment factors includes ndash; government involvement to protect environment, surroundings technology development, emission levels, etc. Considering various environmental factors and safety of people Samsung had discovered its products. It used different measures to invent eco friendly products.

Legal:- Legal factors involves ndash; tax policies, custom operations, judicial system, regulatory incentives, tax abatements, etc. Having favourable tax policies is one of the strength for Samsung as, it was strong policy for encouragement of innovation (Gawer and Cusumano, 2014). The company had opportunities of great innovation with a pleasing tax regime.

Samsung' s existing innovation and capabilities

Samsung electronics as an international IT company has attained quicker growth during the modern years. The brand is functional globally with its 217 operation centres running all over the world. Various of its products involving displays and Galaxy smartphones have been extremely prominent. There are different leading objections in front of the brand in the near time period. In comparison to Apple it is static lagging down in the innovation area. Its financial perspective is stabilised and that can assist it to increase new channels of income in the future. It has 320,671 employees in ending of 2017 in 73 countries.

SWOT analysis of Samsung:- The SWOT analysis bring out how the the company used its combative points to turn into a leader in semiconductors, consumer electronics, home appliances, etc. It determines all the fundamental strengths, opportunities, weaknesses and threats which impact the company to the highest degree.


Brand image:- One of the important strengths of Samsung is its brand value and only because of this reason it is one of the famous IT and electronics brands worldwide (Kindstrouml;m and Kowalkowski, 2014). Separated from being an initiate brand which has invent various market directing products such as high definition screens, Galaxy smartphones, it is also famous as a socially accountable brand. Having powerful brand image is a symbol of quality and Samsung is among the topmost brands in the Asian markets.

Global presence:- It is also essential strength of Samsung. It has 217 operating centres all over the world. It has around 3,20,671 employees in offices in 73 countries. It has skilled and talented employees to perform its operations effectively.

Governing position in smartphone market:- Use and sales of smartphones are increasing globally. A very big portion of the world people uses smartphones and this market is anticipated to develop quicker in size in coming days. Samsung smartphones are extremely famous in the worldwide industry and its ascendant position is primarily because of galaxy smartphones. Having dominant position has important role in increasing company's revenue.

Large product portfolio:- It has astronomic products portfolio involving displays, consumer electronics, semi conductors, smartphones, etc. It also Launch other products such as laptops, printer, desktop, etc.


Weak perspective in the PC market:- Spell the PC market has decreased in the modern years, still it is a leading market with large prospective (Malhotra and Majchrzak, 2014). Lenovo, Apple, HP, and Dell are major performer in this business and Samsung's market percentage is much tiny in comparison of others.

High dependency on the American markets:- Samsung rely on the American markets for a big portion of its income and this is a weak point. Its profits and revenue can be influenced through American markets fluctuations. Samsung is required to get into the European and Asian markets completely. High dependence on American industry can occur excess force which can be deflected by having a more pursuant performance.

Low profit margin:- Samsung always support low-level profit market. It has many other competitors in this market (Rothaermel, 2015). To maintain a lot customers they should offer their products at cheap rates.


HR management:- In the technology business enterprise human resource management is the leading source of combative benefits. The major technology brands are investing in this field, in order to hire and continue the foremost employees and provide effective training to them for best performance. By making investment in human resource management Samsung can modify its performance and total productivity.

Acquisitions and diversifications:- Samsung must make efforts to increase its customer base and market share via diversification and acquisitions. There are many related areas in technology business where variegation can simply open new approach of growth and revenue. Samsung has great financial form, it will be simple for the brand to create new revenue sources by getting other tiny businesses which modify its midpoint offerings.

Digital marketing:- Digital technology is growing fast day by day and introduced new opportunities for HR, marketing and supply chain management for the commercial enterprise brands (Tidd and Bessant, 2014). For technology brands supply chain administration and marketing are very essential domain. To pursue its supplier and customers worse Samsung can utilise digital techniques.


Competitive pressure:- Combative pressures in the computing products, user electronics, and smartphone business has grown. From Apple to Xiaomi and Huawei ndash; these brands are creating a hard situations before Samsung. This results in high persuasion affiliated to product selling and innovation.

High research and development expenses:- Marketing and research amp; development expenses has kept increasing at Samsung. It is facing high competition in the worldwide markets which is a big reason for increasing expenses in this area.

Regulatory legal and threats:- Some regulatory and legal problems in front of world technology brands has fully grown devising it more challenging to run internationally for them. From environment to working class and product security, there are solid legislations in each area that need to be follow with (Van Lancker, Wauters and Van Huylenbroeck, 2016).

The industry in 2018

Consumer electronics are equipments premeditated for daily use, generally in private homes. It involves devices used for communications, entertainment, and interior office activities. Samsung electronics is one of the world's lowest- acting technology frames this year with billions pass of its worth as components from expanded smartphone competition.

Porter's five forces analysis of industry:- This instrument is a handy method to evaluate how each of the industry drivers affect the Samsung company and then supported on the synthesis, appropriate business schemes can be advised.

Industry rivalry:- Having large number of competitors in the consumer electronics the competition is increasing. This component is especially significant for Samsung as the other White Goods international such as ndash; Nokia, LG, Motorola, not to involve Apple are involved in furious combative rivalry. It is the contest of being the prototypic in bringing creation and cut throat technology to the industry.

New entrants threats:- the technology being utilised in the consumer electronics business is constantly developing making it hard for new entrants. Other debut barriers involves brand equity, more capital investment, economies of scale, intense competition, and access to distribution channels. Other factor for consumer electronics is powerful security and government regulations. Even having all these barriers many companies have entered in industry and cover all small markets. Therefore it is medium level threat.

Suppliers bargaining power:- Consumer electronics has get into cooperate relations with providers by becoming their share owners. The company suppliers involves provider of equipment parts which is required for the products manufacturing. Many companies supply these parts and components and the company purchases in majority.

Buyers bargaining power:- There are large number of companies which makes the same products like Samsung. Therefore, the buyers have many options to purchase these products while selecting consumer electronics. For purchasers, the switching price is low. Product distinction lack is also a benefit for the purchasers. Existing brand loyalty in customers is an outcome of great experience with products or brand. The recent action on offering products with large number of attributes and the extended warranty has also crimp the power of buyer.

Threat of substitutes:- There are many consumer electronics which are used by customers such as ndash; laptops, televisions, home appliances etc. Some of the goods of LG like plasma screens and televisions can be exchanged by computers having internet accession to gaze television channels. However, large number of its products are not replaceable or exchangeable such as ndash; air conditioners, washing machines, sound systems etc. They do not have options in the market devising the danger of substitutes reduced for LG. The company should not have any fear of product substitution (Winterhalter, Zeschky and Gassmann, 2016).

Therefore these are the five points of porters five forces model which determines the industry information of current year. It describes all those factors which affects particular companies products from competitive companies and provides advice to overcome from these threats. It gives appropriate advices about business strategies and provides measures to being uppermost in the industry. To expand the structure of consumer electronics market these five forces of Michael Porter can be used.

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From the above project report it is concluded that innovation is the method of changing an idea or thoughts into service or product. PESTEL analysis is a tool or method used for analysing or evaluating external factors in the business environment before innovation of new products. It involves all legal, political, social, technological, environmental and economical factors. Further, SWOT analysis helps in identifying internal strengths and weaknesses of company to create or launch new products or services. Along with this Porter's five forces of model assist the company in expanding particular structure of different products. It gives suggestion to perform best in the industry.

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