Krispy Kreme

Samsung Electronics Company Limited has been cranking up new product development process to develop and launch hundreds of innovations based on the latest technology and beating competitors to the marketplace. They produce premium priced, feature-jammed goods and have been a strong rival for Sony, Nokia, and Panasonic. They target their products towards affluent households with high annual incomes. Samsung's products include TVs, cell phones, digital music players, personal digital assistants (PDAs), DVD players, camcorders, camera phones, and more. In each of these products categories, Samsung offers many models, and they are sometimes the first firm in the industry to launch a given type of product. At other times they closely follow the innovation firm, trying to improve on what the rival offers (a "second-but-better" strategy).

Despite Samsung's success, it will have to determine how to maintain its growth in an industry where stalwarts like Sony, Nokia, Panasonic have faltered. Due to rapidly-changing technology, the consumer electronics industry's product life cycle is extremely short and getting shorter, many companies beside Samsung are falling behind the curve for lack of innovation. Also, According to Exhibit 4, Samsung ranks fourth in the Plasma TVs and Camcorder global market and ranks third in the mobile phones and microwave ovens market. Now each year Samsung is making a loss on these digital appliances, which is becoming a growing concern for Samsung's lead managers. After a careful review of these central issues pertinent to the Samsung Electronics case we recommend three alternatives, diversification to explore new hardware markets, incremental innovative technology for software to restructure the company's sustainable business model and aggressive marketing campaign for the digital appliances to improve the profit margin.

Samsung electronics can diversify to explore new hardware markets by the means of internal development. By diversification, the company can use the resources such as technology, research and development and the management to create new strengths and capabilities for new hardware market. Since, Samsung is number one in the manufacturing of memory chips; they could use this technology to make medical equipments such as MRI machines, ultrasound equipment, X-Ray technology and many more. Also, the company could sell these customized memory chips to major companies on a contract basis. That is, Samsung could have an opportunity advantage to its main competitor by creating a channel of exclusive production to corporation with the need to the quick and cheap manufacturing of memory chips. For instance, Samsung can manufacture high-tech machines such as Gas Chromatography, PLC machine and other by utilizing the technology that it already has, without the use of addition expenses in the manufacturing arena. Apart from this, Samsung could manufacture new products in the pharmaceutical market, a market that is in a rapid demand by the retired baby-boomer, whose needs expands to medical aid to mechanical devices in order to continue with their regular daily routine. Beside, partnering with major pharmaceutical companies, Samsung could develop a new way to make good use of its research and development, a technique that could be transferred into the software companies that are in the continuous need to change and design new technology for new advance products.

One of the positive outcomes in the outreach of major legally binding agreements is that Samsung can excel in the productivity of the business by putting in practice its expertise and delivering the required products manufactured in a timely manner. This will allow Samsung to continue reducing the amount of time to release a certain product in to the market, either for their clients or for their own benefit. Through this connections of the company to make software and expand the manufacturing of healthcare devices will help Samsung to operate in a cost effective and the reliance on other softwares or medical companies will be minimum. Also entering the booming gaming market would be an excellent strategy. Another via of revenue growth for Samsung is the association with major gaming companies. In recent product development for the gaming industry, we could see that companies like Nintendo benefited handsomely by providing active personal devices that allow customer to actively participate in the games. This main difference in comparison to other game companies, differentiated Nintedo from its main rivals.

To overcome the competition faced from the low priced product manufacturers from China and other companies, Samsung should consider restructuring its business strategy by selling those businesses which are undergoing losses and innovatively utilizing resources to manufacture products that are differentiated in the market. Restructuring should also be performed to evaluate the corporate portfolio by the implementation of strategic tools such as the BCG matrix. We believe that since Yun has decided to stick to the current sustainable business model, this decision would have been made on a complete research and analysis of the prospective industry. Collaboration or partnership with major software developing companies is essential which can bring product differentiation to the company. So what will this restructuring bring to the company and to the consumers? Restructuring will build the value of the brand and will bring the latest technology into the market which will be difficult to be copied. It will increase the turnover and improve profitability for the company and may bring brand awareness among consumers. Also, the company should consolidate all its businesses to build synergies. By relocating plant manufacturing to locations for lower product costs, the company builds higher relocation costs and loses synergies due to that. Whereas consolidation for manufacturing facilities will build synergies, reduce production costs and increase the company's profit margin.

Finally, Samsung seems to rely heavily on its design and manufacturing technology and its focus on marketing and sales of its products is minimum. Therefore, an aggressive marketing plan for Samsung products should be a commitment for the company's managers. The marketing should be concentrated on those products that are "hot" in the consumer eyes, such as integrated cell phones, digital appliances and LCD TVs. Is essential that Samsung's advertisements are aiming towards the high growth market such as the US and Indian markets, in order to keep its revenues increase. Furthermore, Samsung needs to aggressively market its products in the global market, especially in places like India where there is an exceptional growth opportunity in the technological field. Another way to maintain leadership on the sales of its products, the