Strategy Adopted by Samsung
According to Chen et al. (2014), Samsung group, founded by Byung-Chull Lee in Korea, has been awarded a gold and two silver awards for their brand. Samsung is now at the number one position which has gained most of IDEA’s awards in the last five years. There was not the case some years back. It was noticed, that the company was below the average performance level. They were unable to attract the customers towards their brand. An active step in changing the market share and demand pattern of their products was necessary.
To upgrade their level of performance as a multinational company and to expand its business with a comparative advantage worldwide, Samsung took the decision to adopt design strategy (Buckley, Burton and Mirza 2016). This added an element of differentiation of its products with the others goods that wee in the market.
The founder of Samsung group noticed, that the product of his company has been focussing on volume and cost of production, while reducing the customer value. They are maintaining a policy which focuses on quantity rather than quality. In order to attain specific changes in the demand pattern for their product, a new policy was generated in the economy which would create the value for the product through its design (Girod and Whittington 2016).
Samsung created a design strategy to be implemented in their company, that would give the company a new identity and a new scope for economic growth of the company. they generated a tear of design revolution for the Samsung group. the workers of the industry were send to different companies related o furniture manufacturing, cosmetics, fashion industries, etc. where the people were employed for a span of six months to two years. this helped reemployed to think out of the box. on their return, the employed were able to come up with new ideas that would help in framing the design strategy of the company. Samsung created world class design infrastructure that helped in improving the capabilities of the company by including designing labs, research centres and improved technologies in manufacturing their products.
In order to implement the design strategy plan, Samsung had to break free itself from the traditional beliefs of the people and the country. Traditional belief had created a boundary to the thinking capacity of the people, which had led to a considerable fall in the growth of the organization (Whittington 2015). Moreover, designing products for the international market, seeks those employees who are free at thought and has moved outside of the country. In order to maintain the communication plan and understanding between the engineers and the designers of the country, one year programme has been generated to facilitate the same.
Samsung has seen stark difference in their growth level since the adoption of the design strategy that they have completed. This strategy has now made the company reach to those success levels, which has made it reach the highest rank in developing the best design strategy.
Samsung Strategies Related to the Theories of Richard Whittington
Richard Whittington had framed the understanding of strategy in four ways. The concept of strategy has been used by all the companies in order to raise their standard. According to Richard Whittington, there are namely four kinds of strategies that are followed by an organization to upgrade their development level. These four strategies are classical strategy , processual strategy, evolutionary strategy and systemic strategy (Yin 2013). Here, classical and evolutionary approaches aim at achieving profit for the company, by implementing those strategies. On the other hand, evolutionary and systemic strategy aims at achieving other possible outcomes, than only seeking profit for the organization.
Samsung has been implementing various strategies, in order to gain their market share and expansion in business . These operational strategies that have been framed by the company, could be related with the theoretical strategies framed by Richard Whittington (Heizer, Render and Munson 2016). The two theoretical approaches aligned with the strategies framed by Samsung are classical and evolutionary.
Classical Approach – according to the classical approach , the classicists frame a strategy which would use the resources of the company in such an efficient manner, that would earn great returns for the company (Ward and Peppard 2016). The top managers of the company , needs to frame such an efficient strategy that would aim at maximising the profits of the organization. The classical approach is considered as the most stable approach for mature companies that aim at gaining stability in their productivity levels. The strategy under this approach is planned, framed, formulated and controlled by the top managers or the owners of the firm.
Samsung performs the classical approach of strategy making by implementing the design strategy approach for achieving comparative advantage globally. It aims at efficiently using the resources of production, thereby raising the efficiency of production. The employees are made to analyse the situation of design strategy by making them think out of the box. The people were made to join various other organizations related to the furniture manufacturing, cosmetic industries, fashion industries, for a certain period of time. This gave them the advantage of raising their knowledge in designing better models of 6he products. After joining the company, the employees had better developed ideas, which they would not come up with earlier. All the decisions to be taken regarding the design strategy were planned, framed, and controlled by the owners and the top managers of the organization (Whittington 2014). This gave them the authority to maintain equal and strict approach in the company, thereby not compromising with the strategy change to be implemented.
The employees had to break themselves free from the old traditional and Confucius believes that were held within the country. The design strategy were followed by such individuals that had never travelled to faraway places. In order to design a product to be marketed internationally, needs such employees who are diverse in cultural beliefs and are ready to gain knowledge regarding the cultures and beliefs of the other countries (Johnson et al. 2013). Samsung aims at raising the communicative approach between the designs of the product model and the engineers by planning a one year programme, which aims at planning a full time six days a week classes for the employees.
All the strategies mentioned above, aims at focussing on the classical approach theory as stated by Richard Whittington. This has helped Samsung in gaining the appreciated growth which makes the company gain comparative advantage internationally.
Evolutionary Approach - according to the evolutionary approach mentioned by Richard Whittington, economic environment is continuously changing (Slack 2015). This change in the economic environment, aims at survival o the fittest in order to maximize the profit of the organization. As the markets are unpredictable in nature, it is considered by the evolutionist that in order to survive in the market, there must b a raise in the profitability and in the efficiency of the company to perform. They aim at keeping their costs low , raise the efficiency of production and keep various options open. In order to compete with the other companies, it is quite important for the referred company to analyse the situation and raise the stability of their survival in the market. Evolutionists believe that framing a product by maintaining differentiation from the others, would help in yielding higher profits and stability in economic growth.
Samsung’s strategy of achieving comparative advantage globally. Samsung mad various research labs, improvement in technologies, collaboration with other companies, and use of advantageous cost effective techniques, to lower their cost of production. they designed a better process of the delivery system. at first, Samsung modified the product creation process. the company had lack of interaction with the engineers, marketers ad the designer of the company.
Samsung has planned to provide their customers with real benefits. they launched hybrid products with the combination facilities of two products together into one, that would help in providing the customers with the best facilities in one product. this strategy is completely related to the theories of Richard Whittington. following the evolutionist theoretical strategies Samsung aims at achieving the profitability and stability in their approaches.
With their powerless performance many years back, Samsung had to implement various strategies which could help in providing them with an approach to change their current scenario. This was only possible by providing an innovation to the company. Focussing on quality rather than quantity was one of the most important approach for the organization. By implementing the design strategy , Samsung has helped itself in raising the standards of the company, thereby focussing in attaining stability in the market. The strategies framed by the company is relatable to the theories stated by Richard Whittington. These strategies have created the current image of the company, which has exceeded its competitors and raised its par with respect to market share, profit margin and productivity.
Buckley, P.J., Burton, F. and Mirza, H. eds., 2016. The strategy and organization of international business. Springer.
Chen, T.F., Ko, C.H., Huang, C.C. and Wang, W.C., 2014. Green Management in High-Tech Industry: A Case Study of Samsung. In Advanced Materials Research (Vol. 869, pp. 737-740). Trans Tech Publications.
Girod, S.J. and Whittington, R., 2016. Reconfiguration, Restructuring and Firm Performance: Dynamic Capabilities and Environmental Dynamism.Strategic Management Journal.
Heizer, J., Render, B. and Munson, C., 2016. Principles of operations management: sustainability and supply chain management. Pearson Higher Ed.
Johnson, G., Whittington, R., Scholes, K., Angwin, D. and Regn?r, P., 2013.Exploring Strategy Text & Cases. Pearson Higher Ed.
Slack, N., 2015. Operations strategy. John Wiley & Sons, Ltd.
Ward, J. and Peppard, J., 2016. The Strategic Management of Information Systems: Building a Digital Strategy. John Wiley & Sons.
Whittington, R., 2014. Information systems strategy and strategy-as-practice: a joint agenda. The Journal of Strategic Information Systems, 23(1), pp.87-91.
Whittington, R., 2015. The massification of strategy. British Journal of Management, 26(S1), pp.S13-S16.
Yin, R.K., 2013. Case study research: Design and methods. Sage publications.