Samsung Electronics

The type of change undergone by Samsung can be characterized as evolutionary taking into account the various strategic steps through which the company has been exposed by incrementally introducing changes with an aim achieving the desired levels of transformation. The major aspects seen with regard to change process include the institution of gradual activities and processes aimed at changing the market scene (Mark 2001, p.34). According to Balogun and Hailey’s framework:

Time:  Samsung has phenomenally reduced the time taken to roll out new product designs down to 6 months while 78% of cost, quality and delivery are effectively determined at initial development stage.

Scope: Samsung has largely broadened its product portfolio.

Preservation: Samsung has preserved its manufacturing initiatives by refusing diversification into software domain.

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Diversity: numerous products ranges are currently being produced by Samsung. These include large LCDs screens, mp3s, and camera phones

Capacity: Samsung has gradually improved its investment in key technologies through research and development initiatives.

Readiness for change: Samsung director’s efforts to changes the management aspects including management team and employees numbers.

Power: the up scaling of Samsung products from discount stores such as Wal-Mart and k-mart to expensive stores such as Best buy and Circuit city.

Jong-Yong Yu has been instrumental in driving the organizational change initiative through his decision to produce virtually all components and establish partnerships with software firms. He also introduced pricing competition strategy by dispelling the phenomenon of being a low cost supplier of components to their competitors. This can also be seen through his scouting for ambient location in order to keep low manufacturing costs for its product ranges. His effort is evident in his turn-around efforts at the time of economic crisis in Asia, for instance, by closing down poorly performing entities like coffee makers and laying off 30000 workers. Furthermore, he instituted manufacturing objectives in addition to his impact upon management style through appointment of new staff, for instance, Eric Kim as marketing director.

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Samsung enhanced its innovation and through production of more varieties of products, from television sets and microwaves to LCD screens and CDMA phones. Diffusion of ideas in the organization was essentially achieved through re-orientation of the firm by developing new capabilities as seen in appointment of new managers and engineers. This is also evidenced by transition from a seniority based system to a functional merit based system, which is entirely phenomenal (Andrew 2004, p.58).

Just 8 years ago Samsung had a ‘brush’ with bankruptcy as it majorly relied upon technology produced by its competitors with regard to television sets and microwave ovens. Furthermore, Brad Aham admits that there still is significant challenge in identifying new the areas, which will potentially give way to the growth of earnings, the fact that Samsung has is yet to reach the highest point of sales.

SWOT ANALYSIS

Strengths

Revolutionary products

Established low cost supplier of components

Regular customer contact leading to new items, for instance, DVD-VCR and PDA phone

Elite staff

Research and development initiatives

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Staying in tandem with changes in other industries (Andrew 2004, p.74)

Weaknesses

Poor adaptation strategies leading to bankruptcy at a time when there was crisis in which Samsung maintained production yet demand was at a critical low point.

Opportunities

Price strategy a new mechanism (Mark 2001, p.23)

Innovation through design and technology enhancements, for instance, Nexio and zipel products.

Threats

Global economic crisis, for instance, the one that engulfed Asia in 1997

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