1. continue growing of market share 2. well diversified and differentiated products
3. team product designers and engineers that continues to develop designs of Samsung’s new products
4. Samsung’s rigid seniority-based system replaced with a merit-based system
5. advertising on 55 different advertising agencies around the world and placed them in one firm
The internal weaknesses include but are not limited to: 1. increasing competition as it develops innovative products
2. high investment on research and development 3. focus on mass market instead of niche market
The external opportunities include but are not limited to: 1. high and strong consumer demand for innovative products
2. increasing on electronics consumer markets 3. Young population as a means of expansion of market in present and future
The external threats include but are not limited to: 1. bureaucratic obstacles
2. low-cost Chinese producers 3. sustainability of products in technology industry
V. ALTERNATIVE COURSES OF ACTION
After thoroughly considering and analyzing the internal strength and weaknesses and external opportunities and threats, the possible courses of
action that Samsung can undertake are as follows: 1. Undertake forward and horizontal integration.
2. Product Proliferation 3. Cost minimization
4. Increase sales through market penetration and market development
VI. ANALYSIS OF ALTERNATIVE COURSES OF ACTION Forward and Horizontal Integration
Forward integration is a business model whereby a company takes direct control of how its products are distributed. For example, a company may market
its products directly to consumers rather than selling them to a retailer. Alternatively, forward integration may involve the company simply acquiring the
retailer. This is an effective tool when present distributors are expensive, unreliable, or incapable of meeting firm’s needs; availability of quality
distributors is limited; when firm competes in an industry that is expected to grow markedly; advantages of stable production are high and present distributor
have high profit margins.
On the other hand, horizontal integration is the acquisition of additional business activities at the same level of the value. Horizontal growth can be
achieved by internal expansion or by external expansion through mergers and acquisitions of firms offering similar products and services. A firm may diversify
by growing horizontally into unrelated businesses. This will be a good sort of action when firm can gain monopolistic characteristics without being challenged
by federal government; competes in growing industry and increased economies of scale provide major competitive advantages.
Product Proliferation
Product proliferation occurs when organizations market many variations of the same products. This can be done through different color combinations,
product sizes and different product uses. This produces diversity for the firm as it is able to capture its sizable portion of the market. However, it can also be
considered that marketing so many new products leads to economic resources being wasted; the consumer becomes confused and mistakes are made in the
purchase of products.
Cost Minimization
The process or goal of incurring the least possible opportunity cost in the pursuit of a given activity. Cost minimization is comparable to other objectives,
including utility maximization and profit maximization. This goal, however, is generally used when circumstances constrain a decision. In the case of
Samsung, to maintain its high profit, and recover its investment of research and development it must incur less expenses but maintain those cost that are really
beneficial on the pursuit of quality and competitive products they offer.
Market Penetration and Market Development
Market penetration is a strategy which focuses on seeking increased market share for present products or services in present markets through greater
marketing efforts. This is a good idea if current markets not saturated; usage rate of present customers can be increased significantly; market shares of
competitors declining while total industry sales increasing; increased economies of scale provide major competitive advantages. For example, if there are 300
million people in a country and 65 million of those people have cell phones then the market penetration of cell phones would be approximately 22. This would
mean in theory there are still 235 million more potential customers for cell phones, which may be a good sign of growth for cell phone makers.
Market development is the introduction of present products or services into new geographic area. This will be an effective strategy when new channels
of distribution that are reliable, inexpensive, and good quality; firm is very successful at what it does; untapped or unsaturated markets; capital and human
resources necessary to manage expanded operations; excess production capacity; basic industry rapidly becoming global
VII. CONCLUSION
