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CASE ANALYSISby ANNA MAYOR, THEIA ORDIALES, JOSEPH YAO

BACKGROUNDSAMSUNG:Biggest IT firm and market leader in consumer electronics

Known for heavily investing in design and product innovation

Plans on conquering industries where it doesnt have an identitySTATEMENT of the problemWhat are the strategies that Samsung needs to execute in order to successfully penetrate the green technology and the health business, which cover five new business areas: Solar Energy, LED Lighting, Electric Vehicle Batteries, Medical Devices and Biotech Drugs? OBJECTIVESTo make it in the green technology and healthcare business

To generate $50 billion worth of revenue from these five new business areas in 2020 and $400 billion in the electronics industryAREAS OF considerationBlue Ocean Strategy: The focus has been on finding whats likely to sell before consumers even know they want it. Samsungs reinvention: The importance of design is the key to create a lasting advantage in the industry. Samsungs brand identity: In the past, physical design was the focal point. In the future, the user interface will be emphasized more.Other issues: $20 billion budget, Samsung as competitors supplier, Perpetual crisisAREAS OF considerationGetting to know the businesses: What are the risks?Solar and LED : OversupplyElectric vehicle batteries may be in similar straits if demand for the cars they might power remains sluggish.Medical devices and drugs: Crosshairs of Chinese Companies

Make or break - From Infotainment to LifecareTHEORETICAL FRAMEWORK(SWOT Analysis)StrengthsWeaknesses1. Samsungs prestige1. Samsungs product life cycle2. Excellent research and design team2. Customer behaviour on consumer electronics3. Design as the unique selling point3. Competition4. Samsungs reinvention4. Experience in penetrating new markets5. Manpower development and new design centers5. No legal identityTHEORETICAL FRAMEWORK(SWOT Analysis)StrengthsWeaknesses6. Proven success record6. Shared information7. Relevant product lines7. Brand loyalty8. Thinking ahead9. Market positioning10. Veering away from Confucian hierarchiesTHEORETICAL FRAMEWORK(SWOT Analysis)OpportunitiesThreats1. Green technology and healthcare = relevant in the 21st century (Socio-cultural, Technological)Corruption (Political)2. Decreasing costs of power and empowering poor countries (Economic)2. Government issues, e.g., tax evasion (Political)3. South Korea = highest living standards (Socio-cultural)3. Competition from China and Japan (Technological, Economic)4. Increase in South Koreas gross exports (Political and Economic)4. Asian financial crisis (Economic)THEORETICAL FRAMEWORK(Porters Five Factors)RIVALRY IN THE INDUSTRYTough competition among big, established brands

THREAT OF NEW ENTRANTSProduct quality is important

THREAT OF SUBSITUTESCompetition against traditionally used materials

THEORETICAL FRAMEWORK(Porters Five Factors)BARGAINING POWER OF CUSTOMERSCustomers are faced with many substitutes

BARGAINING POWER OF SUPPLIERSPartnership between firms and suppliers is commonALTERNATIVE COURSES OF ACTIONACA #1ACA #2ACA #3Develop product research and manpower for new business venturesChoose (and specialize) which among the 5 product lines is the closest to the existing product lines of Samsung. (For example, Solar Energy and LED Lighting)Stay where they are. (S1, S2, S5, S6 / O1, O2, O3, O4)(S1, S2, S7, S9 / O1, O2, O3, O4)(S1, S2, S6 S8 / O1- O3)(W1-W3, W7 / T2, T3)(W2 W7 / T1 T4)(W1-W7 / T2, T3)RECOMMENDATION AND CONCLUSIONWe recommend alternative courses of actions numbers 1 and 2: Develop product research and manpower, and focus on a specific product line.

Decreased riskDoes not jeopardize Samsungs brand imageMaximizes the budget

ACTION PLANCoordinate with the Human Resource department.

Hire highly qualified individuals in the solar energy or LED lighting industry.

Apply the training and skills development program that has been conducted effectively on Samsungs design team.

ACTION PLANDo product research.

Partner with establishments who have been in the industry for a very long time.

Apply the existing brand image of Samsung to the lifecare industry.