Type of paper: Report

Topic: Business, Company, Samsung, Print, Growth, Strategy, Management, Market

Pages: 7

Words: 1925

Published: 2021/01/02

Organization profile

Samsung Corporation is a South Korea international company founded by Lee Byung-Chull in 1938.It sells several electronics and provides services that resemble those of apple in addition to other electronic companies. Most of the Samsung products include cellular devices, tablets, and televisions. The company began investing in substantial research and development in 1980s.It leads to the company growing into an international corporation.
The company separated into four groups after the demise of Byung-Chull. By 1992, it became the global principal producer of memory chips and the second prominent computer chip maker. From 2000s to date, it pioneered the digital age making it the world’s largest phone making company in 2012. Examples of its distinguished smartphone models include the galaxy s series, a note series and the Nexus series. Samsung is the closest Apple competitor in the smartphone market.

Strategic theory

The BCG matrix also referred to as growth share matrix is a commercial planning tool used to portray a company’s brand portfolio and the SBUs (Krogerus and Ppeler 151).It displays them in a quadratic form alongside comparative market shares on the horizontal axis and the rate of market growth on the vertical axis. Large organizations like Samsung face difficulties in the allocation of resources within the business units. BCG matrix, developed by Boston consulting group helps in planning for the management of the various business units in Samsung Corporation.

Application of the strategic model

The matrix is friendly in usage that inspires better decision-making (Bensoussan and Fleisher 90). Samsung is an organization that derives unlimited benefits from BCG matrix specifically when dealing with better administration of resources. The BCG matrix leads to simplification of management within the Samsung group. It offers the best framework regarding allocation of resources within the different units making it an effective tool in the management. There is a quotation in the Samsung homepage that states that their products are their people and their approach to business holds the highest standards. Their aim is an active contribution to the better world (Bensoussan and Fleisher 29). While using the BCG model, the company ought to bear in mind that the design basis its analysis in the internal competitive advantage like minimization of the costs but has no say on the external environment.
Samsung has five business units within the organization (McCormick and Dewing 41). They include the digital appliance business, semiconductor business, telecommunication network business, the digital media business, and LCD business. Samsung provides semiconductor, digital convergence technology in addition to telecommunication. Its workforce is greater than 200,000 workers within 60 countries (Samson and Daft 288). It produces CDMA mobile phones, TFT-LCDs, memory chips, monitors, and VCRs. Samsung has a massive portion of devices making use of Windows operating despite having most of its devices running on Android operational system (Henry 241). The company has subsidiaries in Peru, Chile, Columbia, Mexico and Argentina. The BCG matrix is a square representation. It has stars on the upper left quadrant. The question marks are on the top right side of a square. On the left at the bottom side is the cash cows and finally the dogs on the right.
The location of the digital appliance business unit is in the upper left quadrant implies that it represents the stars. The business unit has the best market shares and generates a lot of cash in the company (Maclntosh and Maclean 83). The company is leading globally in telecommunication, digital media in addition to digital convergence technologies and semiconductors with sales of approximately US$52.2 billion and after deductions income of US$10.3 billion. It has an approximate of 113.000 people in more than 48 countries.
It has received recognition from the world’s largest manufacturer of color TVs, memory chips, color monitors and TFT-LCDs. The high growth rate within the business unit requires an enormous amount of cash. The level of money coming in is directly proportional to the level that is going out. The company devoted to continuous improvement development in addition to growth and explored methods to build stages with the aim of improving the products and the systems (Davenport and Leibold 67). In connection with that, there is the amalgamation of three divisions including the system air conditioning (SAC), home appliances (HA) and residential air conditioning (RAC). All this is the digital devices. The business unit has hopes of delivering the target and dynamic innovations to the markets in South Africa.
The company believes that their action of consolidation the groups will form a solution to customer’s problems and improve the level of services (Jones and Dewing 169). They hope to provide better understandings for the offices and homes of the future and move nearer to their targeted markets (Griffin 200). The stars can change into cash cows in case of sustenance of success until the time of decline in the market growth rate. It is advisable for corporations to invest in stars.

BCG MATRIX for Samsung

The location of the digital media business unit is on the bottom side on the left implying that it is a cash cow. As a cash cow, the digital media business is the leader in the marketplace. The capital created by digital media business is greater than what they consume. The business unit has a high share of the market but a low prospect of growth rate. The consolidated operating profits always go up to 8.12 trillion (Drejer 51). It represents a 91 percent increase yearly (Harrison and John 132). The company rock-solid performance led to increasing the level of sales of the handheld phones in addition to increased demand for display panels. There was placement of 26.25 trillion secured in revenue for the quarter bookkeeping for greater than semi- of the entire earnings of the Samsung group.
The display panel section increased consignments of organic light- emitting diode (OLED) and the liquid crystal display panels. Their use is in the tablets and smartphones and TVs that increased the profits. Samsung is expecting an improvement in the chip business with the recovery of the PC DRAM price. The BCG model helps in evaluation of the strategic position of the company brand portfolio in addition to its potential. There is the classification of the business portfolio into four categories on the basis of the rate of growth in the industry in addition to the comparative shares in the market. It figures out the employees market shares in addition to growth rate and hence helping them in the creation of new strategies. The BCG matrix is the best worldwide despite the fact that it is one of the oldest models formulated ever (Koontz and Weihrich 109). The dual scopes disclose possibility of profitability of the business portfolio. They do so in terms of the cash in need for supporting the unit and the capital produced by it (Lafley and Charan 123). The broad-spectrum of analyzing is to assist in deciding the brand the firm should invest in and the ones that require divesture. It hopes to expand its new product category with the mobile application processors basing on 32 nanometer class process technology.
The company has plans of bolstering its competitive advantage in the mobile phone sector. The achievement will involve the introduction of a high-end smartphone (Lewis 198). The cash cows offer the value needed in turning off the question mark into the market leaders that aids in covering the administrative costs of the company (McCormick and Dewing 179). It helps the company in the clearance of the dividends to the shareholders, servicing the corporate debt and raising funds for research in addition to the development. Investment of Samsung in the cash cow helps it in maintenance of the present productivity level.
The location of the semiconductors business unit is on the top right implying that it is a question mark. The rate of growth is high but has a little share of the market. The rate of consumption of cash is greater than the rate of return. Question mark also means the problem children or the loose money. Business units have a faster rate of growth, and thus they have no potential of turning into stars. Companies with products having potential to grow invest in question marks (Schermerhorn 177). Samsung is one of them and accepted to purchase approximately 10 million shares which is about 23 percent of the total semiconductors. The proposal of the dual corporations is to sell 12 million shares of Sun Edison semiconductors. With that, the sun Edison shares will reduce to 15 million shares, and Samsung will acquire approximately 6.15 million shares. The companies have hopes of jointly raising $262 million from the sale (Robbins and Coulter 315). The market value of a product is dependent on acquiring the leading shares of its market before growth begins to decline. It’s very popular, and in addition; there is a platform on the internet where characters portion their ideas regarding the best methods of making use of BCG matrix. For this reason, any new person intending to have a look at the model always gets assistance in addition to supporting. It is very first in the allocation of resources and gives its application leads to enormous profits.
In the meantime, the demand of the LCD and profits are declining. In relation to that, Samsung wants to focus on new technologies in the maintenance of a healthy competition with its rivals. It will give them a room to make decisions and make more hasty response to consumer’s needs. The improvement in business effectiveness will enable them to provide greater services and products (Chow 190). The dog’s business units are principal entrants for divestiture.
The BCG matrix helps the Samsung group in making better decisions. It gives room for making distinct comparison in measurement of growth and the rate of development compared to the average rate of growth in that particular industry (McCormick and Dewing 80). Managers have the opportunity to make comparisons between the several business units at the time of their choice. There is a simplification of several factors affecting the company.


The new streamlined business of Samsung made it experience success in 2014. Samsung ought to use that as a stepping stone and target product development and initiatives so as to make the coming years successful. The competitors are working hard day and night to outdo Samsung, and thus there is the need for it to remain vigorous (Bell and Zimmerman 99). They ought to prepare for the tests that they are likely to encounter in their daily performance. There is also the need to develop and identify the opportunities that might come along their way.
It will enable them to improve their production processes in addition to ensuring outstanding customer relations. In their current adventure in digital appliances, Samsung has a vision of gearing up in the provision of several technologies that will blow into the connected life in addition to the internet of things. The company ought to analyzes the needs of the consumers and react accordingly to avoid unhealthy competition from the rivals (Jeffs 46).
The company should, therefore, ensure it takes the outer environment into consideration as much as possible. Of importance is that despite its simplicity, challenges may occur at times of measurements (Afuah 84) The Company may not be sure of the competitor to compete with and the determination of market growth. Samsung group should remain alert and ensure it maintains the consumer loyalty to their products. It should focus on its weaknesses and take appropriate measures for it to stay at the top.

Works Cited

Afuah, Allan. Strategic Innovation: New Game Strategies for Competitive Advantage. New York: Routledge, 2009. Print.
Bell, Jeanne, and Jan Masaoka. Nonprofit Sustainability: Making Strategic Decisions for Financial Viability. San Francisco: Jossey-Bass, 2010. Print.
Bensoussan, Babette E., and Craig S. Fleisher. Analysis without Paralysis: 12 Tools to Make Better Strategic Decisions. Upper Saddle River, NJ: FT, 2013. Print.
Chow, Irene. Business Strategy : An Asia-Pacific Focus. Singapore: Prentice Hall, 2004. Print.
Davenport, Thomas H., and Marius Leibold. Strategic Management in the Innovation Economy: Strategy Approaches and Tools for Dynamic Innovation Capabilities. Erlangen: Publicis ;, 2006. Print.
Drejer, Anders. Strategic Management and Core Competencies: Theory and Application. Westport, Conn: Quorum, 2002. Print.
Griffin, Ricky W. Principles of Management. Boston, MA: Houghton Mifflin, 2007. Print.
Haour, Georges. Resolving the Innovation Paradox: Enhancing Growth in Technology Companies. New York: Palgrave Macmillan, 2004. Print.
Harrison, Jeffrey S., and Caron H. John. Foundations in Strategic Management. 6th ed. Mason, Ohio: Thomson/South-Western, 2013. Print.
Henry, Anthony. Understanding Strategic Management. Oxford: Oxford UP, 2008. Print.
Jeffs, Chris. Strategic Management. Los Angeles: SAGE, 2008. Print.
Jones, Tim. Growth Champions the Battle for Sustained Innovation Leadership : The Growth Agenda. 2nd ed. Chichester, West Sussex, U.K.: Wiley, 2012. Print.
Koontz, Harold, and Heinz Weihrich. Essentials Of Management. New York: Tata McGraw-Hill Education, 2006. Print.
Krogerus, Mikael, and Roman Ppeler. The Decision Book: Fifty Models for Strategic Thinking. New York: W.W. Norton, 2012. Print.
Lafley, A. G., and Ram Charan. The Game-changer: How Every Leader Can Drive Everyday Innovation. London: Profile, 2008. Print.
Lewis, Pamela S. Management: Challenges for Tomorrow's Leaders. Mason, Ohio: Thomson/South-Western, 2007. Print.
MacIntosh, Robert, and Donald Maclean. Strategic Management: Strategists at Work. New York: Palgrave Macmillan, 2014. Print.
Robbins, Stephen P., and Mary Coulter. Fundamentals of Management. 5th Canadian ed. Toronto: Pearson Prentice Hall, 2008. Print.
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Schermerhorn, John R. Exploring Management. 3rd ed. Hoboken, N.J.: Wiley ;, 2011. Print.

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