Final Strategic Plan

Samsung Mobile Devices: Running head: FINAL STRATEGIC PLAN

Samsung Mobile Devices: Final Strategic Plan Darryn Urueta University University of o f Phoenix

BUS 475 Patricia Hudson March 22, 2011

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Samsung Mobile Devices:

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Samsung Mobile Devices: Final Strategic Plan This paper will reflect a descriptive strategic plan for Samsung Mobile Services, which will include implementation of strategies and tactics that will assist the company in att aining its business goals and objectives. Additionally, this paper will explain three methods to monitor and control the proposed strategic plan and recommend actions necessary to address ethical, legal and regulatory issues faced by the Samsung S amsung Corporation. Business Structure of Samsung Mobile Services: y

Industry: Digital Mobile Communication --- Specialization: Consumer Electronics

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Product: A myriad of mobile phones to include Smartphones and touch screen input devices

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Customers: Tech savvy and not so tech savvy consumers who are active and need the means to communicate while on the go.

The creation of mission and visi v ision on statements stat ements is key elements that comprise the strategic planning model for any business. Strategic management is defined as the set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company¶s objectives (Pearce & Robinson, Ro binson, 2009). Whether the endeavor is to establish a new business or re-engineering the direction for an existing exist ing company, the basic goals and fundamental philosophies must be developed in order to assume a strategic bearing. Subsequently, the issues at hand must be clearly defined as strategic matters so as not to expend energy on the wrong path. This paper will further discuss the guiding principles by w hich the mission and vision statements work congruently to unify the values and objectives of the company.


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Mission Statement The purpose of a mission statement for a business is to endorse the principle of the company by articulating the objectives of the business that corresponds with the product or service offered in the market place and the ultimate characteristics of the company that distinguishes it from the competition. The mission statement classifies what type of marketplace a company will enter. This encompasses a study of buyer requirements and consumer desires. A mission statement, while broad in scope, enjoins all stakeholders towards the pursuit of profit, success and longevity. It should state the social and or political requirements that are needed to exist and identify how the organization will recognize, foresee, and react to those needs. The Samsung Corporation will become a global leader in the digital age. Offering multifaceted products that span ethnic and social boundaries, Samsung provides products to enrich lives. Contributing to society at large by being a responsible global citizen, Samsung will create products and approach business that effectively contributes to a better world. At Samsung, it¶s all about knowing who the customers are, what they want and earning t heir trust. Samsung will do this by tireless devotion to customer support; before, during and after the sale. Samsung mobiles devices combine cutting edge technology with innovative features to help customers do much more than simply talk on the phone. From smartphones with the all new Android 2.2 operating system, to the Galaxy Tab, a multi-media powerhouse, Samsung gives you options for today¶s fast paced lifestyle. SWYPE® technology allows the user to quickly compose text messages while on the go. The Galaxy Tab features two web cameras, enabling video chat coupled with the ability to capture and share photos simultaneously. Samsung mobile devices are designed to adapt to the consumer, affording a rich media experience while remaining easy to use.


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Vision Statement The vision statement of a business is just that; where t he company sees itself in the future. It details how the company plans to grow and expand. The vision statement should be dynamically worded to engage and motivate the employees of an organization to be a part of something bigger than themselves. An effective vision statement is one that broadens an organization¶s image of itself. The Samsung vision is ³Inspire the World, Create t he Future.´ The vision promotes the leveraging of three key elements, ³New Technology,´ ³Innovative Products,´ and ³Creative Solutions.´ Samsung¶s plan is to reach $400 billion in revenue and become one of the world¶s top five brands by 2020 (Samsung, 2011). To assist in this goal, the company has established three strategic approaches: ³Creativity,´ ³Partnership,´ and ³Talent.´ Additionally, Samsung looks to expand beyond the consumer electronics market and into the fields of medicine and biotechnology. Guiding Principles The guiding principles of an organization are deeply held beliefs which serve to help the company persevere regardless of changing circumstances, goals, management or basic work function. In a sense they are norms integral to defining what is most desirable in the course of daily work. The Samsung Corporation believes that rigorous adherence to values are at the core of every decision that is made. The company holds true that: 1.

There will be equality in the workplace. Although different jobs require equally

different descriptions, everyone will be challenged to add value to the work they perform. 2.

Each person operates from a unique set of core values and as such the company

strives to ensure these values are understood and respected to the fullest extent. 3.

Employees are the most important asset of the company. While balance sheets


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and annual reports reflect an organization¶s health, so too do its employees. The human capital of a company is the driving force behind success or failure. 4.

Diversity is not only welcomed, but encouraged. Through multiple viewpoints

and personal experiences an organization endeavors to achieve the richest potential. Samsung advocates genuine appreciation for and integration of the vast variety of skills, backgro unds, experiences, generational differences, and beliefs that diverse employees bring to the workplace. 5.

Company operations are to be shared with employees. In this way, Samsung

employees will be able to contribute and make appropriate decisions having been given the relevant operational information. 6.

Our management is the most powerful agent for good in the organization. Our

managers will empower the employees and positive reinforcement when applicable. The job of managers is to develop and coach all employees without regard to skill level or competence. The mission, vision and values of the Samsung Corporation influence the strategic planning that affects innovative thinking and co llaboration among all levels. The devotion to talent and technology is exemplified by creating superior products and services that contribute to a better global society. To further guide the company, Samsung utilizes the tenets of compliance with ethical standards, respect for customer, shareholders and employees, maintaining a clean organizational culture, caring for the environment and acting as socially responsible corporate citizens. Samsung values the employees that make up the company by recognizing them as the most important asset. However, the other facet of the equation is the customer. Samsung has created a Quality Charter that exhibits the commitment to world class customer care. The charter comprises a pledge to do five things; be customer centric, stay true to t he basics, demonstrate


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professionalism, provide quality workmanship and create customers for life. Samsung has invested in quality management system upgrades, strengthening specialized skills at contact points and standardizing a global customer response system. These help to give Samsung a competitive advantage in the mobile device industry. An effective strategic planning model enco mpasses many unique tools. In an effort to capture all of the pertinent data necessary to make informed and educated choices in a business environment, a SWOTT analysis is a vital piece of the puzzle. This tool provides a cogent evaluation of a company¶s strengths, weaknesses, opportunities, threats and trends. Another feature of this tool is the ability to give a business the 30,000 foot view of the current operation in order to generate strategic alternatives. Samsung uses this analysis with the e xpress purpose of identifying the internal and external variables within the e xisting business as well as the outside competition. It is important to acknowledge and understand these variables as they can have a significant effect on how the company competes in their chosen market. In short, the SWOTT gives an enhanced perspective on how to approach and develop the future strategic planning focus. The external factors that Samsung must take into account in terms of trends are legal and regulatory issues, economic environment, the competition and technological advances. All of these factors serve to either guide or derail the business depending on how they are examined and positioned. Business taxation is important in that a business must keep abreast of legal and regulatory laws. The Internal Revenue Service (IRS) will gladly remind individuals and businesses of their fiscal obligations; however it is the responsibility of the business stakeholders to ensure they are in compliance with all applicable federal regulations. This can beco me increasing difficult if they business is of foreign origin operating on U.S. soil. The business


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needs to be authorized as a licensed entity in order to process the required tax documentation. In addition, Samsung requires different forms of licensing to ensure op erations will not be interrupted or disallowed altogether. These include the proper requirements from the Federal Communications Commission (FCC) and the intricate area involving state and local government to allow the shared use of mobile device transmission towers. The economic factor is critically important to Samsung during these times of personal and governmental financial insecurity. Although co nsumers need to have the ability to stay in touch with one another, Samsung recognizes the sacrifices that families must consider and strive to make their mobile devices affordable even under the most trying circumstances. It requires an enormous budget to operate its mobile communication division, $2,846,955 million in Korean Won (Samsung, 2009). This earmark is offset to the positive by Samsung¶s strong sales in the telecommunications segment $139,000,000 million in Korean Won (Samsung, 2009). Even in times of economic uncertainty, Samsung continues to keep a firm grip on the mobile device market by offering versatile and feature rich devices at affordable prices. Competitively, Samsung remains one of the top manufacturers of mobile entertainment devices. The world we live in is ever changing. Samsung understands that to remain in the market and thrive, the status quo must be challenged. Samsung has established an Open Innovation system in their research and development hubs with the objective being to expand strategic partnerships with the research communities in Korea, North America and t he United Kingdom. Samsung¶s is in the process of restructuring the business to focus on life solutions. These solutions enjoin the medical and biotechnology fields, renewable energy sources and consumer conveniences. The design efforts employed by Samsung endeavor to incorporate personality into the product which in turn embodies the image of the brand. To confirm


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Samsung¶s commitment to the consumer they have set up a network for design centers around the globe to encourage strategic design-oriented management principles. Samsung¶s competitive edge will be strengthened by consumer centric designs that combine technology and enjoyment. The technology factor cannot be emphasized enough within the Samsung SWOTT model. After all, it¶s through technology that Samsung has positioned itself as a world leader in mobile device deployment. The very basis for Samsung¶s appeal is that the products touch the hearts of consumers. From mobile phones with touchscreen capability to cutting edge 3D televisions, Samsung delivers intuitive user inputs to yield personalized user experiences. The key to Samsung¶s success lies in the core belief that building products from the consumer point of view is inherent to brand value and loyalty. Technology changes rapidly; in some cases overnight. Samsung understands this obstacle and meets this challenge head on by lowering the learning curve in new product design without compromising on style and function. Samsung leads the way with the philosophy of the 4C¶s: content and services, connectivity, creativity and component capability. As Seungho Lee, manager at the Affiliated Company Sales Branch in Korea so eloquently puts it, ³We make a habit of listening to the voices of our customers, drilling down to analyze every minor detail. If we learn what customers want from our products, we can more quickly develop next generation innovations that they hadn¶t even thought possible. We want to guarantee that our customers remain satisfied.´ The internal factors that Samsung includes in the SWOTT analysis are those of strategy, culture and the process and system. The strategy factor is the most important as this forms the framework for the analysis as a whole. The development of company expansion and success depend on how well the strategy function of the exercise is handled. The strategy vision takes into account where the business currently is and where they want it to be. To strategize means to


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plan careful, measured steps that ensure success. They are not to be rushed into execution without thoughtful input from all relevant members; otherwise the plan is to fail. The internal factor of culture is inclusive of all walks of life; from the early adopters o f technology to the busy housewife who has limited time to learn complicated features of a new phone. Culturally speaking, Samsung has worked tirelessly to become a company that people respect ± not only for their products, but because of what the company gives back to the global community. In countries around the globe Samsung has committed both educational resources and human capital in the form of electronic devices for disadvantaged schoo ls to participating in charity events and philanthropic actions in the spirit of hope. Process and systems comprise a concentrated focus on the supply chain. To remain competitive, Samsung engages in active collaboration with suppliers. Through this effort they have created the Partner Collaboration & Enhancement Office. This group acts to support the suppliers by offering technical and financial support. A core emphasis is on training and guidance for both Samsung and its partners in developing technology jointly, rather than singly. The goal of this process is to augment supplier competitiveness that result in operational improvements, cost savings and inventory reductions. To provide a snapshot view of how the Samsung Corporation envisions the strategic planning process, the SWOTT chart below is provided.


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The first issue that can be observed from the analysis is that although Samsung retains a robust product line, there exists the possibility of the mobile device market becoming over saturated to the point where the competitive advantage is nullified. This can be overcome by Samsung¶s commitment to creating a user intuitive experience t hat enriches the lives of the consumer rather than providing just another electronic device. A second issue that arises is that the all too prevalent economic downturn. As political unrest continues to be at large, prices for commodities will rise. This will result in price increases for raw materials. To combat this challenge, Samsung reinforces the company¶s pledge to support and foster growth with its supply partners.


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The biggest opportunity to be had is that of entry into the medical and biotechnology field. As Samsung found its roots in the e lectronic entertainment arena, this will pose a challenge with regard to design and engineering of products out of the niche market that the company has enjoyed. To address this issue, Samsung takes bold steps to create think tank gro ups and committees that seek to utilize creativity and connectivity as stated in the 4C philosophy to deliver devices designed to give the user the same intuitive experience as w ith the mobile device line. Communication Plan Written Communication: Written communication is the easiest form to review for clarity. The ability to reference material makes it a valuable asset for large audience communication. This method also allows for the reader to review at convenient times, but still be held accountable for the contents. Methods used can include email, memos and newsletters. Oral Communication: The use of oral communication, while quicker than the written word can pose obstacles if not utilized in the correct fashion. The target audience must be taken into consideration. The expectations of the stakeholders should be analyzed when choosing to use this method. To effectively communicate a strategic plan requires the use of good vocabulary, active listening skills and the use of nonverbal tools such as body language. The overall success of oral communication lies in the nurt uring of two way dialogue between members of the organization and affected stakeholders. Only in this manner can an environment of mutual respect and trust be developed towards accomplishment of company objectives. Balanced Scorecard The balanced scorecard is a strategic planning instrument that plots an organization's strategic goals into performance metrics in four perspectives: financial, internal processes,


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customers, and learning and growth. These perspectives provide advice as to how well the strategic plan is formulated so that changes can be made as required. The balance scorecard structure is represented as a grouping of four intrinsic elements that in turn encompass the relevant objectives, measures, targets and initiatives that determine the effectiveness of the strategic plan. The word scorecard reflects quantifiable performance and balanced denotes that the system is balanced between: -

Short and long term objectives

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Financial and non-financial measures

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Lagging and leading indicators

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Internal and external performance perspectives

Additionally, the balanced scorecard hones in on the performance using metrics within the four elements. These metrics should be limited in number so as to avoid an inordinate amount of data and dilute the intent of the measures with irrelevant data. T he measures should be limited to ensure that parameters can be efficiently measured for each included perspective. The balanced scorecard essentially forms a cause and e ffect relationship among the performance indicators. To develop the scorecard from a practical standpoint, the business must define: -

Strategic objectives - what is the goal?

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Measures - how progress will be measured.

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Targets - the target value sought for each measure.

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Initiatives - how the target will be achieved.


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The development process helps organizations clarify its purpose by first reviewing and expounding the business strategy and then selecting measures based on that strategy. The goal of making measurements is to permit stakeholders to see the ir company more clearly, from many perspectives in order to make better, long-term decisions. These measurements must be interrelated; the scorecard approach helps stakeholders understand how measures influence one other. By having four different perspectives the scorecard promotes an overall balanced view o f any organization. To support the business strategy, metrics must be created to measure the


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effectiveness of the scorecard elements (Kaplan & Norton, pp1-30, 369-80). Financial perspective ± Samsung mobile services seek to increase the return on equity by 12 per cent. Further, realize a 15 per cent growth in revenue, a 6 per cent decrease in production costs and a 4 per cent decrease in capital expenditures. Customer perspective ± Samsung mobile services seek to enhance market share by 5 per cent, increase export sales by 10 per cent, increase sales kiosks by 8 per cent and obtain competitive pricing. Internal process perspective ± Improve production standards by incorporating enhanced quality check procedures that capture 25 percent more line produced phones. Eliminate defects in workmanship by an additional 10 percent. Provide technical awareness and skill for multi-tiered levels of employees. Learning and Growth perspective ± Involve the employees in corporate affairs. Instill leadership aptitudes at all levels. Become a customer centric culture (Punniyamoorthy, M., & Murali, R., 2011). Once the scorecard model has been developed with appropriate metrics in place, the model needs to be monitored over time. In some cases the measures set are achieved and in other cases, not. For some factors, actual performance is greater than targeted performance, for some it is less. Therefore, for the decision makers there may be uncertainty regarding the direction in which the organization is going (Punniyamoort hy, M., & Murali, R., 2011). To meet this challenge, specific weight should be given to the parameters set in the scorecard model. In other words, benchmarks can be constructed that will serve to deduce a distinct value for comparing the target performance and the actual performance of the organization by taking into account the


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weight assigned to each factor by considering the users frame of reference. A goo d balanced scorecard must contain a mix of both lag and lead indicators. A leading indicator can be considered a driver of lagging indicators. There is an anticipated relationship between the two indicators which suggests that improved performance in a leading indicator will drive better performance in the lagging indicator (Niven, Paul, 2006). Cash ± This is a lagging indicator, it is a historical measure and represents previous results of operations. Product appeal - This is a lagging indicator that provides past performance data on how satisfied customers are with the product. Power features index ± This is both a leading and lagging indicator. It is a leading indicator of market share and product appeal and can impact revenues by indicating when sales prices can be increased. This metric is a lagging indicator in that it provides past data on how Samsung¶s product compares to competitors. The world of business process management is ever changing and evolving. To provide a roadmap for success and measurement of performance, a balanced scorecard is a vital tool to assist managers and decision makers in the course of developing operational strategies. The balanced scorecard usually includes both company targets and business entity aims, which are then honed into individual measures and targets. It's a very adaptable model, designed to be accommodating towards many organization requirements. Strategic Direction Samsung Mobile Devices caters to a widespread market. The users of mobile technology are vast and growing each day. Innovation is a crucial element to the company. New technologies are being introduced almost daily, so speed is of the utmost importance in order to


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remain competitive. Samsung will use a collaborative mix of people, global research and development and a strong commitment to ongoing investment. The company¶s strongest asset is its people.They collaborate on strategic technologies for the future advances designed to forge new market trends and set new standards for excellence. Samsung's R&D organization has three layers. The Samsung Advanced Institute of Technology (SAIT), Samsung's technology co mpetitiveness in core business areas, identifies growth engines for the future, and oversees the securing and management of technology (Samsung, 2011). The company will demonstrate its commitment to investment in the research and development by investing 9% of the sales revenue to this end. The company incorporates a closely linked network of global research and development facilities in nine countries around the globe. These centers are tasked with recruiting and hiring top notch talent who share in the vision of the company and strive to develop technologies that inspire the world. Samsung Mobile Services enjoys a distinct advantage by offering the latest mobile technology at an affordable price. The devices provide interactivity on an unprecedented scale. Samsung¶s functional experts encourage customer interaction to voice comments, complaints and of course, kudos. Samsung Mobile is managed by a team of highly technical qualified individuals whose skills and experience afford the company the capacity to think beyond the norm and produce products that truly make a difference in people¶s lives. In the future, Samsung looks to expand into newer markets such as the medical and biotechnology industries. The company will accomplish this by leveraging the already strong global partnerships with suppliers, but also by associating the familiar and trusted Samsung name to new technologies. Samsung strives to enter the emerging field of nanotechnology whereby hospitals and laboratories can benefit from highly advanced products that are significantly


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smaller in scale, but by no means less powerful than their counterparts who feature bulkier footprints. Medical practitioners will be able to enjoy a more user friendly experience while in the office by utilizing front and rear cameras on all tablet based computers in addition to the robust display screen that feature MagicSuite techno logy that is easy on the eyes, can be comfortably viewed from any angle and has the potential to double energy savings. The corporate and business strategies of the co mpany are directly influenced by its mission, vision and value statements. The core belief in these statements is to offer a feature rich, value added experience to every customer. The strength of the company exists in the possibility of aligning individual employee goals with overall organizational goals. The aim is to make efficient use of all available resources, effectively using market ing strategies, relying on a strong research and development team and the tireless commitment to investing back into the company. Of course there is always risk involved with any a mbitious endeavor. For Samsung Mobile, the cost of doing business on a global scale can become tenuous by way of increasing tensions in oil producing countries that may result in the loss of international trade agreements. Natural disasters such as the recent events on Japan can have a devastating effect on the company¶s ability to remain competitive. Evaluation and Control of Samsung Mobile Services The management will collect data from sales, profit, expenses and liabilities for the express purpose of assessing the effectiveness of the strategic plan and its continued direction. Performance evaluation system; Samsung will measure the p erformance of its employees in conjunction with their peers and immediate customers. The evaluation will be linked to any and all appropriate salary increases or promotion. If it becomes apparent that the e mployee does not meet the expectations of the company, he or she will be re-trained and supported in their


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success. Code of Conduct; all employees of the company will abide by the global code of conduct as set forth by the executive team. The code is guided by five distinct principles: Principle 1. We comply with laws and ethical standards Principle 2. We maintain a clean organizational culture Principle 3. We respect customers, shareholders and employees Principle 4. We care for the environment, health, and safety Principle 5. We are a socially responsible corporate citizen Furthermore the company will expect each employee to embrace and exemplify the following 7 factors of a World Leading Company. Dream, Vision & Goal, Creativity & Challenge, Insight & Good Sense, Technology & Information, Trust & Credibility, Speed & Velocity, Change & Innovation. Ethical Concerns; the company has developed many benchmark achievements to assist in addressing ethical dilemmas that may arise. They range from recruiting and retaining global talent to respecting human rights and diversity. With diversity come a slew of challenges that must be proactively approached. The company will not tolerate nor will it sponsor any entity that chooses to knowingly engage in child labor. Additionally, the company will pledge to conduct labor relations in a cooperative format by creating a formal grievance reporting procedure. Samsung will conduct regular education courses to help employees build a desirable hu man network and protecthuman rights. We have a ³Mutual-Respect Corporate Culture´ course and ³Workplace Manners´ course. The mutual-respectcorporate culture course is an annual mandatory course for all employees to help them protect human rights, prevent sexualharassment and improve relationships (Samsung Integrity Management, 2011).

Samsung Mobile Devices: Legal issues; the company will adhere to all government rules and regulations as they apply to the industry. These include Federal Communication Commission (FCC) standards as well as specific regulations with regard to operating in a foreign nation. The company will maintain detailed records of all financial dealings in acco rdance with Securities and Exchange Commission (SEC) rules. Corporate Social Responsibility: The company strives to promote sustainability thereby contributing to a better global society. The philosophy for Samsung Mobile Services is ³Harmony between Business Vision and Vision for Society. This means that t he company will make every effort to ensure this philosophy by following the roadmap of talent management, integrity management, green management, social contribution, partner collaboration and world class products and services.

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References Pearce, J. A., & Robinson, R. B. (2009). Strategic Management. Formulation, Implementation, and Control, Eleventh Edition (11th Ed.). New York, NY: McGraw-Hill. Samsung Electronics Ltd. (2011). Retrieved February 27, 2011, from Samsung Corporation Web site: http://www.samsung.com/us Frank Irby, Initials. (2006). Conceptualizing a business. Associated Co ntent, Retrieved fromhttp://www.associatedcontent.com/article/2133461/conceptualizing_a_business_.html Samsung 2009 Annual Report. (2009). Retrieved March 10, 2011, from Samsung Corporation Web site: http://www.samsung.com/us/aboutsamsung/ir/financialinformation/annualreport/downloads/ 2009/SECAR2009_Eng_Final.pdf Kaplan, R.S. and Norton, D.P. (n.d.), The Strategy Focused Organizations, Harvard Business School Press, Boston, MA, pp. 1-30, 369-80. (Niven, 2006) Niven, P. (2006). Balanced Scorecard Step By Step. Hoboken: John Wiley & Sons, Inc. Punniyamoorthy, M., & Murali, R. (n.d.). Balanced Score for the Balanced Scorecard: A Benchmarking Tool. Retrieved March 15, 2011, from Emerald Insight Web site: http://www.iem.unifei.edu.br Schwartz, K. D. (2007, July 13). Balanced Scorecard Definition and Solution. Retrieved March 15, 2011, from A CXO Media Inc. Web site: http://www.cio.com/article/123750/balanced_scorecard_definition

Final Strategic Plan

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