See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/331114761 Analysis of Samsung’s Innovation Strategy Article · February 2019 CITATIONS READS 0 44,604 1 author: Yigit Aslan Nottingham Trent University 32 PUBLICATIONS 2 CITATIONS SEE PROFILE All content following this page was uploaded by Yigit Aslan on 16 April 2020. The user has requested enhancement of the downloaded file. Aslan 1 INNOVATION STRATEGY Analysis of Samsung’s Innovation Strategy Yiğit Aslan Middle East Technical University Northern Cyprus Campus INNOVATION STRATEGY Aslan 2 Samsung is a South Korean multinational company which serves many areas such as information and communications technology, construction, entertainment, and advertising. We can mention that some of their products are electronic components, telecommunication. Samsung's revenue was equal to 17% of South Korea's $1,082 billion GDP. Given that it was a low-cost metoo manufacturer of imitations of Sharp’s microwaves in the 1970s this is a huge achievement. Pivotal to Samsung Electronics’ success over the past decade or so has been the way it has embraced design as the source of competition. Growing from 2 to 900, the Samsung Electronics design team now consistently takes most awards at the prestigious annual design events as the company’s products are time and time again seen as leading the category in performance, quality, and value. The company has over the 500,000 employee that proves the company is a multinational company. The current company’s chairman is Lee Kun-hee and vice chairman is Lee Jae-Yong. Company culture is very important in terms of innovation driver because it helps shape up the productive community within the organization. Moreover, business culture is also powerful to the company because it creates a behavior pattern inside the companies. Samsung has a strong culture in their organization because, in order to become an innovative company and world leader, their employees need to have the same understanding about their business and also business direction. These business cultures not only make Samsung a market leader, but they also teach lessons in struggle and success. One of the lessons thought is that after the company’s world tour, Lee-Byung-Chull noticed that their product sales had not met the expectation because the sale representative did not pay attention to their brand. Moreover, Quality Management becomes the most important idea for their production. INNOVATION STRATEGY Aslan 3 To compete with other companies like Apple, they concentrated on the specific telephone which is Galaxy S. So that they can continue to competition which was ordered by the top management in March 2010. Samsung is not only responsible for the mobile technology but also responsible for great global shipbuilders, a major presence in construction, indeed they are involved in both advertising and game productions. As mentioned earlier, the main purpose of this research is to understand how Samsung can change its innovation strategy from 'fast follower' to 'leadership' for INNOVATION STRATEGY Aslan 4 next communication systems, 5G technology. This model that we mentioned involves four basic components which are effects their innovation strategy. Strategy This is deals with the current strategy which includes targets, existing innovation efforts, end the area where the strategy has to be done. Resource: All the proper preferential and secured assets to innovate. Capabilities To lead and makable the sources to be reached and configured and reconfigured. Processes: It refers all the innovations that lead to an outcome which is made up by the model, innovation strategy means, how a company is improving and opens the resources, capabilities and the corporate processes. For understanding Samsung’s future innovation strategy to transit from follower to be leadership in 5G time, in the future, the gap investigations are fulfilled for strategy, resources, even capabilities, and processes. This process has been an ongoing effort for decades as Samsung has grown. It is difficult to accommodate the elements of both the Japanese and American management styles into a single company which is unique to Samsung company. Mostly, in Japan managements, concepts are characterized by market share orientation, unrelated diversification, vertical integration, emphasis on manufacturing competitiveness and operational efficiency, strict organizational discipline, emphasis on employee loyalty, internal and seniority-based promotion and rewards, and participation of both workers and shareholders in management. The American style management is more focus on profits and revenues. Even, they likely to use outsource manufacturing or move abroad to increase their brand marketing and their marketing capabilities. Samsung both vertical and horizontal diversification, its mentions that manufacturing competitiveness and product quality, being open to competitive recruitment for starting new level positions, careful employee training to improve the standardized workforce, stiff organizational discipline, and emphasis on the loyalty to the all the organizational resemble managerial process. In INNOVATION STRATEGY Aslan 5 addition, Samsung management style is similar to American-style management. Both of them care about technology, brand, and design of the company's’ product. Also, talent requirement and excellent performance are some of the important points of both management style. That's why factors of both style and organically linked, and cannot easily be disassembled and grafted onto the other. Both of these two styles within Samsung directly stems from the fact that it runs a business with big strategic undetermined while maintaining the big amount of manufacturing facilities. This flagship IT business is an industry were noted for sharp swings in demand and fast advancing technologies, so required a high level of strategic foresight. Bold risk-taking, securing core talent, strong performance-based incentives, creative organizational culture, and high speed are some core elements which adopted by Samsung itself to survive in such an environment. By this time, Samsung ambitiously strives to reject costs mainly on the huge manufacturing facilities it has constructed around the world. These efforts are powered by the Japanese management style that Samsung built for decades before New Management. Results from these, Samsung’s strategic planning, focused on its top managers such as CEO system, now generally uses American practices, while its operations mostly depend on Japanese management practices. Some examples of Samsung company product service and social innovations are: Samsung currently revealed new curved television which called SUHD TV which is unique for the point that provides their users to make the beautiful view from every angle. Samsung’s 2016 SUHD TVs feature the world’s only cadmium-free, tender the most true-to-life picture quality, with amazing shining exceptional contrast and the most beautiful colors which is ever offered by Samsung. Considering that most viewers watch TV in a lighted room, Samsung has designed its new SUHD TVs to offer the best viewing experience, regardless of the lighting environment. With the help of New Ultra Black Technology, we can significantly reduce light reflection. The Samsung AddWash Washing Machine has one of a kind access door that makes it convenient to add any item, likewise a piece of forgotten laundry, without causing to drain the washer in order to release washer door mid- INNOVATION STRATEGY Aslan 6 cycle which allows us to add hand-washed items for rinsing, or additional softener anytime during the cycle. It is very good for time-saving and washing performance, the AddWash Washing Machine comes with a superspeed feature that makes it possible to be done with a normal wash in less than an hour without compromising washing performance. What Does Innovation Mean to Samsung? Samsung has developed a New Concept Development (NCD) process that all business units can implement while renewing and innovating new products and services. Innovation Process of the Samsung team has emerged out of the need to have an incubator team to study and work with every business unit to provide more market insight. Innovation approaches of Samsung: What is the PIT? PIT’s aim is to develop production and solution concepts using consumer opinion, marketdriven technologies, and innovation for commercialization. They do this working directly with the product planning groups at the same time for each business unit. There are four main stages PIT’s specifically concentrated: Stage 1 The first stage is understanding which means that innovation is to understand what trends are exploding in the world. To achieve this, PIT conducts field research and collects data, ideas, and information to gain opinion into the user’s perspective. The team also examines the market and keeps track of who and what is making the most noise. Stage 2 The second stage is to indicate in the further step of NCD, founders and designers generalize and dispute the ideas by analyzing and evaluating the data collected from field search, at heart brainstorming tens or hundreds of ideas that can supply innovation or solution to the task at hand. Stage 3 INNOVATION STRATEGY Aslan 7 The third stage is concept development. The team applies all the information they have been covered. The business strategy, the research, and then the ideas they’ve generated. They take up a treasure of knowledge and make it a single concept that defines it. The concept then became a solid business case for business units. The 4. and the last stage is the Concept of Finalization, in this stage, PIT employees with business units to finish and end the product concepts depends on the market and consumer requirements. Radical/Disruptive Ideas for Your Company Although They are the market leader in their areas, Samsung always learns from their competitor to improve both their product and their technology. Also, they continuously try to produce their products quicker and with more variety design in terms of the market demand faster and better prices to have the advantage in the market competition. In the early time of the feature phone business, Samsung always used to follow the low- end market leader, which is Nokia. The company always try to keep the trend by differentiating its products, with design, function, and feature. In the 2012 days, while Samsung was launching Nokia to become the market leader, Nokia tried to turn its portfolios into a smartphone market. Samsung not only follows the leads of the market leader. They are also followed at the market environment and other competitors. So that when Nokia had faced with the problems, Samsung had caught up in other areas such as the smartphone market. Aslan 8 INNOVATION STRATEGY References R. K., J. H., & R. K. (2014). Samsung’s Innovation Strategy in Smart Phones Market. Retrieved February, 2014, from https://www.researchgate.net/publication/ 319585333_Samsung's_Innovation_Strategy_in_Smart_Phones_Market. S. (2014). What is the Samsung Way? Retrieved August 12, 2014, from https:// www.industryweek.com/companies-executives/what-samsung-way. Samsung Newsroom (2016). Samsung Electronics Unveils Transformative Innovations for Smarter Living at the Southeast Asia Forum 2016. Retrieved February 1, 2016, from https:// news.samsung.com/global/samsung-electronics-unveils-transformative-innovations-forsmarter-living-at-the-southeast-asia-forum-2016. Samsung Newsroom (2013). SKIP TO CONTENT Samsung’s Product Innovation Team: How Ideas Becomes Streamlined. Retrieved February 2013, from https://news.samsung.com/global/ samsungs-product-innovation-team-how-ideas-becomes-streamlined. View publication stats
