Samsung, a Multinational Enterprise

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The multinational enterprise this assignment will be looking at is Samsung. “On March 1st 1938, founding chairman Byung-Chull Lee started a business in Taegu, Korea with 30,000 won. In the 1970s, Samsung laid the strategic foundations for its future growth by investing in the heavy, chemical and petrochemical industries. Samsung’s core technology businesses diversified and expanded globally during the late 1970s and early 1980s. In the mid-1990s, Samsung revolutionised its business through a dedication to making world-class products, providing total customer satisfaction and being a good corporate citizen – all under the vision of ‘quality first’. Despite the 1997 financial crisis that affected nearly all Korean businesses, Samsung was one of few companies that continued growing thanks to its leadership in digital and network technologies and its steady concentration on electronics, finances and related services. The digital age has brought revolutionary change – and opportunity – to global business and Samsung has responded with advanced technologies, competitive products and constant innovation.” The way that Samsung has stayed so successful is because it has used the 7 P’s of marketing. The reason they use seven is because in international business four is not enough because they are only designed for competition against other companies with the same restrictions as you (i.e. country). However international businesses have extra ways to increase competitiveness. These are the extra 3 P’s. “The marketing mix framework was particularly useful in the early days of the marketing concept when physical products represented a larger portion of the economy. Today, with marketing more integrated into organizations and with a wider variety of products and markets, some authors have attempted to extend its usefulness by proposing a fifth P, such as packaging, people, process, etc. Today however, the marketing mix most commonly remains based on the 4 P's. Despite its limitations and perhaps because of its simplicity, the use of this framework remains strong.”

The first is People. This is making sure that the company recruits the right staff and trains them up properly. What Samsung have done is that they have moved most of their production over to China where labour is much cheaper, hours are longer and the labourers work harder. They have however kept the nucleus of the company in Korea. This is the R&D (research and development) side of the company. This is because there are many skilled well educated Koreans who are well qualified to research and develop new products and there is a lack of that in China. This however is not the only reason that this is the case. Samsung are in direct competition with cheap Chinese electrical brands that can produce their products much cheaper. There have been problems with these Chinese companies accused of trying to obtain Samsung’s technology as they are behind in that respect as a result I think that this makes Samsung even more determined not to more any R&D to China. This is because the technological advantage is the main one that Samsung have over their Chinese competitors. Were Samsung not to have moved most of their production over to China they would probably not be able to compete with the Chinese companies prices as they would have to charge a great deal more to cover the cost of manufacture in Korea. This is why the People aspect of the 7 P’s is vital in overseas operations. The second is Process. This is all to do with the way that Samsung manage this is that they are constantly on top of R&D this gives them good PR (public relations) as they are seen as some of the best innovators of electronics. They sell this in their adverts and on their website. They find out what sort of process people in general in each country are after so that they can tailor to the needs of each...
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