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9. Key Strategic Implementation Issues
9.1. Market Flooding According to Michell (2010), Samsung has been focusing on flooding the market with unique and innovative products. In terms of smartphone, this market flooding strategy was intended to create larger portfolio of smartphones and addressing more market segments (Forbes, 2012). However, Samsung has unveiled several similar-looking products with no significant differences in the specifications. Hence, Samsung need to start focusing on creating different products with more significant specifications and also differentiate itself from the main competitor, Apple (Michell, 2010).
9.2. Inappropriate Cost Leadership Strategy According to Lawton (1999), cost leadership strategy incorporates various tactics and approaches with the intention of achieveing the lowest possible costs for producing products and services. Those approaches consist of many possibilities, such as outsourcing or producing in lower-cost countries (Zarrabi & Vahedi, 2012). As in this case, Samsung applies its cost leadership strategy by investing in low-cost countries (Kim, 1998). However, there are several issues arised from the implementation of this type of strategy:
Legal Issues in Brazil BBC News (2013) reported that the government of Brazil sued Samsung because of labor violations. The employees were working up to 15 hours a day and given insufficient breaks while making Samsung’s products (Tsukayama, 2013). Therefore, Samsung was claimed to pay $108m for the damages and has to endure the employees’ treatment costs (Tsukayama, 2013). Thus, the company should better cooperate with the government of Brazil and change its plant procedures, in order to create better workplace environment for its employees across the world (Lee, 2013).
Legal Issues in China
There was another labor violation issue in China, whereby China Labor Watch sued Samsung for employing child workers (Lee & Yang, 2012). According to Kim (2012), those
9.1. Market Flooding According to Michell (2010), Samsung has been focusing on flooding the market with unique and innovative products. In terms of smartphone, this market flooding strategy was intended to create larger portfolio of smartphones and addressing more market segments (Forbes, 2012). However, Samsung has unveiled several similar-looking products with no significant differences in the specifications. Hence, Samsung need to start focusing on creating different products with more significant specifications and also differentiate itself from the main competitor, Apple (Michell, 2010).
9.2. Inappropriate Cost Leadership Strategy According to Lawton (1999), cost leadership strategy incorporates various tactics and approaches with the intention of achieveing the lowest possible costs for producing products and services. Those approaches consist of many possibilities, such as outsourcing or producing in lower-cost countries (Zarrabi & Vahedi, 2012). As in this case, Samsung applies its cost leadership strategy by investing in low-cost countries (Kim, 1998). However, there are several issues arised from the implementation of this type of strategy:
Legal Issues in Brazil BBC News (2013) reported that the government of Brazil sued Samsung because of labor violations. The employees were working up to 15 hours a day and given insufficient breaks while making Samsung’s products (Tsukayama, 2013). Therefore, Samsung was claimed to pay $108m for the damages and has to endure the employees’ treatment costs (Tsukayama, 2013). Thus, the company should better cooperate with the government of Brazil and change its plant procedures, in order to create better workplace environment for its employees across the world (Lee, 2013).
Legal Issues in China
There was another labor violation issue in China, whereby China Labor Watch sued Samsung for employing child workers (Lee & Yang, 2012). According to Kim (2012), those