Samsung Electronics has been struggling with management in the recent past. The company has experienced several challenges, including retrieving the Samsung S7 smartphone from the market. The South Korean electronic goliaths have always applied the theory of “follow first, an innovative second” as their strategy. The firm needed first to identify the potential market in every sector so that it could topple most of its competitors in the market. To gain market leadership, Samsung Company has embraced inventions and innovative technologies in their electronics. For instance, the firm showcases its prowess in technology and innovation in its launch.
However, it should be noted that the challenges the firm experiences are due to the change in management strategy. It is believed that the company, having outsmarted most of its competitors, started playing a catch-up game with Apple, which adamantly remained miles ahead of them. It is, therefore, critical to note that the management changes its approach to the market since the catch-up plan has proved to be challenging. Thus, the firm should embark on a dangerous mission to enhance its innovation. The reason is that creativity and innovation are essential to the success of any organization. The company needs to be a part of its rivals, such as Apple, in embracing change.
The problems the firm is currently facing can be attributed to a more advanced level of vertical integration, thereby contributing to the complexity of the overall structure of the organization. The third-quarter result was not good, as they had been warned earlier, and this caused the company to make a loss. Their recent report shows an average of 60 percent drop in their extensive operation profit, and this marked the fourth consecutive drop in a row, a pattern that is frightening for such a company. Additionally, the company has also recorded a decline in its overall revenue by 20 percent in the financial year that ended in September.
Studies reveal that the farm will experience a drop of 62 percent in the operating profit. The company is blaming the high cost of promotion and the increased rate of competition in the general market. There is also a prediction of 22 percent in the percentage of sales. The high drop margin has continued to widen and mount pressure on the firm. However, the management of the high-tech conglomerate believes their new strategy and approach to the market will, at last, boost their profits and results. They have series of new innovative designs and materials, and as well, a lineup of new mid to low-end smartphones with proper hardware specifications and prices and they believe these products will be able to sell averagely kind in the market.
To gain market leadership, the firm should focus on enhancing the competitiveness of its products for each price level. They must implement new plans to reiterate their smartphone displays and metal frames to uniquely identify them from cheap, high-end Chinese and Indian smartphones. Overall, the company should conduct market research so that it can meet the needs of its consumers. The management should explore the markets by producing quality products and services for its consumers. Finally, the administration of the firm should embrace innovation and creativity.
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