National School of Business and Management Casablanca (ENCGC) Strategic Management Course S8 - Professor Karim GASSEMI May 18, 2021 - Exam Duration : 1h00 – (13h00 – 14h00). Name First name Option General Instructions 1 - Fill in your name, first name and option (Filière). 2 – Answer directly inside the corresponding boxes 3 - Your file must be saved in PDF format with the following form: filièrenamefirstname.pdf Example : Hind Tahiri student in S8 Logistics will save her file with the following form: MLtahirihind.pdf Mohammed Amine Akli student in S8 Financial Management and Accounting (group 1) will save his file with te following form: GFC1aklimohammedamine.pdf Hakim Zyad student S10 – « Ajournement » of Strategic Management will save his file with the following form: AJRhakimZyad.pdf "No document would be take into consideration if it does not comply with the specified form" 4 - The PDF file must be sent by email from your @ edu.encgcasa.ma address to the following address: [email protected] 5 - The PDF file must be sent before 14h:00 ENCG - Casablanca Strategic Management - Final Exam (2021) Professor : Karim GASSEMI Page 1 Part I : Understanding basic concepts and Key words (5pts) Briefly define the following concepts : a-Corporate Strategy- b- Core Business -c- Business model -d- Competitive Advantage eBusiness Strategy f- Internal growth -e- resource capacity. Part II : Case Study (12 pts) Part I : Understanding and Analyzing the strategy of a multinational company (13 pts) Read carefully the following text (minimum twice) - Highlight the key points about Samsung's Strategy and Growth (source : www.panmore.com) A- Samsung’s Mission Statement & Vision Statement Samsung is a technology conglomerate whose corporate mission and vision statements focus on innovation for global societal improvement through technological products. The company’s mission statement indicates superiority, which implies excellence and leadership in the semiconductors, electronics, and other markets. On the other hand, Samsung’s vision statement promotes an inspiration-focused strategic objective that makes the business an influencer among people and societies around the world. Samsung’s mission statement is “We will devote our human resources and technology to create superior products and services, thereby contributing to a better global society.” This corporate mission was published in the 1990s, when the company was undergoing rapid global expansion in various semiconductors, electronics, and related technology markets. Based on its business operations and current international industry positioning, Samsung focuses on the following components in its corporate mission: Human resources and technological resourcesSuperiority of products and services- Improvement of the global society. Samsung’s corporate vision is to “Inspire the world with our innovative technologies, products and design that enrich people’s lives and contribute to social prosperity by ENCG - Casablanca Strategic Management - Final Exam (2021) Professor : Karim GASSEMI Page 2 creating a new future.” The company follows this vision statement to maintain profitable technology business operations that contribute to the improvement of people’s lives. Samsung frequently refers to a shortened version of this corporate vision: “Vision 2020: Inspire the World, Create the Future.” The company extensively implements this statement throughout its subsidiaries’ operations in the consumer electronics, computing technology, and semiconductors industries. The following components are contained in Samsung’s vision statement: Global inspiration - Innovation - Improvement of lives and future social prosperity. B- Samsung’s Organizational Structure & Its Characteristics Samsung’s organizational structure is designed to promote technological innovation throughout the enterprise. Technological innovation is at the heart of the company’s strategies, as seen through rapid innovation involving smartphones and other consumer electronics. Structural facilitation contributes to the effectiveness of implementing Samsung’s generic competitive strategy and intensive strategies for growth. The corporate structure is also a manifestation of the evolution of the business from a small trading firm into a diversified multinational enterprise that offers advanced technologies. Samsung has a product-type divisional organizational structure. This structure type uses product categorization as the basis for determining which resources and business operations belong to certain divisions, such as the company’s Device Solutions division. The entire corporate structure is unified via Samsung’s headquarters, which are located in Seoul. Strategic management directions from the corporation’s headquarters are implemented through strategic objectives specific to the structural divisions’ contexts, such as the context of the U.S. market for consumer electronics. Samsung’s corporate structure has the following main characteristics: Product-type divisions - Centralized corporate hierarchy- Geographical groupings C- Samsung’s Generic Competitive Strategy & Intensive Growth Strategies Samsung’s generic strategy and intensive growth strategies continue to push for technological innovation as a critical factor for competitive advantage. Headquartered in Korea, the conglomerate competes against technology-intensive firms, such as Apple, Google, Lenovo, LG, Sony, Intel, and other firms that create strong competitive forces, as determinable through a Five Forces analysis of Samsung. The industry environment imposes aggressive competitive behavior that typically involves rapid technological innovation for product differentiation, as seen in the evolution of smartphones available in the global market. To effectively compete, Samsung’s generic strategy and growth strategies must involve investment in technological innovation. The resulting competitive advantages enable the company to keep its competitive position as one of the best performers in the semiconductors, consumer electronics, and home appliances industries. Samsung applies the broad differentiation generic competitive strategy. Based on Michael E. Porter’s competitive strategy model, the strategic objective of broad differentiation is to maintain competitive advantage by providing unique (or differentiated) products targeting a wide market, which in this case is industry-wide, involving practically every person or ENCG - Casablanca Strategic Management - Final Exam (2021) Professor : Karim GASSEMI Page 3 group that buys smartphones, laptops, and other equipment. To achieve Samsung’s strategic plans for growth and expansion in the global market, this generic strategy requires the application of product development as a main intensive growth strategy to compete against technology firms like Apple, Google, Sony, and LG. Market Penetration (Primary). Samsung’s revenue growth depends on market penetration as the primary intensive strategy. In Igor Ansoff’s matrix, the strategic objective of market penetration is to grow the technology business by increasing its revenues from the sale of current products in current markets, such as the European Union’s consumer electronics market, where the corporation already has operations. Competitive advantages and business strengths identified in the SWOT analysis of Samsung combat negative forces from competition in these markets. Product Development (Secondary). Considering the emphasis of product superiority in Samsung’s corporate mission and vision statements, product development is a major intensive growth strategy of the enterprise. A strategic objective of product development in this case is to grow the business through new products, such as new electronic gadgets. Also, this intensive strategy grows Samsung’s operations through iterative innovation, which leads to improved versions or variants of existing products. For example, the company regularly rolls out new smartphone models, similar to what Apple Inc. is doing in its product development strategy. The implementation of product development as an intensive growth strategy is based on Samsung’s differentiation generic competitive strategy, which requires product development for uniqueness that differentiates the business from the competition. Economies of scope based on the conglomerate’s various subsidiaries support product development and competitive advantage by providing technological expertise and material inputs from the subsidiaries. Market Development. The global scale of Samsung’s operations makes market development a minor intensive strategy for business growth. Market development’s strategic objective is to enter new markets using the company’s existing products, such as introducing new Galaxy tablets in Latin American markets after these products’ introduction in the United States. As an intensive growth strategy, market development’s success depends on product value and competitive advantage, which in this case comes with Samsung’s differentiation generic strategy via technological innovation. For example, effective innovation for cuttingedge technological design makes the corporation’s products more competitive when rolled out in target markets. With this intensive growth strategy, introducing products to new markets may come with changes in Samsung’s organizational structure. Diversification. Samsung Group’s diversified business operations maintain multiple revenue channels and spread risk across industries and markets. This intensive growth strategy’s implementation is infrequent in the technology conglomerate, considering regulatory hurdles and other barriers. With the strategic objective of establishing new profitable businesses, the diversification strategy grows Samsung typically through acquisitions of smaller firms, such as Harman International Industries. The minor role designation of this intensive growth strategy limits the risks of establishing new business operations. In implementing diversification, the differentiation generic competitive strategy is also applied for competitiveness and strategic alignment among Samsung subsidiaries’ business operations.The performance indicators of samsung worldwide in comparison with its main competitor are shown in the following table. ENCG - Casablanca Strategic Management - Final Exam (2021) Professor : Karim GASSEMI Page 4 (year) Indicators Anual Variation Rate Rate (AVR) Relative Share Market Value (RSMV) MCR (Market Coverage Rate) 2016 Saumsung 2017 Apple Saumsung 2018 Apple Saumsung Apple 10% 15% 16% 13% 12% 17% 3% 7% 2% 8% 2,5% 7,5% 18% 25% 16% 26% 19% 32% Table 1 : Worldwide Performance indicator (Samsung vs Apple) 1. What is the architecture of Samsung's business model f 2. What are the characteristics of samsung's mission? Explain the link between samsung’s mission and vision? ENCG - Casablanca Strategic Management - Final Exam (2021) Professor : Karim GASSEMI Page 5 3. What is the nature of samsung's organizational structure? what is the impact of this structure on samsung’s corporate strategy ? 4. What is the nature of samsung’s corporate strategy ? (you have to argue your answer). 5. Wat are the key elements to highlight regarding samsung’s business strategy ? ENCG - Casablanca Strategic Management - Final Exam (2021) Professor : Karim GASSEMI Page 6 6. what are the suggestions to address to samsung regarding its competitive strategy against Apple (you have to analyze the indicators in table 1)? ENCG - Casablanca Strategic Management - Final Exam (2021) Professor : Karim GASSEMI Page 7
