Case Study of Samsung Electronics

1.The five dimensions of Entrepreneurial Orientation are key factors that firm’s practice in order to be successful in an industry. These five factors consist of autonomy, innovativeness, proactiveness, competitive aggressiveness, and risk taking. The first dimension, autonomy, describes how an independent action by a person or a team working on project has a vision or concept for a business and develops the plan and carries it out, onto completion.

The second dimension is innovativeness in which a firm or business must be willing to bring a new product into a market through such means as experimentation and imaginative processes; thereby creating these new products or services and laying a new production line process on how these products are entered into the market.

This process is the most difficult to achieve due to the fact that creativity and technology must work together in order to be successful. The third factor is proactiveness, where firms capitalize on new opportunities by monitoring trends of their current customers and anticipated the needs and wants of their customer in order to catch the market at the right time. This is only done when a company is proactive and is adaptive to changes in markets.

The fourth dimension is competitive aggressiveness; a firm has an concentrated attempt to oust other companies in their own industry by using tactics such as combative posture or an aggressive response to improve one’s own companies position in a market. This can be also used to overcome a threat in one’s marketplace. The fifth and last factor is risk taking, which involves a firm taking a chance on a project or venture without knowing the probable outcomes of their action.

These risks may require substantial resource and capital to move forward with a venture and can lead to loosing the firm large amounts of capital if it fails. Jong Yong Yun incorporated all five dimensions of entrepreneurial orientation when he went about reorganizing Samsung from 1996 to 1998. Jong Yong Yun clearly demonstrated autonomy as soon as he took over as CEO in 1996.

He took Samsung, a low cost supplier of appliances and products that other companies’ made and created an entire new direction and vision for the company, for Samsung to create their own brand of products. Innovativeness was demonstrated through all the technology and products. Samsung has created in the marketplace ranging from semiconductors to LCD displays the size of a king-sized bed.

Samsung has also spent a great deal of money on research and development as well as reducing bureaucratic obstacles that other companies have that may possibly hinder creativity of innovation. By foreseeing that, in the long term, it will be driven out of the market by other low-cost producers that were developing in China, Jong Yong Yun demonstrated proactiveness.

He pushed the company in a new direction and new marketing strategy before it pushed them out. Jong Yong Yun displayed competitive aggressiveness through rigorous training that the mangers went through during a four week boot camp and mountain climbing in order to establish a new way of culture within Samsung. Last but not least, he displayed risk taking by captivating the possibilities that his vision of becoming a product creator instead of a product imitator will become successful.

2.Seeds versus Weed is the idea that firms need processes for sifting out real opportunities from the larger group of product possibilities. Even more importantly, they need programs to nurture the selected products and bring them to market. Yun overcame this problem by seizing opportunities such as the Liquid-crystal-display business in which Samsung buys half from a Japanese company and the other half are from in house teams. This reduces the time it goes from new product concept to rollout time by six months.

The Experience vs. initiative problem is that firms do not support and reward organizational members who have new ideas. Yun addresses this problem by creating a five story VIP center were employees have dormitories and shower as well as other indemnity’s to help initiative for new products. The Internal vs. Eternal Staffing problem was resolved by hiring marketing whiz Eric Kim whom gave Samsung a new upscale marketing scope, and consolidated their advertising campaign narrowing it from 55 firms to simply just one.

Samsung achieved Building Capabilities vs. Collaborating, forging links with outside parities to the innovation process by buying half the liquid-crystal-display by a Japanese company and the other half in house established a partnership well being able to do what the other company creating. Incremental vs.

Preemptive Launch refers to the problem of allocating funds that allow for projects to hit the ground running and be responsive to market feedback can be difficult to manage. This problem is combated strongly through Samsung’s position in the future of digital home appliances. Samsung believes in the long run they will be able to produce every need of a customer has concerning technology at home thereby linking their brand to adapt to personal needs of consumers.

3.Samsung was well known for being a low-cost supplier of various components and appliances to larger and better-known manufacture around the world. Their main strategy was that of competing on lower prices of products that were created by other companies. The company had no brand recognition whatsoever other than the fact that they had cheap products, which could easily be found in discount technology retail stores such as Target, Walmart, and K-Mart. Although the company was making profits, they would not last as the leading low cost supplier for long. Jong Yong Yun was aware of this and designed a new strategy that would lead Samsung to the bright future they have today. His strategy was to completely transform Samsung to be a new premium brand.

They invested large amounts of money to research and develop new and innovative technologies to then create their very own brand of appliances that no one had ever made or sold before. These products were attractive and far more advanced in technology than their competitors. This became the company’s niche and new marketing strategy. They then repositioned their products to more upscale retail stores such as Best Buy, Circuit City, Fry’s Electronics.

4.In its essence, leadership is an organizational role that first, clearly defines a vision. Second, shares, communicates, and inspires that vision with others so that they will follow willingly. Third, providing the information, knowledge, and training to make that vision become a reality. Lastly, it is a leader’s job to coordinate and balance the conflicting interests of all stakeholders. A leader takes control when there is a crisis, and works alongside his or her employees toward a common goal.

The three key leadership interdependent activities are deterring a direction, designing a new organization, and creating a nurturing culture. Jong Yong Yun achieved the first by reestablishing the company as an upscale and innovative company, and away from its’ old strategic plan of being a low-cost supplier of copy cat appliances. He achieved the second by laying off 30,000 employees, and getting rid of all Samsung’s inventory by closing down factories for an entire two months.

Soon after, Jong Yong Yun sold two billion dollars worth of business he felt was not constructive for the future of Samsung. Jong Yong Yun successfully creates a nurturing culture by recruiting new managers and engineers, many of whom had developed considerable experience in the United States. In order to get them in shape, he put them through a four week boot camp consisting of martial arts drills at the crack of dawn and mountain hikes that last all day. To create new incentives, Yun discarded the Samsung’s seniority based system and replaced it with merit based system for advancement.