Samsung Group is a South Korean Multinational Company. Headquarter of the Samsung Group is in Samsung town, Seoul. In the beginning, Samsung was a small trading company and now it has evolved as a world class corporation. The group businesses in several sectors like digital gadgets, semiconductors, advance technology, Finance, Hotels, Constructions and many more. The inventions and the perfect value chain made them the leader in these businesses.
Samsung was founded by Mr. Lee Byung Chul in 1938 as a trading company. Maximum revenue of the Samsung is through their electronics subsidiary where they entered in mid-1970.
After the death of the founder Lee in 1987, Samsung was divided into four business groups – Samsung Group, Shinsegae Group,
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Porter’s Value Chain Model
A value chain is nothing but a set of activities that a firm operates to deliver a much valuable and quality product or services in the market. The term comes from Business management and was firstly coined by Mr. Michael Porter in his best seller.
This model actually focuses on systems and how the inputs are changed into the outputs purchased by the customers.
Figure 2 Porter’s Value Chain Model
Within the value chain there are two kind of activity, first one is Primary activity as they are directly related to the product or services that a firm produces to the customers and the other one is secondary activity, these are related to the activities that are within the company infrastructure that assist in the company’s primary activity.
All of these activities are independent irrespective of being primary or secondary. According to the Porter’s model all the activities are interdependent and must be managed together by any firm to succeed. Samsung did the very same value chain implementation within their organization.
Chapter 4
Application of Value Chain Model into the Strategic management of Samsung Electronics Company.
Figure 3 Samsung Value Chain
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That’s how they made a new management environment for themselves.
Chapter 5
Management of Samsung through Generic Value Chain
Porter’s Value chain model has clearly influenced the understanding of how the management system works. But in spite of the importance of the value chain model very less is known about the determinants of failure or success through these techniques.
The main objective of Porter’s Value Chain was to transfer raw materials into standardize physical products where the product can differentiate from its competitor’s through its value. An explicit emphasis on inbound and outbound logistics explains the model’s appeal to the SCM field.
In the Value chain model there are primary and secondary activities.
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Figure 6 Support activities and Primary Activities in VCM In the primary activities we have:
• Network promotion and contact management.
• Service provisioning.
• Infrastructure operation.
In the support activities we have:
• Infrastructure Development
• Human Resource Management
• Technology
The value chain, made by Michael Porter, is really important to see how a company structure is created. The value chain is constituted by two parts: support activities (firm infrastructure, human resource management, technology development, procurement) and primary activities (inbound logistic, operations, outbound logistic, marketing and sales, service). (Johnson et al. 2011, p.97-99)
Value chain is a set of activities a company performs in order to provide a valuable solution to their customer problem in their market space or industry. The value chain is made up of primary and support activities. Primary activities being research and development, production, marketing and sales and customer service. These are the primary steps that are required to get a product or service to market to solve the customer problems. Some of the secondary steps include company
The value chain is one of the critical elements of a company’s strategy in today’s competitive world, because company’s profit depends on how the successful and efficient it runs its operations and how the end product appeals to the customers at a price that covers all the expenses of the company.
The value chain is one of the critical elements of a company’s strategy in today’s competitive world, because company’s profit depends on how the successful and efficient it runs its operations and how the end product appeals to the customers at a price that covers all the expenses of the company.
SAMSUNG Electronics Co. is a South Korean multinational electronic information technology company having headquarter in South Korea. Samsung Electronics is the world’s larger mobile phone maker and world’s second larger semiconductor chip-maker.
Samsung is a South Korean multinational company which is headquartered in Seoul, South Korea. It has number of businesses under its own brand name. Samsung was founded by Lee Byung-chul in 1938.
Samsung is electronic device company that have been found by Lee Byung Chul in the year of 1938 as a trading company. Before it became the electronic based company this company fall into the areas of food processing, textiles, insurance, securities and retail. In the late of 1960s Samsung enter electronic industry and middle of 1970s this company enter construction and shipbuilding industries. However after the death of the founder Samsung have been classified into four major business group which was Samsung Group, Shinsegae Group, CJ Group and Hansol Group.
Samsung was formed in 1938 by Lee Byung-chull as a trading company based in Su-dong. The small company started as a grocery, trading goods produced in and around the city as well as its own noodles. The company grew and soon expanded to Seoul in 1947 but left once the Korean War broke out. After the war, Lee expanded in to textiles and built the largest woollen mill in Korea.
During 1985, Michael Porter, one of the most important American economists, introduced one of his most famous theories: “The Value Chain”. Through this model is possible to describe an organization like a set of processes. Precisely nine processes divided in five primary activities and four support activities that help the business to gain its competitive advantage. The primary activities are composed by “Inbound Logistics”, “Operations”, “Outbound Logistics”, “Marketing & Sales” and “Service”, while the support activities are: “Firm Infrastructure”, “Human Resource Management”, “Technology Development” and “Procurement”.
A value chain is a chain of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market. The concept comes from business management and was first described and popularized by Michael Porter (Porter, 2013)
Samsung as a company was founded in 1938 in Korea. 46,500 employees are working at six Samsung Electronics facilities in Korea. Although they are at different locations, all share the same goal and that goal is satisfying global customers by producing a quality product. Here in the U.S. Samsung is a very recognized brand, sitting along side Sony, Panasonic, Phillips, Toshiba, Matsushita and other more know brands of TVs. In South Korea, Samsung was a governmentally subsidized large business until in the 1990 's. In the mid 1990 's one of the most significant threats to Korean corporations was that their major advantage in low labor cost
Value chain is an approach to know how an item or activities create value for consumers. The most of value provides to consumers, the most of competitive advantage an organization build. In this analysis, value chain model has separated into primary and support activities. Primary activities are included in the physical creation of the item and service. On the other hand, support activities give the inputs and infrastructure that enable the primary activities to happen. This value chain model can be refer to below figure 5.
Company Background: Samsung is a South Korean multinational company those starting its business as a small trading company and right now becoming world largest corporation. The company deals with its business in several sectors such as advance technology, finance, petrochemical, semiconductors, plant construction, skyscraper, medicine, fashion, hotels, chemical and others. The company was established in 1969 in Suwon, South Korea and known globally for its electronic products (Kelly, 2011). The company is manufacturing several latest technologies, electronic appliances such as mobile phones, tablets, laptops, TVs, refrigerators, air conditioners, washers and other products. The company runs its operations and sales its products in 61 countries with approx 160,000 employees in all over the world (SAMSUNG, 2014). Moreover, the company acquired the position of the world biggest IT maker in 2009 by beating the Hewlett-Packard (HP) previous leader. Its sales revenue in the segment of LCD and LED is the highest in the world. Furthermore, Samsung also becomes world leader in the segment of tablets, mobile phones and gadgets.
Value Chain Analysis describes the activities that take place in a business and related to the business core competencies. It can classify by primary activities and supporting activities.
Founded in 1938 by Mr. Byung Chul Lee, Samsung Group’s original line of business was exporting dried fish, vegetables and fruits produced around Korea to Manchuria and Beijing in China. Within a few years of incorporation, the company expanded its operations to include manufacturing and sales when it set up a flourmill and bought confectionary machines. In