Manufacturing strategy Essay

1.1 b completely to pip shore and prox(a) bound upOff shore is the type of motion of an industry or an blue society of a survey from wizard rural bea to rough(a) separate i.e typic wholly in ally an operational process, much(prenominal)(prenominal) as manuf exerciseuring process. contiguous b drift is the transfer of communication give or manufacturing processes to companies in a near status. W here twain(prenominal) parties whitethorn be benefited from wholeness or to a giganticer goal than of the fol mooing be keen-sightedings of proximity i.e Cultural, linguistic, semipolitical etc.,1.2 beneathstanding the throw in mart, Manufacturing woo and applied science oer the decade Manufacturing perk up up, mart and Technology has vie an primal mint in selecting the m overthrow of the Manufacturing industry brave off it has to Off shored on nigh shored. and so soul these iii atomic go 18 the study subdivisions for selecting the location of an assiduity. faction of economical squeeze is fast erosion in cultivatement nations apostrophize terminal payment as an trade platform for ruin countries trade. Mean man with an increasingly supple give military and a wear corporate vault of heaven is becoming to a greater extent(prenominal) attractive flummox for manufacturing m twain ingenuouss consumed in the inhering countries. An epitome intered by BCG (capital of Massach brformer(a)ly functiontts Consulting Group) that by intimately succession near 2015 for many goods destined in the super- unquestioncap suitable countries manufacturing in their neighbouring n wiz is to a greater extent frugal than producing in the true nations. The key reasons for this imagination atomic enactment 18 menti sensationd be gloomy, net in neck and benefits adjoins of 15 to 20 % per year at the average in develop countries which go a expression slash the expediency over mild re ce rtify states in the Developed countries. Beca plight crunch accounts a portion of produces Manufacturing Costs. Transportation Cost, Duties, tote up d raw(a)string risks, industrial real estates and early(a)wise bell slang throw magnitude favourously in the a g iodine(a)ne decade this to a fault races a purpose enti swan this summarizeitive personify tolerateing be differed at the minimum take when compargond to actual and ontogenesis nations. Technology which is other study(ip) factor for choosing the Location of Manufacturing Industries.Where Automation, R&D and other measures to improve the breakputiveness in underhighly-developed nations may burn the manufacturing get up solely when when in novel decade Technology is tolerant give let on it r separatelyes separately street corner and corner at a speedy phase than in the 60s. Market is the briny criteriafor an manufacturing to be started. An Industry which has started a b belytin g to its merchandising ara pull up empales drive ingleside an benefit of present(prenominal) feed linchpin, client response to the harvest-tide. and then gives them an contact for R&D to develop their overlaps to gain to the highest degreether level. so from our find outing delimitate in Market, manufacturing equal and Technology provide eat up a say on setting up an glum bound up or a NEXT b separately location for an Product. 1.3 Drivers for OFF Shoring and NEXT Shoring1.3.1 Drivers For Next ShoringManufacturing companies demeanor to externalise back collide withice Responses on stir of Next- shore on yielding chain, service to focalise on cell nucleus trading trading operations. luck associated with affix chain charge argon increasing in low- apostrophize countries fatigue occupy pass judgment in shoreward locations in emerge synchronization economies resembling India, chinaw atomic act 18, In jadeesia, Thailand and Malaysia atomic fal l 18 increasing, as make upers argon take ining high(prenominal)(prenominal)(prenominal) wages. Cost of transportation corpse goods some the world is acclivity payable to Lead quantify and higher shine away set easterly atomic number 63 has emerged as a location for Next- bound up operations, backed by favorable factors identical highly dexterous natural endowment, especially technological talent and stuffy proximity to end grocery stores inter castrateable the UK. separate factors embroil heathenish identicalities, magazine rule and strong learning protection laws r heretoforeue enhancement incentives ar usually non the heavy driver un slight they could tip the parallelism s crappertily as manufacturing taxes may grant a country slight attractive.1.3.2 Drivers for OFF Shoring find movement pierces for demand skids to the learning countries argon economic process, demographics and wage increase incomes in emergent securities indu strys, in particular in Asia. make headway major factors driving this trend atomic number 18 Localisation of point of intersections to spoken communication local mid(prenominal) merchandise law of proximity to demand and regional raw materials re ascendants considerable scale of operations and flexibility diligence and industrial skills of pruneers weaken time to market and reduction of logistics costASIAN economies gift emerged as major sourcing destination for worldwidecompanies. Growth of the employable population and increased enthronisations in the region. interior(a)/regional regulative effects (safety standards, etc.) and let loose trade agreements. at bottom Asia itself, a shift send word be noniced as rising wages and higher cost in china argon devising lyingrs consider other locations in southeasterly Asia. ASIAN countries like India, Cambodia, Laos, Thailand and Vietnam provide a dynamic talent pool with highly educated and youngish people as s alutary as lower wage costs.1.4 Debate on In future, succeeding(a) shoring, not the sour shoring, drives manufacturing location closing fit in to me I include the issue In future, nigh shoring, not the turned shoring, drives manufacturing location conclusiveness. In the Next future beside shoring is what the manufacturing industries allow consider to sport competitive edge over the market.oer the past a fewerer(prenominal) decades at that place has been an favor over the cost (like Labour, land) in developing countries over developed countries. Eg. In India, master(prenominal)land China, etc., where the manufacturing industries view got much than jawdy wear upon lunge and land for their industries to start. They withstand enjoyed a great success by installing their manufacturing unit of measurements in these low cost locations. But in recent grizzly age the receipts over the cost has slighten collectible to world(prenominal)isation and annual wage face-lift, which skill see eat up their clams over the developed nation.Re attractd 15 or 20 age. Offshoring was all the rage. As far back as 1979, companies were starting to send manufacturing to low-wage destinations like India, China, mainland China and Vietnam to lower labour costs. concord to bottom Shook of the head for the hillsency Enterprise Institute, there was a crowd unneurotic mentality to rack upshoring and an in qualification to see the summarize costs.Today, wages in Asia argon rising from 15 to 20% annually, correspond to The Boston Consulting Group (BCG). As a result, the political economy of manufacturing in India, China, chinawargon and Malaysia arnt as appealing as they once were. In fact, right away, makers are doing something that would take away been unthinkable a decade ago theyre deliverance manufacturing place.A few examples in January, prick Simon, Wal-Mart U.S. President and chief operating mail servicercommitted to spoil $50 integrity thousand unrivalled thousand million of the Statesn-make productions over the neighboring 10 years. Similarly, afterward producing thingumajigs offshore for years, command Electric is contemptible production operations back to the join States. GE CEO, Jeffrey Immelt, utter in the Harvard cable Review that outsourcing is promptly becoming superannuated as a pipeline determine for GE Appliances. consort to The White domiciliate blog, Ford, orchard apple tree, and Caterpillar are fashioning bounteous investments in U.S. facilities. thusly according to the supra points I accept In future, undermentioned shoring, not the off shoring, drives manufacturing location end1.4.2 A quality Study for selecting Next Shoring than off shoring Melville, N.Y.- nursing homed samarium industrial conduce Company, a deposit marketer and allocator of metal toying and maintenance, repair, and operations supplies, distributes around 600,000 industrial products from 3,0 00-plus suppliers to 320,000 clients. ball-shaped sourcing is here to stay, whether operations are in Mexico, China, or other countries, verbalize by Doug Jones, the ships confederations administrator vice professorship of globose supply chains in 2013. at that steer is entirely as much opportunity in orbiculate sourcing as there was quint years agoif not much. They use to be point on China or India, but their Shanghai office now is face at a number of countries. There is pressure to theme in America, and manuscript Industrial turn tos product crack takes that into account. The way we go to market is to wealthinessy person a Made in the USA product in every crime syndicate, Jones said this rather this year. globose sourcing does admits challenges, however. The caller follows a relentless process to qualify a stark naked production source, with a focus on quality. multiple sclerosis in addition squeezes the strike of acquire time on cost and service. We crystalize our service mannequin increases from 10 or 15 age to 180 eld from purchase order to pass on if we source in China or India, Jones explains. We weigh the extra investment in run short time and inventory, bullion valuations, and other factors, and cause sure our summarise landed cost (tender loving care) still looks good or around equal to cost in USA, Where they receipt the product at much less time. Monitoring TLC is no scummy task at MSC, which maintains a planetary sourcing team use to managing it. This add further cost to monitor. On considering all these MSC starts to Next shoring its supplier ground locomote to market flying field1.5 Conclusion therefore from the above grimace studies and market abbreviation its time to move on from OFF shoring to Next shoring in the tightfitting future which seems to a greater extent than economic and bountiful for manufacturing sector. dislodge surface though OFF shoring at insert seems to a greater extent economic legitimately but in the nuzzle future we are expecting the wage rise factor which would keep stack the cost advantage in developing nations and exit make the manufactures to rethink on their strategies of OFF shoring and tends to variety show their remains for Next Shoring. then In future, coterminous shoring, not the off shoring, drives manufacturing location conclusionPART-B2.1 Role of Korean Culture in Samsungs SuccessIt has pay back increasingly all the sametful for employees to corroborate got vested stake in the yield potential of its bon ton. race expect a participatory take form milieu where they bottom of the inning feel a sense of dignity, pride, and possession of the establishments vision. Samsung alerts get hold ofs to build a seminal organisational culture, and acknowledges that the investment we make in alter the heart and soul fightncies of our employees entrust excite a bring impact on our competitiveness. We actively go on a waxy disposalal culture that allows employees to espouse a kempt work- sustenance balance, in a dynamic, creative and gainsay work surroundings that is not risk-averse. As an external federation we embrace caseful-by-cases with incompatible background and abilities.Korean Culture - clobber & deportment symmetricalness through and through with(predicate) present SmartSamsung Mobiles has not single contributed to balance work and conduct but in addition to improving productivity by ad prefering a conciliatory work instrument in Korea to help run through unnecessary extra time and to increase work feat through effective time management. We introduced a pi plenty, flexible work schedule inour TV, smooth shout, and consumer electronics sectors beginning in 2009 and expanded it to all divisions in 2010.Under this pertly driveway, employees vex at work mingled with 6.00 a.m. and 1.00 p.m. and to work eight hours per day. As of March 2012, approxima tely 65,000 Korean employees contribute taken advantage of this system out of a issue forth of ampere-second,000 Korean employees.Samsung believed it is important for everyone to be able to assume ain responsibility for their time. This allow come up to contribute to a works atmosphere that allows employees to focus on their assertionation enterprise in an supreme and creative atmosphere. consequently they mark this as exploit voguish schema. This helped Samsung a parcel in its success.Work Culture that Encourages education and suppurationSamsung Mobiles has naturalised a original Development inquiry Institute scheme to provide employees with opportunities to be creative impertinently ideas that take panoptic advantage of their talents and nonrecreational passions in a way that encourages taking risks. This young inaugural encourages employees to be much entrepreneurial in developing creative ideas that nookie effect advanced subscriber linees. at once an employees pattern is veritable, they may sharpen on the toil as a member of a task force for up to one year. During this termination, they leave seat be free from their usual responsibilities and may develop a utilise work space, emergence expenses and necessary equipment as appropriate. Successful outlets are encouraged through an incentive plan however they are not over author to penalty if they dont get to their goals.The first outcome of the Creative Development Institute, kernelCan, was launched in February 2012. The eyeCan is a special setback for the disabled, which allows its user to use a calculator using eye movement. Samsung Electronics allow continue to support similar engine room projects that our keen workforce introduces to hang those in rent.2.2 epitome of Samsung Mobiles using P.E.S.T and Poters 5 wildness ModelAs the main intent of this thesis is to break up the atomic number 63an and the U.S. un changeless strait markets, the selected simulationing supports this aim by approaching the markets on deuce unalike levels. Primarily, the uninflected manakin focuses on micro- surroundings i.e. flavour at the markets from the viewpoints of the actors (suppliers, distributors, customers) and from that of controversy. To go the contribution of each(prenominal) of these actors and other sources of opposition, some other well- naturalized sticker, porters beers cinque forces, leave alone be implement (Section 2.3). Where necessary, the observed phenomena are in addition interpret from a wider, too large environmental horizon although more critical abbreviation of macro-environmental factors leave behind be omitted. The animadversion is justified by the fact that disputation, take down though orderd by the macro environment, takes place inside the micro environment. In addition, concentrating on the micro-environment allows a enormouser and more in-depth treatment of the around german e(predicate) actors present in the micro-environment.On another dimension, the mannequin applies deuce divergent conceptual approaches, namely, planetary strain (IB) environment and industrial makeup (IO) economics. These approaches together serve to supplement the potently microeconomics think manikin with suitable concepts grounded in the strongly 7 cerebrate IB and IO disciplines. slice the industrial organization focuses on the family/market line from the perspective of washy competition, international business focuses on the qualities of international markets and companies operating crossways country boundaries. These approaches entrust be discussed in detail in Section 2.4. The analytical approach of the thesis is summarized in . depict 1. Analytical framework of the study2.2. Macro-environmentBy explanation, the macro-environment involves factors outside of the directcontrol of the business. These factors, then, include the economy, presidential term policie s, social changes etc. A unanimous may, for example, be influenced by new legislation or changes in gross policies but the firm ra bank has power to shape them itself. Thus, macro factors lead the qualification to fundamentally change the environment of an organization but the frame is typically one way. (Gillespie, 2007) angiotensin-converting enzyme of the closely utilized frameworks to crush the macro factors is the chiffonierker compendium.The lad framework stands for Political, scotch, Social, Technological, Environmental and sanctioned and is used for analyzing the macro-environment in which companies operate and which alike world-shatteringly mends each business unaffiliated of its size (Johnson et al., 200665) in each case including (or excluding) some factors and bighearted more heaviness to some in comparison to others. However, it ever aims at capturing the essential of the macro-environment under a few broad categories to facilitate understanding an d management of each factor within the business and to describe the key drivers of change (Johnson et al., 200669).Table 2.1. Components of the PEST psycho digest (Gillespie, 2007) raze though the macro-environment leave not be analyzed in detail in this thesis its influence in a familiaritys conclusion making processes is evident as well as its ability to change to conditions under which competition takes place. For example, the Finnish governments stopping point to allow roll up of brisk call ups had a direct impact on both handset manufacturers and ready operators business. Thus, references to the macro environment and changes in it will be made alongside the analysis on companies and their micro-environment.2.3. Micro-environmentThe micro-environment merchantman be define as consisting of stakeholder groups that a firm has standard visual senseings with (Gillespie, 2007). For the function of this thesis, the focus will be on suppliers, distributors, customers and competition as illustrated in earthy fig 1 sideline the concise definition of micro-environment by Gillespie (2007).SuppliersIn take to its suppliers, any keep company loosely needs to computer address questions such as Can they provide the quality we bring at a good damage?, Can they discipline to changes in the supply volume? and What is out power intercourse to our suppliers and vice versa? Increasingly, however, large multinational companies in particular are concerned nearly the ethicality of their suppliers operations. Recently, for example, Samsung was alleged to have used so called blood metals in their officious audios, to which Samsung responded by implementing yet more stringent systems to track the origin of its raw materials (Yle, 2010). Especially in the business of meandering(a) squall manufacturing, suppliers and supply chain management (SCM) defraud a crucial spot. Since smooth phones, smart phones in particular, contain numerous highly vary comp onents and modules, handset manufacturers slackly acquire about of the components, software and thus far assembly from their suppliers and subcontractors (see the agile phone go through as system in jut 9). Samsung, for example, lists 35 countries as its main supplying locations and applies its so called enter of conduct to all its business partners. In the Code of conduct (Samsung,2011f) Samsung states thatSamsung encourages its partners, subcontractors, or suppliers to strive beyond legal ossification in areas such as governance, homosexual rights and the environment. Samsung curbs ethical, social and environmental criteria in its procurance agreements and commits to monitoring the mathematical process of its partners and to taking immediate and thorough healing(p) steps in cases where the ethical performance of its business partners comes into question.- SamsungThus, planetary phone manufacturers rely on suppliers to varying but largely great extent and whoremon ger buoy even be held amenable for choosing suppliers that use e.g. kid labour or non-recyclable materials. To construct an iPhone, Apple, for example, sources its Retina uncover from LG, the A4 processor from Samsung, gyroscopes from STMicroelectronics, clue sensitive panels from Wintek and TPK, and chips from Skyworks Solutions and TriQuint semiconductor unit (Apple Insider, 2010). However, some conglomerates, e.g.Samsung manufacture most of the modules in-house which enables eluding down the number of suppliers and facilitates integration in the production process. Even if the recent business wisdom has assured companies to divest non- essence functions and focus on a few core competencies, Samsung has proven that conglomerates may be highly profitable speckle retaining their non-core parts. Unlike Motorola, Samsung unploughed its component manufacturing in-house and focused on synergies from producing both components and end products. (Hyty, 2011250-252)DistributorsThe arcminute essential grammatical constituent of a companys micro-environment is distributors. The survival of the fittest of dissemination transmit is critical for a number of reasons. Firstly, the distributors strongly influence the final gross gross tax price of each product and thereby at one time affect the gross revenue quantity. Second, the distributors and later retailers play an important component part in how the product is presented to the customer and, to some extent, how it is positioned relative to competing products. Finally, the election of the dispersal channel affects how customers perceive the stigmatize. bit Samsung, for example, utilizes a wide range of sales channels for its Samsung branded products, it sells its luxury phone brand vertu (typically gold and infield decorated, ranging from $6000 to $300 000) only in virtu and Samsung flagship stores (Vertu, 2011 Dialaphone, 2007) In the wandering(a) handset business, the diffusion channel plays a crucial role. maculation in Europe most energetic phone manufacturers rely on a large number of individual distributors and retailers, in nitrogen America the bulk of handset sales is carried out by nimble network and practical(prenominal) operators (see Figure 22). The long-lived dominance of prompt operators over distribution in the coupled States has allowed them to introduce additional bearments tie in to e.g. adapt and stigmatization of phones, and together with subsidies a command position in the industry. Still, the choices related to distribution come down to the same primary questions, i.e. what are the derive costs, how is the brand communicated, how flexible is the distributor etc.CustomersThe third element of the companys micro-environment is customers. In thisrespect, it is common to separate amid individual consumers and organizational (or industrial) customers (or buyers). piece of music consumers are traditionally considered less rational and hot headed in their ending making process, companies tend to be viewed as professional buyers pastime strict budget, cost and profit considerations. (see e.g. Webster & Wind, 1972 Baumgartner & Steenkamp, 1996) These kind of clear differences in purchasing demeanor have been questioned (Wilson, 2000) and todays B-to-B marketers astray severalise that emotions play an important role as well as in business get decisions (Kotler & Armstrong, 2006178).In the lively phone business, consumers roleplay an enormous compartmentalization of tastes, preferences and affluence. In developing countries, the sales of low-end active phones (often under $50) dominate, spell in developed markets of e.g. Europe and North America, consumers often opt for more go on works incorporating cameras, GPS navigation, Internet search etc. Moreover, most of these consumers appreciate jimmy added features and post-purchase operate provided by the manufacturer (e.g. Apple App Store, Nokia Ovi Store a nd Google android Market) and often base their purchase decision on the combination of the phone and the approachability of these services (see e.g. Singh & Goyal, 2009). Industrial buyers, on the other hand, tend to pass judgment services related business use of the phone (e-mail, data security etc.) and suppliers ability to provide a communications closure to the company instead of only handsets.Finally, with regard to the energetic phone industry in Europe, Asia and the United States, there are some signifi roll in the hayt differences in customer profiles. While in Europe & Asia a handset manufacturer can sell both directly to the consumer and via distributors and retailers, in the United States the only major customer is the operator that, then, functions as a distributor and retailer. This, obviously, has its effect on what kind of merchandising is needed to put on the end customer. disputationThe Merriam-Webster dictionary defines competition as the effort of two or mor e parties playing in leechlikely to warrant the business of a third companionship byoffering the most favourable terms. (Merriam Webster Online, 2011) Correspondingly, The rising Palgrave Dictionary of economic science states that competition arises whenever two or more parties strive for something that all cannot obtain. (Stigler, 2008) In this thesis, these competing parties are handset manufacturers who act to secure the business or strive for the limited pick, i.e. the money, of their customers.In terms of developed economic theory, competition is one of the most researched areas of economics. Economists generally recognise meliorate and debile competition, concluding that no other system is more Pareto in effect(p) than stark(a) competition.According to Organisation for Economic Co-operation and Development (OECD, 1999) perfective aspect competition is outlined by quatern conditionsa) There are such a large number of buyers and sellers that none can individually aff ect the market price. This way that the demand curl up facing an individual firm is suddenly elastic.b) In the long run, resources must be freely industrious, nitty-gritty that there are no barriers to admissionway and exit.c) All market participants (buyers and sellers) must have full rag to the knowledge relevant to their production and consumption decisions.d) The products should be homogenous. flawed competition, thus, occurs when any of the criteria for perfect competition is not satisfied, e.g. when there is information asymmetry between buyers and sellers, either buyers or sellers are able to influence prices or products are not homogenous.In regard to the lively phone industry, there is a clear case of imperfect competition. Firstly, the trey largest manufacturers Samsung, Samsung and Nokia held about 64 % of the global unit sales in Q1/2010 speckle the tenth largest Huawei had 1,3 %. (Gartner, 2010) This kind of a market government agency is generally referred to as an oligopoly in which producers are so few that the actions of each of them have an impact on price and on competitors (Merriam Webster Online, 2011). Second, there are fairly high barriers to entry due to the capital intensive nature of the business. In addition,gaining market administer generally requires significant investments in merchandising and established manufacturers can benefit from advantages of scale.Poters 5 developament ModelThe ostiariuss five forces object lesson has been criticized, for example, for its inherent assumptions. Firstly, an industry is fancied to consist of an unrelated set of buyers, sellers and substitutes and competitors that act at arms length. Second, companies can gather wealth that allows them to erect barriers against active competition and new entrants thereby creating morphological advantage. Finally, the prevailing incertitude is assumed low bountiful to stick out predictions about the participants demeanor and aim a do dging accordingly. In addition, one should to a fault note that the model was developed more than 30 years and, since then, new industries have been born and the old ones taken new shapes. In an argument that the classical model such as the tailfin Forces and care for chain analysis were designed for the analysis of traditional industrial firms and do not apply well to todays knowledge-intensive companies.Figure 2.2 Porters Five Forces modelThe precept for choosing the Five Forces framework was as follows. The model was to be long-familiar and tested. Even though Porters model has been criticized for its pertinence to certain industries and for its assumptions, few models have gone through such thorough scrutiny and prevailed. While no model is perfect the limitations of the Porters framework are, nevertheless, long-familiar and documented. Finally, the use a widely accepted framework facilitates practice session and interpretation of the results as opposed to some other model with less preponderance and academic/practician interest.Table 2.2 Opportunities and Threats for Samsung Mobile2.3 Suitable furrow schema to get over threats and grab opportunity in Samsung Global R&D (Research & Development)In 2003, Samsung invested 3.5 one million million million won ($3 billion) or 8% of correspond revenues in R&D. It acquired 1,313 US overts in 2003, be it 11th inthe world in US patent awarded. (Exhibit 9) Samsung has about 19,700 researchers functional in R&D. Researchers account for approximately 34% of its total employees. Every year, R&D engineers developed about 100 new technologies and they work on the victimisation of core technologies in the fourth genesis (4G) mobile communications and in nigh generation retention chips.Samsungs selective information and Telecommunication R&D center of attention is in Suwon, where the companys home plate are located. This R&D eye was designed to incorporate all of its business specialtiessemiconductors, electronic components, multimedia, and telecommunicationsto maximize technological synergies among them. The Suwon R&D magnetic core also interconnects with other R&D centers, both in Korea and in other countries.In the mobile business, Samsung has applied for 12,000 patents in Korea and 25,000 patents overseas since 1998. The main focus of R&D is the development of new technology standards for 4G communications and the mobile Internet. Samsung holds approximately one hundred patents related to 3G and 4G technologies. Recently, Samsung sold its cdma2000 1x EV-DO system to Japan and southeastward Asian countries.Global marketSamsungs clever selling strategies played an important role in lifting Samsungs see from that of a low-end manufacturer to that of a global digital technology leader. For effective global merchandising and stigmatization, Samsung established a new organization to deal with its integrated global marketing activities. Eric B Kim, who used to work at IBM, wa s recruited to lead the Global Marketing Department. wholeness of his most important decisions was to throw in the towel all existing contracts with 55 advertising agencies and to sign a $400 million contract with one ad agency, FCB Worldwide. Since then, Samsung has expose a serial of corporate branding campaigns and the slogan, Samsung DIGITall Everyones invited.One of Samsungs major global branding strategies is exceeding snitchship. In1996, Samsung was an unofficial sponsor of the Atlanta 1996 Olympics, having sponsored the Samsung exhibition in the pavilion of the Main Stadium. In the same year, Kun Hee leeward was selected as an IOC member, and Samsung reliable an opportunity to enter in go through (The Olympic Partners).The IOC proposed that Samsung get in in sponsoring the home appliance category for the Olympics. However, Samsung wanted to utilize the opportunity to promote a advanced ensure, and felt that the home appliance category was not enough to empha size Samsungs technological advances. Samsung set its sights on the telecommunications category and believed that, through the Olympic sponsorship, it could shed its image as a low-end home appliance maker and agitate itself as a high-tech mobile communications company. To win the sponsorship negotiations, Samsung concentrated its marketing resources on the mobile phone business.Samsungs Key Issues to make better their threatsThough Samsung has go on its success in the mobile phone business, it faces a number of challenges to keep the harvest-tide momentum in the future.First, competition in the mobile phone market will become more intense. Lower entry barriers will bring in more competitors to the market, and the digital lap will expedite the competition even further. Companies from other industries such as PCs or network services will compete directly with Samsung. As such, it will have to devise more creative win-win strategies in the highly mutable digital crossway lands cape.Second, the sustainability of Samsungs high-end system, which was attributed to Samsungs brand building, may be in question. Samsung has achieved high profit margin, which is comparable to that of Nokia, chiefly ground on its high price, plot of land Nokia has done so based on its cost dynamics. In terms of per-unit cost, Nokia spends less on R&D and marketing. One might mistrust whether the high-end strategy can really be sustainable.As the mobile communications market becomes saturated, future revenue sourceswill come mainly from emerging markets (China, Brazil, India, Eastern Europe, etc.). First-time buyers in emerging markets tend to prefer low-cost phones. This could hurt Samsung unless it begins to cover the low and middle-end markets. Nokia and Motorola, as well as many newcomers from China, have already identifyed those emerging markets. How to compete in the low and middle-end markets, while preserving its premium brand image, will be important questions in Sa msungs future growth.Third, Samsung is highly dependent on contradictory companies for core technologies and modules. For example, it sources core CDMA base-band chips from Qualcomm and sophisticated camera-phone modules from Japanese firms. Consequently, the proportion of royal family payment in total manufacturing cost is likely to increase unless Samsung develops its own technologies. nigh industry experts deliberate that most of Samsungs patents are on applied technologies, which are developed based on others patent-protected core technologies. Recently, Samsung experienced a shortage in the supply of Qualcomm chips and camera-phone modules. This suggests that Samsungs high colony on core technologies and product modules would expose not only its future profitability but also its competitive position.Product Life motorbike of Samsung galaxy For my analysis it will be useful to understand how Samsung has introduced its extragalactic nebula Smartphones. The opening awa rd of a product is one of the most important, because in this branch a company positions its products in the market. In order examine the strategical choice of the company I need to understand the strategic possibilities in the establishment stand for of a product. According to Kotler and Keller, companys status and diametriciation strategy must change throughout the animateness sentence of its products. I will give a brief comment of the details of the product life roll and strategic possibilities in each of these stages. According to Kotler and Keller to be applicable to a product the assumptions behind the life-cycle are that the product must have limited life sales go through dissimilar stages, with different challenges, opportunities and problems gelt change at different stages products require different manufacturing, financial, marketing, purchasing and human resource strategies in each lifecycle stage. The Smartphone products fulfill these assumptions. Kotler a nd Keller have sex 4 different Life-cycle stages for a product. entree tier foot is a stage of slow sales growth as the product is just introduced. It is also accepted with heavy advertising. According to Shaw (2008) in the psychiatric hospital stage a company can choose by discernment strategy or quoin strategy. A penetration strategy involves truculent marketing conflate and product for the visual sense market offered at a low price. A receding strategy according to Shaw (2008) involves a set market instalment and a higher price. In this stage Shaw (2008) recognizes only two possibilities targeting the hoi polloi market with low price and a break strategy involving higher price. Looking at the smartphone market it is assertable for the companies to target mass market with higher price as for instance iPhone & Nokia does. This is also due to the inexpensive terms of the mobile operators where people can buy the Smartphone on leasing.6.2 Growth formatThis is a peri od of rapid growth and market acceptance. hither the net are higher. According to Shaw (2009) in the growth stage companies can choose between two strategic options these are fraction refinement and brand expansion. In segment expansion, the company can add new target segments, with their own marketing mixes. Strategic utility(a) to segment expansion might be brand expansion. This strategy adds new products or variations to the existing line. The strategy delivers to the customer segment bigger choice, or greater value. nearly of these strategy ideas might be delivery, gift-wrapping (Shaw, 2012).6.3 maturity StageIn maturity stage the sales are lower as the product is already bought from most of the voltage buyers (Kotler and Keller 2009 p.490). According to Shaw (2010) in Maturity stage it is common for a company to employ s stable marketing mix. As the Product moves further on the frizzle harvesting strategy becomes necessity.6.4 Decline StageHere sales go under and prof its erode (Kotler and Keller 2009 p.490). In this stage Shaw (2011) recognize only divesting strategy as an option.The following picture shows the life cycle of Samsung extragalactic nebula (first model in Smartphone ) by Samsung which was launched in 2008. Where in the front period it was blossom since it was on affordable cost. This model was briefly hit in the market. In 2009 its has started its awe-inspiring growth. In around 2010 it reached its maturity state. Where Samsung enjoyed a lot on its success. This encouraged Samsung to do R&D in Galaxy model and they started to develop a lot newer version. Due to opening of new models and everyone had the current model, Galaxy has started to decline in 2011.Figure 2.2 Product Life cycle of Samsung Galaxy