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Business Environment

Autor:   •  February 6, 2019  •  2,326 Words (10 Pages)  •  54 Views

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Screen Development Success Story of Samsung

The South Korean company Samsung founded in 1938 made its inception in consumer electronics industry with its washing machine. The washing machine intended to compete with the leading brand Toshiba had certain attractive features to attract the consumers. The digital display screen on the washing machine to indicate time was its specialty. Though the performance of the product was not applauding, Samsung’s inclination towards design of the product was evident (Chen et al., 2013). During 1990s the political differences between America and Russia opened up new opportunities for Samsung to reap. While Russian Government was in desperate attempt to improve its economic condition and stabilize its suffering economy, Samsung wanted intelligent resources which could make its visions of smart and leading designs realized. This gave Samsung the exclusive rights to leverage fundamental scientific advancements after an agreement signed with Russian Academy of Science (Shaughnessy, 2016). Samsung could use the Russian resources and work with their collaboration to design products for future. In return Samsung would employ Russian youth and help Russian Academy with funds and sponsorships for various projects.

Even after the advent of globalization, the arch rivals of Samsung including Apple and Google could not buy the access


to institutions which had similar competence as Russian resources. This was because of globalized labour market which was governed by new regulations, had difficulties in identifying, hiring and retaining talents and excessive competition from global businesses worldwide (Shaughnessy, 2016). Shaughnessy’s account of Samsung’s success in screen development is very helpful in understanding why Samsung could lead when the other electronics businesses of similar innovative capabilities or higher were struggling. Political and Economic conditions were the reasons behind this technological development. According to Chen et al. (2013) the social derivatives like demand for convenience and inclination towards certain technological trend has always helped the innovative brands like Samsung. There is however a clear inference that can be made among the impactfulness of the external factors. Samsung’s case reveals that it was political and economic scenarios which led to the development of screen technology. Later the marketing endeavours of Samsung helped it in harnessing the changing social preferences worldwide including America. Globalization is also a highly contributing factor since the process of globalization presented before Samsung a wide market where technological trends in one region travelled rapidly to the other region.

Samsung’s growing command on screen development technology therefore had a sure impact on social environment, indirectly affecting the economic capabilities and political decisions of various countries. It also shaped the competitive structure and changed the consumer electronics industry scenario in the globalized world. There were however both positive and negative impacts in this regard.

Samsung Impacting Business Environment: Positive and Negative Impacts

In terms of the impacts that Samsung’s screen development technology has created on the global business environment, there are both direct and indirect impacts. According to Wang and Wang (2007) size of the firm is a strong determinant in adjourning the scale of the impact. Samsung being a multinational firm with revenue over $560 billion (Samsung Newsroom, 2017) it is easy to see that the effect that technological development at Samsung makes is extremely high. The firm with its potential to create and change industry trends


or lure political authorizes in certain regions for investments have far reaching impact on political, social and economic scenarios than that could be created by a small sized firm.

The greatest benefiters of Samsung’s leading technology are the global consumers. Tough competition among top electronics firms which compete on design, cost and performance criteria have enabled the consumers to possess high class and good quality products at affordable prices (Huang, 2011). Samsung’s digital screens with noise filtering technology have been the trend setters for an entire new level of technology for which innovative firms have got the direction to further research and develop (Jin-Young, 2016). Samsung’s commendable growth has also reflected in its marketing endeavours, as the firm funds severalPoliticalprojects worldwide with a special emphasis on Russian

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(Wang and Wang, 2007). In India electronics industry is the one among few industries that has long been enjoying the de-regulations since 2004 and has attracted decent foreign investments and strengthened the economy (Singh, 2013).

On the down side is the growing rivalry among competitors on reducing cost of production to enhance profitability. While Apple stopped the use of toxic element Arsenic in the production of its screens in 2007, followed by LG and Lenovo, Samsung continues to use it because of the price and expensive access to alternatives (Huang, 2011). To retain the profitability Samsung is also often criticized to have abused the social circumstances in both developed and developing countries. Between 2012 and 2014 the firm is accused of several child labour allegations which forced Samsung to include ‘zero tolerance policy’ on child labour violations in 2014 (Jin-Young, 2016). In China Samsung was alleged to pay standard wages to workers denying their over-time hours. The firm is also accused of copying Apple’s innovations and presenting them with tweaked features in order to maintain its market leadership (Singh, 2013). The firm is also alleged of patent-trolling where Samsung misuses certain


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