STRATEGIC ALTERNATIVES AND RECOMMENDATION STRATEGY

Alternative strategy for Samsung would include developing alliances with other companies,
shifting their manufacturing base to low cost countries like China and India, spending more
on promotion of the products etc. These strategies seems to be transitional strategies
which can make an impact on the business growth and development for some time but in
longer run competition would catch up with it and entire market would be a saturated
market with strong players competing for every percent of market share. Secondly profit
margins would eventually drop down with increasing competition and it would not be
beneficial for the company in general to continue with business growth strategy of
conventional approach (Beckhard, 1998).

Secondly these strategies might be appropriate for a few market segments and a few
geographies where penetration in market is not sufficient but on the other hand a
transitional strategy would not help them in developing differentiation factor which is
strongly needed by the Samsung. Over the period of time they used various conventional
strategies in market and they became a huge success but not these alternative strategies
would only saturate the market in longer run. It is also important for company to include
some out of the box thinking. There is one benefit associated with alternative strategies is
that they are time tested, their risk levels are low and they are not as expensive as an
innovative and out of the box based strategy would be.
Growth Strategy:

It is the type of strategy in which an organization focuses on its current products that are
being produced and the potential market. Ways of growing are considered to make the
product more innovative.

Samsung basically relies on four different growth strategies i.e Market Penetration, Market
Development, Product development and Innovation.

Market Penetration:

Samsung maintains its market shares. the organization innovates its product so that their
potential customers doesn’t get bored with the product and they can attract new
customers. In this way their customers will be satisfied with the product and this can lead
to greater market share for Samsung

Product Development:

Samsung targets same old customers with a new product. By launching a new product, they
will attract more customers towards their product and can increase their market share by
doing so. For the awareness of the product, they advertise in TV, newspaper, and
pamphlets and on billboards.

Example: Samsung launching Galaxy S5 mobile phone

Market Development:

Samsung entering a new market will cause an increase in market growth and its market
shares. By adopting this strategy, they enter a new market by targeting new customers in
other areas. New market for Samsung could be a new Country or a new City within the
same country it is operating in before.

Example: Samsung introducing its product in a village or a new country.

The future strategy that our selected organization, Samsung, will adopt is substantive
growth strategies. In substantive growth includes vertical integration.

Vertical Integration:

There are three types of vertical integration, vertical forward integration and vertical
backward integration and horizontal integration.

1. Vertical forward integration:

Vertical forward integration in a business is when a manufacturer decides to controls

distribution or retail store. Samsung will cut themselves off from the wholesalers to sell
directly to retailers and then the retailers directly to the customers.

Example: Samsung owning retail shop or franchise and sells their product directly.

2. Vertical backward integration:

It is a form of integration in which companies controls its suppliers directly. There will be
efficiency and cost will be saved. This might cut transportation cost, improve profit margins
and make Samsung more competitive.

3. Horizontal integration:

Samsung do not follow Horizontal integration

Diversification:

Other than Samsung’s electronics, Samsung also produces unrelated products. Samsung has
Samsung heavy Industries, which is 2nd largest shipbuilders. Samsung also has two
Construction Company which is 13t h and 36th largest companies which are Samsung
engineering and Samsung C&T. Samsung also provides services such as Samsung Life
Insurance and it is world’s 14 largest companies.