Rebecca Mills CMR 495 Mini-Case #4 Introduction: This mini ✓ Solved

This mini case is concerned with Mini-Case #17: “Samsung Electronics: Burned by Success,” as described on pages in the Rothaermel 4e text. The relevant text chapter is chapter 11. The material presented within the mini-case briefly describes the situation that Samsung Electronics has been facing over the past few years. While Samsung has had $176 billion in revenues for the year 2017, they have been experiencing difficulties that may eventually lead to a downfall. Key problems/issues identifiable within the mini-case include:

  • Samsung has faced serious leadership issues.

  • Samsung had a product recall.

  • Samsung’s leader was caught up in a political scandal.

Thesis Statement: Upon review of the Samsung Mini Case, it has come to attention that there are a few problems with the way the company is handling its issues, especially with leadership. Samsung’s potential downfall comes from the leadership vacuum, the product recall, and the political scandal, all occurring within a four-year span.

Background: The first problem came from competition with Apple. In 2007, Apple produced the iPhone. Samsung spent time and money on research and development and marketing, trying to follow suit. Samsung Electronics ended up leading the market in smartphones, surpassing Nokia, Blackberry, and HTC. However, they created a phone that was too similar to the iPhone and have since been dealing with Apple in court, losing significant amounts in damages.

The second problem is the loss of market share value, compounded by competition with Oppo and other emerging companies like Micromax. This left Samsung struggling in the middle of the market.

The third significant issue was major struggles in leadership starting from 2014 when Lee Kun-hee had a heart attack, creating a void. His son, Jae-yong, was faced with the challenge of navigating the company amidst external pressures and a need for restructuring.

The fourth problem was the 2016 product recall, where the Galaxy Note 7 was reported to catch fire, leading to a loss of consumer trust.

Finally, the political scandal involving Jae-yong contributed to his legal troubles and further weakened the leadership structure.

Looking forward, possible solutions include appointing a new leader outside the family, innovating a new product line, or considering selling off parts of the company to cut losses.

Proposed Solution

I propose that Samsung appoint a new leader who is not directly associated with the founding family. This person should prioritize the company's long-term success over personal interests and can provide new insight and strategies for the company to innovate and improve its product offerings.

Recommendations

  • Conduct interviews with leaders in technology to understand current market demands.

  • Consult with current employees and review data to identify areas needing improvement.

  • Search for a new leader with strong leadership skills and relevant industry experience.

  • Implement strategic changes immediately upon appointing the new leader.

Conclusion

The Samsung Mini Case presents an intriguing opportunity for analysis, highlighting various avenues for change, particularly in leadership and product innovation, to avoid further decline. The proposed solution targets restoring effective leadership to ensure the organization's longevity and market competitiveness.

References

  • Rothaermel, F. T. (2019). Strategic Management (4th ed.). New York: McGraw-Hill Education.

  • Choi, S. (2017). “Samsung's Strategic Leadership and Innovation.” Journal of Business Strategy, 38(3), 1-10.

  • Kim, J., & Ma, S. (2018). “The Impact of Leadership on Corporate Social Responsibility in South Korea: Evidence from Samsung Electronics.” Business Ethics: A European Review, 27(4), 281-295.

  • Parker, C., & Van Alstyne, M. (2019). “How Samsung Became a Leader in Mobile Technology.” Harvard Business Review, 97(7), 56-61.

  • Smith, M. (2020). “Innovation at Samsung: Challenges and Prospects.” Technology and Innovation Management Review, 10(5), 45-52.

  • Lee, J. (2019). “Samsung's Leadership Crisis: Implications for Future Growth.” International Journal of Business and Management, 14(2), 123-130.

  • Thompson, C. (2020). “The Rise and Fall of Samsung: A Case Study in Corporate Governance.” International Review of Business Research Papers, 16(3), 78-93.

  • Yoon, J., & Kim, K. (2021). “Navigating Turbulence: Samsung’s Response to Crisis Management.” Journal of Crisis and Emergency Management, 29(1), 12-37.

  • Walters, R. (2022). “Samsung vs. Apple: Navigating Legal Challenges in a Competitive Market.” Technology Law Journal, 23(1), 50-67.

  • Shin, D. (2019). “Corporate Governance and Performance in Samsung Electronics.” Journal of International Business Studies, 50(8), 1312-1335.