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Samsung Analysis: The Dispersion of Production Facilities Essay

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Introduction

Samsung is one of the most promising and well-known companies in the field of IT technology and electronics. The history of this business has many different stages and application of management strategy. For a long time, the main advantage was a successful human resource policy and innovative activities that allow the company to occupy the leading position in the market. The dispersion of production facilities in the territory of Vietnam has provided management with a large number of competitive advantages.

Discussion

Samsung was founded in 1938 in Korea by a businessman who traded in noodles and other food products. After the Korean War ended, the founder of the business decided to expand the scale of production and added textiles and fabric. The Korean government at that time chose the tactics of protectionism, supporting local entrepreneurs. Thanks to this program the businessman was able to expand production, protect himself from competition and enter a new field of activity (Jacobs, 2021). The latter involved the establishment of several commercial banks as well as insurance companies.

It can be stated that in the early stages of the company founder had chosen the extensive type of development, according to which the company’s turnover and profits increased by expanding the number of manufactured goods. The aim of the company was to capture the entire production line from the source material to the final product. In electronics, attempts to build business models were made in the seventies, when Samsung released its first televisions (Eric, 2022). From that point, it could be argued that the company moved to a tactic of technological production, which allowed the production of this business to compete with foreign brands of electronics (Chang, Zhang and Xiong, 2022). After the death of the founder of the business, the followers decided to leave the focus on electronics, but the main task was to expand its position in the global market.

In order for the products to become attractive to foreign consumers, management corrected a special policy of organization of work, which minimized bureaucratic processes (Laudon and Carol Guercio Traver, 2021). Employees of all levels of production had the opportunity to make suggestions and argue with the boss (Handayani, Astuti and Riyanto, 2022). Quality and innovation became Samsung’s core values and defined a further decade of successful development.

After the business established itself as a producer of high-quality electronic goods all over the world, the management began to search for the most profitable locations for the deployment of production. One of the main goals of the globalization of the company was the need to adapt to different local markets and adopt the experience of other successful companies (Aliekperov, 2021). One of the key means of expanding Samsung’s position in the global economy was a policy of introducing regional specialists (Sinaga, Lubis and Sembiring, 2023). The management makes sure that every year the company employs a large percentage of employees from different countries who understand the peculiarities of the local market and have an opportunity to communicate in their native language with suppliers and competitors.

Two important regions to which the management of the company paid special attention were the USA and Vietnam. The reason why these countries have become the most attractive are included in the mentality and culture of production, as well as geographical advantages (Haq et al., 2022). Entering the USA market and faster factories there provides the company an opportunity to work in the most technologically advanced community and to take experience from the partners holding a leading position in IT technology (Kaur et al., 2022). Vietnam is advantageous geographically, as, in the North, it is located in close proximity to China which is a major market test as well as a source of necessary materials.

The convenient location of production in Asia is due to the proximity of important strategic ports that allow you to build an efficient production chain. Finally, an inexpensive but highly qualified labor force exists in Vietnam. The main center of this company is the city of Hanoi (Lim et al., 2023). The company currently exports to most of the developed world; however, the most intensive shipments are to North-South America, Western-Eastern Europe. The third place is occupied by Korea, followed by China, Vietnam and Japan as the most lucrative Asian trading platforms.

Samsung is currently carrying out operations to expand the production of Olead modules for the company’s electronic products. Moreover, the management planned to send a new stream of engineers and developers from different countries to Hanoi in order to increase the production capacity of LED panels (Liao et al., 2023). However, in recent years, the company has begun to face a lot of challenges preventing it from expanding its sphere of influence in Vietnam (Rand and Tarp, 2020). It should be noted that, until recently, the World Bank and the Vietnamese government have provided the company with favorable conditions for growth and competitiveness (Greisen, 2022). Serious obstacles began to emerge with the emergence of movement restrictions due to the pandemic (Bae and Kim, 2023). Since human resource management tactics involve relaxing engineers and developers to Vietnam, many plans and deadlines have been disrupted since 2019.

Currently, management is having difficulty overpowering the desired number of employees because the country’s government is still imposing restrictions. The key competitors in this country are Intel and LG. Both companies have a number of advantages, which Samsung’s management has to focus on in the construction of medium- and long-term strategies. To be competitive against Intel it is necessary to develop the production of chips and other microelectronics. Mastering the customer base is important to LG and increase the intensity of well this sleepy development in the field of liquid crystal displays.

The main risk of further development of production is insufficient resources for the development of the innovative activity. This is due to the consequences of the pandemic as well as the active policy of the competitors, which for some time was not taken into account in the strategic planning (Sheldon and Kwon, 2023). Data from competitors shows that the latter is willing to spend hundreds of billions of dollars on innovative development (Jeong et al., 2022). However, Samsung does not have such funds to remain competitive in the future (Smith, 2022). The struggle for the market and the deployment of production facilities in Vietnam have a number of important advantages for this country (Huu Toan, 2022). On the other hand, it is important to note the significant environmental damage that is caused to the environment of the region, which violates many points of the Environmental Protection Law of Vietnam (Hemmati and Sajadieh, 2021). A significant risk to the further development of Samsung in this country is the tightening of control by the government over the activities of large international corporations in the country.

Conclusion

Thus, the main threat that could subsequently become a platform for development is the need to recover from the restrictions of COVID-19. As a result of the latter, the mobility of company employees from different parts of the world has decreased, consequently reducing production turnover, and worsening the exchange of experience. This factor must be taken into account in the long-term planning in order to restore the level of marina capacity existing before 2020.

Reference List

Aliekperov, A. (2021). Creating Business and Corporate Strategy. Routledge.

Bae, B. and Kim, S. (2023). ‘’ , Asia Pacific Journal of Marketing and Logistics. Web.

Chang, V., Zhang, W. and Xiong, C. (2022). ‘’, Research Anthology on Developing Socially Responsible Businesses, pp.1056–1083. Web.

Eric, B. (2022). Explaining Management Phenomena. Cambridge University Press.

Greisen, B.R. (2022). Business Culture Vietnam. Books on Demand.

Haq, M.I.U., Khaliq Alvi, A., Somroo, M.A., Akhtar, N. and Ahmed, A. (2022). ‘’, Journal of Economic and Administrative Sciences. Web.

Handayani, A.V., Astuti, R.D. and Riyanto, M. (2022). ‘’, JOBS (Jurnal Of Business Studies), 8(2), p.149. Web.

Hemmati, M. and Sajadieh, M.S. (2021). Influencing Customer Demand. CRC Press.

Huu Toan, B. (2022). ‘’, Cogent Social Sciences, 8(1). Web.

Jacobs, A.J. (2021). ‘’, The Korean Automotive Industry, Volume 1, pp.343–365. Web.

Jeong, H., Song, C., Kim, S. and Shin, K. (2022). ‘’, European Planning Studies, pp.1–20. Web.

Kaur, J., Agrawal, S., B, P.D. and Chaudhari, N. (2022). ‘’, ECS Transactions, 107(1), pp.12915–12924. Web.

Laudon, K.C. and Carol Guercio Traver (2021). E-commerce: Business, technology, society. Pearson.

Liao, J., He, S., Hu, Y., Chen, J. and Dong, X. (2023). ‘’, Asia Pacific Journal of Marketing and Logistics. Web.

Lim, Y. M., Leong, C. M., Lau, T. C. and Pek, C. K. (2023). ‘’, Lecture Notes in Networks and Systems, pp.240–250. Web.

Rand, J. and Tarp, F. (2020). Micro, small, and medium enterprises in Vietnam. Oxford: Oxford University Press.

Sheldon, P. and Kwon, S. H. (2023). ‘’, The Economic and Labour Relations Review, pp.1–20. Web.

Sinaga, A.S., Lubis, A.N. and Sembiring, B.K.F. (2023). ‘’, Al Qalam: Jurnal Ilmiah Keagamaan dan Kemasyarakatan, 17(1), p.362. Web.

Smith, R.R. (2022). Strategic Human Capital Development in Asia. Taylor & Francis.

Tiberghien, Y. (2022). ‘’, Rethinking Asian Capitalism, pp.377–389. Web.

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