SAMSUNG

Samsung’s business strategy consists of three pillars or elements namely Effective market
readership, scanning and utilising opportunities in the market, and new product development.

A market reader can be described as a business that closely watches the market and is quick to
duplicate new products and/or introduce new features to existing products that other companies
initially introduced. Specifically, Samsung has shown itself to be successful in replicating the
design and essential features of smartphones from its’ main competitor, Apple. It was reported that
"one internal Samsung presentation from 2010 presented Samsung engineers with a step-by-step
process to try and steal so much of what made the iPhone such a special product”. (Heisler, 2016)

The second element, on the other hand, incorporates a relentless quest for current gaps in the
market and takes advantage of the opportunity with positive outcomes for the company. Samsung,
for instance, found that Asian-language speakers in particular needed a device they could hand-
write on, as drawing characters with a pen is simpler. The result was an unexpected success with
the emerging series of Samsung Note phones as a combined phone / tablet (“phablet"). (Nisen,
2013)

Lastly, Samsung Electronics has a wide range of products covering hundreds of product lines and
is divided into three brand divisions: IT & Mobile Communications (IM), Consumer Electronics
(CE) and Device Solutions (DS). The multinational electronics company has 36 Research and
Development (R&D) centers worldwide to secure the future core technology and invested KRW
14,8488 trillion in R&D in 2015. Since 2006, Samsung has been the second largest patent holder
in the United States. Accordingly, as one of Samsung's strong competitive advantage, new product
development capabilities have been firmly established. (Samsung Sustainability Report, 2016)

1. Human Resource Strategy and Performance

At Samsung Electronics, they continue dedicating their human resources and technology to
producing superior products and services, ultimately leading to a better global society. The
company, in order to reach its full potential and the three-pillared business strategy they employ
various human resource strategies such as enhancing professional procurement capabilities by
nurturing global procurement experts and leaders and using training facilities dedicated to supplier
employees to provide free-of-charge training programs. With these kind of strategies, Samsung
becomes closer to their third goal which is new product development and even effective market
readership. Moreover, they are more able to adapt to the business environment because of their
constant trainings and updating themselves of the changes or improvements in terms of
technology. The company values their employees such that they conduct employee satisfaction
surveys for monitoring purposes and using other innovative HR practices, they build a creative
organizational culture. Another facet of Samsung’s Human Resource Management is the Samsung
Talent Review Session (STar Session). This comprehensive talent development process helps the
employees with their supervisors to design their career growth path and benefit from career
enhancement programs. Employees can apply for a wide range of human resource development
programs in line with their career development phase–MBAs, career training, and job skill
training. This talent promotion program is aligned with Samsung's Expertise Development Process
(EDP) that is tailored to all the company's staff.
2. Developing Compensation Plans

As its main compensation strategy, Samsung Electronics uses salaries. Their approach is
flexible and based on fair and transparent evaluation of performance. The compensation plan of
Samsung is being updated on changing demands. The business is based on the company's
feedback, experience, and quality of its employees. The policy on wages or cash compensation
involves minimum wages and incentives. In addition to performance based on wages, the
organization also measures the salary of an employee based on firm-specific job experience (the
quality employees have gained over time while working at the company) and firm-specific
knowledge that could promote promotion. Such a strategy helps keep the company's workers as
valued as they are. Reiterating the aforementioned business strategy of Samsung, their fair
compensation plans will push the employees to reach them.

For several reasons, this policy of compensation is appropriate. Samsung Electronics has
control over its compensation costs through the compensation policy. The ease of determining pay
ensures this control as the highest remuneration is for top performers. The use of merit as criteria
for determining the employee's pay and advancement also helps to create healthy competition
among the employees of the company which helps in adapting to the new business environment
as it is ever-changing. Moreover, the policy previously described allows the company to achieve
a balance between the needs of the employees and the financial objective of the company. The
company is also in a position to promote lasting, critical interpersonal networks, employee
attachment, and specific knowledge of the company, considering that the salary is also market-
oriented and well above minimum wage rates which is important to achieve the business strategies
imbibed in the company.

3. Personnel Planning and Recruiting

One of Samsung’s focus on Human Resource Management Strategy is Integrity

Management. This branch of Human Resource Management deals heavily on Respecting Global
Diversity. This refers to their recruitment style that focuses on hiring global employees within the
organization. It can be further described into four facets specifically recruiting and obtaining talent,
fair evaluation and compensation, respecting human rights and diversity, and Labor-management
cooperation and addressing employee’s grievances. Basically, Samsung is employing talents
worldwide. Each foreign employee is given a mentor and has a regular meeting with the
executives. Samsung believes and has seen that this kind of diversity, with having global talents,
leads to new business ideas which tackles a portion of their three-pillared business strategy. It
creates a wider range of ideas and abilities, offering greater scope for innovation and competitive
performance. BBC Business News reported that on November 2014, Samsung kicked start the
Virtual Reality market. This kind of innovation stemmed from global talents coming together to
execute an idea. Moreover, it was recently reported that Samsung had higher profits than Apple in
the smartphone industry. Another advantage from Samsung’s strategy in Human Resource is the
representative workforce. Because of their initiative on diversity, their workforce can provide
superior service because they can better understand the needs of the customer. The diversity also
answers for the gaps in the market that can be seen in multiple lenses, touching again another pillar
of their business strategy. In addition, diversity allows for rapid responses and adaptations to
change. Overall, Samsung’s goal of hiring a diverse team look to have achieved their aim of
sustainable global expansion and new business growth.

References:

Bentley, K. (2016). Samsung: Compensation Plan Outline. Compensation Management.

Dudovskiy, J. (2017). Samsung Group Report, Retrieved from https://research-

methodology.net/samsung-electronics-report/

Heisler, Y. (2016) “A look back at when Samsung copied every single thing about the iPhone”
BGR, Available at: http://bgr.com/2016/12/29/iphone-vs-android-samsung-copycat/

Nisen, M. (2013) “Samsung Has A Totally Different Strategy From Apple, And It’s Working
Great” Business Insider, Available at: http://www.businessinsider.com/samsung-corporate-
strategy-2013-3
The Samsung Electronics. (2016) Samsung Electronics Sustainability Report 2017. Retrieved from
https://www.samsung.com/us/smg/content/dam/samsung/us/aboutsamsung/2017/Samsung_Elect
ronics_Sustainability_Report-2016.pdf. Retrieved on November 20, 2019.

The Samsung Electronics. (2017) Samsung Electronics Sustainability Report 2017. Retrieved from
https://www.samsung.com/us/smg/content/dam/samsung/us/aboutsamsung/2017/Samsung_Elect
ronics_Sustainability_Report-2017.pdf. Retrieved on November 21, 2019.