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Samsung: A Case Study: Cost Structure Of Samsung

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 COST STRUCTURE OF SAMSUNG

Low cost structure of Samsung and high responsiveness to economic events has made Samsung more competitive. For example, initially Samsung focused more on volume and domination on market rather than increasing profitability. However, in 1990s, during the Asian financial crisis, Samsung cut costs and reemphasized product quality and manufacturing flexibility, which allowed its consumer electronics move from project phase to store shelves within next six months.
Under the resources-based view of strategic management, effective resources available to a firm, as well as the competency of a firm is responsible in affecting competitive advantage received by a firm. The competitive advantage received by a firm will likely …show more content…

• That is comparatively more from last year's Galaxy S7 Edge which costs $271.20 to produce.
Activities at Samsung
Samsung has aimed to carry out various environmentally focused campaigns in all corners of the globe. Samsung’s campaign include directing the earth a cleaner, healthier place to live for e.g. Samsung employee around the world have personally participated in environmental cleanups, end of life(EOL) recovery campaign and community tree plantings.
Samsung Engineering seeks to make better conditions around the globe through our various social contribution programs. Company-wide, Samsung utilize their strengths and resources to benefit local communities and help children and families who are in need. Individually, employees of Samsung are encouraged to take part in the many volunteer programs offered by the company.

REVENUE STREAMS
Samsung posted quarterly revenue of 51.68 trillion Korean won, or$45 billion. up 8.9% year over year. Profits came in slightly above its earlier estimate, at 7.39 trillion, or $6.45 billion, up a …show more content…

“buffs” for e.g. customers which can be seen as innovators or early adopters and shoe high interest in every new release of Samsung. These customers are easily enthused by the new technologies like smartphones and other add ons as they are lee price sensitive.
Following figure shows the dimension of value creation:

Dimension of value creation
Pricing tactics
Since Samsung is present is present in so many product categories, the company follows a variety of pricing tactics the pricing strategies can be divided to match the product it used for.
Skimming strategy with this strategy, Samsung brings a new product in the market, for e.g.S7 edge, initially it uses skimming price for the product, where it tries to get high value in the start before competitors catch the product. Once the product is outdated or same product is released in the market, price immediately drops.
Additionally, Samsung also uses competitive pricing for the product other than smartphone, for e.g. T.V., refrigerator and other home appliances.

 CUSTOMER

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