Three Significant Challenges Facing Samsung in the Asian Region
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Three Significant Challenges Facing Samsung in the Asian Region
Introduction
Business environments vary depending on the region in which a company operates. Many of the most successful large corporations are flexible and adapt in specific areas by changing how they do things, such as customizing their products and services to meet consumers’ needs. In particular, operation in the Asian region comes with a fair share of challenges, but Samsung has managed to overcome the majority of them. That is why Samsung will be the company operating in Asia that this paper will focus on based on the problems it encounters. Notably, Samsung is a larger corporation that has managed to operate in multiple countries in the Asian region. The paper focuses on the three most significant challenges that Samsung is currently facing in the Asian region and provides recommendations for each problem.
Brief History of Samsung’s Operations in the Asian Region
Lee Byung-Chull established Samsung in 1938. Currently, Samsung is a multinational conglomerate South Korean company with headquarters in Seoul, South Korea (Burris, 2020). Although the company began as a grocery store and exported products to China and other Asian countries, it entered the electronics sector in 1969. Some of its first products included black-and-white televisions. In the 1970s, Samsung was a significant manufacturer in South Korea and exported home electronics products to various countries. Samsung has operations in various countries in Asia, such as Thailand, Laos, Singapore, Philippines, Indonesia, Malaysia, Vietnam, New Zealand, Myanmar, Taiwan, and Cambodia. In 2015, during the Asia Corporate Excellence and Sustainability (ACES) Awards, Samsung was given the Top Community Care Company (Samsung Newsroom, 2015). In that light, the company is renowned in the Asian region due to its commitment to innovating electronic products that meet the needs of its clients. The primary objective of Samsung in the Asian region is to transform individuals’ lives positively and create numerous possibilities using technology. Moreover, the company addresses problems in the region using technology. Besides, ACES recognizes corporations based on two primary domains: corporate social responsibility and leadership.
Samsung’s Challenge in Cambodia
Although Samsung’s operations in Cambodia have been successful since the multinational company entered the country, the primary challenge that it faces is maintaining the quality of its smartphones. In 2016, the local authorized distributor of Samsung in Cambodia pushed for a recall of the Galaxy Note 7. The report indicated that the smartphone had exploding batteries (Gaudemar, 2016). When it comes to Cambodians, the quality of the products matters the most, which explains why Samsung should be worried to regain the trust of its customers in this country. Many shoppers of Samsung products in Cambodia are middle-class earners who are price sensitive (Rayome, 2017). These individuals are not ready to compromise the quality of their electronic products. Although Thai Samsung Electronics, a Cambodian branch, introduced an exchange program that began on November 10th to 30th, individuals have been doubting Samsung products since then and it has affected the sales of the company’s electronic devices in that country (Cantillon, 2017). When Samsung noted the problem with its Galaxy Note 7, it urged the Cambodians who had bought them to stop using these gadgets and return them in exchange for another handset and money. Specifically, owners of Galaxy Note 7 were advised to get a distinct Samsung model and additional cash refunded to cover the price difference. Approximately 97% of devices were returned by Cambodians during the exchange program (Gaudemar, 2016). However, the worst thing was that reports emerged that replacement phones from the South Korean manufacturer had a similar problem, which tarnished the brand name of Samsung in Cambodia.
Despite Samsung’s effort to do everything to protect its reputation by coming up with an exchange program for Galaxy Note 7, things deteriorated when individuals noted that its products had a similar issue that caused the recall. In that light, the relationship between the company and one of its primary stakeholders, clients, started dwindling (Foroudi et al., 2020). Samsung made the situation worse by saying that it had not assessed the problem since its primary focus was on ensuring its customers’ safety. Besides, when a company’s quality of products is in question, it should own its mistakes and know where the problem is so that it can rectify it. However, Samsung did not show care about the cause of the battery issue. Although Samsung remains to be a prominent brand in Cambodia, the company admitted that the problem made it harder to sell in the country than it was before. With the high rate of competition from the Chinese smartphone manufacturers who are ready and take less time to address quality issues, Samsung might not recover well from this challenge despite its product promotion to boost its sales.
Samsung’s Challenge in China
Another significant challenge that Samsung is facing in China is the increased competition, particularly from the smartphone business segment. Specifically, the manufacturing and sale of high-quality android smartphones have given Samsung a competitive advantage in China and other countries in Asia. However, with the rise of Oppo, Huawei, Lenovo, Vivo, and Xiaomi handsets, things have changed, and Samsung might not keep up with the pace of its Chinese business rivals if it does nothing (Lohchab, 2020). The emergence of numerous competitors in the smartphone business threatens the firm’s market share. The company should not assume that it has loyal customers since its competitors are highly innovative and its products are affordable. Besides, when it comes to technological and electronic products, many people buy the cheapest and most high-quality goods and services (Feifei, 2022). In addition, Apple’s iPhones are also competing with Samsung’s smartphones in China. Based on a 2017 survey by the International Data Corporation (IDC), Samsung had a 23.3% market share of smartphones in China, Apple had 12%, and Huawei had 11.3% (AFP, 2017). Xiaomi and Oppo were also in the top five. Although Samsung recorded huge profits from sales of smartphones, if it does not innovate and invent new products, the company will continue to lose its market share to its competitors. Additionally, the Covid-19 pandemic crippled Samsung’s manufacturing of electronic devices. Since numerous countries in the Asian region, including China, entered a recession, many people were unwilling to spend on electronic products due to the decreasing purchasing po...