The activities in the value chain analysis of Samsung are presented below. 2.2 Research and Development (R&D)Organization R&D has been prioritized by Samsung in its technological development as the most important step in its value chain. This is because this first step adds more value to the brands of Samsung thereby propelling Samsung to be a global leader of the mobile technology. Effective R&D has enabled Samsung to progressively maintain the market leadership position due to its ability to break new frontiers at every stage of product development such as in integration of technology and in product design.
The quality of the product design can be demonstrated comparison with Apple’s I- product family. Research and Development (R&D) is Samsung is organized into three layers. The first layers is The Samsung Advanced Institute of Technology (SAIT) whose main purpose is to secure and oversee proper and safe management of technology such as patents, identification of future growth engines for advanced technological development and ensuring that Samsung builds its technological competitiveness in the fundamental functions. The second layer is the SEC, which refers to the R&D centers which specialize in the development of technological ideas designed for development of promising long term results.
This layer is divided into several sections and each section handles a research department. These two layers are considered as the core R&D layers as they are purposely involved in the core product planning and technological development. The last layer is made up of divisional product development teams which are mandated with the responsibility of working with design centers to commercialize products that are due for market in the short run, such as two or one year.
In the mobile phone industry, design and R&D for phone technology is decentralized in a number of centers. Korea holds the Solution divisions which is handles the final products in preparation for the market. 2.3 Procurement In Samsung, the activities involved in procurement are different from those in other companies such as Dell or Apple. This is because Samsung has intra-firm attributes which lacks in other electronic companies where the production of all the components is not done by the firm. This has been known to result in complications with the suppliers of electronic components or potential suppliers as some of the product may overlap with some of the divisions as a result of sharing a component, whether it is internally made by Samsung or sourced from outside.
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