New Product Development and Risk Analysis

Question: Explain New Product Development and Risk Analysis of Samsung. Answer: Introduction: Samsung is one of the leading international electronic company based South Korea. There are many affiliated and Subsidiaries Company under Samsung making the business as the largest South Korean Conglomerate. The business was initiated by Byung-Chul Lee, and the present chairman of Samsung is Dr. Oh-Hyun Kwon. The company earns around US$ 327 billion having 427,000 numbers of employees being employed. The project focuses on the new product launch by the company and the strategies used in it, apart from that it also highlights the process of launching the products and how it benefits the development of the organization in the international forum. The corporate strategy and direction of strategy: In the beginning of the 21st century, the chairman of Samsung proposed a blueprint for the success of the organization with New management. This new policy encouraged the employees for their productivity to contribute with the strategy of the business. The company aims to devote their technology and people for creating superior services and products. This mission unites all the affiliated companies under Samsung. Today with the vision of 2020, they have an aim to achieve around 400 billion US dollars being the brand value amongst the top five leading companies. They have three main strategies which are considered as their culture for operations of business, they are- great people, partnership and Creativity. The company aims to inspire pioneering technological designs and products which enriches the standard of living of people and which also contributes in future sustainability. The strategic direction of the company can be explained with the following model (Samsung.com, 2015): Fig:1.1 strategic direction of Samsung According to the strategy of Samsung, the company believes that it delivers quality services and products because of their empowering people who are creative and delivers their best in their job (Armstrong, Adam and Kotler, 2011). Apart from their people, they also have a strong partnership ties that has contributed to the success of the company. The process of launching product adopted by Samsung: The products are of three different types and through promotion they make their product reach the market. They promotes their products in various ways which includes promotion through specific sheets and specification along with providing brochures that are printed and attending various fairs related to trade (Aryana and Boks, 2012). The company also provides authentic information about their new launched products in their websites through online brochures. They are numbered 0800 which can be used by the public so as to find about certain products and their availability. Presently Samsung has launched galaxy S6 edge in its Smartphone categories, one-touch freezer with digital inverter, and curved monitor. Along with promotion the company also focuses in increasing their brand awareness in the market by sponsorship. The approach differs according to the type of product. They maintain a good database about their customers which helps them to provide a good customer service (Dimitris G, Elias G and Rafiq, 2010). Description of product launch: There are certain steps that the company follows in launching their products they are: Pre launch build-up: Samsung generally makes a build up through visual promotion that something new is about to come in the market by creating the hype among its customers (Chang, 2010). Location of product launch: Samsung selects one of the most popular and prestigious location for launching their products and invites their crowd of people to participate. In their product launch they ensure that their customers are fully aware of the utility of their products. Relevancy of target market: the target market is focused and fixed and they also aim to increase their target market so that the product receives a warm welcome by all. Technological commitment: Samsung has a commitment to their customers in provide unique product with unique features that their customers are looking for. Tagline of the product: Samsung mobiles have a tagline states to skip the portion which is boring, that means the product will provide things which are exciting. Whereas Samsung freeze has the tagline of design that actually performs. This means that they not only focus on the design but also the performance of their products. Samsung knows their competitors and their potential so they had certain strategies for the market operation (Fuioagă (Băsu), 2013). USP: they provide good special features to which they are different from their competitors and basically their product features and accessibility is the unique features. Product launch component: the product launch is set with a pervasive theme along with providing a good overview of the company as well as about the product use (Fuller, 2011). Advantages of Launching new product range with global business: New product launch in the international market has certain advantages they are as follows. Grabbing the attention of the customers: A new product attracts the attention of their customers. This makes their customers feel that the company is continuously making efforts for satisfying the needs of their customers. This creates hype among the customers and grooms their curiosity to learn about the product. This interest of the customers sometimes leads them to buy the product (Hagedoorn, Letterie and Palm, 2011). Generating revenue: If the new product which is launched does well in the market then it leads to people buy the product and increase in revenue that leads to increase in sales as well. This launch of product sometimes proves to be consistent for years. Company image: A company has to maintain their image and reputation. If Samsung is amongst the leading company for their respective products then it means that they have to sustain their image and make innovative products and products acceptable for their customers, this helps in keeping their image strong in the market and the customers. Launching innovative and unique feature product helps Samsung to stand up to the market expectation (Hoyer et al., 2010). Business relationships A new product launch enhances the business relationship for Samsung. I help in building new partnership plan and it also helps in business expansion and profitable tie-ups (Kotabe, Jiang and Murray, 2011). Other company gets attracted to invest in their share and depending on the launch of the new product the company extends their hand in time of necessity. Benefits of successful new product development in International business: As Samsung responds to the changing needs of the competing environment it has to use unique process for developing new products (Kuester, Homburg and Hess, 2012). New product development means when a product is developed with new and unique features and they intend to benefit the company with the positive response from the market and the customers, they are explained below: Providing customer needs: Market survey: In order to undergo a development strategy of new product the company had to make efforts to collect the data about the international market and understand what the customer needs or prefers and what possibly can be their future preferences (Roebuck, 2010). Samsung gets a benefit of understanding the market preference with the idea and data collected from the international market and some more facts about the countries. In order to understand the product acceptability it is important to have a good hold of market information. A new development of product also paves a way for Samsung to find out the acceptability of its other products also. More emphasis on development and research section: For the development of new product emphasis is given on the department of development and research. Samsung is a technology based company and all it need is to constantly invent and innovate their technology with relevance to their customer needs (Sarin and Mohr, 2011). In this way the research and development gets more priority. This not only leads to the benefit of the company bust also for the benefit of the society. The standard of the society is influenced. Identifying the efficiency level: Through the new product development Samsung invites competition for other companies and this as a whole results a group of technological company constantly putting their efforts for inventing products that helps the society for development. To produce new enhanced product the efficiency also requires to be increased and if the efficiency is increased for the people and the organization as a whole, this makes the people possess unique quality to contribute in the development of new product. Identifying product acceptability: Whether the people in the international market is ready to accept a new product or not, or whether the new product has been able to make any impression is estimated on the launch of new product. This also determines the acceptability by the customers whether they encourage it or not. Samsung has been able to make their customers accept their products many a times. Since the introduction of Samsung Galaxy, Samsung was able to create a better standard of living for its customers in the developing countries. Analysis of potential risk: In order to understand the risk the matrix grid must be referred, The table provides an analysis of risks for the product: table 1.1 risk assessment Potential risk potential risk elimination Risk in matrix grid 1. Technical capability fails to meet the customer needs Predefined risk before research on market Medium risk 2. Expenses on manufacturing the product Balanced between time, required fund and quality of product High risk 3. Durability of the process of development of product. Estimation on the life cycle of the product is made. Low risk 4. Complicated manufacturing process Limitations on accepted risks High risk 5. Need of critical resources Monitoring and planning serious risks and developing practices and plans Medium risk 6. Product price extending market expectation Responding to the reaction of the competitors with detailed estimation Low risk 7. Use of new technology Proper testing of the technology and tools introduced Medium risk 8. Competence of the new product Project manager with good experiences are involved Medium risk Impact of the new product development process: With the help of the risk analysis the potential impact is analyzed and discussed with the help of an estimated probability on behalf of Samsung, it is clearly demonstrated in the table below. Table 1.2: impact of risk Risk no. Probability Risk number Impact of risk 1. 12 1. 5,5 2. 15,5 2. 14,5 3. 4,5 3. 9 4. 2 4. 5 5. 10,4 5. 14,6 6. 9,8 6. 6 7. 4 7. 4,8 8. 3,5 8. 10 Through the risk assessment it can be seen that there is a high risk involved in the market for the production of the new product. Whereas the risk on durability of the development process and the extension of the product price with the market expectation is low. This is because Samsung is assuming that their loyal customers would act according to their behavior. There were many assumptions that Samsung has to consider, they are: The brand name and equity, The previous records of the product development process The customer behavior on the international market The financial budget backup A proper risk analysis by the number of experts It is a fact that Samsung is a multinational company serving for many years and still surviving with its ongoing business. Samsung has a good partnership with other companies and to have one of the best qualities of employees who are talented qualified and above all satisfied with their job. The contribution of the employees and their creativity is one of the main things that Samsung considers as their reason for successful operation. There is a high risk in the manufacturing process which can be overcome with the help of proper measures, for this the recommendations are: Samsung needs to share information about their products, legal changes, customers or related activities. Encouraging more communication between the departments and with the employees of the company in order to provide an idea to contribute in the success of the company. Conclusion: Today the process of manufacturing has become more advanced as well as complicated. The solutions to the organizational problems are more. Samsung has potential competitors in the market like Apple, Microsoft, LG, Sony and many more. With the changing scenario of market Samsung should also start sustainable marketing keeping in mind the environmental impact that is created through their business operations. Samsung has been able to keep its position not just because of their marketing strategy but also having strength of understanding the customer wants. They are also well aware of their competitors and hence encourage their department of development and research. References Armstrong, G., Adam, S. and Kotler, P. (2011).Principles of Marketing. Pearson Australia. Aryana, B. and Boks, C. (2012). 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