Online Tutoring on Customer Benefit Packages
Introduction
The primary objective of this report is to study and analyze the customer and management perspective of two different organizations in the same industry. For this purpose, Samsung and Netflix are taken into consideration; they both belong to the same industry i.e. electronics, high technology, and innovation services. This study would provide a detailed comparative analysis of the operational side as well as the customer offerings of both the companies.
Samsung
Since its foundation, Samsung has expanded into an international information technology leader around the world. Starting its operations initially in 1969 from Korea, Samsung now manages more than 200 subsidiaries and has successfully gained a competitive advantage in fulfilling customer needs through producing electronic components (Samsung Vision 2020). Samsung is an innovative electronic appliances company that deals with the manufacturing of appliances and delivering superior quality products to its customers, providing them a smarter and convenient lifestyle. Samsung started its operations by producing chips, memory, and batteries, but with the growing demand started manufacturing TV displays, air conditioners, microwaves, etc. Samsung currently is a market leader in mobile phones in the smart phone categories and has achieved competitive advantage in this regards (Global Value Chain Analysis on Samsung Electronics, 2012).
Samsung’s Vision
Samsung has set his goals and objectives in a way that they will be able to attain their strategic vision “Inspire the world, create the future” by 2020 (Samsung Vision 2020). Their vision mainly focuses on the innovations providing the world with enhanced digital products. They have decided to achieve a particular target by the end of 2020 which will be done by collaborating together through strategically managing creativity, people, and partnerships; all these can be their competitive advantage.
Samsung’s Strategy
One needs to have a strategy before initiating its business, identify its weaknesses and strengths and then accordingly assign activities. Samsung is an international company created synergies and balanced the activities through diversifying them into different regions depending on the area of strength. Such that it’s Research and Development centers were based in USA and England as these countries had strong research bases. The manufacturing plants were situated in China and Brazil due to the availability of cheap labor and functioning knowledge (Simonin, 2014). In this way Samsung creates synergies among countries so that there’s a free flow of information, knowledge, and expertise towards idea generation, brainstorming and manufacturing innovative products meeting customer needs worldwide. Therefore, Samsung’s international strategy is combining expertise of people all around the world, taking advantage of economies of scale contributing to their company success.
Samsung’s Organizational Structure
The organizational structure of Samsung can be divided into three main sub categories; digital media communications, device solutions and Samsung advanced institute technology. (Global Value Chain Analysis on Samsung Electronics, 2012)
Samsung’s Value Chain Analysis
Value chain analysis includes the value that the company is getting from the customers on their product after cutting the cost of all the activities; therefore the difference between revenue and cost is the value. The process of value chain includes all the activities starting from planning to raw materials to the end product. Primary activities are those that are directly associated with the product that the company is selling; whereas secondary activities are those that are performed within a company’s infrastructure. This analysis is based on three broad categories; services based, manufacturing based and hybrid.
Since Samsung is a high-tech company, its value chain largely shaped on the Oracle value chain with the integration of logistics as it shows an essential role in the size of Samsung electronics. Logistics is important as most of the activities do not take place in the same place and is scattered across the globe, mainly concentrated in China, Korea, and Vietnam.
Samsung adopts a different approach of Value Chain as compared to Porter’s Value chain; research, design and product development are considered as primary activates under Samsung’s VCA (Value Chain Analysis). The primary activities in case of Samsung includes all those that lead to the production of their products to the sales whereas supporting activities are those that are secondary to the primary activities. In Samsung’s case technology development is considered as a primary activity because it is a high technology company that produces innovative features, hence technology is one of essential elements for the production. Samsung gained a strong market leading position due to its strong research and development department, which is its primary activity.
Samsung’s Customer Benefits Package
Marketing and branding side of Samsung plays a critical role in providing customer benefits through their differentiated products depending on the region they are catering to, therefore now Samsung has strong customer oriented position in the industry worldwide as it identifies and tries to fulfill the emerging needs of the customers. Samsung keeps a global perspective in mind while designing the products, providing the customers with both functional and emotional benefits (Jung, 2014). In addition to this, Samsung provides after sale services to the customers too in order to achieve customer satisfaction at all levels. Samsung tries to engage the customer through the following benefits in their products or services:
- Fulfilling the functional and emotional benefits
- Eco-friendly and user-friendly designs
- Products that reflect the lifestyle and personality
Netflix
Netflix is a US based services company that provides internet subscription service to the customers so that they can entertain themselves through various TV shows and movies. Netflix is providing its services to around 190 countries around the world with approximately 104 million subscribers (Overview Company Profile, 2017). Once the customer subscribes to the Netflix offers, they can get access to unlimited movies and shows that can be watched on their phones, computers or TV displays. Netflix is the market leader in this particular service industry and is being operated at a relatively low fixed cost.
Netflix’s Vision
The vision that Netflix looks forward to is “Our core strategy is to grow our streaming subscription business domestically and globally” (The Mission Statement, Vision, Promise and Values of Netflix, n.d.). They want to be the world’s largest internet provider service to enhance the customer experience through their online streaming of shows and movies without commercial advertisements in between.
Netflix’s Strategy
The main focus of Netflix is towards delivering the original content to the customers, they want to play with this competitive advantage in the market. The company believes that the customers should be able to view ad free content based on their willingness, preference, and availability rather than watching a particular show live with commercials in between. They are going to invest in high-resolution shows and movies so that the viewers cannot compromise and regret their decision over buying the Netflix subscription package (Team, 2017). Therefore, this will be a competitive advantage for Netflix by providing high-resolution shows and movies to the customers at a reasonable price, compared to competitors such as Amazon and Hulu.
Netflix’s Organizational Structure
The organizational structure of Netflix is really simple as it has fewer levels so it has a wider span of control over the activities and management. The structure is fragmented based on the functions rather than dividing them on the basis of regions or customer segments. The CEO has a direct supervision over the six departments, therefore it’s a centralized system (Krengel, Dudek, Momboisse, Paik, & Martin, 2010)
Netflix’s Value Chain Analysis
Since Netflix is a service provider company, there’s no manufacturing plant in their value chain analysis. It should have a strong customer services response rate as it is an online streaming facility to the customers, therefore services are one of the primary activities for Netflix. It also has a 24-hour service to handle the customer queries and technical problems so that the customers are fully satisfied without any delay in the services (Corporate Strategy Exam Project, 2014).
In order to gain competitive advantage, Netflix should consider services as the principal point so that they can explore new dimensions adding value to the customers through technological development.
Netflix’s Customer Benefit Packages
Customer experience is the most important factor in which Netflix functions, as this factor influences the customers and their profit margin directly (Advantages and Disadvantages of Netflix). Therefore, Netflix has been working really hard in order to improve the customer satisfaction through providing original HD content and making it user-friendly for the customers so that they can easily stream or download their favorite shows. The number of subscribers is increasing on a regular basis, both locally and internationally due to its superior quality content. Netflix tries to engage customers through the following aspects:
- Offering a free month trial so that the customers can decide about the subscription packages; keeping it more customer centered
- Ease of accessing the software, no technicalities to confuse the customers
- No commercials are shown in between streaming shows and movies, which is their competitive advantage
- They showcase original content with high-quality movies and shows, do not compromise their service
- Solving customer queries timely is another factor that increases customer satisfaction towards the service
Conclusion
Since we have taken two companies for the analysis, Samsung and Netflix both the companies are different from each other as one of it is a manufacturing company and the other one is a services company. One of the major difference between both of them is the industry in which they are operating, as Samsung is a purely manufacturing company and Netflix is a company that offers services online. Taking into consideration the organizational structure of Samsung, we can conclude that their structure is extended and a bit complicated since Samsung is located in many countries in the form of subsidiaries. Therefore the organizational structure is first divided into regions, under which management hierarchy follows by connecting all the regional structure to the headquarters where everything is managed. On the other hand, Netflix is a services company which offer subscriptions to the customers in order to stream and download movies and shows. Hence the organizational structure for Netflix is simple and regular since all the activities are managed by different departments directly addressing to the CEO. Taking into consideration, the value chain of both the companies, Samsung has a different value chain as it takes technology and development one of the primary activities rather than support; technology and development is one of the key areas where Samsung has to be vigilant about their products matching with the changing customer needs. Therefore, Samsung cannot compromise on this part and support activities play a vital role in delivering these manufactured products to the end consumers. Hence they need to be managed properly in order to gain profit margins. When comparing the value chain of Netflix, we can say that the company does not have any manufacturing plant which is a major difference as compared to Samsung. One of the key elements of Netflix is the services as they have to take serious actions to improve their services to the customers. Netflix should work on making a user-friendly interface in order to increase the customer satisfaction which can be done through improving their primary activities as listed above in the exhibit. The customer benefits are also different for both the companies as the main focus is quite different to each other.
References
Simonin, D. (2014). The International Strategy: The Strategy of Samsung Group. University of Technology Sydney.
(2012). Global Value Chain Analysis on Samsung Electronics. Korea Associates Business Consultancy Ltd.
Jung, S. C. (2014). The Analysis of strategic Management of Samsung Electronics Company through the Generic Value Chain Model. Advanced Science and Technology Letters.
(2012). Global Value Chain Analysis on Samsung Electronics. Korea Associates Business Consultancy Ltd.
