" How Do I Build a Business that
lasts for Decades - The
Sustainability Checklist"
Prof Suresh Srinivasan
" How Do I Build a Business that lasts for
Decades - The Sustainability Checklist"
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SUSTAINABILITY CHECKLIST – RULES

ESTABLISH FINANCIAL CONTROLS
Know where your money is going
MINIMIZE DI...
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SUSTAINABILITY CHECKLIST – RULES

STREAM LINE PROCESSES
The quality, consistency & documentation ...
SAMSUNG’s CLEAR PRODUCT WISE
ORGANIZATIONAL CHART
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What is a Smartphone?
• A Smartphone is a mobile device offering highly
developed features beyond a classic mobile phone
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" How Do I Build a Business that lasts for
Decades - The Sustainability Checklist"
PRODUCT DEVELOPMENT – MEANS ...
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" How Do I Build a Business that lasts for
Decades - The Sustainability Checklist"
The mobile phone market le...
" How Do I Build a Business that lasts for
Decades - The Sustainability Checklist"
• The mobile phone market leaders have ...
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5 Forces Model

• Rivalry within the industry
 Main Competitors
- RIM, HTC, Palm, Motorola, Samsung, Nokia
U.S. Market Sh...
5 Forces Model
 Threat of Potential New Entrants
- The threat of new entrants is low since start up costs for a
cell phon...
Bargaining Power
• Buyers
 Customers Buying Power
- Phones are changing dramatically and what consumers want is
cheap and...
• Threat of Substitute Products
 Cost and Innovation
- Companies within the industry compete on innovation and
new applic...
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5 RULES FOR GOOD BUSINESS

• WHAT RICHARD BRANSON OF VIRGIN ATLANTIC SAID IN 1970 –
Holds good even today!!
• IF YOU DO NO...
Conclusions from this case for SAMSUNG
• First, competition in the mobile phone market will become more
intense.
• Lower e...
Conclusions from this case for SAMSUNG
• As the mobile communications market becomes saturated, future
revenue sources wil...
Conclusions from this case for SAMSUNG
• Fourth, Samsung needs to strengthen its product portfolio in next
generation phon...
suresh@mybskool.com
09962959381
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Topic - How Do I Build a Business that lasts for Decades - The Sustainability Checklist

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Faculty - Prof. Suresh Srinivasan

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  • myBskool Live Virtual Class - How Do I Build a Business that lasts for Decades - The Sustainability Checklist | Online Mini MBA (Free)

    1. 1. " How Do I Build a Business that lasts for Decades - The Sustainability Checklist" Prof Suresh Srinivasan
    2. 2. " How Do I Build a Business that lasts for Decades - The Sustainability Checklist" • The presentation provides insights into how a late-comer to an industry can overcome certain disadvantages and successfully position itself as a widely respected and successful brand. brand 10/18/13 mybskool 2
    3. 3. • • • • • • • • SUSTAINABILITY CHECKLIST – RULES ESTABLISH FINANCIAL CONTROLS Know where your money is going MINIMIZE DISTRACTIONS Free your self as the owner of the business from Cash flows – Develop new products/Services/Relationships…etc INCREASE SALES Generate leads/Analyze your past data – customers, their buying habits, value brand selling, offers made, prices (types), communication vehicle..etc DIVERSIFY PRODUCTS & SERVICES Spreading sales over more customers, product lines or markets reduce risks. • " How Do I Build a Business that lasts for Decades - The Sustainability Checklist" 10/18/13 mybskool 3
    4. 4. • • • • • • • • • • • • SUSTAINABILITY CHECKLIST – RULES STREAM LINE PROCESSES The quality, consistency & documentation of the way you operate. IMPROVE EFFICENCIES Every Rupee of improvement, results in more Rupees of VALUE. PROTECT INTELLECTUAL PROPERTY RIGHTS Make sure you have appropriate rights to trademarks, names, designs, technologies etc. MAINTAIN PROPERTY , EQUIPMENT. Maintain access to money, so that newer technological improvements, expanding operations & keeping everything in order, can be done. REDUCE EMPLOYEE TURNOVER REMEMBER HEFTY PAY PACKETS DO NOT GURANTEE LOYALTY. Instead fair practices, participative in decision making, Respect can do wonders. AVOID COMPETING ON PRICE Undercutting on price , can destroy your margins. Customers should buy from you because of the superiority of your product/services.!! • " How Do I Build a Business that lasts for Decades - The Sustainability Checklist" 10/18/13 mybskool 4
    5. 5. SAMSUNG’s CLEAR PRODUCT WISE ORGANIZATIONAL CHART 10/18/13 mybskool 5
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    11. 11. What is a Smartphone? • A Smartphone is a mobile device offering highly developed features beyond a classic mobile phone – Computer-like functionality – Applications for entertainment – Access to the Web – Personal data processing
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    19. 19. • • • • • " How Do I Build a Business that lasts for Decades - The Sustainability Checklist" PRODUCT DEVELOPMENT – MEANS USING TWO PARALLEL PATHS TERCHNOLOGY PATH: IDEA GENERATION – DESIGN – ENGINEERING MARKETING PATH: MARKET RESEARCH & ANALYSIS 10/18/13 mybskool 19
    20. 20. • • • • • • " How Do I Build a Business that lasts for Decades - The Sustainability Checklist" The mobile phone market leaders have achieved competitive advantages, based on: technology leadership, economies of scales, brand power, and superior negotiation power over suppliers and mobile service providers. {They have invested heavily in R&D to keep their technology leadership and to make their core technology into the industry standard.} 10/18/13 mybskool 20
    21. 21. " How Do I Build a Business that lasts for Decades - The Sustainability Checklist" • The mobile phone market leaders have TO DO THE FOLLOWING: • Also, as the mobile phone market gets saturated, the demand for replacement will lead market growth. • To stimulate the replacement demand, introduction of new mobile communications technologies and services will be required, resulting in a shorter lifecycle for mobile phones. • In addition, the market is diversifying at an increasingly rapid pace, embracing new technologies, features and applications. • Example: Color screens, Java, multimedia messaging, consumer applications and enterprise applications now characterize the market that only recently was defined simply by high, middle and low tiers. 10/18/13 mybskool 21
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    27. 27. 5 Forces Model • Rivalry within the industry  Main Competitors - RIM, HTC, Palm, Motorola, Samsung, Nokia U.S. Market Share of Smartphones
    28. 28. 5 Forces Model  Threat of Potential New Entrants - The threat of new entrants is low since start up costs for a cell phone service provider are extremely high. A great sum of money must be invested to attain the economies of scale, and it is difficult to enter the market with existing firms already operating on cost and differentiation strategies.  First Mover Advantage - Releasing a product early will enable one to capture the largest market share, establish partnerships, erase barriers to entry, and dim the chances of competition.
    29. 29. Bargaining Power • Buyers  Customers Buying Power - Phones are changing dramatically and what consumers want is cheap and efficient. Buyers have high bargaining power and will usually pay for what the consumer’s value the most.  Buyers Willingness to Switch - Will switch for innovative products and good ratings • Suppliers  Suppliers end up being in a low bargaining position because cell phone operators provide such high volume orders that they have to be cautious not to temper with the relationship.
    30. 30. • Threat of Substitute Products  Cost and Innovation - Companies within the industry compete on innovation and new applications.  High switching costs with servers/phones - Consumers would more than likely not switch between a new product due to contract fees and the cost of purchasing a new product. • Intensity of Rivalry Among Competitors  Innovative (Blue Ocean)  Applications (GPS, Google, Email, Video/Camera, Bluetooth, Games etc.)  New target market - Price reduction attract more customers
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    41. 41. 5 RULES FOR GOOD BUSINESS • WHAT RICHARD BRANSON OF VIRGIN ATLANTIC SAID IN 1970 – Holds good even today!! • IF YOU DO NOT ENJOY IT, DON’T DO IT. • CREATE SOMETHING DIFFERENT THAT WILL ALWAYS STAND OUT. BE INNOVATIVE. • HAPPY EMPLOYTEES MAKE FOR HAPPY CUSTOMERS. YOUR EMPLOYEES ARE YOUR ASSETS. • GET FEEDBACK FROM CUSTOMERS AND EMPLOYEES. LISTEN!! • MARKET THE COMPANY AND ITS OFFERS BY PUTTING YOURSELF OR YOUR SENIOR PERSON IN FRONT OF THE CAMERA!!! 10/18/13 mybskool 41
    42. 42. Conclusions from this case for SAMSUNG • First, competition in the mobile phone market will become more intense. • Lower entry barriers will bring in more competitors to the market, and the “digital convergence” will accelerate the competition even further. • Companies from other industries such as PCs or network services will compete directly with Samsung. As such, it will have to devise more creative win-win strategies in the highly uncertain digital convergence landscape. • Second, the sustainability of Samsung’s high-end strategy, which was attributed to Samsung’s brand building, may be in question. Samsung has achieved high profit margin, which is comparable to that of Nokia, mainly based on its high price, while Nokia has done so based on its cost dynamics. In terms of per-unit cost, Nokia spends less on R&D and marketing. One might doubt whether the high-end strategy can really be sustainable. 10/18/13 mybskool 42
    43. 43. Conclusions from this case for SAMSUNG • As the mobile communications market becomes saturated, future revenue sources will come mainly from emerging markets (China, Brazil, India, Eastern Europe, etc.). First-time buyers in emerging markets tend to prefer affordable phones. This could hurt Samsung unless it begins to cover the low and middle-end markets. • Nokia and Motorola, as well as many newcomers from China, have already targeted those emerging markets. How to compete in the low and middle-end markets, while preserving its premium brand image, will be important questions in Samsung’s future growth. • Third, Samsung is highly dependent on foreign companies for core technologies and modules. For example, it sources core CDMA baseband chips from Qualcomm and sophisticated camera-phone modules from Japanese firms. Consequently, the proportion of royalty payment in total manufacturing cost is likely to increase unless Samsung develops its own technologies. 10/18/13 mybskool 43
    44. 44. Conclusions from this case for SAMSUNG • Fourth, Samsung needs to strengthen its product portfolio in next generation phones. In the smart-phone segment, Nokia has shown a great start, shipping 5.4 million units RECENTLY, which accounted for 54% of the world market. 10/18/13 mybskool 44
    45. 45. suresh@mybskool.com 09962959381

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