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Operational problem faced by international firm

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Executive Summary

The current study is based on quality management issue of Samsung which can occur at the time of operating business in international market. It is one of the major operational issue that can affect the overall operational performance of the company in negative manner. Along with this, study has discussed the major reasons behind this problem such as high defects and wastage, inappropriate strategies, high use of unsuitable technologies, high competition and inappropriate promotional techniques, etc. In addition, study has discussed that lack of sales and profitability, low market share, high loss, decrement in the organization image are the major effects of this quality issue of Samsung. Besides, research has suggested that Samsung should use total quality management approach, lean methodology, six sigma, digital marketing and social media marketing for managing these quality issues in effective manner.

Introduction

At the time of running business operations at international level organizations face number of issues such as high cost, strong competition, quality issues, marketing problems, customer’s issues, etc. All these issues affect the overall performance of the company such as lack of sales and profitability, low market share, high loss, decrement in the organization image, etc. so, for managing these issues in effective manner organizations need to use appropriate strategies which can help in improving performance in effective manner (Rushton, Croucher and Baker, 2014). The current research is also based on operational problems which can occur at the time of operating in the global environment. Regarding this it has chosen Samsung which is one of the leading company and operating its operations in number of countries. It is running business in electronic industry. It has started its business in UK as well. But, at the time of starting and running business in this country organization has faced number of issues. The current research will discuss the operational problems, causes and effects on performance of the company. Afterwards, appropriate recommendation and suggestions will also be describing in the following paragraphs of the report.

Mainbody

Task 1

Samsung has started its business at international level. Providing quality services and goods is one of the major aim of this organization so, it focuses on the quality of product rather than cost. So, it attracts those customers who wants quality products. But, at present operating business in UK Samsung organization is facing quality issue (Kloppenborg, 2011). As per this issue customers are complaining about the quality of products and services especially in the smart phones. Company is facing quality problem in battery life and other features of the smart phones. Along with this, Samsung is using different technologies for resolving these issues which is increasing extra cost for the organization. As well as inappropriate strategies is leading high wastage and defects in the final production of the company. Therefore, all these are increasing the quality problems for the organization as well (Schönsleben, 2016).

Including this, there are different other quality issues also such as Samsung smart phone’s batteries have got blast and due to this reason number of customers have faced physical injury. Most of the airline organizations do not allow those passengers who have Samsung smartphones because due to the blast in battery it can create problem for all passengers. So, it is one of the major issue which can declined the image and trust of customers on Samsung smartphones (Dekker, Bloemhof and Mallidis, 2012).  Along with this, there are number of other electronic organizations which are offering new smartphones with unique and different features from Samsung which is increasing competition for the organization. Along with this, company is facing issues in getting appropriate supply of raw materials also which is also have negative impact on inventory management that leads issues in total quality of the operation and production department of the organization (Christopher, 2016).

Major needs to customers regarding quality of products a are performance, appearance, availability and delivery, reliability and durability, price and value for money. But, Samsung is not capable enough to meet all these quality standards because performance of its smart phone is not fit for the purpose of customers. But, it provides premium appearance products to its customers but for getting smart look company uses high technologies which raise the total cost and price of the product which is not valuable for the purchase money of customers because consumers can get more effective products of other companies in low price (Top Five Quality Management Mistakes Affecting Operational Excellence, 2016). Along with this, battery blast and short life of batteries of smartphones has declined the reliability and durability of products. So, overall, all these quality issues are creating high operational issues for Samsung in the international market.

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There are number of negative effects of all these operational problems such as poor sales performance, loss of profit, reputation damage and decrease in share value, etc. For instance due to low quality products and services organizations face problem in attracting products (Bozarth and Handfield, 2016). Low number of customers decline the overall sales of the company in the international market. At the time of starting business in international market other strategic issues such as high competition, inappropriate marketing strategies also affect the customer’s relations of Samsung. Inappropriate relations with customers reduce the total sales of the company. Along with this, use of high technology increases the total expenses of the organization due to this reason in the international market Samsung needs to charge high price of products and services in UK market which also reduce the demand of Samsung product and decline the total sales of the company (Toth and Vigo, 2014). Low level of sales also reduce the overall net income and profitability of the organization. High cost of goods sold increases the total operating cost of the organization which reduce the gross and net profit of the Samsung. Therefore, it can be said that quality issues affect the overall sales and profitability of the Samsung in negative manner (Goetsch and Davis, 2014).

As per the above discussion issues in battery and blast increases the threat for customers. So, these issues can reduce the image of the organization in front of customers which damage the reputation of the organization and decline the goodwill of Samsung in international market. Overall, quality problems decline the image of products and services in customer’s mind which reduce their attraction towards the Samsung products. Therefore, all these impacts have negative effects on overall performance of the company (Martin and Guerin, 2006).

In addition, there are number of other effects such as declining in the share value and competitiveness of the organization. There are number of competitors which are operating their business in UK and providing number of products and services to customers with low price and different features. It has negative image on Samsung and reduce its level of competitiveness. Along with this, it also declines the market share of organization and due to this reasons investors and shareholders do not want to invest in share of Samsung (Sallis, 2014). Therefore, all these effects have negative effects on share value of the organization. Overall, quality issues have all these negative effects on Samsung which reduce the overall performance of the company.

There are number of reasons behind these issues such as Samsung is facing quality problems due to the lots of defects and wastage of raw materials. Along with this, due to inappropriate use of technology company is facing quality problems. Including this, use of latest technology require huge investment in technical equipment which increases the total expenses and cost of the organization. So, it is also one of the major reasons behind the quality and cost issue. Further, at the time of starting business in UK high competition from local electronic companies is also one of the major reasons because of them Samsung is facing issues of low competitiveness  (Operations Management, 2016). In addition, at the time of starting the business Samsung needs to use number of promotional techniques which helps in increasing the marketing performance of the organization. Therefore, inappropriate promotional methods affect the marketing performance of company which reduce the awareness of customers about the electronics product of Samsung. Thus, low awareness of customers reduce the share value and total sales of the organization. Overall, these are considered as major reasons behind the quality issues of Samsung in international market which is reducing the overall performance of the company (Zwikael, 2009).

Task 2

As per the above discussion there are number of quality issues which have negative impacts on overall performance of Samsung in international market. For resolving these issues organization needs to take appropriate strategies which are described as under:

Total quality management principles is one of the major approach which helps in managing quality of the products and services of Samsung (Walker, 2007). This approach focuses on the customer’s needs and requirements and skilled employees. Along with this, as per this approach Samsung needs to focus on appropriate allocation of resources which also helps in maintaining quality. Further, monitoring and controlling each and every activity on time also plays important role in managing quality. Therefore, total quality management is one of the appropriate approach which needs to be used by Samsung because it will help in producing those products and services which will satisfy all needs and requirements of customers. It will also help in attaining all quality standards as well so, company needs to implement total quality management approach for maintaining quality in operation and production department  (Levy, 2009).

Cording to the evaluation of the operational problem study has reflected that high number of wastage of raw materials is also one of the major issue which is creating problems in quality. So, for reducing the level of wastage Samsung needs to use Lean methodology. It is one of the major method which reduces the overall wastage of materials because it helps in allocating all resources as per the needs and requirements of activities. Along with this, lean methodology also focuses on skilled and experienced employees which also helps in managing every activity and resources in effective manner which decline the total wastage of resources (Dekker, Bloemhof and Mallidis, 2012). Therefore, it is also an appropriate methodology which needs to be followed by Samsung for managing wastage of resources.

High defects in finished goods increases the unnecessary cost of the organization and reduce the total quality of production process. So, six sigma analysis is one of the appropriate process which helps in reducing the total defects in final production process. So, it needs to be followed by Samsung.Inappropriate promotion in international market can affect the total performance of the organization (Bozarth and Handfield, 2016). So, Samsung needs to use digital and social media marketing for promoting products and services in effective manner. Because, it includes number of communication channels such as mobiles, sms, emails, video conferencing, internet, etc. Including this, Samsung can also use social media marketing technique because it helps in making strong communication with mass number of customers with less time and cost. In addition, these techniques are also important for making customer to customer communication which plays important role in increasing awareness of customers about the new products and services of Samsung. Therefore, it is also one of the important strategy and solution for resolving issues of Samsung.

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For increasing market share and competitiveness organization needs to introduce some different and attractive products in the market. Regarding this, differentiation strategy will be appropriate for this purpose (Schönsleben, 2016). Because, it focuses on producing new and unique products which have different features from existing products of customer. It will help in attracting customers and augmenting the market share of the organization. Along with this, it will also plays important role in attaining competitive advantages in international market as well.

Therefore, all the above discussion strategies are appropriate for resolving all issues of Samsun which are associated with the quality of products and services. As well as these strategies will also resolve operational issues of Samsung which are facing by organization at the time of operating business in the international market  (Toth and Vigo, 2014).

Conclusion

The current research project has concluded that Samsung is facing the quality problems at the time of running business in other countries. These issue has negative impact on total sales, profitability, market share and competitive image of the company. Major reasons behind this issues are inappropriate allocation of resources, unsuitable quality management strategies, wastages and defects, etc. So, for managing all these issues Samsung needs to use Total quality management, six sigma, Lean methodology and digital marketing, etc.

References

  • Bozarth, C. B. and Handfield, R. B., 2016. Introduction to operations and supply chain management. Pearson Higher Ed.
  • Christopher, M., 2016. Logistics & supply chain management. Pearson Higher Ed.
  • Dekker, R., Bloemhof, J. and Mallidis, I., 2012. Operations Research for green logistics–An overview of aspects, issues, contributions and challenges. European Journal of Operational Research, 219(3), pp.671-679.
  • Goetsch, D.L. and Davis, S.B., 2014. Quality management for organizational excellence. pearson.
  • Kloppenborg, T., 2011. Contemporary Project Management. 2nd ed. Cengage Learning
  • Levy, B., 2009. Legal Project Management: Control Costs, Meet Schedules. Manage Risks, and Maintain Sanity.
  • Martin, S. C., and Guerin, A. D., 2006. Using research to inform design solutions. Journal of Facilities Management. 4(3). pp.167 – 180.
  • Rushton, A., Croucher, P. and Baker, P., 2014. The handbook of logistics and distribution management: Understanding the supply chain. Kogan Page Publishers.
  • Sallis, E., 2014. Total quality management in education. Routledge.
  • Schönsleben, P., 2016. Integral logistics management: Operations and supply chain management within and across companies. CRC Press.
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