In competitive markets like the worldwide electronics market, conducting a systematic risk analysis is imperative for every firm. Samsung is able to expand speedily inside the worldwide market being a major competitor in the industry. However, every business possesses inherent risks; Samsung faces various risks from such factors as: economic, political, industrial environmental and social. These risks require to be mitigated and the company has set strategies towards that purpose.
This strategy focuses on strengthening supplier relationships. Strengthening supplier relationships decreases the risk of supplier defiance or inefficiency (Samsunglife, 2012). Thus by having effectual and jointly beneficial relations the foundation for growth towards success is enhanced as supply delays of parts and products is eliminated (Samsunglife, 2012). Additionally, the company utilizes the transference risk management whereby suppliers are required to enter into binding contracts to guarantee their supplies arrive in time. Thus, Samsung transfers untimely inventory risk to the supplier to protect the enterprise model.
This is done by improving the companies HR department. This because the company heavily depends on its employees globally to boost its products image (Samsunglife, 2012). Thus by improving the HR the company reduces general costs risks. This achieved by constantly training the employees in areas of after sales services and prevention of internal company crime. Additionally, incentives along with bonuses are given to boost their performances (Samsunglife, 2012). Further, Samsung applies the risk avoidance strategy by opting to buy innovative products from other companies. This helps in avoiding the high and risky costs of research and development. This additionally helps the company save expenses and time along with maintaining a competitive edge with its opponents
Samsunglife. (2012). risk management. Retrieved September 4, from http://www.samsunglife.com/companyeng/pdf/2010_SR_eng_1_Business_1_3.pdf
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