SAMSUNG
ELECTRONICS CO.
Executive Summary:
Samsung has made them noticeable as one of the most innovative and quality brands in the electronics industry. Samsung strives to be sustainable and achieve competitive advantage by remaining at the forefront of the digital market. Samsung policy is "We will devote out human resources and technologies to create superior products and services thereby contributing to a better global society”.
In today’s digital era, speed is the essential competitive as new technologies constantly introduced to the market. Thus, Samsung spend lots of effort in expanding their R&D center. Samsung Corporation has become one of the world's leading memory producers in all types of PCs, digital cameras, game players, and other electronics products. Since Samsung bought DRAM technology from other company, they have developed and come up with better technology. Samsung has introduced many products with low price and high technology. Although Samsung has been very successful, they have a few issues that need to be looked at in order for them to stay up to date and maintain long term profits. Problems that have been identified with Samsung are; increased competition means decrease in Samsung's profits and market share because it generates oversupply and decrease in sales. Competition affects Samsung's market share because new entrants will segregate the market by offering lower cost products with a variety of functions. Furthermore, Samsung is also facing a Chinese DRAM company because of limitability of their resource. There are many competitors that produce similar products as Samsung; Samsung has to deal with competitors in five different industries. They are doing this by differentiating their products and adding different features into their products. The two possible solutions for the stated problems are 1) If Samsung wants to be the leading company within electronic industry, they need to differentiate their products enough from their competitors and introducing a new cell phone with touch screen and new features to stay current in the market. 2) Samsung is currently is one of the leading businesses in the electronic industry. In order for the company to stay competitive, they need to go to the different global markets and try to introduce their products to new demographics. In order for Samsung to be successful they need to go Global. This solution offers a physical presence and greater opportunity for talent buildup, and brand name establishment in foreign markets. The Global solution has many advantages in developing growth, pressure on competition, and international development.
TABLE OF CONTENTS:
Table of Contents
Executive Summary: 1
TABLE OF CONTENTS: 2
Acknowledgment: 3
Company Overview: 3
History : 4
5
Vision 2020 5
Swot Analysis: 5
Strength: 5
Weakness: 6
Opportunity: 6
Threat: 6
Strategic Marketing objective: 6
Nokia loses its top position after 14 years to Samsung: 7
Market Positioning Strategy: 7
Market Segmentation Strategy: 7
Price strategy: 7
Products differentiation Strategy: 7
Promotion strategy: 7
Direct Competitors: 8
Competitive Advantage 8
Conclusion 8
Recommendation 8
References: 8
Company Overview:
Samsung Electronics America, Inc. markets consumer electronics and home appliance products. It operates through two divisions, Consumer Electronics and Information Technology. The Consumer Electronics division provides various digital products, including flat CRT, plasma, and rear projection HD-ready televisions; DVD players, digital audio players, digital mini DV camcorders, home theater systems, and terrestrial HDTV set-top boxes; and microwave ovens, air conditioners, refrigerators, and wine chillers for home and individual use, as well as LED lighting solutions for the U.S. consumer market. The Information Technology division offers TFT and CRT display products, color and monochrome laser printers, wireless printers, fax machines, and multifunction devices for professional, corporate, and SOHO users; plasma displays for professional and commercial markets; and sliding tablet PCs. The company also provides LED and LCD monitors; monitors for use as a secondary display for notebook PCs; 3D LED and 3D Plasma TVs; digital cameras; touch screen devices that provide users an instant connection to social networking, messaging, and multimedia features; SD and micro SD cards for digital imaging and mobile devices; and common access cards that provide security for sensitive government information. In addition, it offers HDTVs, MP3 players, digital imaging products, and washing machines, as well as offers notebook computers, e-book devices, and LED data projectors. Further, it offers Blu-ray players, portable media players, sound bars, AV receivers, and e Reader products. The company offers its products through service dealers, resellers, retailers, and OA distributors. Samsung Electronics America, Inc. has strategic alliances with DreamWorks Animation SKG, Inc. and Technicolor. The company was founded in 1977 and is headquartered in Ridgefield Park, New Jersey. Samsung Electronics America, Inc. operates as a subsidiary of Samsung Electronics Co. Ltd.
History :
From its inception as a small export business in Taegu , Korea , Samsung has grown to become one of the world’s leading electronics companies , specializing in digital appliances and media , semiconductor, memory, and system integration. Todays Samsung’s innovative and top quality products and processes are world recognized. This time line captures the major milestones in Samsung’s history, showing how the company expanded its product lines and reach, grew its revenue and market share, and has followed its mission of making life better for consumers around the world.
- Samsung Electronics Held the 4th Samsung Young Design Award in Italy
- Samsung Electronics Introduced Samsung Galaxy Tab to U.S. Market
- Samsung Mobile Display developed flexible AMOLED panel with four time’s clearer WVGA resolution
- Samsung Electronics honored with 37 CES 2011 Innovation Awards
- Samsung Electronics launched OMNIA 7, the first Windows Phone 7 Smartphone
- Samsung announced that it will establish seven social enterprises over the next three years to support the underprivileged in Korea
- Samsung Electronics began mass producing 20nm-class, 64-gigabit 3-bit NAND flash memory
- Samsung Engineering won the Sabah (Malaysia) Oil & Gas Terminal Project
- Cheil Industries established the WPM (World Premier Materials) flexible display business unit
- Samsung Electronics held the WCG 2010 Samsung Euro Championship at IFA 2010
- Samsung Electronics held the “Samsung Mobile Solutions Forum 2010” in Taiwan
- Samsung’s brand value was ranked No. 19 in the world by Inter brand’s 2010 Best Global Brands
- Samsung Electronics’ 3D LED 8000 & 7000 series TVs were selected as this year’s best TVs by product testing magazines “Which?” in UK and “Test” in Germany
- Samsung Electronics won five European EISA Awards
- Samsung Electronics introduced Samsung Galaxy Tab to U.S. market
- Samsung Electronics’ TV won “Product of the Year” Award in Russia two years in a row.
- Samsung Electronics qualified foundry industry’s first 32nm low power High-K Metal Gate Logic Process and Design Ecosystem
- Samsung Electronics introduced high-speed 512GB SSD utilizing new toggle-mode DDR NAND memory
- Samsung Electronics captured five 2010 IDEA awards
- Samsung Fire and Marine Insurance entered the Chinese automobile insurance market
- Samsung Electronics hosts “Samsung Global Developer’s Day” for the Bada platform
Vision 2020
As stated in its new motto, Samsung Electronics' vision for the new decade is, "Inspire the World, Create the Future."
This new vision reflects Samsung Electronics’ commitment to inspiring its communities by leveraging Samsung's three key strengths: “New Technology,” “Innovative Products,” and “Creative Solutions.” -- And to promoting new value for Samsung's core networks -- Industry, Partners, and Employees. Through these efforts, Samsung hopes to contribute to a better world and a richer experience for all.
As part of this vision, Samsung has mapped out a specific plan of reaching $400 billion in revenue and becoming one of the world’s top five brands by 2020. To this end, Samsung has also established three strategic approaches in its management: “Creativity,” “Partnership,” and “Talent.”
Samsung is excited about the future. As we build on our previous accomplishments, we look forward to exploring new territories, including health, medicine, and biotechnology. Samsung is committed to being a creative leader in new markets and becoming a truly No. 1 business going forward.
Swot Analysis:
Strength:
- Customers are loyal and trust the brand also.
- Samsung is enjoying for formidable position against competitors.
- The company is maintaining good relationship with labors.
- Samsung is financially strong and stable.
- The productive process system, Inventory management are consistent with industry standard.
Weakness:
- Samsung needs improvement in defining the mission, vision and strategic corporate objectives.
- South Korean trade union strategically link and they are strong in bargaining and negotiation.
- Marketing management needs improvement in all facets of marketers.
- Hrm needs improvement in human resource management.
Opportunity:
- Economic condition of South Korea apparently some favorable.
- Samsung is internalizing the social shaft.
- Samsung is having consistent policies given by the government.
- Samsung is reasonably equipped to the technological changes.
- Samsung Is maintains a good international relationship with other countries.
Threat:
- lisatation has been past frequently related to the industry.
- Technological transformation taking place in the industry.
Strategic marketing objective:
- To establish as market leader in creating and manufacturing innovative products in IT industry.
- To enable Samsung Inc to satisfy, fulfill and equipped the consumer’s personality and lifestyle needs as well to increase Samsung popularity as an icon in digital lifestyle product.
- To establish as market leader in portal music player sector by increasing market share.
- To enable Samsung Inc to monopoly the portal music device sector share by 75% by year 2011.
- To enable the Samsung Inc revenue from galaxy Business Division to increase to 63% by year 2015.
Nokia loses its top position after 14 years to Samsung:
This was bound to happen and it has. The one mistake of Nokia – not tying up with Android and not bringing forward really high tech mobile phones has hit the brand in its heart and opened up the avenue for another super player – Samsung.
Nokia has been the market leader for the last 14 years with value for money products, products which were really good and had the latest technology. The best part was the rural spread of Nokia which is now being challenged by Samsung Guru Range of phones which have a fantastic battery life. The grass was green for Nokia until the first I phone launched. Than the grass began wilting.
The launch of the first I phone showed the world the actual true potential of touch screens. This was soon followed up by I phone 2 as well as various followers who gave variants of the touch screen models. But the one company to truly capitalize the market was Samsung. Samsung realized the power of Google Android and the one smart move of Samsung to adopt Android operating system has paid off.
But only the operating system does not make cell phone brands. Cell phone brands are made by giving consistently good products over a period of time. Nokia failed in this aspect of business. Its entire new model appears almost the same. There were very minor changes and Nokia failed to attract the proper positioningin the consumers. All these factors created an opening for Samsung which gave the public exactly what they wanted – variety of prices in the smart phone segment, with touch screens, with Android and with a fabulous marketing plan. Samsung also came out with Tablets and unique models like Samsung note which have attracted the public eye.
The end result? Samsung is finally the world leader in cell phone market. Please note that this has happened only in the first Quarter of 2012 (January to march) but this trend is expected to continue over time until Nokia comes out with an smart strategyto regain its number 1 position. You can’t just write off Nokia because of the deep pockets which Nokia has due to years of market leadership.
Market Positioning Strategy:
As mentioned earlier, Samsung has positioned themselves as wide variety products, good quality-affordable priced company. There are many companies competing in the same industry like Samsung with its mp3 and computer products, Canon with its camera systems and Sony with music entertainment and HD TV. Samsung is one of the largest electronics and IT companies. According to Fortune, they have made themselves noticeable by being ranked second company in their industry (Electronics, electrical equipment) with a fortune 500 rank of 46 (Fortune, 2007). We have chosen to position Samsung's products in 5 different categories, because they have different position in each category.
Market Segmentation Strategy:
The chosen methods of segmentation for Samsung are geographic and demographic segmentation. Geographic segmentation is based on region and county size while demographic segmentation depends on the variables of income, gender, and education level. The results of the research on these topics will prove to be the information basis of the target market section.
They clearly defining US market segments and definitions between B2C and B2B categories with strategies for each category.
Price strategy:
Since Samsung bought DRAM technology from other company, they has develop and come up with better technology. Samsung has introduced many products with low price and high technology products. High technology requires high cost; Samsung tried to reduce cost by having main R&D facility and fib line in South Korean instead of having many branches in other countries (Barney, 2008:PC2-17). These cost leadership came from Samsung policy, which is
“We will devote out human resources and technologies to create superior products and services thereby contributing to a better global society”.
Products differentiation Strategy:
Samsung has tried to differentiate their products from other companies based on three categories, which are product attributes, firm-customer relationships and firm linkages. There are many competitors that produce similar products as Samsung; Samsung has to deal with competitors in five different industries. Samsung add different features into their products to differentiate from others. For example, adding pod cast feature into headset in order to provide more function from customers (Samsung to put podcast feature on handsets, 2007). Feature difference attracts more customers and Samsung trying to differentiate their products by present new features. Samsung was not popular brand, but they became No.1 TV market in 2007 (Moon, 2008). Currently, Samsung is a well known brand; they have reputation from customers and provide quality products to customers. Also, Samsung opened showroom in the New York City to create loyalty with customers. Samsung differentiate their products by acquiring other companies. Samsung Electronics has acquired Phoenix Secure Core in 2007, in order to produce firmware for their electronic devices (SAMSUNG LICENSES PHOENIX SECURECORE, 2007). Also, use their supply chain management system to forecast trends and sales, therefore, Samsung can prepare for next strategies (Moon, 2008).
Promotion strategy:
Some of the most relevant and effective methods of promotion that Samsung utilizes are through television, magazines, internet, bill boards, road shows, display exhibition stalls etc. With its target market being males 15 years of age and older, Samsung should focus its advertisements through male-focused magazines and television stations, such as sport, automotive, and high sex appeal subjects.
Direct Competitors:
| Competitor Name | Facts |
| Phillips Electronics | -Founded in 1891 -$66,469,000,000 in sales in 2010 -Global business (Hoovers, 2011) -First to introduce the Cinema 21:9 ratio TV (Murph, 2009.) |
| Sony Co. | -Founded in 1946 -$77,824,600,000 in sales in 2010 -Global business -Net Income of $440.2 million (fiscal year ending March, 2010) -One year growth of 2.1% (Hoovers, 2011) |
| Toshiba | -Founded in 1904 -$69,853,000,000 in sales in 2010 -Global business (Hoovers, 2011) -Leader in technology for 3D TV’s not requiring 3D glasses (Resigned 2010) |
| Sharp Co. | -Founded in 1935 -$29,266,600,000 in sales in 2009 -Global business (Hoovers, 2011) |
| LG Electronics | -Founded in 2002 -$27,462,100,000 in sales in 2010 - Global business (Hoovers, 2011) |
| Mitsubishi Electric | -Founded in 1921 -$38,022,900,000 in sales in 2010 - Global business (Hoovers, 2011) |
Competitive Advantage
Innovation is Samsung only way to achieve sustainable and competitive advantage. In today digital era, speed is the essential competitive as new technologies constantly introduced to the market. To remain at the forefront of the digital market, Samsung spend lots of effort in expanding their R&D center. Each year the company invests approximate of 9% of their sales revenue into R&D activities (Samsung, 2008). As of today Samsung had approximate 17 R&D centers operates overseas. The R&D focuses on exploring the possible and introduces new products to meet the supply demand of consumers. Besides R&D, brand is another competitive advantage of Samsung. Samsung build it brand images by rapidly take initiative in executing change and innovation with a sense of crisis, and constantly strive to innovate (Samsung, 2008). As a result, the Brand Keys Customer Loyalty Engagement Index recognized Samsung for number one in customer loyalty in the cell phone category for seven years in a row.
Conclusion
Samsung provides the electronics market with a full range of great consumer products, ranging from mobile devices to home appliances. They have proved themselves an innovative and efficient company that strives to provide their customers with the newest products for a great price. With their wide range of products they have generated a powerful supply of products. The limitability of their resource that Samsung is facing from Chinese DRAM Company has to make Samsung think of new ways to stay on top of the market and stay profitable in the long run. In order to secure future success in a very competitive market, they need to focus on being innovative and expand their products in to new markets and countries. Samsung should also invest heavily into establishing its brand name in foreign countries to attract talent. Applying all of these recommendations and suggestions will generate a better future for Samsung and will make them be able to compete with other companies in the industry.
Recommendation
The proposed benefits of the Global solution are far too great to bypass. The Global solution offers a physical presence and greater opportunity for talent buildup, and brand name establishment in foreign markets. The trade-off table shows the decided advantage the Global solution presents has many advantages in developing growth, pressure on competition, and international development. The drawbacks for employing this strategy are the high costs involved and the potential for failure. If Samsung does not increase the perceived value of their products but incurs high costs in the process further market share losses will follow. The Redesign solution offers high potential for success if the culture of innovation can be successfully established. New designs and product offerings can improve sales in the short and long term. The drawback to this strategy is the culture for innovation is essential and difficult to establish. Furthermore, long term growth capacity is not as great as the Global strategy due to only culture change not accompanies by physical growth. Design and manufacturing facilities in the two most heavily populated countries will establish brand name and loyalty among the newly empowered citizens of China and India. A price tag cannot be placed on the tremendous value of brand loyalty in countries that have strict and loyalist family structures. The upside of establishing brand name, brand loyalty, and employing the best and brightest a country offers is enough to push the Global solution past the Redesign solution.
References:
- Strategic marketing (David W.Cravens/Nigel Piercy) 9th Edition.
- www.samsung electronics co.
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