Samsung Critical Analysis
Samsung
Samsung’s Background Samsung Electronics is a consumer electronics manufacturing company based out of South Korea. Samsung Electronics ranks among the world’s largest manufacturers of smartphones, tablets, and memory chips. They produce phones with a variety of operating systems (OS) including Microsoft’s Windows, in-house OS’ Bada and Tizen, and Google’s Android. Android’s success today as the mobile industry’s most popular smartphone platform is largely due to Samsung, accounting for 95% of profits (Kelion, 2013). Samsung has dominated the world smartphone market since 2011, most recently reporting a market share of 35% in quarter 3 of 2013 (Pfanner, 2013). They have achieved this market share through high sales of their flagship Galaxy S model (40 million units sold to date in 2013), and by offering a diverse product line of over 40+ smartphone models along a broad spectrum of prices. Samsung is able to introduce such a widely diverse market offering through a highly integrated value chain that keeps production costs low. Samsung’s “shotgun” strategy has been highly successful in capturing market share in the short term, and pushing its competitors (Nokia, HTC, and Apple) to differentiate or exit the market. Over the summer of 2013 investors questioned this strategy and became concerned that as differences in technology among the models became less pronounced that Samsung would lose its ability to charge a premium for high end models, resulting in a temporary dip in the share price.
Samsung’s Problem How can Samsung continue to offer a diverse line of products along a wide range of price points and maintain their position as the world’s leading smartphone producer?
Samsung’s Alternative Solutions Samsung can continue appealing to a broad array of market segments and penetrate open segments without offering an overly diverse product line. Samsung can use popular trend analysis and rely heavily on the success of previous model
Samsung’s Background Samsung Electronics is a consumer electronics manufacturing company based out of South Korea. Samsung Electronics ranks among the world’s largest manufacturers of smartphones, tablets, and memory chips. They produce phones with a variety of operating systems (OS) including Microsoft’s Windows, in-house OS’ Bada and Tizen, and Google’s Android. Android’s success today as the mobile industry’s most popular smartphone platform is largely due to Samsung, accounting for 95% of profits (Kelion, 2013). Samsung has dominated the world smartphone market since 2011, most recently reporting a market share of 35% in quarter 3 of 2013 (Pfanner, 2013). They have achieved this market share through high sales of their flagship Galaxy S model (40 million units sold to date in 2013), and by offering a diverse product line of over 40+ smartphone models along a broad spectrum of prices. Samsung is able to introduce such a widely diverse market offering through a highly integrated value chain that keeps production costs low. Samsung’s “shotgun” strategy has been highly successful in capturing market share in the short term, and pushing its competitors (Nokia, HTC, and Apple) to differentiate or exit the market. Over the summer of 2013 investors questioned this strategy and became concerned that as differences in technology among the models became less pronounced that Samsung would lose its ability to charge a premium for high end models, resulting in a temporary dip in the share price.
Samsung’s Problem How can Samsung continue to offer a diverse line of products along a wide range of price points and maintain their position as the world’s leading smartphone producer?
Samsung’s Alternative Solutions Samsung can continue appealing to a broad array of market segments and penetrate open segments without offering an overly diverse product line. Samsung can use popular trend analysis and rely heavily on the success of previous model
References: Cho, A. (2013, June 13). The Motley Fool. Samsung Could Be in Serious Trouble. Retrieved April 8, 2014, from http://beta.fool.com/alexcho/2013/06/13/samsung-could-be-in-serious-trouble/36675/?source=eogyholnk0000001 Epstein, Z. (2013, November 5). Trouble at the Top: Samsung Reportedly Lowers 2014 Smartphone Forecast. Yahoo! News. Retrieved April 8, 2014, from http://news.yahoo.com/trouble-top-samsung-reportedly-lowers-2014-smartphone-forecast-163025641.html Kelion, Leo. “Samsung: Is the Smartphone-maker in Deep Water?” BBC News. N.P., 20 June 2013.Tues. 08 April 2014. Pfanner, E. (2013, November 4). Samsung Prepares to Slowly Lift a Curtain to Investors. Economic Times. Retrieved March 8, 2014, from http://economictimes.indiatimes.com/news/international-business/samsung-prepares-to-slowly-lift-a-curtain-to-investors/articleshow/25208586.cms