The competition between Samsung and other companies
The competition between Samsung and other companies
Nowadays, electronic products are loved by people, and have become the trend of the necessities of life and the pursuit of goods. In the face of fierce competition and huge market potential of electronic industry, the major foreign manufactures and domestic manufacturers both want to occupy the leading position in the market, grab market share. In this period with opportunities and challenges, how to enable enterprises to be invincible is an important problem that every electronic enterprise explored actively. Therefore, many companies established their marketing strategy for the further development.
1.1 Samsung Company
Samsung Company is the first big business in South Korea, and also is a multinational enterprise group. Samsung Group concludes numerous international affiliated businesses, such as Samsung Electronics, Samsung Corporation, Samsung Life, and Samsung Aviation and so on, and its business involved many areas of electronics, finance, mechanical, chemical, and others, which is in the list of the world’s top 500 enterprises. Samsung Electronics is its largest subsidiary, which is the world’s largest mobile phone manufacturer and revenues the largest of the electronics companies. In 2011, its global enterprise market capitalization is up to $150 billion. Samsung Group is a family business, the Lee family hereditary, its Samsung industries are a family business, and other members of the family to manage, now the current leaders of the Group has spread to the Lee’s third generation. (Samsung, 2013)
Samsung Company was established in 1938, and is an international marketing company. It’s mainly industry, Samsung electronics, is established in 1969, is a semiconductor, communications, computer products and consumer electronics products in one of the major electronics companies, and is committed to the perfect experience for global customers through advanced technology and thoughtful service. 30 years ago, when Samsung Electronics is just established, it worked for Japan’s Sanyo to manufacture low-cost 21-inch black and white TV. In the early 1990s, Samsung Electronics, in the minds of consumers, products is just a company to imitate others cheap products. With its development, nowadays, Samsung has become to one of the world’s largest companies in the electronics industry.
Samsung Electronics is the main industry, and came into the top 500 companies in the world. The mainly products include: Samsung mobile phones, television, digital audio and video, computer office BSV LCD splicing screen, etc. Samsung has nearly 20 kinds of products occupied first world market share in the global enterprise, and highlights the relative strength in the international market.
2. Analysis the market of Samsung Company
This part used the SWOT method to analysis the market of Samsung Company, concludes its external and internal factors to analyze its strengths, weakness, and opportunities, and threatens (Hill and Westbrook, 1997).
1. Strong technical R&D and design innovation capability;
2. “People-oriented” human resources strategy to attract global talents; 3. Clear development strategy and effective execution;
4. Strong after-sales service system;
5. High brand awareness and good corporate image;
6. Own outstanding business leader;
7. Good relations between the government and enterprises;
8. Product position is high-end with high profit margins;
9. Strong market leadership, market share high.
1. Personnel structure is not enough international that the overseas recruitment of senior corporate leadership most Korean people; 2. Product line is too long, that it concludes so many products, and some not dominant products may be fall. 3. Cost is too high;
4. Product life cycle is short. Especially Samsung Electronics aims to increase its market share through product differentiation strategy, leading to further shorten the product life cycle of Samsung Electronics. Opportunities:
1. The world economy continues to take a good, for the majority of products targeted at the high-end, Samsung Electronics is a further opportunity to increase its market share; 2. Samsung 3G technology is mature, and the 4G technology is under study; 3. Samsung mobile market share is on the top, and has a large development space.
1. Under the global trade protectionism, some may be anti-competitive behavior are investigated by other countries; 2. In the electronic industry, it has some competitive pressure, such as the Apple, LG, Nokia and so on; 3. Flat screen monitors market demand continues to weaken, Samsung Electronics as a global flat-panel TV market in the second, facing the pressure of the growth rate slowed down.
3. The Strategy of Samsung
The brand positioning is the enterprise market positioning and product positioning based on specific brand commercial decisions on cultural orientation and personality differences, and it is to establish a target market the brand image of the process and results (David and Erich, 2000). Through the analysis of the market of Samsung, it can be seen, with strong R&D and design capability to product high-end fashion products, not only in
the positioning is different from competitors’ products, but also to meet the target consumer demand, Therefore, Samsung Electronics chose the high-end fashion as their own brand positioning concept. Its target group is mainly the fashionable young people, which have a certain amount of spending power, like to try new things, and about the age of 22 to 35 years old young white-collar workers.
Samsung Electronic began to develop the semiconductor business from 1980s, and then gradually to the development of high-end products. Now, its main business includes the four major categories of semiconductors, digital media, and communication networks. Samsung Semiconductor is the main competitor to Intel-core businesses, mainly in the memory market. Samsung random access memory business market share is firmly in the first over the past 10 years, and the flash market share is also in the global forefront. Digital media, film liquid crystal displays and recorders share ranks first in the world. Telecommunication Network Business, Samsung is the largest mobile phone manufacturers in the world now and has exceeded Apple, Nokia and so on and it also world’s largest manufactures the CDMA handsets.
Samsung’s high-end fashion brand philosophy is embodied in Samsung different areas products. Take the mobile phones for example, Samsung has used three words to express their ideals: Wow, Simple, and Inclusive. In this concept, Samsung has pioneered the use of flip phones, the first to promote the color screen, slider phone design, and vigorously promote the camera phone. In addition, Samsung also launched a number of mobile phone for women. Compared to the Nokia and Motorola that pursuit of comfort and reliability, Samsung are more prominent products fashionable and aristocratic, and are better able to attract the attention of consumers.
Marketing strategy is the critical part in the marketing plan. In this part, company select the appropriate combination of marketing strategy based on the analysis above including the marketing environment, market opportunities, internal resources and target market (Subhash, 2000). After
market research, Samsung products are focus on creating unique high-end products with high price, and not position on the low-cost, low-price and low-end products. So in order to establish a high-end brand positioning of Samsung electronics, it implements high-price strategy in the global to enhance the brand image, and opened the grade with other manufactures of similar products. The high price strategy creates a first-class high-end image for Samsung and brings more profits for Samsung, which provide strong financial support for the new R&D.
Promotion strategy is how company uses the personal selling, advertising, public relations and sales promotion to communicate product information to consumers, in order to arouse their attention and interests and stimulate their desire to buy and purchase to achieve expand sales (Johny and Johansson, 1997). In the promotion strategy, Samsung adhere to brand position, through a variety of means of promotion to build brand image.
Advertising is the most direct way of branding promotion. In 2001, Samsung has invest nearly $ 400 million worldwide to launch an extensive advertising campaign, which it played a moving slogan that “digital world, everyone share”, has greatly changed the cheap, low quality image of Samsung products in the minds of consumers in Europe and the United States and other developed countries and Samsung products linked to fashion, high-end for the first time. At the same time, Samsung also invite youth, fashion star as the spokesperson, make the consumers soon shift from the original concept that low-grade, obsolete, outdated to the now concept of high-end and fashion. After that, Samsung also make full use of international activities for the promotion table to make more consumes understand and prefer Samsung.
Faced to the trend of customer demand characteristics and complexity, Samsung adhere to the market segmentation strategy that category management customers, focus on customer needs, and take the initiative to create demand, adopt differentiation to applicability to personalization strategy to achieve customers trust and make full use of the integration of the sales to do a full range of service for customers. For the target of customers, it
segments the customers through different demand of different ages (Peter and James, 1985). Customers under 18 years old are mainly students, who have no revenues and the attention to telephone is low. 19-25 year old customers are pursuit personalities but economics revenue is not stable, and 25-35 years old customers are pursuit fashion and brands. These two stage customers are the mainly target for Samsung.
Samsung competition strategies mainly focus on differentiation competitive advantage and brand competitive advantage. First, Samsung has always been to provide customers with high quality, high-tech electronic products for the purpose, and this is undoubtedly an important symbol to distinguish between Samsung and other brand electronic products. Behind the support of strong R & D team, Samsung product differentiation competitive advantage can be achieved. Second, In addition, the age of more than half a century brand, especially in the late 20th century Samsung monopolies ground almost five generations established the brand so that the Samsung brand that is synonymous with high-quality, high enjoyment undoubtedly is one of the important competitive advantages.
4. The competition between Samsung and other companies
4.1 Samsung and Apple
In the electronic industry, apple is the mainly competitor to Samsung in the international market. Competition from Apple and Samsung defines the global mobile device market. The two companies together accounted for half of the global smartphone market share. Analysts said Samsung is to get rid of the identity of the “fast follower”, and became to a true innovator, Apple has been the world’s leading innovator, and however, recently the company’s innovation is slowing. In 2012, Samsung Electronics’ global market share is 28%, more increase than the last year of 20%. In contrast, Apple’s market share amounted to 20.5%, slightly more than last year’s 19% (Samsung, 2013)
The competition between apple and Samsung is the competition between Apple iOS and Google Android two mobile platforms. Currently, over 2/3 of the smart phone are using the Android system. Meanwhile, Apple component
procurement and assembly of products has been largely outsourced. This brings to the Apple Company a higher profit margin, but it cannot well control suppliers, while, most of Samsung’s components and products are produced by the company itself. In addition, Apple focus on high-end mobile device market, Samsung is also aimed at the new user for the further development.
4.2 Samsung and LG
LG is South Korea’s second large group second only to Samsung, LG Group continued to infinity technology challenge, and is committed to the development of new technologies, research and development the LG development priorities, but also the strong backing of the Business Development. LG is the production of flat-panel TVs, audio and video products, one of the world’s leading enterprises of mobile phones, air conditioners and washing machines. In the mobile phone market, LG Electronics was the world’s third largest mobile phone manufacturer in the past, however, in 2012, has fallen for the fifth-largest mobile phone manufacturer, which also reflects the inability of the company to launch a competitive product to the market, to compete with Apple’s iPhone and Samsung Electronics Galaxy products compete. In the South Korea’s electronics industry, Samsung occupied the mainly market, while LG behind it to compete the second position.
Samsung Company should make full use of its own advantage, explore market full, against external threats as well as to improve the internal environment and secure and expand its competitive advantage status. This needs the correct formulation and implementation for the Samsung’s market strategy on the product, price, and promotion and so on to become to the true market leader. Meanwhile, at the analysis of competitors, Samsung should clear its competitive advantage, strengthen brand building, explore consumer demands and with the spirit of innovation to achieve further development in the world electronic market.
David, A. and Erich, J. (2000) The Brand Relationship: The Key to the Brand Architecture Challenge. California Management Review, 42 (4), pp. 53-67.
Hill, T. and Westbrook, R. (1997) SWOT Analysis: It’s Time for a Product Recall, Long Range Planning, 30 (1), pp. 46–52
Johny, K. and Johansson, M. (1997) Global Marketing-Foreign Entry, Local Marketing and Global Management, The McGraw Hill Companies, Inc.
Peter, R., Dickson, J. and Ginter, L. (1985) Market Segmentation, Product Differentiation, and Marketing Strategy, Harvard Business Review, 14(4), pp. 182-221.
Subhash C. J., (2000) Marketing Planning & Strategy, Journal of Business Administration, 4, pp. 23-27.
Samsung Inc. (2013) Introduction of Samsung [Online] available from: http://www.marketingweek.co.uk/brands/samsung/ [Accessed: 20 March, 2013]
Samsung Inc. (2013) Introduction of Samsung [Online] available from: http://www.samsung.com/us/ [Accessed: 19 March, 2013]