Samsung Company Situation Analysis - Research Paper Example

?Executive summary Samsung Company is one of the largest providers of technology in the world. The company started as trading company that was exporting different products to Beijing, China from South Korea. The company has grown to a multinational corporation it is today. Samsung in Korean means three stars, it got the name due to the association it had with different business types in various parts in the world and in South Korea (Cohen, 1995). People started associating it with electronics, development and information technology. Samsung’s success as a provider of technology has continued to grow with the merge of Samsung Telecommunications and Semiconductors. The merge paved way and Samsung grew stronger to the international market by manufacturing products which were high-tech and are used by almost every household today. Samsung kept on growing through business plan restructuring so as to accommodate the global market and moving beyond boundaries. Through accommodation of a new management has seen to be great move the company made since its products have made it to the top list of what a house hold should have. LCD-TV’s, Samsung phones, picture tubes, Samsung cameras, Samsung printers and any other products if high-tech have become popular due to the high quality. Samsung became world’s best through venturing to the industry of the LCD in 1993. Its excellent quality control method is what has made it successful in the provision of the best quality products in the whole world. It has maintained the world’s best status of the provider of technology. Its workforce which is highly qualified strive for the best in their fields respectively which makes the whole company a success. Through this effort the company has been able to create the Galaxy S3which is a very high tech phone (Mitchell, 2012). The challenge The Samsung Galaxy S3 contains a multi-touch feature, a slate-format which runs with the Android operating system is developed, marketed and designed by Samsung Electronics. It uses a personal intelligent assistant which is the S voice, it has an increased storage, a wireless option of charging and an eye-tracking feature. It was unveiled in London on 3rd May 2012, following a development phase of eighteen months. The device was released in 28 Middle Eastern and European countries in May before being released progressively in other markets in June. Prior to the release, 100 global carriers placed 9 million pre-orders and it was released in about 150 countries by around 300 carriers by the end of the month of July (Mitchell, 2012). During its release, the first 100 days the companies sold above 20 million units and since then Samsung has sold devices totaling to above 30 million. Samsung’s strategic goals of increasing revenues by 2010 and being ranked the top most company in provision of quality and quantity saw their dream come true when the Galaxy S3 hit the market as the iPhone killer. There was a shortage extensively in the United States due to the large demand which led to a manufacturing problem of the version of the blue version. It was ranked as the No.1 and also won the European Sound and Imaging Association award, Samsung’s operating profit was boosted by this in 2012 second quarter. Situation Analysis Company Analysis Samsung Company has set to achieve many goals by the year 2012. It has aspired to be in the top three companies that deal with electronics worldwide in quality and quantity. It plans to double its sales revenue and achieve US dollars 61 billion with fabrication plants domestically totaling to 24. It aims at becoming the leader in producing a mobile phone that is all-in-one in the sector of Information Technology (Cohen, 1995). Samsung aims at reaching a sales of US dollars 30 billion in the sale of Liquid Crystal Display televisions (LCD). It intends to be leading the business of Digital Media by expanding its world of digital consumer by achieving a sales of US dollars 30 billion. Samsung has a major strength in its well-established equity in its brand, which has been performing very well since 2000 to date. Many innovative products containing value-added functionality and features have since then been launched and have turned out very successful. Samsung strongly believes in holding on to its strengths, it claims that it has intellectual, talented and intellectual human capital (Holloway, 1998). The company is proud of having very capable employees and have confidence in them together with the partners who are the dealers, distributors, advertising agencies and the marketing team all over the world that help the Samsung Group. The mobile segment in particular has helped Samsung achieve the Global leader in telecommunication and electronics devices and goods. Samsung has a weakness in penetrating new markets and this has seen its concentration remain in few countries especially North America and Europe while it focuses mostly on the United States and the United Kingdom in comparison to other countries. Although the company has a great workforce which is an asset of the company, many linguistic and cultural differences arise and they lead to interpersonal grudges and group conflicts. Communication between who come from different origins is not as effective as of those who hold the same social background and same culture. Instead of being thoughtful and careful so as to reach the position it desires globally, it’s in a hurry of launching new segments, marketing campaigns and products. Its big focus not on in development and research, manufacturing, it’s heavily investing in the development of more segments and markets and it intends to capture more markets in a very small time span. Samsung has been at the top in the market share of mobile in the United States after it attracted above a quarter of all the mobile subscribers. The market’s 26.3% was claimed by Samsung by October 2012 though Apple which is its rival is catching up quickly. The iPhone manufacturer saw a very high growth among other manufacturers of cell phones and it managed overtaking LG which took position two. Samsung’s culture is to simply follow a business philosophy which states that they devote their technology and talent into producing superior services and products that will contribute to a global society that is better. This philosophy is brought to life by the good workforce every day. Their leaders intensively look for the most bright talent from all over the world and offer them resources that they require to do the best and be the best. This results to the quality products ranging from memory cards that assist the business in storing vital information to mobile phones which connect people all over the continents. This enriches peoples’ lives and it makes a better society globally. The company believes that the key to a good business is by strong values living. Customer analysis Samsung had one of the best third quarters. It recorded is best profit ever totaling to US dollars 7.3 billion, this marked the straight fourth quarter in profits record for the Korean company. These results were mainly contributed by the Galaxy smart phones sales. It reported that the company sold about 60 to 58 million cell phones. The Galaxy S3 which has been on sale since May 2012 flagged sales between 20 and 18 million units. A significant improvement of galaxy S3 which is the Galaxy s2 hit the U.S shelves and is expected to succeed its predecessor. Samsung’s customers are of different types due to the wide range of electronics it manufactures. It attracts customers from all fields by manufacturing of products like; the Samsung TV’s, mobile phones, freezers and fridges, laptops, docking stations, mobile accessories, monitors, home theatres, washing machines, digital cameras, air conditioners, microwaves, dishwashers, DVD recorders and players and printers. With all these wide range of products it has a wide range of customers in the household, office, entertainment and business sectors. The company conducts a research on their customers and uses their compliments or complains in the manufacturing products that are appreciated by customers. Samsung was ranked the best most when it entered the LCD market, this could not be achieved if the company did not listen to the customer needs and demands. In 2012, it has hit the markets with the Galaxy S3 which has really boosted its profit where it has sold over 30 million units. It’s customers are essential in making key decisions and this has led to the great growth and the success of all its products worldwide. Customer base is the number of consumers and customers any business serves which is the most important thing to consider in market segmentation. It’s of importance for a company to realize the amount of potential customers which is mostly driven by key customer preferences and needs. A company’s ability to lose and gain a market share is dictated by a company’s ability to meet changes that are required by top most customers. Samsung has introduced the Galaxy S3 which meets the customers’ demands. This smart phone has unique features which have not been created earlier. Many of its products are created to the best a customer can expect, the Galaxy S3 has an enlarged memory, a wide screen and a better display screen resolutions. Competitor Analysis The market share numbers of smart phone has been dominated by Samsung and Apple who are bitter rivals for the 2012 second quarter while other competitors fight for the leftovers. Apple which holds 17% compared to Samsung’s 30% but in the US apple holds 31% of the total market share while Samsung holds 24%. Apple which the greatest Samsung competitor strengths include products that are well deigned such as the iPad, the Macintosh computers and the iPhone. The company has a recommendable reputation, it has the best technology in manufacturing of personal computers and dominates a major marketshare. Users of Apple products are loyal to the company’s products because they always use the Mac computers and its not likely for themto switch to any other brand since Apple has a reputation of quality products. These situation has led to an increase in Apple users everyday, this is propelled by the effort put by the company in Research and Development. Apple resources are not usually compatible as compared to Samsung resources. It has a unique system and hardware which are only compatible to Apple product series only. Information from Mac computers is only transferrable to only any other Mac computer only. Apple are very conscious in inventions but they do not factor the customer affordability or financial status (Mithell, 2012). Their products are of good quality but very expensive to purchase, their prices are always surging higher than that of their competitors. This has seen many users shift to other computers although Apple is their favorite, if at all it reduces it prices it can achieve a very high market share. Apples top management has been shuffled constantly and changed, this situation renders the company position as unstable. Collaborators Collaborators and suppliers of Samsung allows the company to assist suppliers and partners to effectively prepare the regulations of the environment. The company strives to improve the capability in order to meet international and local environment regulations, social and safety standards so that they can reach their sustainable management goal. All the suppliers are certified under the scheme of the S-partner and components and parts used for production are purchased strictly from suppliers who are certified. The 50-50 joint venture between Samsung and Sony was broken and Samsung absorption of the South Korea joint venture into its LCD business which exists and turn it to a subsidiary 100%. This will see the LCD business of Samsung as the second largest from LG’s in the world. Sony has been experiencing losses for years for its TV units, in moving out of the collaboration with Samsung it will save around US$640 million each year. Climate The climate of a business is mainly influenced by the macro-environment (Holloway, 1998).. The macro environment are factors that influence the organization positively or negatively but are out of control. The business should be able to adapt to the changing environment, there are competition rivalries in today’s market. Cultural changes are peoples core values or beliefs, the way people view others, themselves, society, organizations, the universe and nature. The political environment is made up of regulations, government policies and laws which limit or influence companies in the market. The government institutes regulations and limits on organizations and companies for the society good. Economic factors always influence the purchasing of consumers. It is of importance that organizations and businesses watch the economy trends to avoid losses and always be at the market top. New technology comes with new opportunities and new markets for companies. It is therefore of importance for businesses young or old to stay always on top of the new technology. Businesses that fail to be updated to the technology will be surprised when their services and products are outdated. Such businesses miss out great markets opportunities brought about by technology. SWOT Analysis Opportunity SWOT means internal weaknesses and strengths of an organization and the environment Threats and opportunities facing that organization. This is the analysis widely used by most mangers in creating an overview of a strategic situation of company. The strengths of Samsung include; a strong has a wide range of products which include Tablets, Mobile Phones, Cameras, Home appliances, PC’s, TV’s and many more accessories. It holds a good market share in majority product categories. It’s holds position two in the mobile phone market share, it captured the market which was dominated by Nokia through introduction of smart phones. It is categorized as the best in terms of technology and design features (Holloway, 1998). It’s the first company to introduce mobiles that are dual screens, the first phone that contained polyphonic ringtones, rotating lens and the lightest and thinnest note pad. It enjoys an advantage of introducing features that are advanced in refrigerators, LCD and air conditioners. it brand value has increased in the last three years by 80% (Mitchelle, 2012). Weakness Samsung is faced by a number of weaknesses which include; the introduction of smart phones series that have led to cannibalization, LCD demand in the future has declined, in India Nokia is still preferred to Samsung in terms of reliability, resale value and ease in usage. There is reduction in sales due to Chinese products which are mainly concerned with the cost. It only leads in hardware but it depends on other companies mostly for software. Online stores sell a wide range of products and give better deals because they do not incur any cost in the channel of distribution. Opportunity Samsung has plans in making the air-condition category stronger with a technology which is unique. It is official Olympic partner of India for London Olympic for the year 2012 and has launched a program known as Olympic Ratna which will enhance awareness of brands and lead to sales increament (Cahill, 2006). It future plans to launch products that are Customized to cater the Indian market, which will lead to an improvement in the rural market share. The youth population in India is rapidly growing and sales for mobile phones are expected to rise due to a decrease in call rates. It has a strong financial position which renders it a scope to enter unrelated diversification. Threats Samsung manufactures varieties of products and failure of a product will have a great impact on the other which will result to brand dilution. Competitors especially Nokia focus on only one segment. India being a potential market, foreign players entry is high. Haier company has already gained market share in the Indian market. There is a great threat from products from China. Market Segmentation Samsung’s mobile division carries out its operations in a very competitive market in the world. The Federal communication of the US states that every year 67 new brands of smartphones are introduced. Galaxy S3 is in a competition with the world leaders which include; Blackberry, Apple, HTC, Motorola, LG, Sony Ericson and Nokia. Microsoft has also joined other leaders by entering into a partnership with Nokia which is a giant from Finland. Google which is a software partner of Samsung has also acquired Motorola’s Division of mobiles. Many may argue that a marketing which is concentrated will serve as Samsung’s actual strategy in it’s divion of Mobile phones. Samsung has a divided market segment in all of its products in which if offers to its consumers which include; Galaxy Mini, Gio, S3, Ace, S, 580, 5, 551, Nexus S, Omina 7 and Wave 723 (Mitchelle, 2012). All these different products which bear the brand of Samsung target different many different segments in the market of mobiles. Traditionally Samsung had a very conservative image which focused on products of low price for the market of the lower end. It was able to be in a competition being in the lower market since penetration to the higher market was not any easy. Penetration to the high market meant that Samsung had leave the lower market and concentrate on innovation and getting a higher value of the brand. Due to high quality perception it’s prices also rose, after the introduction of Apple iPhone which the technology has now available, Samsung has repositioned as to High quality where Samsung’s Galaxy S3 is competing with the iPhone 4. Having features and benefits which match those of iPhone 4 but its prices being abit low than those of the iPhone 4 it believes in having a competitive advantage against competitors. Psychographic and Behavioural segmentations are what fits Samsung best. Demographic and Geographic being important in the segmentation of Samsung strategy emphasis still remain on the earlier strategy. Alternative Marketing Strategies Samsung company had to define its positioning. Its frame of reference, it had to make comparisons to its competitors. Galaxy knew its major competitor and took him head when coming up with a strategy which was a good move. They had to be relevant to the target market, they had to bear in mind that a single message would not be for fit all. It had to start by knowing the market of target(Holloway, 1998). Marketers had to hold and grab the attention of viewers with information that would interest them bearing in mind that many people do not like or watch ads but they watch anything interesting. They had to ensure that messages on these ads was interesting so as to attract communities. They had to have a definition on the proposition of value which truly discriminates one from their competitors. They had to give customers good reasons as to why they had to select them. The marketing team had to make the message simpler so that readers understand easily. They had to keep in mind that pictures are better than words. They had to make their ad a component, they had to create an integrated campaign of marketing. There were similar ads which were geared to addressing the S3 compared to Apple’s product. They had to consider their customers end state values. Most target customers are interested by the new features of technology. Selected Marketing Strategy The product; the first thing intended when starting a business is a product. Therefore, in marketing mix, products are the first variables. A company should take product decisions before creating a marketing plan. The marketers of Samsung S3 must consider their product it must contain which product one is selling? The quality of the product? Different features of the market? If the product is branded as a new one and a sub brand? The price of galaxy S3 depends on so many variables and is updated constantly. There are many considerations to consider in pricing of products, marketing and advertising expenses. When factors change pricing has to increase or decrease in accordance with the market. Place is the channel of distribution of the Galaxy S3. These product needs to be available all over the world for good sales. Having sold all those units means that they had a good distribution channel. In conclusion, Samsung has the success of its Galaxy S3 through a good marketing plan. It is important to market a business if it has to make good sales otherwise if there is no marketing nobody will recognize the product for sale. Work cited Cahill, Dennis J. Lifestyle Market Segmentation. New York: Haworth Press, 2006. Print. Cohen, William A. The Marketing Plan. New York: Wiley, 1995. Print. Ferrell, O.C. Marketing Strategy. Fort Worth, TX: Dryden Press, 1999. Print. Holloway, Stephen. Situation Analysis. Aldershot [u.a.: Ashgate, 1998. Print. Michell, Tony. Samsung Electronics and the Struggle for Leadership of the Electronics Industry. Singapore: Wiley, 2012. Print. Read More