Samsung Product Portfolio - Assignment Example

Samsung Product Portfolio Samsung Group produces a wide variety of industrial and domestic products. It produces electronic products, machinery and heavy industry products, chemical products and financial services. It is also owns many affiliated companies like Samsung Biologics, Hotel Shilla, Samsung Bioepis, Samsung Medical Center and other affiliates that provide professional services. Every product provided by Samsung to its consumer has a contribution to the company. According to the Boston Matrix, Stars are products with a large market share and are in a rapidly growing market. In the case of Samsung, its star is Samsung Electronics. Samsung Electronic produces a vast range of products for the rapidly growing market of information technology and home appliances. In the home appliances category it produces cookers, ovens air conditioners, refrigerators, vacuum cleaners, and dish washers. It also manufactures TVs, Speakers, Home theaters, TV/ audio/ video accessories, air track and Blu-ray. In the vast and growing area of information technology Samsung provides it consumers with mobile phones and, tablets, PC/ peripherals and printers, as well as, memory and storage devices. These items are produced in various and distinct models to meet the consumers requirements. For instance, Samsung India produces products for the middle and lower classes and provides them at a cheaper price (Krishnamacharyulu&Ramakrishnan, 2012). It achieves this by substituting different parts of a product with cheaper but durable material. Consequently, the company sells more electronic units at a cheaper price in India which is profitable for the company based on the low investment involved. Similarly, Samsung makes different models of phones to suit the needs and costs of its consumers. In Africa, there is a large demand for mobile phones for the purpose of communication. The large population of lower class consumers does not require phones that have sophisticated applications. Consequently, Samsung makes simple models for mobile phones to provide for this market. Nonetheless, it also provides smart phones with innovative technology for the same locations but for a different class of consumers. Samsung electronics is the most conglomerate among consumers. Any product development or investment should be made in the department. Internal Environment, External Environment, and SWOT Analysis Internal Environment Samsung Electronics’ vision is becoming a globally recognized business leader by developing innovative technologies and enriching people’s lives. Its internal environment is designed to achieve this purpose. The company has a management structure that supports diversity. It has a diversity vision where it hopes to create the future by fostering a diverse and inclusive culture, which allows the company to attract the top talent in the world. It encourages its employees to work hard and smart and builds trust among them. It encourages the inclusion of all employees the creativity of the workplace. Moreover, the company is keen on the welfare of the employees and every C.E.O is encouraged to take interest in employee welfare(Marete, 2014). It makes effort toward creating a pleasant and safe work environment for the employees. In 2010, the company established an internal environment and health consultancy for the company on a global level due to concerns of cancer risk among its workers. As a result, Samsung’s employees are committed to the company (Marete, 2014). Currently, Samsung Electronics has a hierarchy and decentralizedorganization structure.The Group has its headquarters in Korea and is headed by a C.E.O and Vice Chairman Oh-Hyun Kwon. It has a board of directors, as well as regional presidents. The regional presidents are responsible for specific products. For example, while Charlie Bae heads Samsung Semiconductors in America, Gregory Lee heads Samsung Electronics North America and Samsung Telecommunications. External Environment The external business environment also seems to favor the company. Despite the economic downturn in 2008, the economy has been recovering gradually. The accommodative business environments allow companies to access resources for investment and expand their products, as well as, market share. Samsung’s investment in mobile phones and information technologies in recent years shows that it has bounced back from the economic downturn (Jordan, 2012). Most governments continue to make regulations that encourage information technology. Consequently, there is an enabling environment for Samsung to increase its market share and provide its product to a vast range of consumers. Furthermore, the electronics, information technology and mobile phones industry has continually expanded. Research continues to allow companies like Samsung to produce products that suit the consumer’s specifications. In addition, new markets for the electronics continue to arise due to the increase of the middle class. Finally, Samsung faces strong competition from other global companies. As the market for electronics and mobile phones increase, electronic companies become more aggressive in making products that suit the consumers’ needs. New electronic companies also emerge. Samsung is bound to face competition in from many angles. SWOT Analysis Strengths Its management is strong and the employees are motivated and loyal It has managed to procure highly efficient and skilled labor on local and international levels (Marete, 2014) It focuses on the consumers’ needs and provides products that have customer satisfaction Its strategy of low prices increases its sales It enjoys a large market share in mobile phones and consumer electronics Weaknesses It is not a recognizable brand in domestic appliances It performs poorly in the PC consumable products, as well as, Laser print Poor strategy in pricing (Marete, 2014) Opportunities It is a chief threat to major stakeholders in the mobile phone and electronics Its idea of consumer taste research can sustain it in the market in future Its portfolio continues to grow due to the acquisitions it continuously makes The global market for its products continues to develop rapidly It can increase the range of products that consumers need in electronics, information technology and mobile phones Threats It faces major competition from companies like Sony, Nokia, LG, and Apple in information technology, electronics and mobile phones(Marete, 2014) New technology companies continue to be created and enter the market Limited innovation in the mobile and electronics industry threaten the future of the company Impacts of the slow economy on its sales The Ansoff Matrix The Ansoff Matrix assists businesses identify growth opportunities andthe risks linked to each option an opportunity (Michell, 2010). It provides four strategies of growth for a company: Market penetration: this strategy entails market share expansion. The company uses its existing products to expand the current market portion. Market Development:The strategy entails entering new markets with the current products (Michell, 2010). Product Development:In this case, the company makes new products for the already existent market. Diversification: the growth of the company is relies on the development of new products for a new market. Currently, Samsung sales for mobile phones and TV are high. On the other hand, it faces stiff competition from LG on home appliances like vacuum cleaners, refrigerators, cookers, dishwashers and washing machines. Its other appliances like home theaters, blu ray, DVD players, and mini components also face stiff competition from Sony. Sony is already well established in most markets across the world (Kotler& Keller, 2012). New product The risk of competition is too high if the company decides to use the diversification or product development strategies. Due to slow innovation in the world of electronics, it is impossible to create a unique electronic product. Most electronics function on the same principles of physics (Kotler& Keller, 2012). It is highly likely that making new TVs, vacuum cleaners, or refrigerators will require excessive resources for product research, testing, manufacturing, and promotion. Furthermore, the product may fail to match the competition by the already established brands. Existing products Market penetration and market development are strategies that are more sensible for Samsung. The company can capitalize on the products that already exist and have a market. Samsung already has an established market for televisions and mobile phone devices. The TVs are preferable to a wide range of middle class consumers across the globe. Samsung’s LED and digital TV models are in competition with similar Sony models. However, the company still lagging behind compared to Sony. On the other hand, the sales of its mobile phones are exceptional. This is due to its recent launch of mobile computing android powered mobile phones popularly known as Samsung Galaxy series. The smart phoneshave become popular due to their innovative technology, design, aesthetics, and price. Samsung galaxy s5 was released in 2014 April. Its technology was widely appreciated like all the Samsung galaxy phones available previously. It was launched in around 150 countries and received good reviews from the consumers. Samsung, Apple, and Nokia are the main competitors in the smartphone business (Jordan, 2012). While Apple’s quality is widely appreciated by consumers, its pricing strategy is not appealing to most average consumers. Many consumers purchase apple laptops, computers, and tablets. However, its smartphones are only affordable to the upper class consumers. Moreover, although Nokia is a recognized brand, its technological innovation remains behind. Samsung has access to a wide market of middle class consumers. Samsung s5 is the most sensible investment currently. The phone is popular and preferred due to its specifications and features, which is easy to sell because people already love it. Additionally, it will become less attractive when Samsung finally launches Samsung s6 later in the year. Therefore, market penetration and market development will ensure that all Samsung s5 phones are sold before the launch of the next series phone. Market penetration can be achieved by reaching out to the lower and upper middle class to purchase the phone at a cheaper price. Market development will involve promoting the phone to new market segments. For example, in most countries the phone was launched in the cities and failed to reach the market in other towns in the countries. The Samsung s5 should be introduced to such markets. Segmentation, Targeting and Positioning Market Segmentation Demographics The following are the consumer characteristics for the Samsung s5 (Krishnamacharyulu&Ramakrishnan, 2012) i. Age: young and middle-aged adults ii. Gender: both male and female iii. Income bracket: consumers earning between 1000 to 5000 per month iv. Education: technology savvy v. Cultural background: open minded individuals Psycho graphics: Individuals from the lower or upper middle class are the main target. Must target individuals that are open minded and enjoy the good things in life. They should be drawn to good products that are not necessarily cheap but offer good deals(Krishnamacharyulu&Ramakrishnan, 2012). Consumers have positive attitudes and strong opinions. Behavior: target consumers that shop online, in shopping malls and enjoy discounts or offers. Geographical location: Most countries across the world with Samsung presence. Live in major or minor cities. However, it is preferable that the consumers live outside the major cities. Targeting Samsung should use a multi segment targeting strategy. It has brand presence, especially for Samsung s5, in over 150 countries. It is impossible to utilize a single marketing strategy for all the countries. Therefore, online marketing can be a common global strategy for the product. Each regional executive should then direct the selection of target markets. For instance, in India, the company should focus on smaller towns in the states as opposed to big cities like Mumbai, New Delhi and Calcutta. Similarly, in Europe, instead of focusing on cities like Paris and London, it can focus on medium sized companies in the region. Furthermore, while there are many online shoppers in Europe, it may be the opposite in India (Lee, 2012). The company’s regional executive for mobile phone appliances should decide on the targeting approach. Positioning The company must position Samsung s5 as the best product by the company and in the industry offered to the consumer as an offer. The Samsung s5 goes for between 630 to 750 dollars. The positioning should offer 15 percent off before the high end and efficient product goes out of stock. As a product admired by many consumers, many will buy the product due to its reputation. The consumer also understands that if the offer runs out, he will have to wait for the Samsung Galaxy s6 that is set to be launchedlater in the year, which may not have a similar offer. Marketing Mix An internet advertisement will be a global marketing strategy, which will consist of a short video advertisement (2 to 3 minutes) and photographs. The short advertisements will be uploaded to YouTube and appear as a preview to the popular music videos, funny clips, and others available on YouTube. The advertisement must reflect the diversity of the company and at the same time communicate the offer provided for the phone. The photographs will be uploaded on the internet and appear on websites and social media. Social Media will also be a major part of the marketing mix. Each region will have accounts for different social media websites intended to communicate with the consumers. These two forms of media will create attention and buzz about the product and the offer. Finally, the company will provide gift bags, wallpapers, and posters to enhance awareness. The main point is to remind the consumer of the product and inform them of the offer. The provided strategies are likely adequate on a global level. The local and regional executives must decide on additional marketing media. Reference List JORDAN, J. M., 2012, Information, Technology, and Innovation Resources for Growth in a Connected World, Hoboken, Wiley. http://grail.eblib.com.au/patron/FullRecord.aspx?p=821839. KOTLER, P., & KELLER, K. L., 2012, Marketing management, Upper Saddle River, N.J., Prentice Hall. KRISHNAMACHARYULU, C. S. G., & RAMAKRISHNAN, L., 2012, Rural marketing: text and cases, New Delhi, Pearson Education. LEE, I., 2012, Electronic commerce management for business activities and global enterprises: competitive advantages. Hershey, PA, Business Science Reference. MARETE, F, 2014, SWOT Analysis of Samsung Marketing Plan, London, GRIN Verlag. MICHELL, T, 2010, Samsung Electronics and the struggle for leadership of the electronics industry, Singapore, Wiley. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=405485. PENG, M. W., 2009, Global strategy, Mason, Ohio, South-Western/Cengage Learning. Read More