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Transcript of SMARTPHONES
Samsung electronics is creating a culture of infinite possibilities that enrich lives and amazes the world. The deep trust and commitment of our customers drives our continuous efforts to lead change and innovation
Is an example of an oligopolistic market structures.
Due to the nature of the market competing on price is not enough to remain profitable. firms compete on service and value added.
There are high barriers to entry in this market due to the existence of several patents and copyright laws, consumer loyalty.
Rapid technological change. The serious threat that Samsung and the other tech companies are facing is a rapid technological change. Companies are under the pressure to release the new products faster and faster. The one that cannot keep up with the competition soon fails. This is especially hard when the business wants to introduce something new, innovative and successful.
Main competitors are also largest buyers. Apple, Sony, Dell, HP are the main buyers of Samsung Electronics products as well as the firm’s main competitors. Such situation would be favorable to Samsung (if competitors could not find complementary products and would form a relatively low share Samsung’s revenues) because it could use its bargaining power over competitors. Due to reverse conditions (competitors can find complements and they form a relatively high share of firm’s revenues) Samsung cannot use its bargaining power over competitors as it can easily lose its customers and sales.
Samsung Electronics Co increased both its global smartphone shipments and market share in the third quarter.
Data from Strategy Analytics showed that Samsung's leading market share increased in the latest quarter. According to Strategy Analytics, Samsung's global smartphone shipments surged 55% to 88.4 million units while its market share swelled to 35.2%.
In 2012 sold 213 million units. (Annual report)
A case of market follower becoming market leader.
Samsung was second in 2012 in the number of US patents filed.
Samsung reinvests 5.7% of its revenue in research and development more than any of its closest rival.
Samsung has greater control of the supply chain because it is a conglomerate, and manufacturer.
Product differentiation/ line extension -
innovation vs duplication
indirect Marketing - Patent infringement.
However filed 150 patents on the technology in the galaxy s4
Samsung has increased its advertising budget from $78million to $401 million in 2012 in its flagship smartphone 'The Galaxy'.
This jack of all trades master of none philosophy due to possibly over diversification...
Lack its own OS and software. Software and OS production has a high profit margin, can increase integration of company’s products and brand loyalty. Without strong software and OS Samsung is at disadvantage over its competitors.
The Samsung Company was founded in 1938 initially as a trading company from then on it diversified into different industries and markets.
South Korean conglomerate with headquarters in Seoul
The Samsung mobile a subsidiary of the organisation and has existed since 1983.
Samsungs first ever phone released was a car phone in 1986.
Samsung recognised the declining nature of the mobile phone market. Consumers were beginning to use their phones for than just phone calls in response to this they designed the first ever smart camera phone.
Background and Brief History
Samsung as a 'high performer' in the smartphones market
The Smartphone Industry Sector
Factors contributing to the success and Failure of Samsung
What is the future of Samsung in the smartphones industry?
- Consider convergence technology [value added]
- Exploit PLC
- Market segmentation