Samsung Electronics

Case Study: Samsung Electronics

[Md. Shafique Ahmed, MBA Program, North South University, Dhaka, Bangladesh]

Abstract

Samsung Electronics is one of the world giants in the business of electronic appliances such as memory chips, system-LSI and LCDs as well as A/V, computers, telecommunication devices, home appliances and other stand-alone products into a total solution of digital convergence era. The cases study has briefly focused on SamsungЎ¦s performance and challenges faced by them in the consumer electronics market, where I tried to describe and evaluate SamsungЎ¦s market targeting strategy for its consumer electronic products, analyze the challenges confronting Samsung in building a strong brand for high end products, evaluate SamsungЎ¦s product portfolio strategy and finally develop a critical analysis of SamsungЎ¦s value chain initiatives. I hope the study will give the potential readers a good understanding, based on which further research on these topics may be pursued.-Shafique Ahmed, 23 November, 2005

Description and Evaluation of SamsungЎ¦s Market Targeting Strategy for Its Consumer Electronics Products

Samsung has core strengths in many fields and ЎҐConsumer Electronics ProductsЎ¦ is one of their product lines. Their product mix has a width covering their product lines such as microelectronics, telecom equipment appliances, personal computers and consumer products. They are positioned in each of this major segment quite strongly and aim to complete with world giants like Sony, Philips and Nokia in the market of similar products with intense rivalry. The competitive structure is a perfectfectly competitive market situation, where both major players and their challengers face hard competition from each others besides their followers and market niches.

Samsung targets for ЎҐdifferentiated marketingЎ¦ operating in different market segments and designs different offers for each segment. Samsung produces its consumer products with innovative and cutting-edge design in VCRs, DVD players, TVs, LCD monitors and mobile phones and distributes to different geographies viz. Far East, the North America, the entire South Africa, Western Europe and Indian Subcontinent. The sheer pace of new electronic product offerings is still staggering across the world including new market like Australia and New Zealand and parts of Eastern Europe. This year Samsung launched 100 new products in the U.S., including 53 new TVs. Over the past five years, Samsung has earned 18 industrial design awards; last year alone it won five from Business Week/IDSA, a total matched only by Apple Computer.

Because Samsung has developed a stronger position within several segments including consumer products, their target marketing strategy certainly creates more total sales than an undifferentiated marketing strategy, where a firm ignores the market segment differences and goes after the whole market with a single market offer. However, by creating separate marketing plans for their different lines of products, their effort also increases the cost of business. Developing separate marketing plans for separate segments with different lines of products requires SamsungЎ¦s extra marketing research, forecasting, sales analysis, promotion planning and channel management across the world. And as Samsung is trying to reach different market segments with different advertising, it increases their promotion cost as well. So, Samsung should weigh their increased sales against their increased costs when deciding on this differentiated target marketing strategy.

SamsungЎ¦s new product line strategy also includes adaptive replacement of exiting as well as imitative products ЎVwhich have been influenced by the feed back from their worldwide customer base, marketing intermediaries, trade association and their own sales forces. We see that in the coming years, they want to capture the world market with future generation products ranging from affordable digital televisions and ЎҐsmart cardsЎ¦ loads with movies, sleek wireless phones enabling users to access the web, watch TV and listen to music.

Analysis of the Challenges Confronting Samsung in Building a Strong Brand for High End Products

A few years ago it was unthinkable that Samsung could pose any threat to leaders in the consumer electronics business. The Korean conglomerate was hardly known for breakthrough products. Its global reputation was based on manufacturing memory chips and selling cheap, knock-off microwaves and TVs through discount retailers. Samsung was focused with their overall cost leadership generic business strategy, where they worked hard to achieve