Industry and Market Structure of Samsung Galaxy S4 - Essay Example

? Samsung Galaxy S4 Samsung Galaxy S4 Samsung Galaxy S4 phone is a product of Samsung Company which is based in South Korea. Samsung Company is involved in the manufacture of a wide range of products. These products include fridges, microwaves, smart TV’s, and smart phones. The company has been especially exceptional in the production of smart phones. Smart phones from Samsung Company include Samsung galaxy s3, s2 and Samsung note. The latest smart phone that has captured the attention of many customers is Samsung Galaxy S4. The mobile phone is an advanced form of the Samsung Galaxy S3. It is also a differentiated product of the rival mobile phone company, Apple. Of late, Samsung has positioned itself to take over the market for manufacture of smart phones. The company has been innovative because they were among the first to manufacture smart phone. A smart phone is a mobile phone that is built on a mobile operating system that has more advanced capability of computing and connectivity as compared to the common feature phone (Tidd, 1997). The phone is made up of very special features that make it different from other smart phones and, thus more preferred by many people. Such features include owner recognition ability, high processing speed; a screen that is only recognizes the owner and finger prints identification ability. Industry and market structure of Samsung Galaxy S4 Samsung operates in the telecommunications sector. This is because the company manufactures gadgets used for communicating, such as mobile phones, laptops, tablets and smart TV’s. Samsung Galaxy S4 itself is used to exchange messages, telephone calls, and emails. This phone in a competitive market because there are other smart phone companies, for example, Apple, Techno, LG, Nokia and Alcatel. However, Samsung has been more innovative thus has gained a competitive advantage over these other companies because it has managed to differentiate its products from other rival products. Samsung Company has warehouses in many locations in the world. The major locations are China, Singapore, Japan and India. The most productive of all these firms is located in China. China has the largest population in the world that supplies cheap labour to the Samsung firm in China. The population is also well equipped with the latest manufacturing technology that ensures materials are not wasted. In addition, China has all the minerals that are required to manufacture the several parts of this phone. All these cheap deals put Samsung at a competitive advantage. In addition, China enjoys cheap electrical energy from coal and nuclear power. This combination of cheap overheads makes the final product cheap compared to those of the rival companies (Urban, 1980). Samsung Galaxy S4 can also be said to be in a competitive market because it experience competition from other electronic companies that produce communication gadgets. For example, companies that manufacture laptops are in competition because they all access internet and used to achieve other communication purposes (Tidd, 1997). The phone is also in competition with iPhone, iPod and tablet companies, thus it is experiencing true competition. Elasticity of Samsung Galaxy S4 Samsung Galaxy S4 is a special product because its demand rises despite the high price. The smart phone is bought, especially, by those with high disposable incomes. However, it is also bought as a product to show off especially by people who do not have enough disposable income. The product was made with target customer being the well off in society but many have acquired it because of its versatile nature (Urban, 1980). The product, therefore, experiences complete elastic kind of demand. Elastic kind of demand has very little or no effect on, especially price of luxuries such as Samsung galaxy S4. Therefore, the price of the phone remained constant despite competition from Apple, Nokia and LG. Laws of supply and demand have affecting production and pricing of Samsung Galaxy S4 The first law of demand and supply, states that, at high market prices, more is supplied and at low market price less is supplied. For Samsung Galaxy S4, this rule is true because Samsung has supplied the smart phone market with large quantity of Samsung Galaxy S4 phones. Samsung Company takes advantage of this high demand for smart phones to increase its productivity and profitability. However, the company has broken the rule of demand and supply that states that at high price, fewer goods are bought (Tidd, 1997). This is so because more people are buying the phone despite its high price. Also, majority desire to buy the phone but their ability to purchase is limited by the high price. The third law of demand and supply has also been disregarded by this phone. The fact that, price equates demand and supply, was not worked. This is because the phone price did not change regardless of supply or demand. This phone came into the market and commanded its own price that lasts till today. This is contrary to the prices of rival smart phones that have been fluctuating to either attract customers or to survive the competition that this phone brought. Economic growth of the product over the last 5 years There has been high economic growth of the product over the last five years. This is because the product is cheap, different from other smart phones and the fact that it comes with more features. Samsung has experienced high sales most of them being from Samsung Galaxy S4. The use of the phone has increased in Asia which implies that the South Korea government has received a lot of foreign exchange (Tidd, 1997). The phone has also opened up new markets where they did not exist. For example in United State, the phone has had its market share despite the presence of the chief competitor, Apple in the country. This points out that the phone has won consumer confidence and that it can very soon dominate the world market. Effects of growth of Samsung Galaxy S4 on the economy The growth of sales from Samsung Galaxy S4 has had a good impact towards Samsung Company. This is because the company’s profits have increased and thus the company has been motivated to put more effort to diversify its products and produce more products. The company also plans to improve existing products to suit consumer needs (Urban, 1980). In addition, this phone has attracted customer’s attention to other Samsung products. The company is, therefore, selling the other of its products in large quantities such as air conditioners, fridge’s, smart TV’s and microwaves. The phone, therefore, opened the opportunity for consumers to have a taste of other Samsung products. Growth of the company in the last five years has seen the company form partnership with more subsidiaries such as Ace Digitech, Cheil Industries, Cheil Worldwide, Credu, Imarket Korea and Samsung Card. These subsidiaries have assisted Samsung to sell Samsung galaxy S4 and other Samsung products in various parts of the world (Urban, 1980). In conclusion, this paper has dealt with six major issues. First, the paper has described Samsung Company and the products it specializes in. The latest product that the company has produced in its line of goods and services is Samsung Galaxy S4. Secondly, the paper has paper has outlined the fact that Samsung Galaxy S4 operates in a perfect competitive market because it competes with other smart phone manufacture such as Apple, Nokia and LG. Third, the paper has discussed the demand for the phone. The phone exhibits elastic demand because a price change by competitors does not affect the price of Samsung galaxy s4. Fifth, the paper has discussed how the phone violated the law of demand and supply that at high price few goods are bought. This is because the phone was bought despite the high price. Sixth, the paper has revealed that there has been high growth of the product because it was cheap as compared to that of the rivals. Finally, it is clear that Samsung formed partnership with other subsidiaries to sell its products, thus the growth was beneficial to the company. References Tidd, J. B. (1997). Managing innovation: Integrating technological, market, and organizational change. Chichester, West Sussex, England: Wiley. Urban, G. L. (1980). Design and marketing of new products. Englewood Cliffs, N.J: Prentice-Hal. Read More