Product and Services of Samsung Electronics - Essay Example

? Samsung Contents Introduction 3 Product/services and geographic scope 3 Competitors 3 PEST Analysis 4 SWOT Analysis 5 Porter’s five forces model for Samsung 6 Recommendation 8 Conclusion 9 Appendix 10 SWOT: 10 Bibliography 13 Introduction Samsung Electronics works to render high class innovative products and has materialised as the leader of the market in the field of electrical goods (Samsung, 2012). The company targets the quality-oriented customers. However, before following such strategy, the company focussed on promotion of value creation that has the potential to provide consumers products of good quality at lesser prices. In the capture of the new market, the company diverted the focus onto products of trendy consumer stuffs that serves the preferences of the modern world consumers (Rowley & Paik, 2009, p.63). Product/services and geographic scope The company would promote the products through advertising campaigns in UK. Samsung will continue the brand promotion strategies using celebrities with promotional activities in malls and outlets (Semenik, Allen, & O'Guinn, 2008). Samsung offers a variety of products ranging from LCD and LED panels, mobile phones, semi-conductors, televisions and digital cameras. Till 2005, the company allocated more than 75% of the in-house production capacity to the countries like China, Mexico, India, identified as low cost countries. The operations of mobile phone operations of the company are mainly based in Northern China. In the first part of 2006, Samsung began to produce mid- and high-end handsets in India. The mobile phone manufacturing centres include Korea, UK, China, Japan and USA (Samsung-c, n.d.). Competitors Although the company enjoys a large market share, the company faces some serious threat from the other developed or developing companies, namely, Sony Corporation, Videocon and some other well-known brands. If these are direct competitors, the indirect competitors include Media Player from Microsoft, Ovi player from Nokia and several local brands (Schwarzinger, 2012). Sony is a company from Japan and leads the market in consumer-durable products. The prices charged by Sony are generally high, but if one looks for quality, then Sony is the best option to opt for (Sony, 2012). PEST Analysis Political: The political conditions of the countries where Samsung operate pose some risk. The political climate of South Korea became a worrying factor. In the African continent and in the countries of South East Asia, Samsung has distinct disadvantages as the business environment is hostile (Husso, 2011). Economic: Samsung follows a healthy marketing strategy in the countries where they operate. Since high levels of disposable income are required from the consumers to buy their products, Samsung targets the middle income classes. The company tries to enter into the countries where the business cycle for the offered products is in initial stages. Social: The company has been able to integrate itself according to the market structures. The ‘think global, act local’ mindset strengthens the landscape. It has effectively bridged the gap between culture and society. The company initiates to link a balance between the tastes and aspirants of the consumers with the amount of disposable income they possess (Henry, 2008). Technological: The company can take pride depending on the innovative approaches it launches. The products are made using cutting-edge technologies, and the attractive designs are the incentives it provides to the customers. The innovations are the biggest strength of Samsung, and the technological advancements lay the foundation stone to cement the place of Samsung in global markets. SWOT Analysis Strength: The brand value of the company is the biggest strength. The new innovation of 3D television is selling like hot cakes in the market. It is of no surprise that Samsung is the company with the largest market share of 3D television. Other types of television, namely, the LED television, have been successful in providing a large consumer base to the company through better quality of picture. Therefore, it remains true that innovation in the field of technology and consumer-friendly products contributed in emergence of the company as the leader. With the aim of beginning a new television unit, the management of the company took the initiative to transfer a sufficient number of experts. The continuous effort made on research and development from the part of the company laid the way for achieving the top position in the market. The inventions get accrued on the strengths and provide an advantage before the competitors (Samsung-a, 2010). Weakness: The biggest weakness of the company that can be identified is the lack of close relation of the company with gaming content providers. The new televisions in the market are filled with gaming attractions. Since the company has less access to the gaming department, it may lose some young consumers in the market. The products of the company are mainly highly-priced products, so it can be stated that the higher income earners in the society are the target for Samsung. But targeting a small group will not suffice to solve the purpose of the company in the years to come. In order to expand the market share, it needs to target all levels of income earners. Opportunity: The six sense technology has emerged as the blessing for the company. The newly designed air conditioners are filled with the six sense technology. Therefore, the invention of the new technology will help generate more revenue from the sale of microwave ovens as well as from air conditioners. The technology helps the consumers in dealing in an easier way with the advancement in technology (The Air Conditioning Shop, n.d.). The advantage of six sense technology is the ability of the air conditioner to set the temperature automatically according to the weather conditions. The microwave ovens will become eco-friendly. The objective of the company is to reach the stage of break even in the first year itself with the launch of the new advanced technology products. The new products are expected to provide high reputation and attract the tech-savvy consumers. Samsung will create a favourable distance from the competitors in terms of consumer base and also in terms of quality. Threat: Other competitors like Motorola are emerging in the market. Although Samsung has a consumer base thanks to the quality of the products it sells, the emergence of some local companies can pose some kind of threat to the company. In order to cement the place in the electronics market, intense effort is required. The company has little popularity in the U.S. market, and Nokia dominates the European market. Therefore, Samsung needs to identify a market where it can dominate in the years to come. Porter’s five forces model for Samsung Power of Suppliers: The presence of a number of suppliers in the electronics market reduces the power of them. It cannot be ignored that the suppliers provide some unique parts necessary in the production process of the products which provides them some advantages. Like all other industries, the consumer electronics market also requires a wide spread network of suppliers in order to function effectively. Samsung has to depend on the suppliers for prompt delivery of products, and troubles can creep in if there is any disruption in supply. Threat of Entrants: The impact of entry into the market is high for the company. Samsung found it easy to enter into the emerging markets of China and India and make their business flourish that part of the world. The ease of entry into the emerging markets can be exploited by Samsung for its good. But it might not be possible for Samsung to enter into new markets now because of the various protectionist policies of the governments practiced after the global financial crisis. Before entry, the possible competition required to be faced must be analysed as well. Power of Buyers: The buyers have a basket of products in front of them and the right to choose. Consumers can easily switch to alternative electronic gadgets and therefore the power of buyers is high in the market where Samsung operates. The presence of many players in the market makes the choices widely available, which further increases their power. Samsung is engaged in price wars with the competitors and tries to create a brand image in the minds of the consumers. It takes time for the buyers to switch brands, and they do so only when they are totally dissatisfied with the company. Samsung uses it as their advantage and offers well after sales service. Threat of substitutes: It is of no secret that Samsung needs to be on its toes while facing competition from substitutes. The competitors offer similar products as that of Samsung, and therefore regular market analysis is required to deal with the blistering pace of product entries. New advanced innovations can only take Samsung to be the leader of the market. The presence of “me-too” clone products resembling Samsung’s products poses a threat to the company itself. It can be stated that the power of substitutes is indeed high for Samsung. There are two types of buyers in the market. One group prefers price over quality while the other prefers quality over price. Samsung has to take care of the two types of buyers effectively and offer good quality products at affordable prices. This acts as an advantage to the company as the quality-conscious buyers look for long term relation with the company (Datamonitor, 2004). Rivalries within industry: It can be anticipated that competition is fierce within the industry. The brands have to compete within themselves and with several local brands that tend to copy the designs of the branded companies and offer lower prices to the consumers. The consumers who worry only about prices purchase those products, and Samsung, along with other branded companies, suffers loss in consumer base. Recommendation Samsung group focuses on mainly three epicentres in their business ventures. The focus of the Company is on innovation, and it expects the internal employees to focus on the same. Samsung is recently following the diversification strategies which will provide the opportunity for the company to venture into new areas of business. The large scale diversification programs would empower the company. The market capture and the opportunities available for the company help the company to identify newer opportunities and find itself on the path of personal development. The above epicentres will contribute to sustain in the market and enjoy the market share as the company is currently enjoying. The competitors of Samsung are also following the step, but the comparative advantage is accrued to Samsung. Profits will be generated through environmentally friendly products, and the improved odes of customer satisfaction will act as the catalyst. Conclusion From the above discussion, it can be stated that the company under consideration is on the track to achieve success further, with innovative product services. The product basket of the company attracts consumers, and the sleek designs are the plus points. Quality along with good after sales services are the advantages of Samsung. Although the market where Samsung operates is recognized by many players, Samsung has been able to cement the consumer base. It has been able to impart a sense of confidence into the minds of the consumers. However, some recommendations have been provided which will enhance the growth of the company in the years to come. The newly launched products will benefit the company. The company enjoys a competitive advantage in terms of innovation of new techniques. The consumer friendly goods attract the consumers towards the shops. It competes with the other players in the market in terms of price and quality. oHowever some recommendations have been provided Appendix SWOT: The above diagram represents the SWOT analysis of Samsung. The offerings of the company are based on core technologies. The advanced technologies are user and environment friendly. The technologies are innovative and hence monopolize. The technologies help the company promote the products, and because of their advanced technologies, lots of consumers tend to opt for the products. The company promotes itself as the technology innovator of the next generation. The innovations lay the path for Samsung to stay ahead of the other competitors. By the time other competitors gather the knowhow of the new technology, Samsung already makes its mark on the market (Anderlohr, 2006). Hence, the comparative advantage is what the company accrues. As far as the weakness of Samsung is concerned, the company is associated with the electronic markets, and therefore the target market is segmented. It can diversify the product offerings in order to venture into other markets. It cannot be ignored that the market where Samsung operates is experiencing rapid growth. The technological advancements made are attracting lots of consumers. The electronic gadgets are selling like hot cakes. Samsung along with some other players are exploiting the situation and competing within them on price and quality service. The market for mobile phones is on the steep, upward rising curve. New models of television and MP3 players are now a necessity rather than luxury. The increasing intensity of competition among the firms is a concern for Samsung, but since the company is well placed within the market, the intensity is a little less for Samsung. This does not mean the management should take the level of competition likely as the power of substitution is huge, and it cannot be ignored. Porters’ five forces: The above diagram represents the porters’ five forces model. Five boxes represent the five forces, and the significant features of the characteristics are incorporated within the boxes. The first force defined as buyers’ power are determined by the buyers in comparison with the sellers existing in the market, the costs of switching to other alternative options, the differentiation of the products available, the profit margin of the buyers, the use of multiple sources by buyers, the threat of backward integration as well as that of backward integration and the importance of the product to the buyer (CAPS, 2005). In the second force, the price of substitutes, the quality of them and the switching costs are taken under consideration. In the third force, the power of suppliers, the concentration of suppliers, the availability of substitute inputs, the product differentiations, and the importance of the industry to the suppliers are considered. In the fourth force, the threat of new entrants, the entry barriers along with economies of scale, capital requirements, access to the channels of distribution and other cost advantages can be considered. In the fifth force, competition among existing firms, the number of players competing in the market, the growth rate of the industry, the diversity of the competitors, the balance between the competitors, the barriers to exit from the industry and the strategy strikes are considered. Bibliography Anderlohr, et. Al. 2006. SWOT Analysis. Available at: http://www.srf.tuwien.ac.at/lva/p3_vienna_bratislava/ws_1/p3_workshop01_swot_270206.pdf. [Accessed: 22 November, 2012]. CAPS, 2005. Porter's Five Forces Model. Available at: http://www.caps.am/data.php/879.pdf. [Accessed: 22 November, 2012]. Cravens, D. W., 2009. Strategic Marketing 8E. New York: Tata McGraw-Hill Education. Datamonitor, 2004. Company Profile. Available at: http://www1.pu.edu.tw/~acchang/courses/IBANA/IBA221.pdf. [Accessed: 22 November, 2012]. Henry, A. 2008. Understanding Strategic Management. Oxford University Press. UK. Husso, M. 2011. Analysis of Competition in the Mobile Phone Markets of the United States and Europe. Available at: http://epub.lib.aalto.fi/en/ethesis/pdf/12638/hse_ethesis_12638.pdf. [Accessed: 22 November, 2012]. Mooij, M. 2009. “Global Marketing and Advertising: Understanding Cultural Paradoxes”. SAGE. Porter, M. 1998. “Competitive Advantage: Creating and Sustaining Superior Performance”. Simon and Schuster. Pride, W., Ferrell, O 2004. “Marketing: Concepts & Strategies (12Th Ed.).” United States: Dreamtech Press. Rowley, C., and Paik, Y., 2009. The Changing Face of Korean Management. New York: Taylor & Francis. Samsung, 2012. “About Samsung”. [Online]. Available at: http://www.samsung.com/in/aboutsamsung. [Accessed: 22 November, 2012]. The Air Conditioning Shop, No date. New The Air Conditioning Shop Air Conditioning UK Web Site. [Online]. Available at: Read More