The market is expected to grow at 7% annually globally between 2012 and 2015 with the 3D TV product category as the fastest growing segment in the industry. Sales in consumer electronics recorded a 10% growth in 2011 (almost $965 billion) from a 13% sales growth in 2010 ($875 billion) (Reportlinker 2013). One of the leading consumer electronic brands in the industry is Samsung Electronics, part of the Samsung Group which is headquartered in Seoul Korea. The company registered revenue of KRW 145,044,766 (USD 129,666,338) in the 3rd quarter of 2012 (latest figure available) and had been experiencing an average increase of net profit of 50 % since 2009 (Data Monitor 2011). The company occupies the top position in the television and monitor product category and the world’s largest producer of DRAM, SRAM, and flash memory. It is also involved in the manufacture of other consumer electronics product such as smartphone, computer tablet and home appliance. According to its CEO, Samsung prides as the “fastest in commercializing original technologies” where innovation is encouraged by holding “competition between four main divisions--semiconductors, telecommunications, digital media and flat-screen panels” on who could best deliver the most innovative product that made the company a market leader in color TVs, VCRs, liquid-crystal displays and digital memory devices (Foroohar 2004). II. Environmental/back ground Analysis The external environment of Samsung is highly competitive (see appendices). Industry players are always looking for ways to innovate their products and ways to cut on their prices to make their product more attractive to the consumers. In addition to it, they are also looking for ways to develop new products that would debunk existing products such as the case of Sony Walkman that became obsolete with Apple’s iPod. Suppliers are also used as strategic weapon to leverage companies against competitors. In sum, the consumer electronics industry is one of the most competitive industries because many players wanted to cash in on its phenomenal growth. III. The Company – Internal Analysis Samsung has undoubtedly strong brand recall. This is substantiated by Fortune’s ranking of Samsung Electronics as the second most admired company in global electronics which bids well for Samsung in its position in the market. A strong brand recall provides a company a strong competitive edge because consumers tend to patronize brands that they trust. Research and development is one of the strongest if not the strongest component of Samsung Electronics as a company. This constant focus on research and development enabled the company to become one of the leading brands today from being a nuisance brand in the 1990s. This penchant for research and development has been the company’s practice since 1990s particularly during the Asian Crisis where it was the only activity in the company that Samsung did not cut on cost. It continued its focus on R&D that in 2010, it spent as much as 5.9% of its total revenue in research. This focus in R&D did not only help Samsung to dominate certain product categories but also helped the company to launch new products recently and contributed to its success signfiicantly. Its effort and allocation of its resources
Case study: Samsung Electronics Co Ltd Course name: MSc Accounting and Financial Management Module: Corporate Strategy Student ID: 12019368 Name: Xin Chen Company Analysis: Samsung I. Introduction If there is any industry that is experiencing robust growth right now, it would be the consumer electronics industry…
An information system strategy is defined by Khanna, Song & Lee (2011, p. 142) as the process of analyzing a company’s information systems in terms of their contribution to promoting the success of the organizational units as the route of enabling the company to have a competitive advantage over its rivals.
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).
Samsung Electronics Ltd is an international leader in telecommunication, semiconductor, digital convergence technologies and digital media. The company is a typical paradigm of a family run corporation or ‘Chaebol’ which is an essential element of the South Korean business industry.
The strategy of the paper has been already analyzed using two critical analysis techniques, the SWOT and the PESTEL analysis. At the next level, the firm’s competitiveness needs to be identified in order to understand the potentials of the firm to face industry competition.
There were two sectors in the development of the Korean electronics: labour-intensive consumer products and integrated circuit (IC) assembly. One of the top players in the manufacturing and exporting of electronics products in Korea was Samsung (Steinberg, 2010).
The company is a multinational one that is based in South Korea. Being establish long back in 1938, the company provides various types of technological gadgets, semiconductors, petrochemicals, skyscrapers and finance (“Intel and Safaricom Unlock Kenya’s Smartphone market”).
It mainly operates in Europe, America and Asia. Samsung has five sections of business which include telecommunication network, semiconductors, digital appliances, digital media as well as LCD. In the United State of America, Samsung has become an accomplished brand out shinning other firms such as Sony, Philips, Toshiba, Panasonic, and Matsushita among others in the field of electronics.
It has set trends in the memory segments of the market and is a reputed brand for its quality and value for money. The initial struggle the company endured for a share of the emerging markets can be considered to have eventually paid off when we look at the markets and the level of competition in the 80's.