Timing of market entry strategy for Samsung Galaxy S5 - Research Paper Example

ID Number: Timing of market entry strategy for Samsung Galaxy S5 preferencesand certainty The timing of market entry for Samsung Galaxy S5 seems to be appropriate according to factor of customer preference. The customer uncertainty level regarding technological products, especially mobile phones have decreased considerably over the last few years (Tielmann 160). More customers are using mobile phones with smart applications and features. The use of smart phones with multiple capabilities and features has become common among the global consumers. In the initial stages of the introduction of smart phones in the market, consumer uncertainty towards the new technology was higher. Over years, the customer preference has come to a level where there is enormous potential for new technologies to attract more consumers easily. Customers are looking for innovative and distinctive features in their smart phones and are experiencing more certainty in using new technologies. The prevailing customer preferences for smart phones coupled with the high end features like latest operating systems, large display, a 16 MP camera, fingerprint identification and other unique features have made it appropriate for Samsung to capture the market by introducing this product. 2. Improvement in innovation (Source: Gerald 245) The previous offering of Samsung in mobile phones was the Galaxy S4 which was launched in the first quarter of 2013. The Galaxy S4 was accepted widely and the product had more than 10 million pre orders. The commercial reception as well as the critical reception of the product was impressive. The Samsung Galaxy S5 was launched almost a year after the launch of Galaxy S4 as the immediate successor of the model. However, after the introduction of Samsung Galaxy S5 in the market in 2014, it was noticed that there is only a slight improvement in this model over its predecessors like Samsung Galaxy S3 and S4. Though the Galaxy S5 has received positive reviews and commercial success, it has also faced criticism in terms of design and other hardware functionalities because it has been pointed out that the improvement of the technological aspects of Galaxy S5 from Galaxy S4 was only minor (Keller 16). The differences in technology used in both the models are very less. As such, it seems that the innovation in the technological aspects is much lacking in the new product of Samsung as compared to the immediate predecessor model. Thus, it was identified that the new product was simply an evolution of the Galaxy S4 and lacked any major breakthrough innovation that is distinct from that of Galaxy S4. 3. Mature and enabling technologies The technologies used in Samsung are high end and sufficient for entering the market at an early phase. The brand is a renowned name among the international mobile manufacturing companies. It is one of the top players in the mobile industry. Samsung has access to high end and advanced technologies. The company has always been one of the first movers in the domain of technology. Also, the brand has been widely accepted as an innovator in the mobile phone segment. Thus, the designs, features and functionalities of Samsung galaxy S5 are backed with suitable technological support systems. This is applicable to both the hardware and software features of the new cellular phone model. The innovations in Samsung Galaxy S5 were done with the aim of launching an advanced handset in terms of design, applications and functionalities. This called for the use of efficient and highly advanced technologies which Samsung has proficiently done. The company has used highly mature enabling technologies which have made it possible to launch its Galaxy S5 model as early as within a year’s time of launching Galaxy S4. The technologies used by Samsung in the new Smartphone model seem to be highly appropriate for driving and supporting the performance of the new phone in the market. 4. Influence of complementary goods Complementary goods of mobile phones are mainly the operating systems, software, applications and cellular and mobile network services. The launching time of Samsung Galaxy S5 was a boom period for all these complementary goods (Samau 120). The open source operating systems like Android manufactured by Google are the key complementary goods that were expected to add to the performance of Galaxy S5. Samsung has always used Android as the operating system of all its phone models. The Galaxy S5 model is also not an exception. Google android is one of the most popular operating systems among the mobile phone and tablet users. This complementary good has acted as a beneficial factor for the Galaxy S5. The huge popularity of the model, the invention of a number of applications and software and the widespread use of 3G and 4G networks has made the market entry timing of Samsung S5 much appropriate. Also, the presence of these complementary goods has enabled the company to enter the market for this product at an early stage. 5. Threat of competitive entry The entry barriers in the Smartphone market is quite low (Zhang, Reidstin and Joshi 54). As a result, this market is a highly concentrated and competitive market with intense rivalry between the major players in the industry like Samsung, Apple, HTC, Nokia, Sony, Motorola etc. The threat of competitive entry is high for this product. The Galaxy S5 was launched in a tapped market. Therefore, there remains a high probability of the unique features of the product to be soon incorporated in similar priced or lesser priced smart phones manufactured by the competing companies. The resources and capabilities of the competing firms of Samsung like Apple, HTC, and Sony etc. are equal if not more than Samsung. Therefore, it would be much easy for these companies to replicate the unique features introduced by Samsung in the Galaxy S5 model. However, this does not mean that the company should have waited for a more suitable time to launch this phone. This is because, with time, the innovations in this industry are continuous and frequent and are characterized by short life cycles. Also, a product or market based on technology is always fast evolving with products becoming obsolete at short periods of time. So, the market entry time for Samsung Galaxy S5 could be considered appropriate because the technologies used in this model are deemed to be suitable for the present market and are likely to become obsolete within some time period with new products and technologies coming in the market. The suitability of the market entry timing is reflected in the sale of the Galaxy S5 models after its launch. The company is known to have shipped 10 million units of this phone to the retailers which were sold out within a period of 25 days making Galaxy S5 the fastest selling mobile in the history of Samsung. 6. Increasing returns to adoption The industry may experience increasing returns to adoption. The increasing return to adoption is likely to occur when the benefits to the consumers of a technology are dependent on the number of usage of this technology by other consumers in the market (McDonald and Meldrum 66). The mobile market clearly experiences a high degree of returns to adoption. The peer reviews and critical acceptance of a technological product like a mobile phone are important determinants of the popularity of the products. In the case of the Galaxy S5, this has been a significant factor which has contributed to the conversion of potential adopters of the technology into actual adopters of the technology. An existing base of loyal users of Samsung mobile phones has also acted as major driver of the wide scale adoption of the new model of the company. Though in terms of critical acceptance, the Galaxy S5 faced mixed reviews, yet the sales of the model showed that it was hugely accepted in the commercial arena. This indicates that the factor of increasing returns to adoption facilitated by the popularity of the predecessor models of Samsung mobiles has been significant in the case of Galaxy S5. 7. Capabilities to withstand early losses If the new innovations are accepted at a slow rate by the users, then it may create the need for the company to have sufficient backup and resources. Samsung is an already established company in the mobile industry. As such, the company can leverage its distributor relationships, loyal base of customers and its brand value to market any of its new launches. This has been extensively done in the case of Galaxy S5. The rate of acceptance for the product has been very high which is reflected in the fast selling out of the model within 25 days of its launch and by the high number of pre order bookings. The launch of the phone has not only been supported by the exclusivity of the product but also by the internal resources and capabilities of the company (Lymbersky 231). The new model has been a success among the early adopter users and innovator users which was expected by Samsung. 8. Resources of the company for accelerating market acceptance The capital and technological resources of Samsung seem to be more than sufficient to accelerate the demand and market acceptance for Galaxy S5. The company has adequate internal resources which it has used to accelerate the acceptance rate of the new product. The brand awareness and the advertising and marketing capacities of the company as well as the distributor and dealer base has made it possible for Samsung to push the awareness and subsequently the sale and acceptance of the new product. 9. Role of company reputation in reducing uncertainty Samsung is a globally acclaimed mobile phone manufacturer. The company is reputed to be an innovator and competes effectively with strong brands like Apple. Though the innovation capabilities of Apple has been considered way above other mobile manufacturing companies, Samsung has efficiently competed with Apple in terms of innovation and technology and evolved as a credible and reputed brand. The brand value of Samsung is very high in the market. As such, the reputation of the company is likely to lower the uncertainty level of the stakeholders like the suppliers, customers and distributors (Kotler and Keller 80). Concluding summary paragraph Thus, to summarize all the above factors, the timing for market entry of Samsung Galaxy S5 is strategic and appropriate. The consumer preference in the mobile phone market indicates that Samsung has launched the new Galaxy S5 at a perfect timing of market entry. The innovation of the product is considered to be much low when it is compared with the earlier model Galaxy S4. The Galaxy S5 seems to be a mere evolution from Galaxy S4. The company has been a user of mature enabling technologies that is in line with the timing of entry of the product in the market. The influence of complementary goods has been influential and beneficial for Galaxy S5. The threat of competitive entry for this product is high due to the rapid innovations in technology and low entry barriers in the market. The increasing return of adoption has played a positive role on the acceptance and popularity of the new model. The capabilities, resources and reputation of the company are deemed to be sufficient to withstand any loss, accelerate market responses and reduce any kind of uncertainty prevailing in the market. Works cited Jerald, Tellis. Technological evolution and diffusion of innovation. Journal of Marketing. Vol. 70(1). 2010. Print. Kamau, Amos. Market entry strategy. Munich: GrinVerlag. 2013. Print. Keller, Kevin Lane. Strategic Brand Management: Building, Measuring and Managing Brand Equity. Third Edition. New Jersey: Pearson Prentice Hall. 2008. Print. Kotler, Philip. & Kevin Lane Keller. Marketing Management 13th Ed. New Jersey: Pearson Prentice Hall. 2009. Print. Lymbersky, Christoph. Market Entry Strategies: Text, Cases and Readings in Market Entry Management. Thornaby: Export Marketing. 2008. Print. McDonald, Malcolm. & Mike Meldrum. 2013. The Complete Marketer. London: Kogan Page. Tielmann, Viktor. Market Entry Strategies. Munich: Grin Verlag. 2010. Print. Zhang, John., Reidstin, David. & Yogesh Joshi. Optimal Entry Timing in Markets with Social Influence. Management Science. 2009. Vol. 55(6). Appendix 1: Comparison between Samsung Galaxy S4 and S5. Read More