Few years’ back Samsung was endeavoring to make its place high in the market and now as compared to others it makes more profit. It is now the world largest technology company in means of revenue even the Apple is behind him. Samsung learn from the competitors and are attuned to what other people are doing and what competitors are bringing to the market and then it come up with that innovation of others with its own style. Though the company paid the fine of imitating Apple in the past but it was not a big price also they keep themselves aware of what will attract the customers.
Samsung adopted on creating unique design strategy to achieve global Competitive Advantage. They manufacture and come out quickly with wide range of devices with different design. Their bring devices which have even larger screen with many features come up with what customers’ needs and wants. One example is the Note. Samsung found through their market research that customer’s especially Asian speakers needs a device which has the feature of hand-write on, because it is much easier to draw character with pen. This resulted in a device which was a combination of phone and tablet known as “ptablet” and hit the market unexpectedly.
With their market research they bring a lot of their own innovations. In 2012 Samsung was the company on second number of U.S that were filed and in Galaxy S4 they filed 150 patents. Samsung spend 5.7% of its income on their research which was more than the Apple. Samsung is a business with variety of technology like chips and displays which allow it to compete in offering features which other companies hasn't gotten to.
Company achieved its global competitiveness advantage through successful marketing and advertisement strategy like in case of Galaxy phones. In the year 2012 in U.S the company’s advertisement budget increased five times from $78million to $401 million $68 million more than that of Apple and in Android market comparing with its competitor it was $200 million ahead of them.
Talking about supply chain and distribution Samsung is not only a smartphone company but also a manufacturer, a firm and world-largest company in chip making. Many components are made by the company which are used in its smartphones and give them the cost effective advantage and can avoid the difficulties and delays as compared to the companies which depends on externa partners. In terms of distribution the Samsung has more carriers and is in more places as compare to other leading smartphone companies.
When Samsung gets behind something, it goes very hard. It started to invest in making flash memory and batteries of digital devices in the past decade and then became a global leader. A company fails if it is not confident of making decisions and strategies because of fear of failure. But the Samsung wanted to be the leading smartphone company, it then made its strategies and used the tools it has and become successful
Samsung expanded and invested heavily in Electronics Company by adapting different strategies and through research and put that in the best practice plants. Samsung produced variety of devices like flat-panel and memory-chips and become their largest producers. Company got second position in DVD players and third in mobile phones. It arose like a leader of linking gadgets such as PDAs and even refrigerator to wireless technologies. Samsung significantly invested in the development of handsets and memory chips in the market.
Samsung’s strategy can be defined through Richard Whittington’s evolution and systematic theory. According to Whittington the evolutionary theory is about the survival, where the environment has the selecting option not the managers. Relating Samsung’s strategy to the Richard Whittington’s theory of evolution, in the end of 1990s there were three strategic business blocks in Samsung Electronics as digital communication, digital media and memory-chips. The aim of Samsung was to become a leader in these three areas and did advancements in the digital media and has the largest share in the sales. Though it required a long term planning and wise strategies but they stuck to their commitment and achieved their goals. Company did research by making an enormous investment.
Company changed its design strategy and bring the devices with flat screens which attracted the customers and still do. In year 1993, the chairman of Samsung Lee visited the stores of Los Angeles, USA and become disappointed to see that the appearance of Samsung products was unattractive and was not appealing to the customers. Products were even ignored by the staff of the sales store. Lee then realized that in order to survive, company has to change things and should adapt new economic world. The practitioners in Samsung were focusing more on quality rather than quality and now it’s time to change the display of Samsung products and add value to their design. The change started from shifting its design centre from a small town Suwon to Seoul.
The most difficult practice was to convince those employees of the company who think that improving cost and volume is more important than design. He sent his designers to Art Centre College for Design in Pasadena to broaden their vision. They later hire few designers of ACCD to establish the design lab of Samsung named as Innovative Design Lab for Samsung in which company invested hugely. To create an identity globally Samsung launched its ‘wordmark’ and then later started global brand communication strategy.
Every year many designers were sent to different countries to visit not only technology but other industries too like cosmetic and furniture etc. to help them think out of the box and to get more ideas by meeting different people from different categories and the designers also shared their experiences to spread the knowledge globally.
Company created its design centres in many countries to gain the perspective of different cultures and utilize their talents. Company improved its design capabilities by creating world-class research centres and design labs and in a competitive environment they proved this theory through their survival in market globally.
Whittington defines the theory of systemic as focussing on local and cultural needs and develops a strategy. Strategist must be focused externally and socially sensitive and should know about the new trends and technologies followed. Hence apart from design strategy Samsung started bringing changing in its staff and employees. They started to hire people who had education in America or those had experience of USA. The company generates its revenue of 70% outside of the South Korea.
Samsung also took advantage of its home market to work in many areas of product they operate in. Samsung also bought changes in their systems and product creation processes and redesigned them to bring improvement in delivering its design process. Company created a design bank were designers used to save their designs so that they can utilize them later. They arranged meeting on designs were on daily basis where all the designs were evaluated and new products were accessed by all the heads of different business blocks.
In addition to design and other strategies they also followed the strategy of convergence products which involves the combining the features of two or more products in one product or making a hybrid product to provide great convenience to the customers. Company practiced the advertising and marketing strategy and in 1999 and reduced its advertisement agencies from 55 to only one. It also signed a contract with the Foote, Maddison Avenue firm and Cone & Belding of $400 million US to create a global image of the brand. In 2002 they started a marketing campaign to rebrand and spent $450 million on it.
As Samsung produces variety of product so it’s pricing strategy is different for different products. It used skimming pricing strategy for its smart phone in which the company introduce a unique featured phone in market of high value and when other companies bring their technology similar to Samsung they drop their price instantly. The second pricing strategy is competitive pricing which they adopt for their products excluding smartphones. It is a great brand of home appliances but not more than LG. similarly it has different competitors in different categories to beat. In the market it exists in the many consumer durable segments so it hardly uses the penetrative prices.
Samsung make its place in the market through many channels. It uses channel marketing approach which has three units.Sales and service dealers, Distributors and Modern retail. The sale and service dealers does corporate sale. In second unit of distributors the Samsung has only one distributor in a territory through which they distribute their products. In third modern retail unit they have large retailers. Samsung uses approach of promotions and sales for the customers to push their products. Also various discounts and offers are given to its partners in trade to keep them motivated. This is the Samsung’s marketing mix.
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