Specifically, Samsung has proved effective in replicating the design and important features of smartphones from its main competitor, Apple. For GDPR compliance, we do not use personally identifiable information to serve ads in the EU and the EEA. Later, Samsung became engaged in woollen mill in 1954 and insurance and securities business in 1956. Advertising Strategy of Samsung Samsung involves heavy promotions in their advertising strategy by using both push and pull strategy. The implementation of product development as an intensive growth strategy is based on Samsung’s differentiation generic competitive strategy, which requires product development for uniqueness that differentiates the business from the competition. Samsung aims to achieve the world leadership and accomplish great competitive strength. Structural facilitation contributes to the effectiveness of implementing Samsung’s generic competitive strategy and intensive strategies for growth. [1], 2. Market Orientation, Growth Strategy, and Firm Performance: The Moderating Effects of External Connections. Filatotchev, I., Su, Z., & Bruton, G. D. (2017). Diversification. For Samsung, a low cost strategy has been a significant source of competitive advantage in the global smartphone market. The future Samsung Competitive Advantage 965 Words | 4 Pages. These categories are product attributes, firm linkages, and firm-customer relationships. Based on Michael E. Porter’s competitive strategy model, the strategic objective of broad differentiation is to maintain competitive advantage by providing unique (or differentiated) products targeting a wide market, which in this case is industry-wide, … Based on Michael E. Porter’s competitive strategy model, the strategic objective of broad differentiation is to maintain competitive advantage by providing unique (or differentiated) products targeting a wide market, which in this case is industry-wide, involving practically every person or group that buys smartphones, laptops, and other equipment. Four Types of Competitive Strategy: Michael Porter’s Four Generic Strategies. Samsung business strategy is marked with a high level of flexibility in a way that the company is determined in changing its strategy dramatically according to changes in external business environment. Buyer's’ behavior defines the future effectiveness of the company as it mostly depends on the way representatives of the target market are ready to buy top-notch products by Apple and Samsung. A meta-analysis. Komninos, N. (2016). The manufacturers of the phones and computers are attuned to what the competitor is doing and does not take any step of technology by other companies lightly. This marketing approach and technological innovation sustain the corporation’s competitive advantages and value chain effectiveness in satisfying customers’ needs in consumer electronics, computing technology, and home appliances. Samsung’s marketing strategy related to their overall organisational strategy. As such, Samsung uses the competitive pricing strategy for their TVs, devoting time to comparing their prices with the ones of their main competitors like LG or Sony in every geographical market (Woollaston, 2013). This intensive growth strategy’s implementation is infrequent in the technology conglomerate, considering regulatory hurdles and other barriers. Generic strategies: An empirical investigation of typology validity and strategy content. By following push advertising strategy, Samsung places their products through sales and advertising strategies. The multinational electronics company has 36 R&D centres across the world to secure core technology for the future and invested KRW 14.8488 trillion in R&D in 2015. For example, the company regularly rolls out new smartphone models, similar to what Apple Inc. is doing in its product development strategy. Samsung has been able to have a sustainable competitive advantage by following, Product Strategy Samsung has a strategy of delivering quality products with a stress on design is paying off and the association is sure of its future exhibition. Examining generic competitive strategy types in US and European markets. As an intensive growth strategy, market development’s success depends on product value and competitive advantage, which in this case comes with Samsung’s differentiation generic strategy via technological innovation. Samsung's business model has focused on vertically integrating supply chains and ramping up production volume. Cost leadership is the strategy of leading on the basis of lower costs. Samsung Electronics has an extensive product range that includes hundreds of product types and is arranged along three product divisions: IT & Mobile Communications (IM), Consumer Electronics (CE), and Device Solutions (DS). Few people know that the Samsung initially started as a grocery store in Korea in 1938, switched to noodle business in 1940 and moved to sugar production in 1950. As a result of achieving and attaining a competitive advantage and based on its policy, Samsung has differentiated its products from its competitors from a platform of three categories. Samsung Group’s diversified business operations maintain multiple revenue channels and spread risk across industries and markets. New product development. Apple has made a business strategy … Cost focus leads to the company’s being a best cost provider in some segments of the semiconductors and electronics components markets. Smart environments and smart growth: Connecting innovation strategies and digital growth strategies. The limited application of cost focus still comes with innovation standards that reflect Samsung’s main generic strategy of broad differentiation. [1] Heisler, Y. Slogan of Samsung Company says that Due to the ever-changing tastes of consumers in the technology industry, companies had to follow the pace and offer progressive and evolving gadgets to their customers. Also, this intensive strategy grows Samsung’s operations through iterative innovation, which leads to improved versions or variants of existing products. Competitive advantage revisited: Michael Porter on strategy and competitiveness. Copyright by Panmore Institute - All rights reserved. Other generic competitive strategies, such as cost leadership, differentiation focus, and cost focus, are also applied in Samsung’s operations, but to a limited extent. Samsung business strategy is marked with a high level of flexibility in a way that the company is determined in changing its strategy dramatically according to changes in external business environment. The resulting competitive advantages enable the company to keep its competitive position as one of the best performers in the semiconductors, consumer electronics, and home appliances industries. Samsung business strategy integrates constant search for gaps in the market and exploits the opportunity with positive implications on the bottom line for the business. These generic strategies align with the company’s intensive growth strategies to succeed in sustaining the technology firm’s competitive advantages. Samsung is the 2nd largest patent holder in the US since 2006. Samsung wants to be the dominant player in the smartphone market, it has a strategy to do so, and it's using every tool it has as it attempts to succeed at it. Such devices are designed in a professional manner in order to remain competitive in the global market. It has focused on the power of innovation in order to achieve these goals. As noted above, the main competitive strategy of Samsung is building on the weaknesses of its competitors. Samsung applies the broad differentiation generic competitive strategy. Within the past two decades, Samsung has been combining various business strategies in an attempt to address the changing expectations of its global customers. Corporate Strategy of Samsung Electronics: From a National Champion to a Global Leader 1 Case Introduction Samsung Electronics, headquartered in Samsung Town, Seoul, is the flagship company of the Samsung Group, which is regarded as one of the world’s leading conglomerates (Datamonitor 2009a). The Samsung marketing strategy was one of the most effective strategies ever created because it helped a cost-driven company to change its structure and become an authority manufacturer. Samsung’s generic strategy and intensive growth strategies continue to push for technological innovation as a critical factor for competitive advantage. (2007). The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis and McKinsey 7S Model on Samsung. Headquartered in Korea, the conglomerate competes against technology-intensive firms, such as Apple, Google, Lenovo, LG, Sony, Intel, and other firms that create strong competitive forces, as determinable through a Five Forces analysis of Samsung. Competitive priorities denote a strategic emphasis on developing certain manufacturing capabilities that may enhance a plant’s position on the market and they are key decisions variable for operations managers and researchers. Samsung’s investments in product development are a strategic implication of the broad differentiation generic strategy. Samsung uses the competitive pricing strategy on televisions by making sure their pricing is in line with their competitors. November 6, 2017. japanese companies usually like to offer multiple products whereas American companies are more focused and selective on a small product range. Samsung doesn’t charge an extremely high price or low price to compete with their competitors. Frequent change of direction and new product development persists as important features of Samsung business strategy to this day. [3] Accordingly, new product development capabilities have been firmly established as one of the strong bases of Samsung competitive advantage. Samsung – Competitive Analysis Discussion issue 2: Since the early part of 2001, it has been notices that Samsung has been increasingly successful in repositioning the brand of its various products a higher level competing with market leaders like Sony and Apple. Samsung’s generic strategy and intensive growth strategies direct the organization’s growth and development. Monowar Hussain Student No: 3-12-23-010 Md. Herbert, T. T., & Deresky, H. (1987). It has brought products for both the higher and the lower end market. Campbell‐Hunt, C. (2000). As an intensive growth strategy, market penetration depends on the effectiveness of the broad differentiation generic strategy, in terms of how the company creates technologically innovative products that are differentiated enough to attract target customers in current or existing markets. Samsung’s pricing strategy is also an important support behind its competitive strength and global leadership position. Samsung Group Report contains a full analysis of Samsung business strategy. Another implication of this generic competitive strategy is Samsung’s marketing mix and strategies that promote products as unique or different alternatives to the majority of competitors. The minor role designation of this intensive growth strategy limits the risks of establishing new business operations. To effectively compete, Samsung’s generic strategy and growth strategies must involve investment in technological innovation. View Show abstract The result was a development of series of Samsung Note devices as a combination phone/tablet (“phablet”) that’s been an unexpected hit.[2]. Ansoff revisited: How Ansoff interfaces with both the planning and learning schools of thought in strategy. Considering the emphasis of product superiority in Samsung’s corporate mission and vision statements, product development is a major intensive growth strategy of the enterprise. Douglas, S. P., & Rhee, D. K. (1989). Samsung operates in an industry wherein technological progress or innovation is a key ingredient in a particular market entry strategy, building competitive advantage, or raising the barriers to entry. 3. The core pillars of the strategy adopted by Samsung include: Ultimate fast follower hence the company is very fast when it comes to learning from the trends of the competitors in the industry. Samsung’s revenue growth depends on market penetration as the primary intensive strategy. Samsung business strategy consists of the following three pillars/elements/parts: 1. (2016) “A look back at when Samsung copied every single thing about the iPhone” BGR, Available at: http://bgr.com/2016/12/29/iphone-vs-android-samsung-copycat/, [2] Nisen, M. (2013) “Samsung Has A Totally Different Strategy From Apple, And It’s Working Great” Business Insider, Available at: http://www.businessinsider.com/samsung-corporate-strategy-2013-3, [3] Samsung Sustainability Report (2016) Samsung Electronics, Interpretivism (interpretivist) Research Philosophy. Since such social and environmental values are difficult to quantify, we took a ‘quality over quantity’ approach in setting and managing our sustainability management goals. Such similarity is based on the unitary leadership that influences corporate strategic direction and competitive advantages of the conglomerate’s and its subsidiaries’ operations. Samsung produced black and white TV as the first technological product in 1960 and since then the company emerged as one of the leaders in technology and electronics market segments in the global scale. This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s. Market Penetration (Primary). By John Dudovskiy. For example, the company invests in technological innovation to support the competitive advantage of its products in the consumer electronics market. Product Development (Secondary). Samsung’s Generic Strategy for Competitive Advantage (Porter’s Model) Samsung applies the broad differentiation generic competitive strategy. Strategy of Samsung 1. The revamped competitive strategy and marketing programs that Samsung designed and implemented have been a huge success. The global value of Samsung’s brand increased by more than 200% from 2003 to 2008, and it took over Sony as the most valuable consumer-electronics brand. Market development’s strategic objective is to enter new markets using the company’s existing products, such as introducing new Galaxy tablets in Latin American markets after these products’ introduction in the United States. The report also comprises discussions of Samsung marketing strategy and addresses issues of corporate social responsibility. Perhaps Malaysian E&E firms would want to rethink their strategy for long-term survival, emulating the phenomenal risk-taking by IBM in 1948 and 1956, and by Samsung during 1983-86. Parnell, J. Moreover, the report contains analyses of Samsung leadership, organizational structure and organizational culture. Moussetis, R. (2011). Samsung E lectronics developed a global strategy. Samsung Group’s generic competitive strategy and intensive growth strategies are observable in product design, marketing strategies, and the business organizational development direction of Samsung Electronics and other subsidiaries. A. For example, Samsung noticed that Asian-language speakers in particular wanted a device that they could hand-write on, because drawing characters is easier with a pen. The industry environment imposes aggressive competitive behavior that typically involves rapid technological innovation for product differentiation, as seen in the evolution of smartphones available in the global market. Samsung Business Strategy and Competitive Advantage: effective exploitation of market readership. Apart from the premium Galaxy models of smartphones, the company has also brought a large range of affordable smartphones to the market. Economies of scope based on the conglomerate’s various subsidiaries support product development and competitive advantage by providing technological expertise and material inputs from the subsidiaries. See our Privacy Policy page to find out more about cookies or to switch them off. In. In implementing diversification, the differentiation generic competitive strategy is also applied for competitiveness and strategic alignment among Samsung subsidiaries’ business operations. Samsung seeks a competitive pricing strategy in ensuring a competitive edge. Competitive Priorities of Samsung. What have we learned about generic competitive strategy? For example, effective innovation for cutting-edge technological design makes the corporation’s products more competitive when rolled out in target markets. Another competitive advantage for Samsung is to combine strategies of both Japanese and American. In this strategy, the company waits for its competitors to come up with a product after which it develops its own with improvements on the one of its competitors. Samsung's low-cost strategy has enabled the firm to appeal to lower income consumers. Market Development. The Competitive Environment of Samsung Samsung Electronics operates on the vehemently competitive market, as many companies tend to have diversified product lines in this segment. Global Business Ventures, Foreign Direct Investment, Expansion, and Growth Strategies. only retailer company in the world of electronics and gadgets. Competitive advantages and business strengths identified in the SWOT analysis of Samsung combat negative forces from competition in these markets. Samsung’s generic competitive strategy and intensive strategies for growth are suited to the current business environment and the strategic positioning of the multinational organization’s operations. Competitive advantage They then derive their own unique versio… When it comes to the Business Strategy employed by Samsung, it should be noted that it used the very competitive differences that could have taken its market share and turned them into its competitive advantages. As new tech giants and companies came onto the global field, Samsung Board of Directors (B.O.D) asked themselves It constantly focuses on innovation to achieve cost efficiency and create products that are efficient and yet competitively priced. Scanning and utilising opportunities in the market. To achieve Samsung’s strategic plans for growth and expansion in the global market, this generic strategy requires the application of product development as a main intensive growth strategy to compete against technology firms like Apple, Google, Sony, and LG. It can be described, on the one hand, as a high rate of global inte gration and cost efficiencies and on the other hand as q uite a low responsiveness They know they are better off selling … By combining these two strategies Samsung uses horizontal diversification and vertical integration. This is unlike Apple, which focuses on premium consumers. We use cookies for website functionality and to combat advertising fraud. A strategic objective of product development in this case is to grow the business through new products, such as new electronic gadgets. Samsung electronics has come a long way from being the world’s leader in semiconductors to becoming a top competitor in the mobile handheld industry. However, Samsung does not rely entirely on this strategy but uses it only to a limited extent in its business model to grow sales. Samsung’s presence in very many countries is a major challenge, and particularly its strategy of positioning itself as the producer of the next generation brans beats this main competitor by far since it enjoys a high level of customer loyalty. The Samsung TV prices reflect the quality that the customers can expect from the product. Differentiation plays a major role in building the company’s competitive advantage, although other generic competitive strategies, such as cost leadership and focus strategies, also support the technology enterprise and its competitiveness. It is targeting to coordinate design and development of product, manufacturing, sales and marketing with effective information management. (1997). Samsung’s operations management strategies and administration must align with the differentiation generic strategy and the intensive growth strategies to support business growth while competing against Apple, Google, Sony, and other aggressive multinational companies. Samsung’s organizational culture affects the operational effectiveness, value chain efficiencies, supply chain management, and other business activities that fulfill the strategic objectives of product development. Effective market readership. For instance, Samsung’s market share dropped to 26% in India due to the appearance of Micromax (Growing Micromax, 2013). Zunayed Bin Rakib Student No: 3-14-28-054 Contents: •Company Profile •Market Share & Brand Value •Industry Challenges & Strategies •Core Competencies •Past & Current Business Strategy •SWOT Analysis •Overview on Operational Strategy & performance Being a leader in the electronic market means Samsung must stay innovative and always changing and looking to innovate the products of the future. New evidence in the generic strategy and business performance debate: A research note. Samsung’s strategy is to deliver a high quality product with an emphasis on design and performance. In Igor Ansoff’s matrix, the strategic objective of market penetration is to grow the technology business by increasing its revenues from the sale of current products in current markets, such as the European Union’s consumer electronics market, where the corporation already has operations. Stonehouse, G., & Snowdon, B. 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