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. Smart environments and smart growth: Connecting innovation strategies and digital growth strategies. 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 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. I chose to focus on the marketing strategy implemented by Samsung for its smartphone products, because the purpose of marketing is to act in a way that a company delivers products in the market that they correspond to demand. A strategic objective of product development in this case is to grow the business through new products, such as new electronic gadgets. Samsung's business-level strategy can largely be described as cost leadership. The smartphone industry has grown highly competitive and there are several influential brands that are competing for market share there. However, mature brands that already have a large and global sales and distribution network and which have penetrated nearly all the major markets of the globe use the first two strategies to achieve more growth. Samsung’s mission statement is “We will devote our human resources and technology to create superior products and services, thereby contributing to a better global society.” The statement puts all its emphasis on the superiority associated with the products it brings to its customers. Companies using “Focus Strategy” – incorporating ethics for differentiation. Samsung Stays Focused Amid Venture Capital ‘Insanity’. The promotional and advertising strategy in the Samsung marketing strategy is as follows: Promotion is a strong pillar in the marketing mix of the company. A meta-analysis. Samsung Business Strategy. Frequent change of direction and new product development persists as important features of Samsung business strategy to this day. 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. As a global corporate citizen, we fulfill our social responsibility, deliver innovative products and services, and create economic, social, and environmental values. With the strategic objective of establishing new profitable businesses, the diversification strategy grows Samsung typically through acquisitions of smaller firms, such as Harman International Industries. It is a South Korean electronics brand that has brought a large range of other electronic products also to the market ranging from home appliances to computer chips. Innovation is one main source of competitive advantage for Samsung which is among the leading investors in research and development in the entire industry. Current case focus Even though there were a lot factors which worked towards the rise of Samsung, this particular cases focuses on product & marketing strategy This case does not take into account: 1) Business factors 2) Management style / Culture 3) HR strategy 4) Portfolio / pricing strategy 5) Distribution / channel strategy Develop an effective channel strategy for Samsung’s HME to support its aggressive future growth. 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. Samsung’s generic strategy and intensive growth strategies continue to push for technological innovation as a critical factor for competitive advantage. To remain a market leader in the area of consumer electronics, the company must have to focus on innovation. Differentiation focus strategy is a hybrid of focus strategy and differentiation strategy. Higher brand equity led to higher sales and the company benefited through growing sales in all the leading markets globally. Samsung business strategy consists of the following three pillars/elements/parts: 1. Samsung’s investments in product development are a strategic implication of the broad differentiation generic strategy. For example, the company regularly rolls out new smartphone models, similar to what Apple Inc. is doing in its product development strategy. Samsung ensures that the features it incorporates within its products are different and unique, e.g. Improving communities. Aug 2012, Samsung, the world's largest technology company by sales, is ordered to pay $1.05 billion in damages for violating Apple’s patents for the iPhone and iPad, "Samsung's strategy was to build something similar to another company's product but to make it better, faster and at lower cost", is Samsung going to change its strategy to fit new conditions? Cost focus leads to the company’s being a best cost provider in some segments of the semiconductors and electronics components markets. 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 promotional and advertising strategy in the Samsung marketing strategy is as follows: Promotion is a strong pillar in the marketing mix of the company. They employ this strategy to enter new markets and then through sales and distribution as well as marketing grow their sales and customer base. Samsung is an innovative brand and has used a mix of cost leadership and differentiation cleverly to grow market share and achieve stronger financial results. The Samsung Group is a multinational conglomerate corporation headquartered in Samsung Town, Seoul, South Korea. This is a leading growth strategy followed by technology as well as home appliances and smartphone brands. In a push marketing strategy, a company “pushes” a product or idea through advertising and sales strategies. While product innovation is the main source of differentiation for the company, it has also focused on marketing and promotions to build a differentiated image and create a unique identity in the market. The marketing strategy for Samsung Galaxy products also involves the use of specific promotional strategies and distribution tactics using a combination of push and pull strategies. 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. Focused cost leadership is the first of two focus strategies. about the Samsung Electronics Co. In fact, it exhibits confidence in their potential to change the overall society. The global scale of Samsung’s operations makes market development a minor intensive strategy for business growth. 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. 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. Stonehouse, G., & Snowdon, B. Samsung shows that its focus is not just the immedia… Competitive advantages and business strengths identified in the SWOT analysis of Samsung combat negative forces from competition in these markets. The product development strategy, on the other hand, tries to grow sales by growing the attractiveness of the product portfolio through research and development and by improving existing products or adding new ones. 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. Samsung’s revenue growth depends on market penetration as the primary intensive strategy. This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s. These generic strategies align with the company’s intensive growth strategies to succeed in sustaining the technology firm’s competitive advantages. Bloomberg delivers business and markets news, data, analysis, and video to the world, featuring stories from Businessweek and Bloomberg News on everything pertaining to technology Douglas, S. P., & Rhee, D. K. (1989). Moussetis, R. (2011). the organization innovates its product so that their potential customers doesn’t get bored with the product and they can attract new customers. Copyright by Panmore Institute - All rights reserved. This is a discussion of the generic and intensive growth strategies employed by Samsung and how they have supported its growth and market expansion worldwide. “The idea is opening up to different appr… This intensive growth strategy’s implementation is infrequent in the technology conglomerate, considering regulatory hurdles and other barriers. The Galaxy S7 is on deck for its debut next month. 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. Samsung’s Mission Statement & Vision Statement (An Analysis), Samsung’s Organizational Structure & Its Characteristics (An Analysis), Samsung’s Organizational Culture & Its Characteristics (An Analysis), Apple Inc.’s Generic Strategy & Intensive Growth Strategies, Apple Inc. Five Forces Analysis (Porter’s Model), Apple Inc. SWOT Analysis & Recommendations, Apple Inc.’s Mission Statement and Vision Statement (An Analysis), Sony’s Generic Strategy & Intensive Growth Strategies, Apple Inc.’s Organizational Culture & Its Characteristics (An Analysis), Intel’s Generic Strategy & Intensive Growth Strategies, Apple Inc. PESTEL/PESTLE Analysis & Recommendations, Burger King’s Generic & Intensive Growth Strategies, Apple Inc.’s Marketing Mix or 4Ps (An Analysis), Sony Corporation’s SWOT Analysis & Recommendations, Home Depot’s Generic Strategy, Intensive Growth Strategies, Google’s Generic Strategy (Porter’s) & Intensive Growth Strategies, Sony Corporation’s Five Forces Analysis (Porter’s Model), Microsoft Corporation’s Generic & Intensive Growth Strategies, Samsung’s corporate mission and vision statements, Samsung Electronics Co., Ltd. – Annual General Meeting of Shareholders, Samsung Strategy and Innovation Center – Innovation, U.S. Department of Commerce – International Trade Administration – The Software and Information Technology Services Industry in the United States, U.S. Department of Commerce – International Trade Administration – The Semiconductors Industry in the United States, Generic Strategy (Porter's Model) & Intensive Growth Strategies, Information and Communications Technology Industry, Akwetey, L. M. (2015). That it satisfy its customers’ needs … Samsung announced a new strategy that will see it introduce cutting-edge technology on its mid-range smartphones as opposed to its higher-end smartphones like its Galaxy Note and Galaxy S lines. For GDPR compliance, we do not use personally identifiable information to serve ads in the EU and the EEA. Foreign related Literature Samsung Electronics has been making continued efforts to promote sustainablemanagement under the business philosophy of “devoting our human resources andtechnology to creating superior products and services, thereby contributing to a better global … 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. The fundamental dimensions of strategy. The company has formed strong brand equity through a consistent focus on product quality and technological innovation as well as customer experience. Growth and development are essential parts of the technology. Apple which is one of the leading competitors of Samsung in the smartphone segment also employs this strategy very well and keeps making improvements to its iPhone model in order to grow sales and customer loyalty. Market Development. A market reader can be defined as a company that closely observes the market and is fast in replicating new products and/or introducing … It is the world's largest conglomerate by revenue with annual revenue of US$173.4 billion in 2008 and is South Korea's largest chaebol. The marketing strategy for Samsung Galaxy products also involves the use of specific promotional strategies and distribution tactics using a combination of push and pull strategies. Competitive advantage revisited: Michael Porter on strategy and competitiveness. This early diversification became a successful growth strategy for Samsung, which rapidly expanded into the insurance, securities, and retail businesses. One particular area of interest is startups targeting grand challenges of AI, such as human-computer interaction, intuitive physics, and robot control. Herbert, T. T., & Deresky, H. (1987). Samsung NEXT has a dedicated fund focused on investing specifically in early-stage AI startups. Instead of leading only on the basis of costs, it has used some elements of cost leadership alongside differentiation to reach a larger audience segment worldwide which has led to higher sales and revenue. 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. It is the leading intensive strategy used by Samsung and also one of the leading reasons that the company has been able to achieve enormous success and growth globally. 1960 to 1980 ... Fréry, F. (2006). in English literature from BRABU and an MBA from the Asia-Pacific Institute of Management, New Delhi. Market Penetration: Samsung maintains its market shares. Filatotchev, I., Su, Z., & Bruton, G. D. (2017). However, Samsung does not rely entirely on this strategy but uses it only to a limited extent in its business model to grow sales. Maintain the differentiated image of its premium brands, which have been built up over the years through sizeable financial and manpower commitment 3. Samsung segmentation, targeting and positioning. Put in place a br… As a p art of Samsung’s overall innovation process, the Project Innovation Team was born out of the need to have an incubator group to work with every business unit to provide more market insight. Market development strategy, on the other hand, focuses on growing sales by entering new markets or introducing the existing products into new geographic areas to grow the customer base and revenue. The keys to Samsung's success have been an aggressive and powerful marketing strategy, as well as quality products, effective pricing, and an impressive model of distribution. Product Development (Secondary). The rise of brand Samsung 2. He likes to blog and share his knowledge and research in business management, marketing, literature and other areas with his readers. The Team was officially established on September 1 st , 2006, and the first PIT office opened in Silicon Valley, California in 2007. The first avenue through which Samsung touches on the state of the society is by the provision of products and services that meet their needs, but it also does more. For example, the company invests in technological innovation to support the competitive advantage of its products in the consumer electronics market. "The company will focus on strengthening the competitiveness of its software," it said in its earnings announcement Thursday. SEE … 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. We use cookies for website functionality and to combat advertising fraud. Product development is considered to be one of the most growth strategies when the smartphone market has grown highly competitive and for extra growth, companies need to focus on product quality as well as prices. Samsung Electronics Co.’s organizational culture is essentially the same as the corporate culture of its parent company, the Samsung Group, considering that human resources determine the outcomes of product innovation, strategic planning and implementation, customer relationship management, and other business aspects. The focus of Samsung’s supply chain management strategy is to ensure an all-encompassing competitive edge in terms of cost, delivery, quality, technology, and human resources in order to maximize synergy, speed, and efficiency with its suppliers and create a corporate ecosystem that enables sustainable growth. samsung focus in every segment and class of people be it low income, middle income, high income it does not tailor its strategy to a specific and it pays them more in market share and profitability Samsung Strategy. Samsung is one of the world's industry leaders in technology and consumer electronics. In this way, product quality and marketing both have helped the company differentiate itself from the other brands in the market. This helped its further growth in the later years since increased reliability led to higher penetration of existing markets. Samsung Electronics Co.’s organizational culture is essentially the same as the corporate culture of its parent company, the Samsung Group, considering that human resources determine the outcomes of product innovation, strategic planning and implementation, customer relationship management, and other business aspects. With focus strategy, a company chooses a small segment of the industry to focus its marketing efforts on. It is directed towards serving the needs of a limited customer group. A focused cost leadership strategy requires Focus Strategy The focus strategy concentrates on a narrow segment and within that segment attempts to achieve either a cost advantage or differentiation. Samsung's Product & Marketing Strategy 1. However, the most important thing is that the level of competition in the smartphone as well as the home appliances industry has grown too high. The increased barriers due to intellectual property rights of top companies will not let the Samsung conglomerate apply their following strategy smoothly. To beat the competitive pressure, apart from its higher-priced Galaxy smartphones, the company has brought a large range of other smartphones that are priced affordably. Early-stage startups offer investors a unique opportunity to bring fresh perspectives and innovative technologies into large organizations like Samsung. So, Samsung’s strategy is a combination of both cost leadership and differentiation strategy. Samsung’s generic competitive strategy (Porter’s framework) and intensive strategies for growth (Ansoff Matrix) focus on utilizing technological innovation to support the company’s competitive advantage in the consumer electronics, semiconductors, and home appliances markets. 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