The Innovative Strategies For Samsung Marketing Essay

Samsung has launched a new generation of tablets. This document will explain whether the industry presents the company with an attractive opportunity and what strategic issues and problems merit front burner managerial attention. Concluding with recommendations.

Declaration: “I hereby declare that this assignment is my own work and has not been submitted for any subject previously.”

DUE DATE: 19 March 2013

Executive Summary:

You have heard about Samsung, one thing that has made you hear a lot about them is their innovation. Samsung Innovation has kept competitors at bay and made them one of the leading manufacturers of electronics and mobile devices. If you have tried or used a Samsung product, you will agree that it is utilizing the strong Samsung Innovation that has been laid emphasis by the company. Samsung has launched a generation of tablets. The question posed is: Does the outlook for the industry present the company with an attractive opportunity? What strategic issues and problems merit front burner managerial attention?

In the existing business environment, internal and external, all the businesses irrespective of its size have to face and overcome challenges posed by dynamic external changes, namely technological changes and accelerated globalization. This means it is not innovations per se that matters but innovations which embed within themselves game changing strategies would have to be followed by organizations, creating value could be a necessary condition for the company to survive but not a sufficient condition if they have to compete and win for which they need to change the rules of the game of strategy altogether in a manner that would replace the current ways and methods the businesses have been applying them in creating and appropriating value. In other words, the game changing innovations should not just stop with products and services but summarize within themselves the business processes, business models, and the way a company positions itself in comparison to its competitors. Through the principals we have learnt and acquired in strategic management, this paper will analyse the outlook for the industry and whether it presents the company with an attractive opportunity. In addition it will find out what strategic issues and problems merit front burner managerial attention? It is important to analyse the outlook for the industry and whether it presents the company with an attractive opportunity because Information technology is both an enormous industry in itself and the source of dramatic changes in business practices in all other sectors.

The sequence of this paper begins by firstly recognising the outlook for the technology industry and IT industry and the description of Samsung. A brief explanation of the strategic issues, internal and external issues faced by Samsung will also be reviewed. Following this is Samsungs innovation which will covers key points such as strategies for Samsung, strategies for Samsung innovation and development of technology platform. Finally, this paper concludes by underlining recommendations for Samsung.

Executive Summary

1. The Outlook for the Technology and Information Technology Industry.

1.1. Global perception

1.2. Continental perception

1.3. How South African citizens relate with technology, IT, and Samsung

2. Samsung.

2.1 Description of the company

2.2 Samsung Tablet

2.3 Future Plans

3. Strategic Issues.

3.1. INTERNAL ENVIROMENT

3.1.1. SWOT (environmental) analysis: Strengths and Weaknesses

3.2. EXTERNAL ENVIROMENT

3.2.1. SWOT (environmental) analysis: Opportunities and Threats

3.2.2. Changes in the external environment

3.2.3. Marketing Mix

4. A description of Samsung Innovation and Innovative Strategies for Samsung.

4.1. Two Samsung innovation uncharted innovative strategies

4.2. Future Samsung innovations

4.3. Development of technology platform

4.4. Conclusion on Samsung innovation

5. Recommendations

6. References

The Outlook for the Technology and Information Technology Industry:

Global perception:

Market Analysis:

According to the IT market analysis firm Gartner, “Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company.” worldwide IT spending grew by more than anticipated in 2010, reaching 5.3%, as opposed to the predicted growth of 3.2%. Given the fragile state of the economic recovery, together with very low growth in most of the advanced markets, the mentioned number gives some grounds for hopefulness that corporate are preparing for higher rates of growth than is currently showing up in GDP figures around the world.

In June 2011.The global IT spending will grow by 7.1% over 2010.

Gartner sees some slowdown in spending on desktop PCs as big corporate delay refreshing their desktop PC infrastructure, but this is being more than made up for by increased spending on servers, storage, and networks. Even the spend on PCs shows strong growth if one adds in new spending on tablet PCs, a format that is proving extremely popular both with consumers and executives.

The growth in global hardware spending in 2011 is predicted to be 11.7%. This is slightly behind the 12.1% growth achieved in 2010, in comparison with what was spent in 2009, but it represents a significant upward revision on Gartner’s earlier prediction of growth of 9.5% for the hardware segment in 2011.

Continental perception:

Market Analysis in Africa:

Africa is a continent comprised of diverse countries, and each of these countries are developing at a different rate, many of these countries are dynamic emerging economies, some of which are essential states to American national strategic interests, one of which (South Africa) has been identified by the U.S. (Edward S. Marek)

More than ever, the web is part of our daily lives. We live in a connected world that allows us to laugh, share, and live on the web. One of the major components of technology is internet. Africa has the lowest internet penetration rate globally. In Sub-Saharan African countries, for internet users the penetration rate is below 7% and for broadband it is under 1%. In Latin America and Caribbean, and East Asia and Pacific countries, the number is about 20% for internet users. North African countries are having a rate of 40.4%. However, even in North Africa the penetration rate for broadband subscribers is merely 2%. In Africa most internets is by low speed dial-up connections which are concentrated in Egypt, Kenya, and South Africa. More rapidly speed broadband connections through Asymmetric Digital Subscriber Lines (ADSL) are mainly found in South Africa, Egypt, Morocco, and Algeria.

Africa had the world’s greatest growth in new mobile phones in 2008. Some Sub-Saharan countries had some growth of 40% yet overall penetration rates remain low. There are also important differences between Sub-Saharan countries, with penetration rates in resource rich and resource scarce coastal countries at about 50%, compared 15% in resource scarce closed in countries.

How South African citizens relate with technology, IT, and Samsung:

Amongst other mobile companies, Samsung continued to govern mobile phones in 2011. Samsung is considered trustworthy by many South Africans. The company has managed to establish itself as the ultimate in style and design. Samsung’s target is to dominate the whole South African consumer electronics industry. Based on its trendy designs and innovative products, it has a competitive edge which is difficult to beat.

The overall IT spending in South Africa has increased by 7.1% year-on-year during 2011 reaching a total of more than R111.6 billion, according to the latest figures from market analytics company IDC (International Data Corporation). The growth in IT services spending was determined by a recovering economy, increased business confidence, expanding bandwidth availability, and different infrastructure investments made in the country in 2010. In a recent research report, IDC cited that IT outsourcing constituted around 40% of the South African IT services market, which represents the largest market share of all IT services foundation markets.

The 2012-2016 South Africa IT market compound annual growth rate is projected to be in the region of 13%, as a number of Major IT infrastructure projects generate spending at provincial levels. A projected improvement in South Africa’s broadband infrastructure and international bandwidth will also be an important market growth driver and will help drive demand for cloud computing solutions.

Samsung:

2.1 Description of the company:

Samsung Electronics Co., Ltd is an international leader in digital media and digital convergence technologies; Samsung is the globes largest company having the highest brand value. Samsung is functioning in more than 50 countries in the world. Their global strategy involves eight main regions Southeast Asia, Central Asia, Africa, and Middle East, China, North America, Europe and Latin America. Samsung’s headquarters are in Seoul, South Korea.

Strategy is long term planning to get the goals. It is a roadmap of future actions. After market researching the global market, Samsung gets plenty of feedback from its customer and employees. Samsung needs to advance its products promotional activities, customer service and online business since it is very important to satisfy its customers. Samsung strategic growth plan aims to fulfil the needs and wants of customers, expectations of employees and all other stakeholders. It requires focusing all its resources on increasing technological innovation and market share growth but the industry’s infrastructure and labour skills at that moment were too unfavourable for Samsung to accomplish these and become competitive in the world market. In order to attain this, Samsung reinvented itself by primarily keeping on tract with its customers’ needs and wants.

2.2 Samsung Tablet:

Samsung Mobile is one of the five units within the Korean Samsung Electronics. It is the second largest phone manufacturer and one of the largest technology companies by sales in the world, producing different devices including phones, TVs, cameras, computers, stereo systems, etc.

The below information has been extracted from an article that was written based on Samsung Africa Forum 2013. Samsung Electronics announced the launch of the world’s first 8 inch tablet, the GALAXY Note 8.0. The whole of section 2.2 has been quoted due to technical terms.

2.2.1. A smart diary for life on the go

“Slim and compact enough to become the perfect on-the-go work and play companion, the GALAXY Note 8.0 brings powerful performance and functionality to support even the most demanding of lifestyles. Designed to store and manage your personal and professional data efficiently, this new era device gives users the perfect pocket-sized hands-on organisational tool and as a result, is ideal as a Bring Your Own Device (BYOD) tool to use in the workplace. Practical S Note templates and S Planner feature help to manage everyday tasks, including meeting notes, to-do lists, and even personal diary entries. All content can be entered and updated with the finest of detail. “(Staff writer: Wed, Mar 13th, 2013)

2.2.2. New content and services

“GALAXY Note 8.0 is packed with pre-loaded content and apps specifically for the mass multimedia, value-maximising, consumer. Upgraded Chat-On provides easy instant messaging and group chatting in multiple formats – images, video, voice, contacts – for simple, enjoyable communication. Awesome Note, an integrated application that is introduced in android tablet for the first time with NOTE 8.0, is capable of near-unlimited note-taking uses including Memo, Diary, and Must-remember lists. With Flip board, you’re RSS, social network and other feeds come together in one stylish, flip-able format so you can enjoy all your news and life’s great moments in one place. Flip board developed a customised version of its application exclusively for Samsung’s Note 8.0 that allows users to take the S Pen’s hover feature and preview article headers beneath Flip board’s main screen tiles. Finally, Smart Remote gives you a universal remote control and electronic programming guide allowing you to manage TV and video watching seamlessly.” (Staff writer: Wed, Mar 13th, 2013)

A new age of S Pen intelligence

“Optimised to aid personalised creativity, the Samsung S Pen has evolved to increase everyday usability and enhance creation expression. Embedded within the tablet, the S Pen is an extension of the GALAXY Note 8.0. Removing the S Pen from the device will automatically launch innovative features such as Pen Detection that will suggest adapted menus that it thinks you’ll need and Page Buddy, a feature that will intuitively activate your most recently adapted S Note home screen. “(Staff writer: Wed, Mar 13th, 2013)

“S Pen technology is now so advanced that it doesn’t even have to touch the screen. With Air View, the S Pen needs only to hover over the screen to see previews of videos, emails, photos, and appointments on S Planner without opening the file or application in full. S Pen Gesture allows images and content to be easily edited and cropped, whilst Paper Artist and Photo Note allow photos to be artistically personalised.” (Staff writer: Wed, Mar 13th, 2013)

Maximising mass multimedia consumption

“Creative multi-tasking with the GALAXY Note 8.0 is effortless due to innovative Dual View feature, two multi- window options that seamlessly allow you to facilitate multi-screen usage. Dual View’s split screen accommodates optimal operation of different apps, such as launching the S Note on the web browser screen and allowing content to be resized, dragged and dropped as required.

Multi-tasking is extended to phone calls*. Pop Up Note allows you to access S Note at any time to keep track of key actions and Pop Up Video ensures you can keep surfing the web whilst chatting – content windows can be easily resized by pinching to enlarge or reduce. “(Staff writer: Wed, Mar 13th, 2013)

Perfect info-attainment partner

“Packed with features to engage, entertain, and excite, the GALAXY Note 8.0 supports your everyday needs in a practical way. Reading Mode transforms the GALAXY Note 8.0 into an e-Book reader, provides the optimal reading conditions to ensure you can curl up and enjoy a good book. You can even turn it into a universal remote control with Smart Remote, to seamlessly manage TVs, set-top boxes, DVD & Blu-ray players. “(Staff writer: Wed, Mar 13th, 2013)

2.3 Future Plans:

Samsung Electronics Co., Ltd., the world leader in advanced memory technology, announced on the 05 April that it is now mass producing Ultra High Speed-1 (UHS-1) interface micro SD cards that support the highest performance levels required on advanced LTE (Long Term Evolution) smart phones and tablets. (Seoul, Korea on Apr. 5. 2012)

In the future, Samsung plans to expand its micro SD card offerings with higher density solutions that reinforce its position as the leading market innovator for NAND flash.

Strategic Issues:

3.1. INTERNAL ENVIROMENT:

3.1.1. SWOT (environmental) analysis: Strengths and Weaknesses

Swot analysis is the most important and first stage of planning. It is a feedback mechanism to make new strategies for any company. Strengths, Weaknesses, Opportunities and Threats are the four components of a swot analysis. Weaknesses and Strengths are correlated and examine the internal part of the business analysis whereas Opportunities and Threats deal with the external environment of business operation.

Samsungs electronic strengths are:

A strong global brand. It is the leading consumer’s electronics brand in the world. The Quality is good .They assure the same quality and range worldwide.

Its vision is leading the digital convergence resolutions. It means they want to be the leader of the electronic items worldwide in order to get the goodwill as well.

They have a strong concept. They are offering good design , good quality as well medium prices

They have diversified products. Samsung’s products has based on variety. It means they manufacture same items in diverse ways for the diverse kind of people for diverse countries.

Technology. Voice call is clear and reckoned by customers as having a good value for their money; and the design of Samsung’s electronics technology is very high. We can order right quality at the right price.

Good reputation among customers. Samsung claims that it has well-established brand equity, and has performed extremely well since the past decade particularly from 2000 onwards. A range of innovative products with value-added features and functionalities have been launched by Samsung which have been very successful. The company strongly believes in playing to its strengths. (Samsung Group Timeline and History 2007).

The senior management (2007) claims that the company has a diversified and talented human and intellectual capital. The executives pride themselves in having such capable employees and are confident that the workforce as well as the strategic partners including distributors, dealers, marketing and advertising agencies round the world would help Samsung Group, particularly the Samsung Mobile business segment, reach the rank of a global leader in electronics and telecommunication goods and devices. (Samsung Group Timeline and History 2007).

Weaknesses for Samsung are:

The global scale of Samsung’s operation indicates that it has severe implication on its management system. To control a business in just one location is easy but for a worldwide operation is complicated and could be challenging.

Base on the double digit decrease of its operating profit against the previous year, it indicates that its operating cost had also increased by more than 20%. Its operation had not been efficient enough to produce good profits.

Samsung as a South Korean company is reckoned by most customer as only next to any Japanese firm since Japan is always considered as a high tech country in the world. Although companies strive to penetrate new markets, its concentration remains more on a few countries in Europe and North America. Samsung mobile focuses more Kingdom and United States compared to other countries. Although the diversified workforce is an asset to the company, many cultural and linguistic differences arise which lead to group conflicts and interpersonal grudges. Communication between individuals belonging to different nations may not be as efficient as between those who share the same culture and social background.

The business is heavily investing into development of newer markets and segments. It wants to capture as many markets as possible in a smaller span of time. However, instead of taking thoughtful and careful steps in order to reach the global position it desires, Samsung is seems to be in a hurry to launch new products, segments and marketing campaigns.

3.2. EXTERNAL ENVIROMENT:

3.2.1. SWOT (environmental) analysis: Opportunities and Threats

Opportunities

A business uses its strengths to take advantage of the opportunities that arise, opportunities for Samsung are:

Increases mobile and computer market

Global growth.

Entrance of new technologies

A strong customer demand and good design.

There is an increasing need of faster, dependable, and easy communication. Samsung sees a great opportunity in this. The technologies are advancing at a fast pace. The business, by gaining a deep insight into consumer preferences and needs, can develop products according to what the market needs and desires. Samsung Mobile has plenty opportunities to cease particularly with the rise in global population and the need for rapid communication. (EFFIE/ The Best Brand 2006).

Threats

If any company is aware of possible external threats, it can be addressed by generating new ideas to counter it or can use a particular strength to defend against threats in the market. The threats on Samsung are as follows:

Changing social trends: It is trying to build on line help to guide customer to a more comfortable life. The online business and website promotion entails cost and any change introduces needs getting better staff competencies by training.

Strong competition: Samsung faces strong competition from the other Korean company such as LG, KTF, SK aside from its foreign competitors like Sony Panasonic.

Smart phones are easier to make now more than ever. New entrance in the market, more companies may enter the market, and competitors or even Samsung contractors can scheme around patents to create similar devices.

Samsung has linked product lines; this means that if one product line fails due to its own reasons other product lines will also experience the same failure.

Unlike Samsung, their competitors like Nokia has only paid attention in one segment and put much effort on it. Besides, the products made from China was very economic so Samsung could have a high competitive with their products. Retail chains like “Big bazaar” sell consumer electronics and home appliance in low cost strategy which produced in bulks foreign market. Therefore Samsung is also facing threats from many other low cost companies.

New regulations and increased trade barrier.

3.2.2. Changes in the external environment

External Environment:

The external environment of an organization is those factors outside the company that affect the company’s ability to function. Some external factors can be manipulated by company marketing, while other factors require the organization to make adjustments.

Court Battles all Across the World

One of the components of Samsungs external environment is their competitors. Competitors have a significant effect on how they do business and how they strategically address their target market. Apple has decided to take on the competition, Samsung directly in the same target market.

The UK isn’t the only place where Apple and Samsung lawyers are fighting. Apple and Samsung are fighting this fight across the world in nearly every country where Apple products are sold. Apple is tired of Samsung creating products that are very similar to what Apple puts out. Apple has won some of these battles while Samsung continues to pick up speed.

Samsung has no control over this, as this is the market environment, what the company can really do is to adapt to the situation and fight the best way the knowhow. Any kind of company scandal can be damaging to the company’s image. The public perception of Samsung can hurt sales its negative, or it can boost sales with positive company news. Samsung can influence public opinion by using public relations professionals to release strategic information, but it is also important for Samsung to monitor public opinion to try and defuse potential issues before they start to spread.

The ultimate question is: did Samsung copy Apple or did Samsung simply come up with its own products that just so happen to look like Apple’s? It’s tough to say which company came out with the concept of an “iPad-like” tablet first.

Marketing mix of Samsung

The marketing mix is one of the tools available to businesses to gain the reaction to its target market in relation to its marketing objectives .Marketing mix is the combination of 7ps. This includes price, place, promotion, product, people, process, and physical evidence. It’s manufactures a range of designs which is directly concern to customer satisfaction. Samsung has high quality, capitalizes on packing branding, and having adequate warranties.

Samsung technology is high and of good value. Samsung product electronic goods such as TVS, Computer, notebook, washing machine, microwave etc and the latest product is the tablet. Samsungs pricing strategy is neither high nor low; this means that the prices are affordable. Samsung offers schemes for all new products, during festive seasons, new years, when a new product is launched and on its anniversary, which helps to stimulated psychologically to customer.

Samsung elucidates its vision as well as mission of marketing strategy by the following clarifications of 4 ps.

Product: Samsung’s product range worldwide included CTVs, audio and video products. IT products, mobile phones, and home appliances are Samsungs chief products. Samsungs product range covers all the categories in the consumer electronics and home appliances.

Place: Samsung brands have 25 production base worldwide and more than fifty sales subsidiaries in about 50 countries, and their global strategy involves eight main regions. Samsung also sells its product through independent retailers. Customers can see and handle products they are taking into consideration of buying.

Price: Pricing also seemed to have played an important role in Samsung’s success. Samsung offers different pricing structures to reach out to different customers groups. The price plans are available on a monthly basis and a prepaid option.

Promotion: Samsung advertises on TV, in magazines and in other media outlets; through this type of advertising they reach large audiences and spreads the brand image and the message very effectively. This is also known as above the line promotion. There is also the below the line promotion; every store has special offers, promotions, and posters showing sales offers to attract customers inside the store to buy.

A description of Samsung Innovation and Innovative Strategies for Samsung:

A description of Samsung Innovation and two innovative strategies for Samsung

The innovations recommended here are ones that are diverse in the sense they are not preoccupied with short-term oriented competitive victories but they are focused on the long term oriented competitive advantage. It chalks out a ‘new future’ for the company based on integrating intelligence instead of separating it out through diverse learning where in the ultimate, the output would be innovations. This paper assumes that Samsung’s focal point would be more and more into the Information Technology and Communications (ICT) oriented business and consequently accords the highest priority to technology driven innovations. By the same token, it is also presumed the company would focus on deriving the most advantage from the emerging Internet opportunities.

Two Samsung innovation uncharted innovative strategies

The first innovative strategy this paper suggests focuses towards the expansion of software that would integrate the Smartphone with mobile payment system (e-wallet) which has implications far beyond from the way the current mobile payment system is functioning. In other words, the scope and opportunities in this area has not been exploited even by the stakeholders involved in the industry. The second relates to the development of a ‘technology platform’ that would include the current and potential requirements of smart phones.

Future Samsung innovations

Central to the growth of any economy is a monetized system that makes business transactions and personal transactions competent, quick, and timely. With the technology advancing such a rapid phase, electronic payments in the next few years have the potential to replace in a considerable manner the legacy payments. But for that to happen, the stakeholders in the industry would have to understand the driving forces in the market for electronic payments. Even though at this time there are many solutions which are available that supports connecting bank credit/debit card accounts to on-time practical transactions, yet they suffer from the limitation of not changing the underlying value proposition which is the convenience to customers. Such a value proposition can not only be created but also appropriated only if the current limitations of smart phones as a tool for mobile payment are removed through development of software that could facilitate the contactless payment system. Currently the technology is limited to business-consumer segments, but, it offers scope for development of an assortment of payment system. If Samsung focuses into such an area as its innovative strategy by using the fame of its smart phones and user friendly software, it would ease its capturing and appropriating value proposition in the form of a different competitive strategy.

Development of technology platform

Before the introduction of smart phones, the mobile telephone and Internet were operating as two un-related entities, with its introduction what the customers today have is the ‘mobile internet’ which has been made possible with the merging of smart phones and the Internet. For many of those organizations of which Samsung is one who are involved in the manufacture of computers systems, mobile telephony and personal digital assistant devices (PDAs), utilizing the potential offered by the smart phone industry and capturing the value they have created is considered to be a key to future expansion and profits. The value proposition that I am discussing is not just on the use of existing operating system as Android or what Samsung has developed in its own stable, the headlines that Samsung has imitated Apple by taking over its sales in the smartphone segment in July-September, 2011 quarter has not highlighted yet another aspect that can go against the company in the long term. It has to do with the operating system (OS).

This may have created value for Samsung in the short term but it fails to address a critical issue for the future. Samsung does not have a strategy so far to capture the ‘lock-in value’ of the customers and if it has to confine the value created by it, it should address this issue as it’s another innovative strategy.

In this context to capture the value by ‘locking-in’ the customers, Samsung has to focus on creation a ‘technology platform’ for the present and future mobile devices. The winners in the technological competition are the ones who have not only the best platform strategy but also the best ecosystems to back it up. This makes it clear that if Samsung has to win over in the smart phone industry with a completive edge by capturing value and appropriate it in the form of revenues, innovating a ‘technology platform’ should constitute its second strategy.

4.4. Conclusion on Samsung innovation

This section of the paper has not only through its logical analysis has not only proved it but also identified two new innovative strategies which the company would have to take up to secure its place as a future driven company.

This section has allowed you to agree that Samsung Innovation is real and they have brought up very innovative products and concepts to the market. The Samsung Innovation has made them compete with companies like Apple and larger companies . In electronics, they have also done well.

Recommendations

Samsung is one of the famous global companies (www.samsung.com) it has manufactured electronics goods and other concrete goods. Samsung is a well known brand because of its service, excellent employees, and Innovative reliable product. They have responsible approach to business and global citizenship and globalisation with partners and customers. Samsung t