Company's Products And Market: Research Papers Example

INTRODUCTION

Samsung is a highly diversified conglomerate, which operates in different areas. It has a great number of subsidiaries and affiliated companies. The subsidiaries producing electronic devices (Samsung SDI, Samsung SDS, Samsung Electro-Mechanics, Samsung Networks, and Samsung Electronics) provide the conglomerate with 70% of revenues. Samsung Electronics operates in four markets: digital media, semiconductor, telecommunication network, and LCD digital appliances. The company is the world’s largest smartphone maker. During the first quarter of 2014 Samsung Electronics sold more than 85 million smartphone units in 80 countries of the world. Samsung Electronics occupies 26.9% of top global flat panel TV market and 36% of global premium 60 inches and larger TVs market (Annual Report, 2013). The company produces more than 100 types of products, including mobile devices (smartphones, tablets, cameras, mobile phones, wearables), TV and audio devices, monitors, televisions, print solutions, smart cameras, notebook computers, memory cards, semiconductors and home appliances. Samsung Group also includes subsidiaries operating in Machinery & Heavy Industries, Chemical Industries, Financial Services, Tourism (“Affiliated Companies”, n.d.).
Investments in research and development allow the company to improve the quality of products, to “produce positive change for the world” and to “shape the future to create new experiences for consumers” (Annual Report, 2013).

Organizational Life Cycle:

The Samsung Electronics Company is currently in the elaboration stage of the organizational life cycle. It should be taken into consideration that the life cycle of products in high-tech industry is becoming shorter. Life cycle of mobile devices boil down to 12-18 months, whereas two years ago product life cycle amounted to 2-3 years. Therefore, to stay competitive, technology companies have to successfully progress through the stages of life cycle faster (Daft, 2004).
The level of competition among technology companies is extremely high. Despite Samsung and Apple being the biggest smartphone vendors, they have business rivals (Xiaomi, Lenovo, LG), which can take the lead in future.
In 2014 Apple presented iPhone 6 and 6 Plus. These models became very popular and Apple pulled even with Samsung to become the world's largest smartphone vendor. Samsung witnessed a 13 percent decline in smartphone sales from 86 million units in the third quarter of 2014. In 2014 Samsung sold 2.6 million fewer smartphones than 2013, while Apple shipped 39.3 million more. Samsung reported fourth quarter profits of $4.88 billion, a 36 percent slump compared to the previous year (Kharpal, 2015). Today Samsung is under pressure in the smartphone market. Samsung successfully combines differentiation strategy and cost leadership to maintain top position. In addition, Samsung has increased investments in research and development, though the total number of smartphone patent applications filed by Samsung decreased since 2006. It proves that Samsung is focusing on the quality of its patent portfolio. Samsung Electronics has the second largest budget for research and development ($10.4 billion in 2013) (Jurevicius, 2015). The total number of patent applications filed by Samsung since 2003 accounts to 10,096 (“WIPS Global Analysis Report, vol.4 Korean 3 Smartphone Companies’ Patent Portfolio Comparison”, 2013). Samsung Group has a diversified portfolio. Recently Samsung has acquired LoopPay, a mobile payments company, to compete with Apple Pay. In 2014 the company acquired SmartThings, an application, which allows people to sync up their connected gadgets.

Company's strategy:

In 2012 Samsung managed to sidestep Apple and sold more than 50 million smartphones to become a global leader in smartphone market. Samsung succeeded due to combining the low-cost and differentiation strategy. The company also uses different strategies in separate geographic regions. Samsung mobile phones and devices are represented in high-, mid- to low-cost segments, which allow to cover both developed and developing markets. According to Mitchell (2010), the business strategy of the company was mainly cost efficiency prior to Asian Financial Crisis of 1997. When Eric Kim became chief marketing officer, Samsung started pursuing differentiation strategy. It is based on the innovative approach and developing new products in order to change the world and to create future. As a part of the initiatives under differentiation strategy Samsung design staff has been tripled to 400 people globally (Singhania, 2006). Samsung Mobile is constantly researching the market to explore the tastes of consumers and thus carries out successful marketing policy. The company customizes products around a core design. New models of Samsung phones are available in many variations and have not only superior performance, but also the original design. The company can afford to produce a set of similar smartphones, aimed at different target audiences. This approach allows to meet the needs of the ordinary customers, who need a simple and reliable device, and fans eager to try the last achievements of science and technology. Samsung’s product portfolio is the largest compared to the rivals’ and no other manufacturer can produce a similar amount of mobile devices. This gives the company indisputable advantages and the ability to win a major share of the smartphone market.
Samsung can compete in price using cheaper labor and raw materials as compared to non-Chinese manufacturers. The fundamental principle of Samsung Electronics’ corporate culture, emphasizing the paramount importance of economic feasibility and efficiency, contributed to the formation of a result-oriented corporate culture. The corporate culture of Samsung merged entrepreneurial ideas with focus on high performance and the spirit of commitment and obsession, typical of Korea at the modern stage of development. The company’s managers adhere to the principles of sustainable development and corporate social responsibility, striving to provide harmonious coexistence of society and environment. Samsung is pursuing growth and innovation by continuing to identify new opportunities and possibilities through transformative technologies and innovation. Therefore the investments in research and development and the strategy of global innovation leadership provide flagship position of Samsung Electronics globally.

References:

Daft R. Organization Theory and Design, 8th ed.: South-Western, 2004. Print.
Jurevicius O., 2015, Samsung SWOT analysis 2015. http://www.strategicmanagementinsight.com/products/swot-analyses/samsung-swot-analysis.html
Kharpal, A., iPhone 6 pushes Apple to top spot, tied with Samsung. http://www.cnbc.com/id/102380241
Mitchell, T, 2010, Samsung Electronics: And the Struggle for Leadership of the Electronics Industry, Wiley Publications.
SAMSUNG ELECTRONICS ANNUAL REPORT, 2013. http://www.samsung.com/us/aboutsamsung/investor_relations/financial_information/downloads/2013/2013-samsung-electronic-report.pdf
Samsung: official website. http://www.samsung.com/us/
Singhania, P, 2006, Branding and its Competitive Advantage in Consumer Electronics Industry, Dissertation for M. A. Management Degree.
WIPS Global - Analysis Report, 2013. http://global.wipscorp.com/selectNewsList.do?brdCd=guide