Samsung had been amongst the most growing companies in the last 10 years. The company values its customers as it’s always alert to analyze what is needed by its customers. They develop unique products thus expanding their markzzet share. The essay below looks into both the business-level and corporate- level strategies that will help the company to have long-term success. It further discusses the competitive environment of Samsung and what helps it to succeed over its rivals.
Samsung applies its business-level strategies so that they can have a competitive advantage over their competitors. Their main business-level strategies include cost leadership, product differentiation and mixture of cost leadership and product differentiation. In cost leadership, Samsung has succeeded in gaining better operating margins than that of its rivals because it has access to cheap and affordable labor, it utilizes new design rules that help it produce a lot of chips and its raw materials are 38% cheaper than its rivals.
The combination of cost leadership and product differentiation has not yielded benefits to Samsung Company. This was due to the following factors: difficulty in implementation, this strategy, is applicable to middle level companies, and it was too expensive to compete with companies that offer low cost products.
The best business-level strategy that Samsung can use for long term success is product differentiation. Due to threats exposed to the DRAM industry, Samsung adopted three broad product differentiations. The top management decided to cut off the edge products associated with the highest margins (Barney & Hesterly 2008). They also to have a legacy to work on cost savings of its products especially those which are technology based and finally, Samsung targeted the niche market by developing a unique specialty of their products.
The product differentiation strategy has placed Samsung the ultimate fast follower when compared to its competitors. The company has always risen in ranks due to its ability to be an outstanding market reader after which they became creative to produce their own products in line with those of their competitors. Samsung looks at what is done by its rivals and all products that are entering into the market, and they make an observation of what is attracting a larger customer base. After that, the company establishes its own brand of a similar version but they make its unique with added features.
Samsung is very aggressive into the market since reacts faster and introduces many devices. The company is very smart to respond to a wider market, yearn for its success and eliminate the barriers that may pose on its way. The company never produces a cheaper iPhone, but it had differentiated its phones to have a large screen, unique features and offers products that reach the level of customer satisfaction.
In my opinion, I think the product differentiation business-level strategy of Samsung will lead to long-term success of the company. This is because, by learning about what its rivals introduces in the market, it’s always fast in developing its own version of the product in a distinct style. This ability will always help Samsung to remain relevant in the market and produce products that customers will prefer most as they will always have the unique features over that of their competitors (Barney & Hesterly 2008). The Samsung galaxy note is an example of a successful product that Samsung developed through observing its rivals. The company tendency to link market research and unparalleled innovation will always boost its success overtime.
The best corporate-level strategy for the Samsung Company is to expand its market globally. The company has already taken great steps to expand its market outside South Korea. This enables it to reach its customers to increase sales and profits. It has recorded high sales in the flat-panel TVs as a result of the expansion to the global market. The company also stands out as the largest distributor of laser printers and also the most successful in developing the liquid-crystal-display technology. It has emerged as the greatest competitor to Apple in production of highly advanced smart phones with the current technology (Schwartz, 2013).
The frantic efforts of Samsung to expand its market have been rewarded as it recorded an increased growth that led to a generation of maximum profits of $120 in the last ten years. Its market-share has increased as it has established a larger growing customer base than its competitors. The secret behind expansion to the global market is by closely observing how its competitors manufactures and designs their products. This has enabled Samsung to develop radical innovation in the technology so that they can upgrade the status of their software. The company has always been creative in developing products that have a competitive edge over those of their rivals.
In my opinion, I think that Samsung Company has the best corporate-level strategy that will always ensure that its success remains long term. This is because, building a larger market through expansion all over the globe will create trust and enthusiasm of their customers who will always purchase their products when they are developed.
Samsung competitive advantage is in the prices of their product. Comparing the cost of Samsung product in the market with those of others, its prices are better off and customer friendly. This is as a result of its cost incurred in terms of raw material and labor. This puts it in a strategic position that makes its product cheaper in price than other companies. Samsung also enjoys high sale worldwide than its competitors. This is not only contributed by low costs on products but also by the marketing strategies that it has employed to ensure her product reaches all customers around the world (Chang, 2008). In addition to the marketing strategy, Samsung has quality products that are made using modern technology and go at a lower price than its competitors. For example, the mobile phone industry is very competitive, however, Samsung has continuously outdone its competitors due to its adequate research on customer needs and preferences which it combines to produce better products. This has been a major success strategy used by the company amidst tough competition in the market.
Samsung has successfully incorporated different technologies used by its rivals to come up with unique products. In the wake of Apple dominance, Samsung came up with mobile technology that included various technologies to produce mobile products that were better than the competitors. The company has continued to incorporate these technologies, therefore, outshining its closes competitors. In the mobile industry, the Samsung note 3 and 4 has been the best mobile product of the time.
The technology innovated and used in their production is the best in the market. As a result, Samsung has continued to enjoy market dominance overtaking its close competitor Nokia. Samsung’s success is attributed to its aggressiveness in innovation, marketing strategies, innovation, research and low cost of its products (Chang, 2008). Nokia, the closest competitor, has been outplayed by Samsung. This is because Samsung carries adequate market research, promotes marketing worldwide and uses modern technology in the production of smartphones than Nokia does. Consequently, the result has been significant as Samsung enjoys a large market share whereas Nokia is lagging behind in the technology adoption. Despite the introduction of Nokia Lumia in the market, Samsung is far on smartphone production with the Samsung galaxy S4.
Samsung overtook Nokia in the mobile phone industry and the two have become great competitors. However, a close analysis of the two shows that there is a significant possibility of Samsung continuing with the lead. Look at the two firm’s strategies in all level, Samsung has an upper hand of success. Samsung has its own smartphone make in the android technology. This has brought significant changes in its products than Nokia. Nokia lacks similar technology and only partners with other companies such as Microsoft so that they can produce smartphone. This shows the level of innovation and technology embracement between the two firms. Samsung channel of distribution is worldwide with equal representation even in the developing countries; this creates a wider market for its products making it have more sales and thus increasing its revenue. It is not a surprise that it is a mobile and electronic company with the highest earnings.
Nokia on the other hand lacks adequate marketing in the third world but pays more attention to the developed world, this confine its market area and reduces its sales hence reduced returns. The prices of Samsung products are cheaper and yet they have better features and good quality (Chang, 2008). Samsung products are made to cater for the needs of the consumers. Therefore, the company carries research that enables it to produce goods that meet consumer requirement in so doing; it has continuously overtaken Nokia whose products are expensive. It, therefore, falls that the long term success and dominance of Samsung is more predictable than that of Nokia. This is supported by the fact that Samsung products are cheap, meet consumer requirement, it has better channels of distribution, uses modern technology, the company is innovative and it has adequate resources to meet all its operation and other costs.
Samsung is a fast cycle company both as a management paradigm and as an organizational capability. It’s a company that is known to embrace technological changes very fast. This has become the norm in the way the company is run from the management to the employees. The mobile phone industry, for example, is a fast cycle industry. However, Samsung has thrived as has continued to perform better with the development of every new technology (Chang, 2008). In other electronics such as DVD and television technology, Samsung has also performed well despite them being slow cycle markets.
In comparison with Nokia, therefore, Samsung has an upper hand in both market cycles. Samsung management is well set for rapid changes both in the customer market and technology development. In this case, therefore, the firm is ever ready to embrace and perform the necessary changes that will fit the market and competition requirements. On the other hand, Nokia is slow in embracing technological changes as compared to Samsung. This is evident in the smartphone technology where Samsung outshines Nokia.
Schwartz, S. A. (2013). My Samsung Galaxy S III. Indianapolis, Ind: Que
Barney, J. B., & Hesterly, W. S. (2008). Strategic management and competitive advantage: Concepts and cases. Harlow: Prentice Hall.
Chang, S. (2008). Sony vs. Samsung: The inside story of the electronics giants' battle for global supremacy. Singapore: Wiley.