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The Rise of Samsung Electronics
Case study
Sjoerd van EerdenburgEvgenii GvozdevRoelof van Laar
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Content
Company profileSWOT analysisMarket analysisPorters five forces analysisStrategy recommendations
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Samsung company profile
South Korean company, founded in 1938Largest chaebolTotal revenue € 185.1 bn (2012) Samsung Electronics largest SBU, revenu € 140.5 bn (2012) CEO is Dr. Oh-Hyun Kwon72 Countries206,000 employees
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Samsung smart phones
First SE mobile phone in 1988Apple introduces smartphone in 2007SE smartphones unsuccesful at first3.7% market share at the end of 2009Google Android launched in 2010Samsung Galaxy S in June 2010Market leader in 2012, with 215 m units
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SWOT analysis
Strengths Weaknesses
Patent infringement
Main competitors are largest customers
Product cannibalization
Own OS and software are unpopular
High market share
Innovation and design
Diversified product line
Strong brand value
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Opportunities Threats
Low cost Chinese products
Rapid technological change
Price wars
Advertising revenue goes to/through Google
Unrelated profile diversification
Increasing demand for SE quality application
processors
Strong partnerships that can be enhanched
Growing Indian market
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Market analysisKey Issues:
Samsung performs as flanker, not as leader
Looses market share in emerging smartphone markets to cheaper brands (China -6% 2011-2012)
Needs to develop further software of its own, vulnerable to Google’s power
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Market Overview
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Porters five forces analysisThreat of new entrantsHigh, mainy Chinese competitors
Threat of substitutesHigh, many similar products on the market
Customer powerHigh, low threshold for switching
Supplier powerLow, Samsung market leader
Competitive rivalryHigh, fierce competion with Apple, Sony, SK Hynix, etc.
Complementors (sixth force)Open Handset Alliance (OHA): Android OSApple, market creator, large customer
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Strategy recommendationsSamsung must position itself as market leader and resume its current strategy concerning product innovation and market divided segments in Western Market (including their power in the supply of smartphone components and marketing to revenue ratio), because
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Samsung must research and develop its own software platform, because
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Samsung must attack and enter the growing segment of cheaper smartphones and especially conquer China and be heavily invested in India (long term growth), because both countries will enlarge the smartphone market as a whole and have the need for a cheaper smartphone
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SourcesCase study: The Rise of Samsung ElectronicsSamsung Electronics annual report 2012http://www.samsung.com/us/aboutsamsung/investor_relations/financial_information/downloads/2013/SECAR2012_Eng_Final.pdf
Hong, Y. S. (2012). Modes of Combinative Innovation: Case of Samsung Electronics. Asian Journal of Innovation and Policy, 1, 219-239.Hsin, C. (2010). The Innovation Strategy of Core Competence and Enterprise Growth–The Case Study of Samsung.Vergara, R. (2012). Samsung Electronics and Apple, Inc.: A Study in Contrast in Vertical Integration in the 21 st Century. American International Journal of Contemporary Research, 2(9).