Analysis of environmental dynamics of consumer electronic goods industry
With respect to the environmental dynamics of the electronic consumer goods industry, the industry shows continuous development of the technology and innovation that is used to produce goods demanded by customers such as tablets, smart-phones, etc. Due to high shift of technology in all regions, particularly in developed countries, the demand for electronic consumer goods, particularly cell phone has increased. In addition, the rising growth of smart-phones has mainly contributed to the shift in growth of the industry (as explained by figure a) (Dediu). Therefore, the companies that have not adapted to the fast changing technology and brought innovation in their products are left behind and have low market share such as Blackberry, Sony, etc. thus, the rise in growth of touch screen technology can become main stream in future for which all the companies operating in the electronic consumer goods industry must adapt and incorporate this technology in their products, particularly cell phones.
Figure a Smart-phone penetration (Dediu)
Comparisons of different factors between Samsung and Apple
Market share comparison
With respect to 2012 data, the market share of Samsung is more as compared to Apple (figure b).
Figure b smart phone market share (Orcutt)
Advertising Expense Comparison between Apple and Samsung
The following figure shows that Samsung spends more on advertisement as compared to Apple (figure c).
Figure c Advertising Expense comparison (Mick)
Comparison of Profits of Samsung and Apple
The following figure shows that Samsung is more profitable as compared to Apple (figure d).
Figure d Profitability Comparison (Neo Mobile)
Comparison of R&D spending
Samsung spends more on research and Development as compared to Apple that is explained with the help of following figure (e).
Figure e Comparison of R&D spending (Leber)
Porter’s Generic Strategies
Porter's generic strategies include lower cost strategy, differentiated strategy and focus strategy. Samsung implements a differentiation leadership and cost leadership strategy through the development of its products, particularly smart-phones.
Porter’s Five-forces
Industry Rivalry
The industry rivalry refers to the competition that exists between Samsung and competitors such as LG, Blackberry, Nokia, Apple, etc. however, the rise of smart phone has increased the competition more between Apple and Samsung. Thus, it can be said that there is high industry rivalry.
Barriers to Entry and Exit
The industry in which Samsung operates is referred by low barriers to exit and high barriers to entry because entering in electronic industry requires huge capital and technology to compete and increase market share.
Power of Buyers
The buying power is high in the industry as the buyers have options to quickly switch to the competing brands.
Power of Suppliers
In the industry in which Samsung operates, there powers of suppliers are low as there are several suppliers who offer their services at low rates.
Threat of Substitutes
There is a high threat of substitute in the industry for which Samsung must carefully plan and implement its decision strategies.
BCG Matrix
BCG refers to the Boston Consulting Group. The BCG matrix is used as a tool to evaluate the performance of the company operating in the market. The BCG matrix mainly considers market share and market growth (figure f).
Figure f: BCG Matrix (Brooks)
Samsung has star position in smart-phones due its large market share and higher profits (figure b and d). However, some of its products such as, iPad, and tablets, etc that uses similar technology comes under cash cow that shows good market position but requires little investment to generate high profits. None of its products comes under question mark and dogs.
SCM model of Samsung
Figure g Global SCM (Sandor)
Samsung has one of the best SCM model (figure g). The above SCM model defines that its major objective is to increase speed and flexibility through different activities. The major stages in the supply chain management includes global sales network, various models, numerous partners, global production site and ensuring more than 1 Million sales per day. However, the global supply chain model is different for each product that it produces (Sandor). Besides this, the supply chain model of Samsung includes different activities such as process, governance and system that optimize sales, marketing, development, purchasing, manufacturing, services and logistics. In addition, the company also supports successful supply chain management innovation in other business by offering a series of services and activities such as Process Innovation (PI), SCM diagnosis, Cello (SCL) solution and integration establishment which is explained with the help of following figure (figure h).
Figure h SCM Solutions (Sandor)
Product-Market Expansion Grid
The product market expansion grid is well defined through ANSOFF matrix (figure i). Samsung’s key focus is on market development and product development. However, the company tries to constantly revamp and update its products, i.e., smart-phones with new technology, feature, colors, designs, etc to remain in a competitive position, i.e., product development. In addition, besides operating in existing markets, Samsung aims to expand to different regions.
Figure i ANSOFF Matrx (Harrison and Cupman)
Balance Score Card
A Balance score card serves as a strategic planning and as a management system that helps to align business activities according to the vision and mission of an organization. A balance score card considers organizational performance from four distinct perspectives such as financials, customers, processes and learning & growth (figure j).
Figure j Balance Score Card (Business balls)
Industry and competitors success factors
As Samsung belongs to consumer electronic goods industry, therefore the key success factors for the industry include mainly adaptation to technology and innovation which is not possible without effective and efficient research & development. Besides this, other success factors are marketing and operation. The efficient marketing requires consideration of channel development, consumer marketing, PR, branding, communication, B2B marketing, sales and business development, advertising and market assessment. In contrast, effective operations include business process improvement, channel and retail management, operational effectiveness, organizational transformation, manufacturing improvements, introduction of new products, product planning and supply chain analysis.
With respect to competitor’s success factors, Samsung must consider different success factors of its competitors where its main competitor is Apple. The key success factors of apple include extensive focus research and development, innovation, advertising and differentiation, supply chain management, well recognized brand name and breath of product line. However, these success factors are well considered by Samsung, but it needs to take into account consideration of these factors in more depth to obtain competitive position over Apple.
Comparison of the Samsung’s leadership and culture strengths/weaknesses with Apple
Both Apple and Samsung are highly esteemed brands that serve its customers throughout the world with their consumer electronic products. Therefore, much similarity in the strengths is found in the culture and leadership of Apple and Samsung. Both the two organizations focus on the business transformation and constantly try to take next design advantage through integrating service, hardware, software and connection. Moreover, the leadership approach of both the two organizations is focused on and identifying more social ways to produce innovative products (Shaughnessy). However, with respect to culture approach used by both the two organizations, i.e., Samsung and Apple, learning culture is incorporated in its root because the success of the two organizations is largely dependent on the learning and innovation.
SWOT Analysis of Samsung
The analysis of SWOT (as above) shows the internal strengths and weaknesses besides external opportunities and threats of Samsung in its industry. If the SWOT of Samsung is compared with the SWOT of Apple (main competitor), then almost all the components of SWOT will show similar outcomes except for the television products. Thus, it can be said that Samsung is no more behind Apple in maintaining its strong position in the market particularly with respect to smart phone series.
Works Cited
Harrison, Matthew and Cupman, Julia. “Competitor Intelligence Research & Market Intelligence”. 2014. Web. 18 November 2014.
Leber, Jessica. “Can Apple Still Innovate on a Shoestring?”. 7 November 2013. Web. 18 November 2014.
Neo Mobile. “Top weekly news from the mobile & tech industry selected by Neomobile”. 4 November 2013. Web. 18 November 2014.
Orcutt, Mike. “With Smartphone Sales, Samsung Is Already Pulling Ahead of Apple”. 11 September 2012. Web. 18 November 2014.
Sándor, Nacsa. “Samsung has unbeatable supply chain management, it is incredibly good in everything which is consumer hardware, but vulnerability remains in software and M&A”. 11 November 2013. Web. 18 November 2014.
Shaughnessy, Haydn. “8 Leadership Lessons from Apple and Samsung”. 10 February 2013. Web. 18 November 2014.
Mick, Jason. “Samsung Breaks the Bank w/ $14B in Advertising, But is it Trying Too Hard?”. 4 December 2013. Web. 18 November 2014.
Brooks, Chad. “What is a BCG Matrix?”. 26 December 2013. Web. 18 November 2014.
Dediu, Horace. “The late smartphone adopter paradox”. 5 November 2012. Web. 18 November 2014.
Business balls. “Balanced score card”. n.d. Web. 18 November 2014.
