“samsung Electronics Successful Growth Strategy in the Mobile Phone Business”.

“Samsung Electronics successful growth strategy in the mobile phone business”.

 By wansanthaneel

Introduction

Mobile industries has rapidly developed in 1997 – 2003 there are so many mobile service providers can be seen Samsung electronics, Motorola, Apple phone, Hutchinson, Ericson, LG  they are pioneer in the market. They are faced various experience in their career path to ach their targets and goals. South Korean cellular market is latecomers in the market but they captured the market by doing new strategy formulation by innovate the information by doing the research by getting and hiring expertise in the technology.

Overview of the Samsung production

In 1969, the Samsung electronics (SE) has been established in North Korea to provide better service to the customer under the Samsung product categories. This company has been more popular for the electronic items in the works in additionally this company has been merged with Sanyo in Japan who produced black and white television then after three years , they stated to produce own television under the Samsung brad name at 1970. Their product categories are home appliances, such refrigerators, color televisions microwave ovens, iron.

In 1980, SE has been expanded its business lines to personnel computers, semiconductors and telecommunications networks and devices which popular cheaper alternatives to the high end Japanese production. And boosted up a leading semiconductor manufacturer in the DRAM (Dynamic Random Access Memory) market. Top management of the SE has been taken strategy to strive the word class market with concentrating their resources. By doing collaboration with the Japan  giving technology transferring, introducing technology licensing systems establishing Research development unit in the organization to facilitate all to  train and instruct to the technology awareness and new product development. SE has been recruited experts in the semiconductors human resource to giving more compensation from Korea and America. Although financial crisis in 1997 and dropped the turnover drastically within this situation. SE tried to improve the quality and image of the production.

End of 1997, SE already has been started to restructuring initiatives in the organization with requirement of the global standards and had been laid down 16000 employees and sold unprofitable business unit and manufacturing facilities to maximize  profit.  SE already has been introduced new strategy to develop the mobile market introducing New LCD (Liquid Crystal Display) and diversify the business that emphasis the profitability and shareholder value by quality, innovation, and globalization by changing the organizational culture and their value. With this diversification strategy, SE could achieved their higher profit in 2003 because they already introduced CDMA , GSM, 3G to the market those kind of product more popular in that level in which that production has boosted as a market leader. Now two third of from total sale currently exports by the SE. main strength of Samsung has been established research and development unit there were 19700 researchers working. Every minute they are finding new design, new approach, and new techniques

Samsung expected branding would change the customer perception Samsung mobile phone and build up their trust. But according to Fukuda shigeohas been criticized Samsung’s problem in design practices and offered recommendations on appropriate technologies, development of procedures, and design management. (Boon young lee and seungJoolee, 2004, case study Samsung mobile business). The second success factor is internal and external competition especially in design and component innovation. Attractive cellular phone design may be stimulated customer mind to buy that product. Third success factor is south Korean cellular phone manufacturers have used through customized designs with foreign mobile operators and foreign research and development centre to localize modifications and designs to meet foreign market demand then they can get the feedback regarding the new product or services from global customers and start the innovation process all over the model introduced. (Jin Li Hu and Yu Huseh Hsu. The more interactive, the more innovative, a case study of South Korean cellular manufacturers, 2000. 86, 87)

The Growth Potential: An approach to the model

        As per the growth strategy model proposed by Prof. Ansof, an organization could focus on product and market as to develop strategies for growth. The tangible outcome of applying the growth strategies is all about volume and value growth. As per the different options proposed in the model, “Market Penetration” could be figured out getting the maximum exploitation within the existing market. Accordingly when it is selecting competitive strategies, as company has to select most appropriate strategy with existing stage. Some companies are in the growth stage, some are in introduction stage, some are in maturity stage, and some are in decline stage as it is, has to change the strategy and select appropriate one. Igor Ansoff presented a matrix that focused on the firms’ present and potential products and markets. By considering ways to grow via existing products or new products and in existing markets and new markets. There are four possible component can be seen.

Samsung electronic - The market penetration strategy for mobile phone

That is least risky that is based on the firm’s existing resources and capabilities. In a growing market, simply maintain the market share will result in growth, and there may be exist opportunities to increase market share. Here already have existing market and existing product also then company try to use the penetration strategies when concerning the competitors’ level and concerning their approaches, existing company has to use the strategies.

Management team has decided to move new market or do a much better job capturing a current one. Then as company they want a strategy and plan for their executing it. Before going to the penetration the market has to concern following thing,

• Who are your consumers and what are their preferences and trends?
• Who is your competitors and what is their market position?
• How will your sales and marketing team enter and capture the market?
• How will your production and support teams keep up with a rapid increase in sales?
• What is your infrastructure and can it handle rapid expansion?

Who are the Samsung electronics’ consumers and what are their preferences and trends?

Samsung mobile market is rapidly develop every day and they try to find ways to attract the both new customer to the market and attract competitors existing customers. As top management has to concern why non buyers aren’t adopting to our product and why buyers have gone with the competition, it requires a strategic option to business development strategies.  Along with the said, the company has moved to product broad differentiation as the competitive strategy, and the execution of the said happened as introducing differentiated new products to the market where regional wise product differentiations too took place.  Some of the initiative actions and priorities were found in Samsung along with the said;