STRENGHTS 1. Very high R&D expenditure resulting in one of the strongest patent portfolios among the competing technology companies. Innovation is the success key in the technology industry and usually, the more a company spends on research and development the more innovations it develops. Samsung Electronics has spent $10.4 billion for R&D in 2013, which was the second largest amount spent for R&D in the world (Strategy+Business, 2015).
2. Industry leadership position in smartphones. SEC is the largest technology company by revenue in the world and has the biggest market share of smartphones in the world. (Statista, 2014).
3. Brand recognition and reputation. Samsung brand is one of the most valuable and most recognizable brands in the …show more content…
Vertical integration and manufacturing outsourcing resulting in low production costs. SEC in its smartphone business is a vertically integrated company. The company designs and manufactures its own phones and takes care of its marketing and sales. The key for every vertically integrated business is to manage activities inside the organization with lower costs than it would cost to buy the finished products from the external company. SEC, unlike other smartphone developers, manufactures its own chips, displays and batteries. This reduces the costs of the key inputs that are used in the smartphones and results in lower production costs. The company also outsources most of its manufacturing and assembly jobs to low cost countries like Vietnam to further reduce the costs. Therefore, vertical integration helps the company to sell the products at moderate prices while maintaining the acceptable operating profit margins. Few other companies have such strength (Financial Times, …show more content…
Positioning the company as high-tier, mid-tier and low-tier smartphone vendor. In other words, the company is over positioning itself in the smartphone market, which weakens the overall company’s position against its rivals. SEC is the largest smartphone manufacturer in the world and has one of the largest smartphone portfolios among the competitors. The large smartphone portfolio allows targeting the wider consumer segment and capturing larger market share, but it also adds to the production costs. That’s one reason why Samsung’s strategy to position itself as a high-tier, mid-tier and low-tier smartphone vendor is a weakness. Second, company is incapable to focus on one or two most important consumer segments and loses its competitive advantage. Currently, Samsung successfully competes in its most profitable high end smartphone business with Apple, but is losing its market share to Xiaomi and Huawei on low end and to Lenovo on mid-level smartphone segments. That’s because the company can’t figure out how to win in all segments at the same
2. Industry leadership position in smartphones. SEC is the largest technology company by revenue in the world and has the biggest market share of smartphones in the world. (Statista, 2014).
3. Brand recognition and reputation. Samsung brand is one of the most valuable and most recognizable brands in the …show more content…
Vertical integration and manufacturing outsourcing resulting in low production costs. SEC in its smartphone business is a vertically integrated company. The company designs and manufactures its own phones and takes care of its marketing and sales. The key for every vertically integrated business is to manage activities inside the organization with lower costs than it would cost to buy the finished products from the external company. SEC, unlike other smartphone developers, manufactures its own chips, displays and batteries. This reduces the costs of the key inputs that are used in the smartphones and results in lower production costs. The company also outsources most of its manufacturing and assembly jobs to low cost countries like Vietnam to further reduce the costs. Therefore, vertical integration helps the company to sell the products at moderate prices while maintaining the acceptable operating profit margins. Few other companies have such strength (Financial Times, …show more content…
Positioning the company as high-tier, mid-tier and low-tier smartphone vendor. In other words, the company is over positioning itself in the smartphone market, which weakens the overall company’s position against its rivals. SEC is the largest smartphone manufacturer in the world and has one of the largest smartphone portfolios among the competitors. The large smartphone portfolio allows targeting the wider consumer segment and capturing larger market share, but it also adds to the production costs. That’s one reason why Samsung’s strategy to position itself as a high-tier, mid-tier and low-tier smartphone vendor is a weakness. Second, company is incapable to focus on one or two most important consumer segments and loses its competitive advantage. Currently, Samsung successfully competes in its most profitable high end smartphone business with Apple, but is losing its market share to Xiaomi and Huawei on low end and to Lenovo on mid-level smartphone segments. That’s because the company can’t figure out how to win in all segments at the same