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Samsung Electronics Strategy & Business Model


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Capstone presentation on Samsung.

Published in: Business, Technology

Samsung Electronics Strategy & Business Model

  1. 1. The Rise of Samsung Electronics Case study Sjoerd van Eerdenburg Evgenii Gvozdev Roelof van Laar
  2. 2. Content Company profile SWOT analysis Market analysis Porters five forces analysis Strategy recommendations
  3. 3. Samsung company profile South Korean company, founded in 1938 Largest chaebol Total revenue € 185.1 bn (2012) Samsung Electronics largest SBU, revenu € 140.5 bn (2012) CEO is Dr. Oh-Hyun Kwon 72 Countries 206,000 employees
  4. 4. Samsung smart phones First SE mobile phone in 1988 Apple introduces smartphone in 2007 SE smartphones unsuccesful at first 3.7% market share at the end of 2009 Google Android launched in 2010 Samsung Galaxy S in June 2010 Market leader in 2012, with 215 m units
  5. 5. SWOT analysis Strengths Weaknesses Strong brand value Own OS and software are unpopular Diversified product line Product cannibalization Innovation and design Main competitors are largest customers High market share Patent infringement
  6. 6. Opportunities Threats Growing Indian market Low cost Chinese products Strong partnerships that can be enhanched Rapid technological change Increasing demand for SE quality application processors Price wars Unrelated profile diversification Advertising revenue goes to/through Google
  7. 7. Market analysis Key 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
  8. 8. Market Overview
  9. 9. Porters five forces analysis Threat of new entrants Competitive rivalry High, mainy Chinese competitors High, fierce competion with Apple, Sony, SK Hynix, etc. Threat of substitutes High, many similar products on the market Customer power High, low threshold for switching Supplier power Low, Samsung market leader Complementors (sixth force) Open Handset Alliance (OHA): Android OS Apple, market creator, large customer
  10. 10. Strategy recommendations Samsung 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
  11. 11. Samsung must research and develop its own software platform, because
  12. 12. 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
  13. 13. Sources Case study: The Rise of Samsung Electronics Samsung Electronics annual report 2012 al.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