HOW SAMSUNG HAS CAPTURED GLOBAL INDUSTRY LEADERSHIP POSITION? COMPARING ITS KEY STRATEGIES AGAINST MAJOR RIVAL: APPLE

1. SMARTPHONE
INDUSTRY Halil Yildirim

2. TABLE OF CONTENT
 Introduction
Market development
Financial positions
Competitive advantage
Changes and future of the industry
 S-T-P strategies
 Porters’ 4P’s
 Recommendation
 Sources

3. INTRODUCTION
 South Korean, founded in 1938
 Wide range of product
categories:
Smartphones, Tablets, Laptops, TV’s,
Cameras, Office electronics (Printers,
Hard Disks etc.), Home electronics
(Refrigerators, microwaves etc.)
#1 in the smartphone market
since 2012
 American, founded in 1976
 More narrow range of product
categories:
Smartphones, Tablets, Laptops,
Computer, MP3 player, digital media
player, OS,
 #2 in the smartphone market Several
lawsuits


4. MARKET SHARES
 Development in market shares
Apple  18.8% (2011) to 11.7% (2014)
Samsung  17% (2011) to 24.9% (2014)
 Product launch parallels (top models):
* 2 in Q3 2014
Vendor 201
1
201
2
201
3
201
4
Apple 1 1 1 0*
Samsun
g
2 3 4 4

5. FINANCIAL POSITION
 Share price: $118.93 0.07(0.06%)
 Volume: 24,814,402
 52wk Range:70.51 - 119.75
 Market Cap: 697.51B
 P/E ratio: 18.44
 Revenue Growth: 21.80%

6. FINANCIAL POSITION
 Share price: $1155.38
 Volume: 196,891
 52wk range: $968 - $1349.160
 Market capacity: 151.17 B
 P/E Ratio: 7.50
 Revenue Growth: 13.60 %

7. COMPETITIVE ADVANTAGE
 Own chip manufacturer
 Control on manufacturing process
 Vertical integration
 Strict Software standards
 Closed eco system
 Easy sync
 Many suppliers (Hon Hai Precision, Pegatron Corp.)

8. COMPETITIVE ADVANTAGE
 Manufactures everything
 Bring products to the market faster
 Able to rapid change
 Pricing strategy
 Largest tech. Company because of the revenue
 No Suppliers

9. CHANGES AND FUTURE OF
THE INDUSTRY

10. CHANGES AND FUTURE
 Disruptive innovation & Incremental innovation
 Updated software
 Mobile payment

11. SEGMENTATION
 Geographical:
 Global presence  own retail stores,
electronics stores
 61 countries
 Demographical:
 Age: 16-29  students, young adults,
business professionals
 Income: Middle/high
 Psychographic:
 Technology enthusiasts
 Customization
 Geographical:
 Global presence  own retail stores,
electronics stores
 62 countries
 Demographical:
 Age: 14-55  students, young adults,
business professionals
 Income: High (/middle)
 Psychographic:
 Music/gamer, media/design enthusiasts
 Simplicity

12. TARGETING
 Primary target group
Upper middle class
professionals
 Secondary target
group
High school/college
students

13. POSITIONING
 High quality
 Mass consumers
 Wide price range
 Feature oriented
 Premium brand
 High quality
 High price
 Design and trend oriented

14. PRODUCT (4P’S)
 High-end: Galaxy S5, Galaxy
Note 4
 Mid-range: Galaxy S5 Mini
 Low/mid-range: Galaxy Ace 4
 Premium: 6, 6 Plus, 5s
 Mid-range: 5C

15. PRICE (4P’S)
 Cost (Hungary):
 Galaxy Note 4 ~ $ 975
 Galaxy S5 ~ $ 735
 Galaxy S5 Mini ~ $ 490
 Galaxy Ace 4 ~ $ 205
 Strategy:
Price skimming
Competition pricing
 Cost (Hungary):
 6 Plus ~ $ 1 035
 6 ~ $ 900
 5S ~ $ 650
 5C ~ $ 550
 Strategy: Price skimming

16. PLACE (4P’S)
 Electronic retailers



17. PROMOTION (4P’S)
 Tradeshows, Flyers and Postcards
 Videos
 Workshops & Events
 Spent $ 14 billion on advertising
in 2013
 Cultivate an air of secrecy and
intrigue to fuel speculation and
buzz
 Create the illusion of scarcity to
increase demand
 Focus on a "friendly" customer
experience
 Wow customers through design
and packaging
 Create a passionate brand
community of fans who identity
with Apple's brand values

18. RECOMMENDATION &
STRATEGIESMARKETING SPENDING OF APPLE AND
SAMSUNG

20.  Below 42% of iPhone owners had owned an iPhone previously
 While 43% of Samsung owners had previously owned an Android phone.
 Apple does a better job of getting Android users to convert to iOS with about 20% of its customers coming from
Android vs. only 7% of Samsung customers coming from iOS.
 Apple has a bit higher retention rate at 42% vs. 38% for Samsung. Apple does a better job of switching Samsung
customers at 19% vs. Samsung only converting 7% of its users from Apple.

22. RECOMMENDATION FOR SAMSUNG
(MARKETING )
-Increasing Brand Loyalty. Not too focused on the features.
-Creating own Ecosystem in order to differentiate itself from other Android Phones. It will increase its brand
loyalty as well
-Marketing Activities of Samsung is quite promising both in digital and conventional media. (Buzz
Marketing, Media Marketing, Sponsortships)
--Increasing the Loyalty! (Low compared to Apple) It’s more about positioning and bonding activities than
simply adverising via Celebrities or Media. The Message , Contend is more important than the popularity
itself.
-Ie: ‘Celebrity Packed Selfie’ on Oscar Show with Galaxy SIII
--Company should more rely on TV Shows, appearence on the movies etc..
-- Instead of following position , company should lead both in communication and production* (“The Next
Big Thing is here”, ‘The Next Big Thing’

24. RECOMMENDATIONS FOR
APPLE
-Apple’s main marketing strategies- create brand loyalty and excitement
-“Apple lifestyle”. Their commercials are simple, yet elegant, and displays this “Apple lifestyle”
to the consumer.
-product placement in movies
- 30% of films from 2001 to 2011. From 2008 to 2011 Apple has reportedly spent $647
million on iPhone placement in movies
--Need to change its marketing strategy from overlaying on emotional evocative ads.
--Using of Buzz Marketin, using of Celebrities

25. SOURCES
 http://www.idc.com/prodserv/smartphone-market-share.jsp
 https://prezi.com/635kt-vpajlq/segmentation-strategies-used-by-apple-and-
samsung/
 http://stpsamsungmobiles.blogspot.hu/
 https://prezi.com/9varrsfnvjfd/strategy-analysis-formulation-of-apple-inc/
 http://www.slideshare.net/mandarghanekar/group-assignment-22
http://matiesmarketing244.com/2013/09/18/samsung-vs-apple-the-marketing-
war/
http://www.forbes.com/sites/chuckjones/2013/08/20/apple-and-samsung-who-
could-win-the-smartphone-war/