Samsung Electronics Co.
Case study regarding Samsung Electronics Co. An external assessment By : Jan Uriel David
I.
Company Background
Samsung Electronics Co., Ltd. is a South Korean multinational electronics company
headquartered in Suwon, South Korea. It is the flagship subsidiary of the Samsung Group and has been the world's largest information technology company by revenues since 2009. Samsung Electronics has assembly plants and sales networks in 88 countries and employs around 370,000 people. For a 2012 the CEO is Kwon Oh-Hyun. Samsung has previously been known for its position as a manufacturer of components such as lithium-ion batteries, semiconductors, chips, flash memory and hard drive devices for clients such as Apple, Sony, HTC and Nokia. In recent years, Samsung Electronics has expanded upon its manufacturing roots and diversified into consumer markets leading to an ever increasing portfolio of products and revenue stream. Samsung Electronics currently stands as one of the world's largest vendors in the mobile phone and smartphone markets fueled by the popularity of its Samsung Galaxy line of devices. The company is also one of the largest vendors in the tablet computer market thanks to its Android-powered Samsung Galaxy Tab collection and is generally regarded as pioneering the phablet market through the Samsung Galaxy Note family of devices. Samsung has been the world's largest maker of LCD panels since 2002, the world's largest television manufacturer since 2006, and world's largest manufacturer of mobile phones since 2011. Samsung Electronics displaced Apple Inc. as the world's largest technology company in 2011 and has been a major part of the Economy of South Korea. In 2011, Samsung was ranked as India's fifth most trusted brand and in 2012, Samsung was ranked as India's fourth most trusted brand by The Brand Trust Report, an annual report published by Trust Research Advisory,. In 2013, The Brand Trust Report, ranked Samsung as India's second most trusted brand.
II.
Case Proper
Samsung’s external assessment helped greatly in achieving its position right now. In the latest data of Samsung Electronics Co. position in market share, Samsung is currently the no. 1 Smartphone provider worldwide beating Apple’s [Apple Co.] position 2 yr s ago. Samsung kept its firm lead over Apple in the smartphone arena last quarter, though both companies saw their shares drop. For the second quarter, Samsung's slice of the global smartphone market inched down to 30.4 percent from 32.2 percent a year ago, IDC said in a report released Thursday. However, shipments jumped to 72.4 million from 50.3 million over the same period. The surge in shipments came hot on the heels of the debut of the Galaxy S4. But the Galaxy S3also picked up buyers thanks to price discounts ahead of the launch of its successor, IDC said. Apple's smartphone market share last quarter fell to 13.1 percent from 16.6 percent for the prior year's quarter. Shipments rose to 31.2 million from 26 million, marking the company's second-lowest year-over-year iPhone growth rate in almost four years. IDC pegged the slower growth on buyers holding off on purchases ahead of the iPhone 5S. IDC expects shipment growth to rise once Apple kicks off its rumored low-cost iPhone and expands into prepaid markets later this year. Other smartphone makers, such as LG, Lenovo, and ZTE, saw growth in both market share and shipments, this is a growing threat for Samsung because a lot of company
are using Android OS.
They are fighting with co-android users company and Apple iOS users.
Overall, 237.9 million smartphones shipped last quarter, a 52 percent gain from the 156.2 million shipped during the same quarter in 2012. Samsung’s success can be traced when it included Android OS into its phone line starting with Samsung Galaxy traced back last 2010. Android OS is currently the number one Mobile Operating system next to iOS, the Operating system of Apple.
The only thing left for Samsung to dominate is the Tablet market wherein Apple still dominates. Apple started this new line of product that is now known as Tablet. Although samsung’s share in the tablet market is growing, the influxes of low cost same OS [Android] are rising in some parts of the world that makes Samsung in a rough shape.
III. Case Analysis A. Viewpoint In my own point of view, Samsung did a great job in diversifying into the Smartphone market from a mediocre phone producer. We know that Samsung also produces a lot of our household appliances like TV, Refrigerator, Microwave and the like. Having a company that has the capacity to produce new technology makes it not hard to create and take a bet on the growing demands of the customer like the demands for Smartphone and tablets. B. Significant Case facts Although Samsung is currently the number 1 Smartphone producer in the world since it integrates Android OS into its line of phones. External assessment should still be implemented and be used in order to avoid further problems. Some of the things that Samsung should focus and or the significant topics should be its dependent to Android OS, the growing Android fragmentation, the getting-soconfusing line of phones that are being released every now and then and the competition with Apple, it’s greatest nemesis. C. Problems Even a successful company like Samsung cannot avoid problems that arises on your way to the golden goal. One of these is the current Samsung vs Apple court stand-off for their patents that may affect greatly financially and its brand name. Apple filed a case regarding patent infringement South Korea's Samsung Electronics infringes on portions of two Apple patents on digital mobile devices, the U.S. International Trade Commission said. The panel issued orders prohibiting Samsung from further importing, selling and distributing devices in the United States that infringe certain claims on the patents.
The ruling was the latest in a battle between Apple and Samsung that has spread across some 10 countries as they vie for market share in the lucrative mobile industry.Meanwhile, a U.S. appeals court wrestled on Friday with a separate request by Apple for a permanent injunction on sales of some phones made by Samsung, in a case that could have a deep impact on patent litigation.
Another problem that Samsung is currently experiencing is its dependent to Android OS. Apparently, Android OS is experiencing fragmentation of users using the current Android OS. Only 32 percent uses the current Android OS which is Jelly bean, and 23 percent uses Android earlier OS which is Ice cream sandwich. This is bad because users do not use the current OS that Android innovated because of this, old OS users still feels the problem that Android already fixed in the new OS, leading to consumer not satisfied with the mobile phone itself like Samsung, instead of blaming the old OS he/she is using and not knowing that he/she can update.
Comparing to Apple’s iOS, Apple users tend to be updated with their OS because apparently 95 percent uses the current OS and only 5 percent uses the
iOS. Mainly because iOS updates are exclusively for Apple products and they can require their costumers to download it because they own the OS itself instead of Samsung, because Samsung does not own android. Lastly the problem that Samsung should focus more is their revenue. Although Samsung is no. 1 smartphone provider, they still lag in producing profits compare to Apple. This is mainly because of pricing in Samsung’s end. In recent data, Apple still produces more profit comparing to Samsung. D. Alternative Courses of Action We enumerated 3 problems that Samsung still experience, these are : 1. Legal Battle with apple regarding copyright infringement. 2. Fragmentation of its OS, Android. 3. Profit making compare to Apple. The first problem should be fixed by hiring the most competitive legal persons in the company to avoid further problems like this. This can be fixed also by filtering proposals of their employee that focuses on making the mobile’s blueprint. The second problem should be fixed by having a partnership with Google, the owner of Android OS. Currently Samsung doesn’t have any strong ties wit h Google although they have deals because Samsung is using their Operating System. Lastly, the problem should be fixed by carefully assessing price and the costing of the phone along with advertising and the like. E and F. Analysis of ACA’s and Recommendation Recommended alternative courses of action that were mentioned above analysis are :
1. Although hiring of more competitive legal persons in the company may cost a lot. This will have a long term benefit of not incurring damages of a court dispute. Samsung lost 10 billion dollars in their recent dispute with Apple. 2. Having a partnership with Google is very beneficial with Samsung’s future of smartphones and tablets because having partnership with the owner of the OS itself has the greatest advantage compared to other companies that uses android without partnership with Google. Growing numbers of companies using Android OS is a growing threat to Samsung and the only way to prevent this is acquiring it wholly or partly with partnership with Google and making the companies who uses android pay a subscription fee or the like to return the invested money that Samsung incurred with its partnership with Google. Because currently Android OS is a free source OS. 3. Cost in assessing pricing and cost of production for profit maximization will be bit costly since it may require Research cost and development but one thing’s for sure. It will pay off in the future.
G. Implementation Plan I. Targets
To hire competitive legal employee to avoid further legal problems like copyright infringement and the like.
To have a partnership with Google for Android’s acquisition.
Assessment of cost of production and pricing for profit realization and maximization.
III.
Timeframe 1-5 years. This is important and very urgent matters that Samsung should fix as soon as possible.
IV.
Manpower requirements a. Lawyers and Parelegal Consultant b. Researchers for Assessment of Cost production and pricing.
H. Fallback Position If ever Samsung can’t make/do any of these, I can say that they will be de -throne anytime by Apple and other co-android companies.
