Case Study Samsung
Before the Korean electronics giant Samsung entered the 1998 Asian economic crisis, it was widely
regarded as a supplier of cheap imitations of superior Japanese products. At the time, the focus of its
business was on memory chips and low margin items such as microwave ovens and cheap TV’s,
which were mainly sold through discount stores. Following a major restructuring of its strategy and
operations, it has turned itself into the fastest growing player in the global electronics industry, with
sales of approaching US$305 billion expected for 2013. With recent net income estimated at $22.3
billion, it has become the most profitable new technology company ahead of Microsoft, IBM and Intel.
Employing approximately 489,000 people in 90 countries, the company consists of five main
consumer –related business units, the details of which are shown below;
Samsung Electronics Ltd has built up its position through rationalisation and diversification of its
activities, together with strong marketing and innovative product design. It is now recognized as the
world’s leading consumer electronics’ company ahead of the Japanese Matsushita, which produces
JVC, Panasonic and Technics brands, and Sony which markets a range of products under the parent
brand name. From its strong position as a manufacturer of essential electronic components, Samsung
has built a reputation as a major consumer brand in a range of different product categories. The
company is the market leader in the microchip and TFT-LCD screen sectors and is the world’s largest
producer of colour TVs, monitors and VCRs. It is also now the second largest producer of mobile
handsets having overtaken Nokia and now Apple.
Samsung has used its success in the cell phone market to drive its brand performance, which can be
attributed to a strategy of delivering innovative products at premium prices. According to their chief,
Eric Kim, much of their achievement has stemmed from identifying at an early stage that the cell
phone was changing ‘from a utility item to a fashion statement’. This led them into the camera phone
market and they became the first producer to equip a cell phone with an MP3 player. They are
currently launching a mobile TV phone as well as talking phones that can read mail Short Message
Service(SMS) messages to listeners. In addition they are using their powerful chip technology to drive
cell phones that act as a personal entertainment module, which can hold 10,000 songs and over 10
hours of video film and play 3-D video games. Such innovation has been at the heart of the Samsung
brand, whose ‘coolness’ factor received a big boost when one of its futurist phones was featured in
LCDs Semiconductors Telecommunications
Large LCD &
DVD and CD
Mobile phone handsets
3BUS747 Assignment 1 – 2014-15 Tri 3
the follow up instalments of the Sci-fi movie The Matrix; consequently its handsets are priced up to
40% higher than most of its rivals.
The change in direction of the company over the last decade is based on the relisation that there was
more money to be made from innovating and setting the pace than from producing only me-too
products. To do this has not only been able to draw upon its extensive manufacturing and R&D
capability (20,000 researchers in 15 laboratories worldwide) but has also worked closely with strategic
partners including competitors as well as customers in establishing new industry standards. The
approach which has proved so successful in their cell phone business is now regarded as the basis
for further growth in all customer sectors, with a particular emphasis on the use of wireless technology
in the home.
Supporting all its developments has been the extensive use of marketing to communicate with
customers and build a brand which is increasingly recognized as a world-leader. However, in order to
achieve its ambition of becoming and remaining number one in the consumer electronics market, it
plans to invest even more in research, development and design (up to US$6 billion) and at the same
time review its brand positioning.
The above case material has been taken from Samsung’s official website and other various sources and may not be a
true reflection of Samsung actual position today. It use is for academic assessment purposes only
Write a report 2000 words long that:
1 Discuss how the PESTLE forces have influenced changes in the design,
use and application of products in the electronics environment.
2 Explains the concept of positioning and how this analytical approach can
3 With reference to Samsung’s situations, outline the various stages of the
assist in identifying target market opportunities of Samsung’s cell phone
product range .
Product Life Cycle and critically evaluate how each stage might impact on
the company’s marketing decision-making process.
communications tools when developing a communications campaign.
4 Explains the factors that influence the choice of the various marketing
Note: Approximate length of each question 500 words.
a) Consider the changes in terms of the types of products offered today, how the products are
used, what they represent to the people who use them, how important they have become in
their everyday lives. Now discuss the impact of the PESTLE factors/drivers in bringing about
b) Two part question; the first of which expects you to discuss the concept of positioning
generally, the second relates to how an understanding of positioning can help marketers
explore target market opportunities in relation to Samsung’s cell phone range of products.
Students should different perceptual maps for illustration.
4BUS747 Assignment 1 – 2014-15 Tri 3
c) Again a two part question, the first expects candidates to discuss the concept of Product Life
Cycle for the Samsung’s product portfolio and the second discuss how this concept affect
d) This question expects the candidate to explore the various promotional techniques/tools
available to Samsung and to discuss the factors that influence their choice when developing a
marketing communications campaign. Remember Samsung will sell to both B2C and B2B
Report format required presented as; To; From; Subject; Date. Headings and sub-headings can
be used to separate out individual answers to the 4 questions.