BY:

INMACULADA SANCHEZ CANO

PROFESSOR: DR. THOMAS GEI

SAMSUNG BUSINESS PLANNING 2014

-INDEX-
-Present Strategies- ...................................................................................................................................... 3
1.Introduction .......................................................................................................................................... 3
2. Vision And Mission ............................................................................................................................... 3
3. Previous Directional Strategies ............................................................................................................ 3
4. Previous Generic Strategies ................................................................................................................. 4
5. Previous Products To Offer .................................................................................................................. 6
6. Previous Market Segments To Target ................................................................................................. 7
7. Previous Market Position Tactics ......................................................................................................... 8
-Internal Analysis- ......................................................................................................................................... 9
-Porters Five Forces Analysis- .................................................................................................................... 10
-PESTEL Analysis- ........................................................................................................................................ 11
1.Political ................................................................................................................................................ 11
2.Economical .......................................................................................................................................... 11
3.Social ................................................................................................................................................... 11
4. Technological ...................................................................................................................................... 11
5. Environmental .................................................................................................................................... 11
6. Legal ................................................................................................................................................... 11
-SWOT Analysis- ......................................................................................................................................... 12
-Future Strategies & Innovations- .............................................................................................................. 13
1. Samsungs Future Mission Statement ................................................................................................ 13
2. Future Directional Strategy Samsung ................................................................................................. 13
3. Future Generic Strategy ..................................................................................................................... 14
4. Future Products to Offer .................................................................................................................... 15
5. Future Innovations Robots ................................................................................................................. 15
6. Mobile Payment System ..................................................................................................................... 16
7. Value And Revenue Propositions. ...................................................................................................... 16
8. Less Consuming LCD Screens: ............................................................................................................. 17
9. Next Generation Smartphone And Tablet Application Processor: ..................................................... 17
-Actual Innovations- ................................................................................................................................... 18
1. Home Appliances. ............................................................................................................................... 18
2. Cameras ............................................................................................................................................. 18
3.Mobile Phones And Televisions ........................................................................................................... 18
-Pricing Strategy and Channels of Distribution Of Samsung- ..................................................................... 19
1. Penetration, Market Skimming and Value Pricing .............................................................................. 19
2. Samsung Channels Of Distribution ..................................................................................................... 19
3. Convenience Of Those Channels Of Distribution And Prices. ............................................................. 19
4. Pricing & Distribution Strategy For 2015 ............................................................................................ 20
-Market Segmentation- ......................................................................................................................... 21
[] []

1. Segmentation ..................................................................................................................................... 21
2. Market Targeting ............................................................................................................................. 21
[]

3. Kotler Segments (2003) ...................................................................................................................... 21

4. Samsungs Positioning Strategy ...................................................................................................... 22
[][]

2
SAMSUNG BUSINESS PLANNING 2014

-PRESENT STRATEGIES-
1.INTRODUCTION
Samsung Electronics Corporation is a South Korean multinational electronics company. It is the
flagship subsidiary of the Samsung Group. The company, according to 2011 unit sales, is the worlds
largest mobile phone maker and the worlds second largest semiconductor chip maker. Since 2006 it has
been the worlds largest television manufacturer and the worlds largest maker of LCD panels for eight
consecutive years.

2. VISION AND MISSION

Samsungs vision is based on the idea that with technological innovation we could create
solutions for future issues. Technology allows the development of companies and people in emerging
markets by entering digital economy.

"E"
technology
allows to
operate the
most ef7icient
production
processes and
management

E-digital
company
COMPANY
Further strengthening
DIGITAL
the organization to
continue as market Create products
leaders as well as being that lead the
respected and industry
responsible with all our
stakeholders

Samsung wants to develop new opportunities and new markets so they can continue as market
leaders as an E-digital company.

3. PREVIOUS DIRECTIONAL STRATEGIES

Every company needs to grow since its foundation in order to maximize shareholders funds in
the long run and to increase assets.
The way to grow is through diversification strategies such as: vertical integration related or
unrelated diversification. In our case, we are going to focus on Samsungs strategies:

3.1. Vertical Integration:
Samsung is a good example of vertical integrated company because it monopolizes all aspects
of the manufacturing process (raw materials-electronics). Besides, Samsung has entered smartphones
market thanks to the development of Samsung Galaxy S series and the tablet market with Galaxy Tab,

3
SAMSUNG BUSINESS PLANNING 2014

competing directly with Apple. Although Samsung is a specialized supplier most of its revenues comes
from companies of TV production.

3.2. Diversification.
Since its start producing black and white televisions, Samsung has not stopped innovating. In
the seventies began its diversification, integrating its manufacturing processes from raw materials to
end products. As a result, many new companies were created, including Samsung Heavy Industries
Company in 1974 and Samsung Shipbuilding and Samsung Precision Company (now Samsung Techwin)
1
in 1977.
Samsung's core technology businesses diversified and expanded globally during the late 1970s
and early 1980s. In the early nineties, there were great opportunities for the development of high
technology.. Samsung, like many companies began to rethink their technology and offer new products.
Here began the development of mobile phones and Samsungs continuous innovation.
We can say that Samsung is a clear example of a diversified company. The question is what kind
2
of diversification they practice?
Samsung follows an unrelated diversification, that is, multi-business model with the goal of
increasing profits. This company produces
Electronic market: mobile phones, computers, customers admire tablets because they meet
both market and peoples needs.
Home appliances: microwaves, refrigerators, ovens, air conditionerswhich stylishly designed,
with digital features and environmentally friendly.
TV business: with LED TVs we have had an explosive growth and we are in the top position of
the market. To sustain this leadership, Samsung is innovating with 3D technology televisions.
Medical equipment: better clinical environment for physicians and patients through highly
reliable diagnostic results, and easy operations.

4. PREVIOUS GENERIC STRATEGIES

Samsung set into the market the Galaxy Y Duos for Rs 8500 following both cost leadership and
differentiation strategy, reaching a stuck in the middle position. When first set into the market it was
the most economical Android telephone while at the same time it offered special features along with
3
the mobile phone having an attractive layout and shape. Following this same stuck in the middle
strategy, Samsung has been able to launch a Galaxy Tab 2, which also works as a mobile phone. It is of a
lower cost than its competitors (for example apple) and offers a differentiated product: it counts with a
bigger screen (10.5 mm compared to apples 8.8mm, and weighs less, 344 grams to 601 grams
4
respectively).
Samsung was able to set the low price for the product as they count with an offshoring
method, where the company uses the assets and facilities they already have in order to produce their
own product achieving a lower cost: for example the company has their own manufacturing programs in
5
their factories in China and India.
Samsung is also able to provide a differentiated product along a broad target market with for
example their Ultrabook, which is the thinnest laptop, (weighing 1,03Kg) in the windows line, being
6
effective and attractive towards customers needs and eyes. Their launching of the Samsung Galaxy III

1 http://www.samsung.com/us/aboutsamsung/corporateprofile/history05.html
2 http://www.samsung.com/us/aboutsamsung/ourbusinesses/businessarea.html
3 http://www.slideshare.net/neoabhishek/generic-strategy-samsung
4http://www.pcworld.com/article/249851/samsung_launches_lowcost_android_40_tablet.html
5 http://www.craigeisenberger.com/samples/craig_eisenberger_samsung.pdf
6 http://www.slideshare.net/neoabhishek/generic-strategy-samsung

4
SAMSUNG BUSINESS PLANNING 2014

was a complete boom in the market. Their marketing strategy, were they announced the product but
did not release it to the market until months later created expectancy for customers.
The Android telephone offers customers services such as wireless charging, an application
where the phone will recognize faces offering to share things directly, call, message in a direct manner,
as well as validating the use of MicroSIMs. These services contribute to the many others the
7
smartphone offers, helping differentiate their product in a noticeable way .
Samsung has used a focus strategy set in India (best mobile phone market after China, able to
reach a 13% contribution to the handset commerce), where they launched in 2007 a variety of mobile
phones counting with a differentiating focus; long-time battery, integration of camera; achieving a high
number of sales. In 2010 their first Galaxy S and Wave. Focusing in this narrower market helped them
achieve the reach to a high number of customers, gaining reputation and loyalty. Today, they use a
more cost focused strategy where they offer smartphones (todays trend with distinguished services) at
a lower price to reach higher masses, which they can afford due to their Research and Development and
8
manufacturing programs.

7 http://techsplurge.com/9048/boom-samsung-galaxy-s-iii-has-been-launched/
8http://www.rediff.com/business/slide-show/slide-show-1-special-how-samsung-is-making-it-big-in-india/20110505.htm#1

5
 SAMSUNG BUSINESS PLANNING 2014

5. PREVIOUS PRODUCTS TO OFFER

Samsungs 1970- Black-and-white TV (model: P-3202) production started by Samsung-Sanyo.
beginnings

1972- Began production of black-and-white televisions for domestic sale.
Diversifying
1974- Began washing machine and refrigerator production.
in Industries
and 1977- Started export of colour televisions.
Electronics 1979- Began mass production of microwave ovens.
1980- Began producing air conditioners.
Entering the 1983- Began production of personal computers (PCs).
Global
Marketplace 1986- Developed the world's smallest, lightest 4mm video tape recorder.

Competing 1991- Development of mobile phone handset completed.

in a 1992- Developed mobile phone system.
Changing
Tech World 1993- Samsung Advanced Institute of Technology (SAIT) developed first-ever digital video disk
recorder (DVD-R).
1994- Samsung Aerospace developed the world's first four-power zoom camera.
Samsung Heavy Industries developed first Korean-built electric car (SEV-III).
Becoming a
1995- World's first 33" double-screen TV introduced.
Global
Force Samsung Advanced Institute of Technology developed world's first real-time MPEG-3
technology.
1996- Developed world's fastest CPU (central processing unit).
1997- Developed world's lightest PCS (105g).
Advancing
1998- Development of completely flat-screen TV completed.
the D igital
Frontier 1999- Developed wireless Internet phone (Smartphone), a small, multi-function phone.
Developed the world's first 3D TFT-LCD Monitor.
2000- Develops the High Definition Digital TV
Develops Unique All-in-one DVD Player.
Launches PDA phone.
2001- Develops World's first 40 inch TFT-LCD.
2002- Launched new high-definition TFT-LCD colour cellular phone.

Pioneering Development of the 54''TFT-LCD, the largest digital TV monitor in the world.
the Digital 2003- Released the first HD DVD combo.
Age 2004- Released 46'' LCD TV for the first time in the world.
Developed a 3rd Generation Optical Blu-Ray Disc Recorder.
Produced the first wrinkle-free steam washer.
2005- Developed the first-ever speech recognition phone.
Released the world's first 7 mega pixel camera phone.
Developed the largest Flexible LCD Panel.
2006- Launched the worlds' first Blu-Ray Disc Player.

6
 SAMSUNG BUSINESS PLANNING 2014

Launched ''Stealth Vacuum,'' a vacuum cleaner with the world's lowest level of noises.
Unveiled 10M pixel camera phone.
2008- Launched OMNIA phone.
2009- Developed the worlds thinnest 3mm LED TV panel.
Released the worlds thinnest watch phone.
Released the worlds first infrared video phone.

Pioneering Released its 120Hz 3D monitor.

the Digital Released the JET, its new concept full touch screen phone.
Age
Released the worlds first solar -powered mobile phone in India.
Released the worlds thinnest Blu-ray player.
Samsung Digital Imaging developed an innovative hybrid digital camera.
Released its V-line Crystal Rose LCD TV.
2010- Samsung Electronics globally launched the Worlds first Full HD 3D LED TV.
Samsung Electronics launched Worlds first 3D home theatre.
Samsung Electronics launched OMNIA 7, the first Windows Phone 7 smartphone.

1. Market penetration: Samsung needs to create aggressive marketing campaigns in order to stay
on top of the charts on the market.
2. Market development: As we can see in the history of our company, in 2009 Samsung released
the world's first solar-powered mobile phone in India and they Also Introduced into the mobile
WiMax Malaysia, with a very low price Compared to the European prices. This Way They come
in a new market where They will have to invest in advertisements, in admin expenses, new
production facilities, so on and so forth.
3. Product development: Samsung has based its development on all technology (mobile phones,
TVs, computers, etc..) But, if you see their web page today, you could find TVs and Smart TVs,
computers, laptops and all-in-one PCs, cameras and smart cameras, and, the most well-known,
smartphones.
4. Diversification: If everyone thinks about this enterprise, they might visualize products such as
TVs and smartphones.
But the truth is that they have introduced into their big range of possibilities, products like
home appliances (washers and dryers, refrigerators, microwaves, dishwashers, vacuums, ovens
and ranges, LED lightings) and many other electronic devices.

6. PREVIOUS MARKET SEGMENTS TO TARGET 9

Initially Samsung targeted its product at the high class and technology lovers because of its high
price.
Samsung should aim both the high-end market segment as well as low-end market segment
because in both areas there are opportunities. The international brands like Sony, Panasonic, LG, Philips
and Sharp have more than 75 percentage share of the high-end market segment globally. Samsung
being an international brand, it can easily step in both the high-end and low-end marketing segment
because of its overall knowledge and ability to invest in the market.

9http://www.ukessays.com/essays/marketing/strategic-analysis-and-marketing-strategy-for-samsung-marketing-essay.php

7
SAMSUNG BUSINESS PLANNING 2014

7. PREVIOUS MARKET POSITION TACTICS

7.1. Product
The Next generation of Samsung products are new innovative products. In simpler terms, the
products include all features of innovation to provide true entertainment to its customers. The 3D
televisions were voiced as the biggest innovation in the television history with combination of highest
performance and stylish design.

7.2. Price
Customers not only look for price alone. The customers expect a proper service and value for
the money they payed. They act in response to value so a lesser price does not essentially signify
stretched sales if the product is not fulfilling the expectation of the customers.

7.4. Placement
Samsung unveiled its prestigious products globally in the major countries like US, UK, Australia
and china. The products are launched in all the major stores.

7.5 Promotion
For example with 3D TVs the promotion takes the form of a new Starter Kit that offers U.S.
consumers the chance to enjoy 3D movies in their own living rooms, rather than having to head to
nearest cinema to check out the eye-popping action.
Samsung utilized the FIFA Football World Cup to publicize several value-added bundles along
with its new product ranges.

8
SAMSUNG BUSINESS PLANNING 2014

-INTERNAL ANALYSIS-
1. PHYSICAL RESOURCES:
The physical resources and competence of Samsung products are that they incorporate the
latest technologies and therefore there must be created new facilities specialised for this sector of white
products.

2. HUMAN RESOURCES
The staff used for the older products need to be trained to obtain the new knowledge in order
to be able to build the new products.
New staff must be recruited to train the old staff so therefore that would be an extra cost.

3. FINANCIAL RESOURCES 10
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Samsung Electronics Co., Ltd. and its subsidiaries

10
http://www.samsung.com/us/aboutsamsung/investor_relations/financial_information/annual_reports.html

9
SAMSUNG BUSINESS PLANNING 2014

-PORTERS FIVE FORCES ANALYSIS-

1. THREAT OF SUBSTITUTES
This element is high as the market for white goods its full with new substitute products so therefore the
marketing department must be very cautious about choosing the appropriate marketing strategy. This is
why many adopt a differential pricing strategy.

2. THREAT OF RIVALS
This is specially significant for a white product industry such as Samsung because of the high number of
multinationals rivalry Samsung cannot take its position in the market for granted, as in their market
margins are tight and competition is intense.

3. THREAT OF NEW ENTRANTS

It is often very difficult to enter an emerging market because many different factors have to be taken
into consideration. The most important, the distribution network and the supply chain.

4. BARGAINING POWER OF SUPPLIERS

Although the offer of suppliers is very high and they are all willing to offer their services at a discount
such as Samsung always study the markets before setting up a shop.

5. BARGAINING POWER OF CUSTOMERS

In this kind of markets buyers have most of the power so that is why Samsung post-selling service must
be a very good quality service.

10
SAMSUNG BUSINESS PLANNING 2014

-PESTEL ANALYSIS-
1.POLITICAL
Apparently there is no direct relationship between our product and the type of political regime
that governs a country, only in the extreme cases such as the dictatorship or the intervened systems of
the remaining communist. Under these exceptional conditions our company and finally our product will
be affected by the decision of the government. In the rest of the world, especially in the rest of the
developed world, our product will be more or less sold depending on our abilities and capabilities.

2.ECONOMICAL
Due to its medium-high expensive technology and its high price, Samsung products have
become low luxury products. Regarding this fact, our lines of products should be specially focused on
the countries with healthy economic situations right now.

3.SOCIAL
As commented before Samsungs products can be seen as low luxury products, due to their
prices and features. However it does not produce a reject from the people and it is not seen as
ostentatious as a Mercedes-Benz for example, so it should be very well accepted and bought in the
proportion of the welfare of the region the products are sold at. So the target customer should be a
medium-high class individual, couple or family with the desire of a high quality experience.

4. TECHNOLOGICAL
The companies involved in the latest technological innovation like Samsung need to invest a
large sum of money to research and development to keep up in the market and bring new products to
attract more customers who are willing to change in the near future based, because of the speed with
which technology travels today.

5. ENVIRONMENTAL
Today, one of the most serious issues is the environmental protection. The companies involved
in technology development should take into account the new regularization based on energy
consumption, waste recycling; all of them related global warming.
Thus, if customers see how much a company cares about the environment, more faithful they
will be.

6. LEGAL
Legal factors are an area in which all enterprises engaged in any sector, have to carry out and
abide to keep everything legal and equal. Thus, all businesses have the same regulations related to
minimum wages, hours of work per day, vacation days, etc. These factors can affect how a company
operates, its costs, and the demand for its products.

11
SAMSUNG BUSINESS PLANNING 2014

-SWOT ANALYSIS-11

11 http://www.strategicmanagementinsight.com/products/swot-analyses/samsung-swot-analysis.html

12
SAMSUNG BUSINESS PLANNING 2014

-FUTURE STRATEGIES & INNOVATIONS-

1. SAMSUNGS FUTURE MISSION STATEMENT
To devote our talent and technology to creating superior products and services that contribute to a
better global society.
Since the prestige and value of Samsung has already been given and exist, and also the
statement aims perfectly at what a big enterprise should reach at and pursuit, there is NO need to
change the mission statement of the company.

2. FUTURE DIRECTIONAL STRATEGY SAMSUNG
The directional strategy of a firm is where the company is heading, how is it doing it, and how is
it heading in a particular direction. In the case of Samsung, we can explain the main questions as it
follows:
Should Samsung expand, cut back or maintain the same?
This South Korean company is dedicated to the technological industry in all of its
forms, from cell phones to microwaves, etc. In this industry, you always have to keep up with
new inventions that either make things easier than with past products, or that satisfy other
types of new needs. The discovery of new technological resources and how to apply them to
your products is the key to success in this market, because not only can Samsung reach lower
cost of production and implementation, but also gain customers from other firms which havent
got that product on sale yet. SAMSUNG ALWAYS HAS TO KEEP GROWING (EXPAND).
Should we concentrate our activities within the industry boundaries or should we diversify
into other lines of business?
Samsung is known for the technological solutions it provides, so it could definitely
diversify to other lines of business but always related to the technology. For example, if
Samsung entered the automotive industry or the aeronautical one, designing parts of the
engines, the electrical parts; or even selling cars at lower prices than the competitors, it could
succeed. Why? Because people trust a company that comes from a segment of the market that
is related in some way to this other one.
But if Samsung decided to start selling food, like soups, tomato etc, it would never
acquired the trust of the consumers of this markets, because it comes from a radically different
industry and even though the product could have high quality, people wouldnt trust that a
technological company can do things as good as a farmer or a food company.
If we want to grow and expand nationally or internationally, should we do so via self-
development or through acquisitions, mergers, or strategic alliance?
Samsung is already leader of the market in most of the products they sell. It is also so
massive, innovative and known that expanding throughout acquisitions of competitors
shouldnt be the priority. Its obvious that if they have the opportunity to buy a competitor at a
low price or it is a very good moment to do it, it should be done, but the main objective of
Samsung nowadays has to be self-development. With this we mean that the technological
industry is always evolving, and buying new patents, signing deals with new suppliers, reducing
costs of production, keeping a new and fresh company policy and statements, etc is a much
better advantage for a giant company, than more of money that they already have.
Regarding the Growth strategy of the company:
The Samsung enterprise, as said before, should be aiming to reduce costs, be faster
and more efficient, etc (internal development) rather than to aim at mergers and company
relations unless its a great opportunity. This leads us to the Vertical Integration as the best way

13
SAMSUNG BUSINESS PLANNING 2014

for it to pursue the new objectives and products, so that it competes against itself in order to
beat the prior stats, and to become bigger and better.
Since it is such a big company, the best option to take is the Balanced Vertical
Integration, where we not only create subsidiaries that provide the materials to the company,
but also distribute the products that are created to other firms or parts of the market
Actually, Samsung operates using a vertical integration method, which leverages all
aspects of the manufacturing process from raw materials to electronics components to fully
assembled products. Samsung creates its own supplies and also sells its quality supplies to
other company, such as Apple.
Regarding the Diversification of the company:
This ought to be a difficult decision for Samsung, because it is always good news to
diversify the company to become bigger in the same market or to open new horizons in others.
Since it is one of the leaders of the technological sector, and it is very difficult to
remain on top of this market through the years, they could choose not to enter other markets
not to complicate things.
But in case that they wanted to diversify, the one and only option should be unrelated
diversification: Samsung has already more than enough potential inside its own market, so
there is no need to buy other rivals or companies inside the sector because the are self-
sufficient; on the other hand, moving to other areas like building boats or infrastructures, or
even open mines and create construction material could be great segments that are non-
related with their top market (technology) but that create advertisement for the company,
bring to the table new options and deals, ways to apply the technology to new things, new
segment of clients, opening up of the business, etc.
The unrelated diversification could be the real deal for Samsung, but it is complicated
to manage such a big amount of markets at the same time, but anyways this company is so big
12
that they could do it.

3. FUTURE GENERIC STRATEGY
Samsungs relative position within the electronics and phone industry determines whether
its profitability is above or below the industry average. The fundamental basis of above average
profitability in the long run is sustainable competitive advantage. There are two basic types of
competitive advantage combined with the scope of activities for which firms seek to achieve them, lead
to three generic strategies for achieving the above average performance in an industry. The focus
strategy has two variants, cost focus and differentiation focus
In cost leadership, Samsung set out to become one of the low cost producers in the
electronics and mobile phone industry due to its structure way of accessing raw materials and its joint
R&D, which gave Samsung a larger internal economy of scale, proprietary technology, which made
Samsung a low cost producer, which is an advantage
In differentiation strategy Samsung seek to be unique in the electronics and phone industry
buy introduce which is highly valued by buyers a type of warranty that no automobile industry have ever
given in the world of automobile and its technological innovation in design, comfort ability and stability
and low product price.
The generic strategy focuses on the choice of a narrow competitive scope within an
industry. Samsung focus in every segment and class of people be it low income, middle income, high
income it does not tailor its strategy to a specific and it pays them more in market share and
profitability.

12 wikipedia.com, www.samsung.com, gerencie.com

14
SAMSUNG BUSINESS PLANNING 2014

We could say that Samsung has been doing things well with a good balance of materials and
functionality. This makes the company, Apples most direct competitor. In order to become the leader
markets, we should keep our range of products and even go further, researching and developing new
types of gadgets that the people want, such as connecting all of our devices by simply clicking a button,
like the AppleTV application.
As a summary we can say that Samsung is doing a good job of keeping the second place but
if they want to really become the leader of the market they should improve even more by increasing
their quality with no increase in costs and also by creating something new by themselves and not been
always at the tail of the leader.

4. FUTURE PRODUCTS TO OFFER
Samsung in 2012 proved to be a ground shaker when we talk about smartphones and
tablets. Samsung just crossed Apple and Nokia and became the Worlds Top mobile phone manufacturer
with 22.9% of Market share. With smartphones providing every feature a smartphone could, Samsung
have reached a spot where it rules.
Recently at the Consumer Electronics show (2013),Samsung Electronics showcased various
products and their executives talked much about what they will be providing to people in 2014-2015,
like Flexible phone, Galaxy exhibit, Galaxy pocket plus, Samsung smart TV

A brand is a "name, term, design, symbol, or any other feature that identifies one seller's good
or service as distinct from those of other sellers, often it refers to a symbol such as a name, logo, slogan
13
and design scheme
Samsung has been able to create a really strong brand image.
Competing successfully in the 21st century will require more than just outstanding product and quality
functions. Intangibles such as corporate and brand image will be crucial factors for achieving a
competitive edge.

5. FUTURE INNOVATIONS ROBOTS
One future innovation for Samsung would be the industry of robots that help disabled or
handicapped people in their daily life.
For example a robot that can accompany blind people, so instead of dogs we would have a
robot that acts like a person and holds the hand of the disabled so he or she knows where he or she is
heading. There is a big difference between dogs and robots in terms of guiding, since the client can
introduce information inside the robot via USB or CD, with different places the person wants to go, and
the robot would not only help the person but would also calculate the routes to know in advance where
to head or which public transport to take.
Another personal robot could be one that does daily routines to help people. For example a
robot that can be set to cut the grass, clean the pool, wash the clothes, etc. Like if it were a housemaid
and that way people could dedicate their time to what they really need.
Finally we could also use robots for personal protection, like robots that dont turn off at night
and remain alert for possible intruders. These robots could be substitutes of the alarms, and instead of
using violence; they could immediately call the police, close all doors, block entrances and wake up or
alert the clients about any threat occurring. These robots could also be used for businesses, as police
mates, etc.

13 http://www.marketingpower.com/_layouts/dictionary.aspx?dletter=b

15
SAMSUNG BUSINESS PLANNING 2014

We all know that nowadays the robotical industry is something that already exists and keeps
growing more and more, but there is a line that no company has crossed yet and thats the line of
personal robots with human size and human necessities to fulfil. The human life is already too short to
waste time doing things that a robot could help us to do, so we can all have time for what we really
need or want and leave the rest to the robots, that can overall make our lives much easier.

6. MOBILE PAYMENT SYSTEM
Central to the growth of any economy is a monetized system that makes business transactions
and personal transactions efficient, fast and timely. With the technology advancing such a rapid phase,
electronic payments in the next few years have the potential to replace in a substantial manner the
legacy payments. But for that to happen, the players would have to understand the driving forces in the
market for electronic payments. Even though currently there are many solutions which are available
that supports connecting bank credit/debit card accounts to on-time virtual transactions, yet they suffer
from the limitation of not changing the underlying value proposition which is the convenience to
customers. Such a value proposition can not only be created but also appropriated only if the current
limitations of smart phones as an instrument for mobile payment are removed through development of
software that could facilitate the contactless payment system.
At the moment the technology is limited to business-consumer segments, but, it offers scope
for development of a variety of payment system as for instance micro type of transaction and what the
mobile industry and financial community suffers in this regard is the lack of a common vocabulary that
would integrate the mobile technologies with financial service businesses. If Samsung focuses into such
an area as its innovative strategy by using the popularity of its smart phones and user-friendly software,
it would facilitate its capturing and appropriating value proposition in the form of a distinct competitive
strategy.

7. VALUE AND REVENUE PROPOSITIONS.14
The value dimension here relates to both the needs of the customers and benefits they would
derive from such a mobile payment system. As pointed out by Ondrus et al, (2005), Kim et al (2010),
while the anywhere, any time accessibility of mobile payments creates favourable consumer-merchant
nexus, yet it falls short in the capturing of value because so far the system has failed to provide them
the direct access to alternative payment execution options, support information as account balances on
their finger tips etc. In short, as pointed out by Gumpp and Pousttchi (2005), the real value for the
customers is caught through the information value, which is distinguished from the mobility value.
With its smart phones, having on hand its own operating system, if Samsung fills in the gap it
would emerge as a winner with an innovative strategy which before others catches in, it would have en-
cashed.
The scope of revenue proposition can be understood by the fact that estimated revenue of
$800 to $900 is earned by the banking industry through payment transactions and if the company can
make inroads even a small fraction of it would turn into multi-million dollars of revenue for it.

14https://sites.google.com/site/bestreviewsandarticlesxz/others/samsung-innovation-strategic-insightful-information-on-samsung-innovation

http://www.samsungvillage.com/blog/Innovation/

16
SAMSUNG BUSINESS PLANNING 2014

8. LESS CONSUMING LCD SCREENS:

As we speak Samsung is developing for the next generation of smartphone a new, more
sophisticated and efficient type of LCD, or liquid crystal display for its smartphones. This is actually very
useful when using or working with very high definition pictures or videos, where the amount of pixels
per unit is very high such as an entrepreneur that uses its smartphone as a camera, like and architect for
example, mainly because it enables you to use your smartphone without making it go slower in terms of
performance. Apart from this, Samsung grants that this future and new type of displays will save almost
25% most of battery compared with their current system.

9. NEXT GENERATION SMARTPHONE AND TABLET APPLICATION PROCESSOR:
With the launch of the Exynos 5, their current and very recently announced processor, Samsung
is getting positioned as one of the most powerful inner components supplier of smartphones in the
world. The current system is based upon 8 cores from which the application processor offers maximum
performance and higher energy efficiency compared to the previous systems. But what its really
interesting is that theres been rumours that the next processor (supposed name: Exynos 6) is going to
totally overwhelm the competence in terms of performance and energy and battery efficiency, which
combined with the futuristic type of flexible organic light emitting Diode displays, where you can curve
the screen of your smartphone, which has become the flagship of Samsung in term of beating its main
rival, Apple.

17
SAMSUNG BUSINESS PLANNING 2014

-ACTUAL INNOVATIONS-
1. HOME APPLIANCES.
Regarding microwaves, for example, Samsung has been improving their capacity (from 28 L
until 36 L in GE614ST which also has a LED display type). Besides, their heat source has developed from
convection to grill and microwave sources. Also design has changed: first microwaves' door opening
type was to handle, nowadays we open them with a push button.

2. CAMERAS 15
Over almost the last decade, Samsung has shown a great devotion within the camera sector in
their electronic devices, achieving a prominent position in the market. Cameras themselves as a
product could have faced some critical moments as technology has introduced them in mobile phones
for example, but Samsung has well managed these situations by innovating the product itself, getting to
offer for example WiFi in their WB150F model in order to be able to upload the pictures taken straight
away into social nets for example. The next innovation Samsung had was the implementation of some
Android support.
Reaching the end of the year 2012, Samsung managed the launching of a Galaxy Camera,
meeting the most wanted needs: WiFi, touchscreen, applications and Android.

3.MOBILE PHONES AND TELEVISIONS

Samsung has been one of the most innovative and evolutionary of the companies related with
the electronics and new technologies.
The considered as the most important area of Samsung nowadays are the Smartphones, which
evolve quicker and quicker as time runs. Samsung introduces always all the new technologies available
as soon as they get out in the market and that is how it has managed to get into the top rankings of sell
of smartphones in all countries around the world. Recently Samsung has presented the new Samsung
Galaxy S4 its most complete and innovative product in this area.
Even more, Samsung counts with an enormous percentage in the TV selling and productions. In
this are Samsung has evolved in a vertiginous manner as in just a few years it has created its new
SmartTV and even curved TVs reaching this way the leadership of the market.

15 http://takethe5th.com/wp/2013_01/how-why-samsung-leads-innovation-in-electronic-devices/

18
SAMSUNG BUSINESS PLANNING 2014

-PRICING STRATEGY AND CHANNELS OF DISTRIBUTION OF SAMSUNG-

1. PENETRATION, MARKET SKIMMING AND VALUE PRICING
Price set to penetrate the market
Low price to secure high volumes
Useful in launching into a new market
High price, Low volumes
Skim the profit from the market
Niche marketing
Price set in accordance with customer perceptions about the value of the product/service

2. SAMSUNG CHANNELS OF DISTRIBUTION
Consumers concern about: the availability of our products and the delivery time. They create
reliable relationships with suppliers in order to satisfy consumers. When achieved, they establish a good
price to reach being the first option beating competition. Regarding access to products, Samsung is the
leader because of its high availability level: Samsung focuses in an intensive distribution channel
approach. Samsung has an existing distribution network from their existing businesses as well as the
will to sell their products through distributors who will meet their expectations within the offering of
their product in terms of pricing, deliveries and returns, orders, guarantees and a set of requirements
set by Samsung which the distributor will have to complete (image, reputation and prestige), between
others. Samsung develops a marketing channel strategy; following both pull and push strategies.
Samsung also has distributors and offerings of products through e-commercial channels.
Samsung has the potential to be able to obtain a smart market growth reaching a wide capacity of
consumers.

3. CONVENIENCE OF THOSE CHANNELS OF DISTRIBUTION AND PRICES.

Samsung offers its products through e-commercial channels. Those channels present a lower
cost, as it reduces the logistical problems; no physical store space, insurance or infrastructure
investment, thus it makes it a lot more economical; higher margins as business can gain more control
and flexibility and are able to save time when manual transactions are done electronically; a better
customer service as online customer service makes customers happier (saves time and money); and a
quick comparison shopping, helps consumers to compare products and choose de best one.
As this company focuses in an intensive distribution channel approach, it will place the goods
and services offered into as many markets as possible. With this, the idea of Samsung is that making the
products readily available to as many consumers as possible, the chances of generating sales are
increased. When successful, an intensive distribution approach can greatly enhance the sales of their
products.
Nowadays, Samsung is known because of its low prices. Why do they follow this strategy? Once
achieved a market share they seek to increase the perception of image. When the products already have
reached their ideal plot, price should play a stabilizing role able to consolidate the intended image. This
is called maintenance strategy, where the greatest effort is to sell at market prices

19
SAMSUNG BUSINESS PLANNING 2014

4. PRICING & DISTRIBUTION STRATEGY FOR 2015

In the fast-paced business of Information Technology, it is imperative to be on the move so that
technology and the market stay within reach. It is not just the tech firms and high-tech products that
need to be abreast of developments in the industry. However, when it comes to such products as
mobile phones or LCD televisions, companies have no other option but to be on their toes. The market is
flooded with products and brands vying for market share, technology keeps mutating constantly and the
business environment is extremely volatile, which makes consumers susceptible to changing tastes and
preferences pretty fast.

Consider Samsung:
The South Korean brand reinvented itself to develop high-end products and came to be
perceived as a brand that could be at the cutting edge of technology. However, mere technological
superiority wouldnt be good enough if what is at stake is market leadership it takes a comprehensive
approach that tackles pricing and branding as well, to excel in a volatile, competitive environment

Business and Technology:
On the technology front, while Symbian was the preferred Operating System, Google came up
with Android. Then Nokia logged out of Symbian. Now, Samsung has decided to get its own proprietary
Operating System up and running. It has come up with the idea of Bada, its new OS that it would
weave its mobile technology on from the beginning of next year.

The Price Factor:
All said and done, price does matter. The company may be able to mutate and adapt to
changing technology and may be considered sleek and flashy. However, to be at the top of the range
requires proactive measures on the price factor as well. And Samsung did just that in its high-end LCD TV
business in the US market, Samsung slashed prices like no other, pushing its LCD panels vigorously in the
market. And it has seen results from its approach Samsung is the leader in the US LCD market.

The Brand Factor:
Technology, style and price have been taken care of so, what of branding? Samsung has worked
on that too! Samsung is going for a major revamp on its Advertising and Branding Strategy, as it reviews
its 2.3 million pound UK Advertising account to consolidate its brand and product advertising projects
into a single advertising agency for the year 2010. In a strategy similar to that adapted by Vodafone in
the UK, Samsung wants to do away with different marketing messages and give out a uniform look and
16
feel across markets.

16 http://ayushveda.com/blogs/business/samsungs-strategy-change-is-success/
http://www.businessinsider.com/samsung-corporate-strategy-2013-3
http://www.businessweek.com/stories/2003-06-15/the-samsung-way

20
SAMSUNG BUSINESS PLANNING 2014

-MARKET SEGMENTATION- [17] [18]

1. SEGMENTATION
Samsungs current strategy in the market is the seize a dominant market share. For this Samsung
has introduced its new slogan, Inspire the world, create the future and they have also re-organised
their corporation to encourage cross-pollination and innovation.
As we already know the market segmentation is vital for a company, and Samsung has a very
wide market segmentation. Samsungs market target can be easily identified as the Early Adapter. We
can define an Early Adapter consumer as a consumer who has a very quick rate of diffusion, the rate at
which the market processes and accepts a new product or idea.
Considering all of the tools used for market segmentation in the case of Samsung the most
valuable and useful would be the conjoint analysis (Conjoint Analysis [19]: Conjoint analysis is a statistical
technique used in market research to determine how people value different features that make up an
individual product or service) as they would need to know how people would value their new products in
order to know how they would react within that product.
Samsung has established a plan to interact more with the target consumers and expose them to the
products available.

2. MARKET TARGETING [20]

Regarding Samsung new products we can say that all the market targeting strategies are more
and more obsolete nowadays, leaving only one possible solution, the individual marketing. As discuss
previously in the Segmentation part we should be focusing our products in the individual, more
specifically relatively young men, usually Caucasian, from the United States or from Europe, who are
high quality tech lovers. Another interesting niche could be the families with high income, with both
parents employed and only one child.

3. KOTLER SEGMENTS (2003)

Nowadays, at this market we will find a lot of competitors such as Apple, LG and so on.
Thus, the best action plan might be focus on differentiable segments. Why?
Young people are those who renovate most their mobile phones. So, Samsung needs to create attractive
designs, modern applications for these customers to select them because of their last technology
sources.
In other products, for example in home appliances, they focus on helping women at home, by making
them things easier. Thus, they will try to create different advertisement to full their minds and be the
first option when buying washers and dryers.

17 http://es.scribd.com/doc/48355873/Samsung-Marketing-Plan

18 http://www.samsung.com/uk/consumer/tv-audio-video/television/topic/bring-tv-to-life-with-3d-tv

19 http://en.wikipedia.org/wiki/Conjoint_analysis_(marketing)

20 http://www.netmba.com/marketing/market/target/

21
SAMSUNG BUSINESS PLANNING 2014

4. SAMSUNGS POSITIONING STRATEGY[21][22]

The key idea of positioning is that the consumer must have a clear idea of what our brand stands
for in the product category. We can develop a positioning strategy through: distribution, packaging,
pricing, marketing communications and advertising.

Using Product Characteristics Or Customer Benefits
We need to associate our 3D television with our brand. That means, that we need a competitive
strategy over other brands. In Samsung, we have the advantage that if you keep your eyes in a range of
90 degree to TV all the time you will have a better clarity than with other 3D televisions. Besides our 3D
glasses are well built in comparison with other brands, such as LG, and they do not break easily.
We also have to differentiate between physical and pseudo physical characteristics. Physical
characteristics are important because we have to attract our customers not only with good quality in
our glasses but also we need an attractive design in order to make de difference with our competitors.
All of our products are built with a stylish design and environmental friendly, which is important to our
customers because they are buying a television that will give them entertainment without damaging the
environment.

Positioning By Price And Quality [23]
It is important to create a balance between price and quality in our products. The setting of
prices is an important step in our company. We need our customers to spend their money in our
products, in return, they need a good product, with the best quality for them.
Nowadays, as 3D television is a new technology, prices are high. These suppose that not
everybody can afford this kind of technology. This happens with all new technologies, at the beginning
their prices are high because of the innovation that they mean. After a few years, we learn how to
decrease costs in production process so we can decrease our prices.
However, although Samsung 3D televisions are expensive, they are cheaper than our
competence thanks to our vertical integration. We monopolize the whole manufacturing process, we
have our own factories so, and although 3D televisions are expensive we are the cheapest option with a
good quality.

Positioning By Product User
This positioning approach is to associate a product with a user or a class of user. In our case, we
should use this approach with marketing campaigns.
Advertising is important because people get in contact with the product. We should create
advertisements with current people, not famous one. Why? As 3D televisions are expensive, our
customers could think that this is an elitist product. And they could feel discriminated.

Positioning By Product Class
The year 2012 has been challenging for many global companies, with the lingering fiscal problems
in the euro zone economies casting shadows upon the world economic outlook and the pace of
technology development and product innovations increasingly picking up speed.
When many companies are grappling to simply survive, maintaining a competitive edge has
become much more difficult than ever. It is especially so in the high-tech industries where billions of

21 http://ayushveda.com/blogs/business/market-share-industry-growth-and-competitive-advantage-the-samsung-case/
22 http://www.allfreepapers.com/Business/Samsung--Competitive-Analysis/12775.html
23 http://www.samsungvillage.com/blog/2012/08/leading-samsung-products-of-2011-the-nikkei-report.html

22
SAMSUNG BUSINESS PLANNING 2014

dollars in investment and continued research and innovations are just basic requirements to be
considered as a player.
Samsung has number 1 position in seven technology products: Samsung Electronics smartphone,
flat-screen TV, DRAM (dynamic random access memory), NAND flash memory and SSD (Solid State Disk),
Samsung SDIs PDP (plasma display panel) and Samsung Displays OLED.
And the list remains dynamic, as Samsung not only has successfully kept its decades-long
leadership in DRAM (since 1992) but continuously made forays into new area, also securing the lead in
NAND flash memory (since 2002), flat-screen TVs (since 2006) and finally smartphones (in 2011).
Regarding the latest, the Nikkei wrote: With the success of Galaxy S series, Samsung Electronics
strengthened its industrial leadership, showing rapid growth in the highly competitive smartphone
market.
Overall, the U.S. remains at the top of the list when it comes to the number of leading products
and services it dominates; U.S. companies rank highest in 19 product and service categories in 2011,
including personal computers and tablet PC. Japan comes next with nine No.1 products including
automobiles, robots and digital cameras, closely followed by South Korea, which claimed the world
leader position in eight items.

Positioning By Cultural Symbols
Culture plays a very important role in society today. In fact in democratic countries like India or
USA, culture can vary in a matter of a few miles. Thus many brands as well as products have started
positioning themselves depending on culture symbols and cultural values to set them apart from the
competition. And there's something quite symbolic about the Samsung Android being represented by a
little robot. In its little metal heart, the robot just wants to be human. It just wants to fit in. It just wants
to be the same as everyone else out there.

24
Positioning By Competitors
In the process, the majority of companies lose their competitive advantage in recession. When
investments in research and development are down and when companies do not invest in the market in
advertising and marketing activities, market share is lost and advances in expertise are sacrificed for
sake of maintaining cash flows. In effect, this becomes the perfect opportunity for market leaders to
capitalize on.
And this is exactly what Samsung did this recession, shoring up its research and development
investments in its highly successful chip making industry. Samsung is the leader in semiconductor
manufacturing with over one thirds of the market in its control, and is a force to reckon with in chips
meant for both computers as well as mobile gadgets. As markets went on hibernation, Samsung worked
on its capabilities to get cutting edge chips meant for smart phones. Now, as the personal computer
market picks up in the corporate sector, Samsung is in a position to capitalize on its efforts and patience.
Samsung has also increases its market share in its mobile phone business, following Nokia closely. And
Samsung is working on software, as it gets its own mobile operating system, ready for the market. As is
evident from Samsungs strategy, it would be wise to save some cash for the rainy day not just for
sustenance but for gaining that vital competitive edge.

24 http://www.avsforum.com/t/1239698/samsung-3d-tv-vs-sony-3d-tv
http://www.hifivision.com/television/28139-samsung-3d-tv-vs-lg-3d-tv.html
http://smallbusiness.chron.com/examples-positioning-strategy-marketing-10166.html

23