SAMSUNG CASE SAMSUNG CASE STUDYSTUDY

GENERAL MANAGEMENTGENERAL MANAGEMENT

By:-Shilpa Kher (43)Reema Kotak (44)Krithika .S (45) Siji Kumar (46)Bhuvan Lalka (47)Malavika M (48)Heena M (49)

AGENDA OF THE PRESENTATIONAGENDA OF THE PRESENTATION

Background of the Samsung case Background of the Samsung case Strategy process at SamsungStrategy process at Samsung Mission statement (aim & goal)Mission statement (aim & goal) Objective Objective Environmental analysisEnvironmental analysis Strategy (generic, alternative)Strategy (generic, alternative) Swot analysisSwot analysis Challenges faced by SamsungChallenges faced by Samsung

BACKGROUND OF THE CASEBACKGROUND OF THE CASE

Samsung’s Turnover Target and its AimSamsung’s Turnover Target and its Aim Philosophy at SamsungPhilosophy at Samsung How Samsung catches up with LGHow Samsung catches up with LG Samsung’s move from being a Class product to a Samsung’s move from being a Class product to a

Mass productMass product Innovative Strategies( Samsung Marketing Academy) Innovative Strategies( Samsung Marketing Academy)

adopted to tap potential buyersadopted to tap potential buyers

SAMSUNG SAMSUNG ELECTRONICS…ELECTRONICS…

Global leader in semiconductors and digital Global leader in semiconductors and digital technologies technologies

Samsung India commenced its operations in India in Samsung India commenced its operations in India in December 1995December 1995

Sales turnover of over US $ 1Bn in just a decade of Sales turnover of over US $ 1Bn in just a decade of operations in the countryoperations in the country

Core competency in the field of semiconductors which Core competency in the field of semiconductors which is backed by it’s R&D capabilities and manufacturing is backed by it’s R&D capabilities and manufacturing scale scale

Emerge as one of the most unique brands creating Emerge as one of the most unique brands creating innovative and superior digital products every yearinnovative and superior digital products every year

From being a virtually unknown entity in the Year From being a virtually unknown entity in the Year 1995, brand Samsung today enjoys an awareness of 1995, brand Samsung today enjoys an awareness of over 95% and a positive opinion of around 80% in over 95% and a positive opinion of around 80% in the country today (source: BAS 2004)the country today (source: BAS 2004)

Samsung has very successfully leveraged its Samsung has very successfully leveraged its association with Cricket and Cinema in the form of association with Cricket and Cinema in the form of ‘Team Samsung’ and ‘Samsung IIFA Award’‘Team Samsung’ and ‘Samsung IIFA Award’

In 2003, LG was the market leader with a share of In 2003, LG was the market leader with a share of 17.6% followed by Samsung at 15.8% in Consumer 17.6% followed by Samsung at 15.8% in Consumer Electronic Products Electronic Products

SAMSUNG ELECTRONICS SAMSUNG ELECTRONICS (Ctd…)(Ctd…)

STRATEGY PROCESS AT STRATEGY PROCESS AT SAMSUNG SAMSUNG

SAMSUNGS PRODUCT LINESAMSUNGS PRODUCT LINE

Consumer Electronic Products like :Consumer Electronic Products like : Colour Television (CTV’s)Colour Television (CTV’s) Refrigerators (Frost Free)Refrigerators (Frost Free) Air ConditionersAir Conditioners GSM HandsetsGSM Handsets Front Loading Washing MachinesFront Loading Washing Machines LCD TV, Plasma TVLCD TV, Plasma TV

MISSION STATEMENTMISSION STATEMENTAIM :AIM : Samsung aims to become India’s leading volume Samsung aims to become India’s leading volume

retailer in the consumer electronics segmentretailer in the consumer electronics segment Achieving its aim by focusing on its Core Strategy Achieving its aim by focusing on its Core Strategy Work on strengthening its unique Brand ImageWork on strengthening its unique Brand Image Gaining Customer SatisfactionGaining Customer Satisfaction

GOALGOAL : : Achieving $2 billion turnover by 2008Achieving $2 billion turnover by 2008

ENVIRONMENTAL ENVIRONMENTAL ANALYSISANALYSIS

(Where are we now??)(Where are we now??) In 2004 and 2005 sales turnover was 4,900 crore and In 2004 and 2005 sales turnover was 4,900 crore and

6,300 crore respectively6,300 crore respectively Trying to Close on to the Market Leader LG Trying to Close on to the Market Leader LG Trying to come Clean on its IT Business MessTrying to come Clean on its IT Business Mess Making a mark in the High end category Segment –Making a mark in the High end category Segment –

LCD TV, Plasma TV, Frost free Refrigerators and LCD TV, Plasma TV, Frost free Refrigerators and Split AC’sSplit AC’s

RAPIDLY INCREASING

ITS MARKET SHARE

CTVCTV

27.1 26

14.4 1411.3

9.1 8.7 8.3

0

5

10

15

20

25

30

Market share

LG Samsung Onida Videocon

5-May 6-May

WASHING MACHINEWASHING MACHINE

34.5

30.5

12.9

18.1

13.213.4 14.713.7

0

5

10

15

20

25

30

35

Market Share

LG Samsung Videocon Whirlpool

5-May 6-May

AIR CONDITIONERSAIR CONDITIONERS

40.6

32.8

15.919.9

9.5 10.37.5 7.8

0

5

10

15

20

25

30

35

40

45

Market Share

LG Samsung Voltas Videocon

5-May 6-May

REFRIGERATORREFRIGERATOR

29.129.4

23 24

11.4

15.7 16.8

13.4

0

5

10

15

20

25

30

Market Share

LG Whirlpool Samsung Godrej

5-May 6-May

OBJECTIVEOBJECTIVE(Where do they want to (Where do they want to

be ???)be ???) Cross Rs7,500 Crore in Turnover in 2006Cross Rs7,500 Crore in Turnover in 2006 Strengthen ExportsStrengthen Exports Reorientation of Marketing activitiesReorientation of Marketing activities Expansion of its Sales InfrastructureExpansion of its Sales Infrastructure Move to the Tier-II and Tier-III CitiesMove to the Tier-II and Tier-III Cities Become a Mass product and still retain its leading Become a Mass product and still retain its leading

edge technologyedge technology

STRATEGY AT SAMSUNGSTRATEGY AT SAMSUNG

(A) GENERIC STRATEGY:(A) GENERIC STRATEGY:Generic strategy includes Product diversificationGeneric strategy includes Product diversification

and focus of the companyand focus of the company

PRODUCT DIVERSIFICATIONPRODUCT DIVERSIFICATION Product Range is from contemporary to hi-techProduct Range is from contemporary to hi-tech Diversifying products so that each and every segment Diversifying products so that each and every segment

is coveredis covered

FOCUS OF THE COMPANYFOCUS OF THE COMPANY Product Innovation through usage of leading edge Product Innovation through usage of leading edge

technologytechnology Customer Satisfaction Customer Satisfaction Continuously Upgrading with technologyContinuously Upgrading with technology Tapping the ever growing High-end ConsumerTapping the ever growing High-end Consumer Tweaked its focus to concentrate on middle class Tweaked its focus to concentrate on middle class

segment alsosegment also Spending a good amount of its revenue on R&DSpending a good amount of its revenue on R&D

(B) ALTERNATIVE STRATEGY (B) ALTERNATIVE STRATEGY

PRODUCT DEVELOPMENTPRODUCT DEVELOPMENT Research and development centre at Noida.Research and development centre at Noida. Centre recently helped customize two high end frost Centre recently helped customize two high end frost

free refrigerators models, RT 25 and RT 28.free refrigerators models, RT 25 and RT 28. Features offered by these are Cool Pack, toughened Features offered by these are Cool Pack, toughened

glass shelves and high versatility compressorglass shelves and high versatility compressor

MARKET PENETRATIONMARKET PENETRATION Working towards reaching out to smaller cities.Working towards reaching out to smaller cities. Planning Dream Home road shows.Planning Dream Home road shows. Expanding its sales network.Expanding its sales network. Revamping sales infrastructure.Revamping sales infrastructure. Samsung Marketing Academy – set up to train Samsung Marketing Academy – set up to train

frontline sales force and shop demonstrators.frontline sales force and shop demonstrators.

SWOT ANALYSISSWOT ANALYSIS

STRENGHTSSTRENGHTS Clear target: $ 2 billion by 2008.Clear target: $ 2 billion by 2008. Core value: Approach market through technology and Core value: Approach market through technology and

design leadership.design leadership. Launching hi-tech and contemporary products with Launching hi-tech and contemporary products with

zeal and speed.zeal and speed. Target is not only number driven but also about Target is not only number driven but also about

acquiring and retaining customers.acquiring and retaining customers. Created a Unique Brand Image for itself as a high end Created a Unique Brand Image for itself as a high end

value driven brand.value driven brand. The Samsung Marketing AcademyThe Samsung Marketing Academy

WEAKNESSWEAKNESS Approach market through technology and design Approach market through technology and design

leadership: a slow process.leadership: a slow process. Not targeting the mass marketNot targeting the mass market Not spreading the brand all over indiaNot spreading the brand all over india

OPPORTUNITIESOPPORTUNITIES LG: its slowing down and has not had any product LG: its slowing down and has not had any product

innovation in the last 6-8 months.innovation in the last 6-8 months. The Indian Mass Market.The Indian Mass Market. The high end value driven proposition helps increase The high end value driven proposition helps increase

the Market Share.the Market Share. Samsung is well known for it product differentiationSamsung is well known for it product differentiation

THREATSTHREATS

Indian Mass Market may be captured by a rival Indian Mass Market may be captured by a rival company, LG, Onida, Videocon;etc.company, LG, Onida, Videocon;etc.

The consumer durable industry is not in the best The consumer durable industry is not in the best of health.of health.

Due to increased price of inputs and continuing Due to increased price of inputs and continuing price erosion there is downtrend in the consumer price erosion there is downtrend in the consumer durables market.durables market.

Increased emergence of modern retail chains- a Increased emergence of modern retail chains- a problem as Samsung is investing in building a problem as Samsung is investing in building a retail network across the countryretail network across the country

THANK YOUTHANK YOU