Black Box

Samsung: Inspire the world, Create the future

• Founded in 1938 by Byung-Chull Lee• Electronics division began with a black-and-white TV

• Strong semiconductor and memory sales• Began manufacturing cell phones in the 1990s

Company Overview

Company Overview

26.7% US smartphone market share- ComScore, Jan 2014

30.4% Global smartphone market share- Samsung Strategy/Analytics, Jan 2013

Aaa~Aa (Moody’s)AAA~AA (S&P, Fitch)A1 (Credit rating agencies in Korea)

Industry AnalysisFive Forces Model of Competition Analysis

Threat of New Entrants

○ Low Large CAPEX requirements

Bargaining Power of Suppliers

○ Low Suppliers forced to control SG&A

Bargaining Power of Buyers

◕ Medium High

High quality requirements with price sensitivity

Threat of Substitute Products

◕ Medium High

Relatively low switching costs and complementary goods

Rivalry ● High Large market demand saturated by many different suppliers

Industry AnalysisStrength● Strong distribution networks ● High market share and leading industrial

position● Advanced and innovative technology

Weakness● Product patent infringement● Quality issue for mobile phones● Lack of trying for laptops

Opportunity● Rapid development of smart tech● Revolution driven by big data centered in

mobility, cloud and the Internet of Thing● Operating system dominated by iOS and

Andriod

Threat● Fierce competition with other high-tech giants● Saturated smartphone market

Strength • Heavy R&D

• Strong marketing and advertising team

• Physical retail footprint

• Strong market position

• Wide distribution network

• Various range of premium products

• Leading technology standards

• Broad product and services ranges

• Strong R&D technology

• Focus on environmental-friendly and sustainable products

Weakness • Relies on service manufacturers (e.g. Samsung, Foxconn)

• Top-tier price

• Limited types of products

• Issues of product recalls

• Decline in phone business

• Weak outlook for future development

• High costs of manufacturing prices

• Lose main focus on consumer-electronic products

• Reduction on financial performance

Industry Analysis

Target MarketConsumers:

- 56 % Americans with smartphone

- Urban and Suburban markets

- Gender split

- Majority under the age of 54

- Over $50,000 annual income

- Some college or higher

- Largest ethnic/race: Black-non-Hispanic; Hispanic; White-non-Hispanic

Target MarketFirms:

- Manufacturers

- Resellers

- Retailers

- Distributors

Key Issues

• High degree of competition in virtually all markets

• Patent infringement

• Heavy R&D costs

• Trust crisis

• Weak outlook for new market and product expansion

Value Creation

Inspire Communities

New Technology

Innovative products

Creative Solutions

Industry

Partners Employees

•Product

4P Strategy

In-home consumer electronics Portable consumer electronics Computers and peripherals

•Pricing

- Products for prices that suit for real quality

- Adopt Price Sensitive strategy

•Distribution

•Promotion

Strategic Alternatives

•Product Development

- Add New Features - Improve Quality

•Market Development

- “Experience”Store - Market Expansion

Strategic Alternatives

Strategic Alternatives•Diversification

New products with new markets

Our Strategy

Diversification

- Stuffing features problem

- Blue Ocean Strategy

- Increase market share

- Capture new market

Tactics

1.Create Categories (innovation)

• 4% projected increase in global electronics demand

• Immeasurable opportunity

• “Lifestyle enabler” - Samsung COO

- In-car technology

- In-home technology

- Wearable technology

Tactics

2.Customization ( Build your own

device)

• Reinforce Current Positioning

• Attract New Customers

• Collaborative Marketing

- Self-pricing

- Self-Segmentation

Risks

• Uncertainty

• Significant Investment

Measuring Implementation

• Balanced Scorecard - Backward Metrics

- Forward Metrics (Crucial)

Thank You!Q&A