Case Study Analysis Samsung Galaxy S4 Introduction Samsung, a giant conglomerate and member of the Fortune Global 500 list, started off with humble beginnings. Founded in 1936 as a small trading company in the small town of Taegu, Korea it began by selling, “dried Korean fish, vegetables, and fruit to Manchuria and Beijing. ” (Samsung. com). It quickly became one of the leading companies in Korea and the world by diversifying in many different industries ranging from heavy machinery, petrochemicals, and the topic at hand electronics.
The roots of its’ electronics division began in 1969 with the founding of Samsung-Sanyo Electronics (Samsung. com History). With the division in place and the beginning of the digital age Samsung broke into the smart phone market and is currently unveiling its new product, the Samsung Galaxy S4. Internal Environment Mission Statement When taking a look at Samsung’s Mission Statement, “At Samsung, we follow a simple business philosophy: to devote our talent and technology to creating superior products and services that contribute to a better global society. ” (Samsung . om Values and Philosophy), one sees that it promotes the advancement of its products with a talented staff of employees. This all leads up to a superior product that is a leader in its market. Organizational Structure Samsung has an organizational structure focused on many divisions. These range from, “Electronics, Machinery & Heavy Industries, Chemical Industries, Financial Services, Miscellaneous Other Companies” (Samsung. net Affiliated Companies). With proper division of labor among its different divisions and companies Samsung hopes to produce many great products into different industries.
The Galaxy S4 is a machine that is solely focused on by one aspect of the parent company, the electronics division. Division of labor allows for there to be the right allocation of talent to make the S4 “the next best thing”. Corporate Culture The corporate culture of Samsung is surmised in one quote “Inspire the World, Create the Future. ” (Samsung. net Vision). This vision statement shows the forward thinking of Samsung and this idea is especially important in the smart phone market, because if you settle for the status quo you will get pushed into the wayside. Current Marketing Mix
Product – Samsung Galaxy S4 Core The core product or core use of the Samsung Galaxy S4 would have to be the ability to make calls and surf the internet. This is what separates smart phones from your basic no frills mobile phone. Actual The actual product consists of things such as the feature and specs. Things that differentiate the Samsung Galaxy S4 from the Galaxy S3 include a change in available colors, from a plethora with the S3: red, green and blue, to two options with the S4: white and black (Williams). Another change is the increase in computing power from the previous generation to the new one.
This is showcased with an eight-core processor in the S4 compared to the quad-core processor in the S3, as well as a doubling of the ram from 1GB to 2GB (Williams). Size of screen has also gone up with the S4 and a camera upgrade has also been put into place (Williams). Software upgrades in the phone include, “extras that let you interact with the phone without touching the screen, let you replace your remote controls with an app, translate emails and texts on the fly and let you scroll through text by tilting your phone” (Williams). Augmented
The augmented product consists of things not relating to the phone including warranty and customer service. Samsung has a website focused on support for troubleshooting their product as well as a phone number to contact a technical representative (Samsung Help & Troubleshooting). The warranty for the Galaxy S3 and S4 lasts for 12 months (Samsung Warranty). Pricing Pricing for the Samsung Galaxy S4 has unfortunately not been released, however pricing for the S3 has historical data. The retail or no contract price for the S3 ranges from $599 (T-Mobile) to $428. 9 (Amazon) with the original price being at release, $899 (Amazon). However as with most phones, carriers will provide a bundling plan whereas they give a discounted phone for a 2-year contract with said carrier. Bundled pricing for carriers AT&T and Verizon is $99. 99 with two-year contract (Pramis). Promotion Promotions for Samsung have included sponsorship of the 2012 Olympics which helped propel its products, especially phones, to the minds of consumers (Olympic) as well as a commercial during the Super Bowl promoting themselves while also poking fun at the Apple law suits taking place (YouTube).
Samsung has also thrown press release events with the first unveiling of the Samsung S4 for the technology press (Dolcourt). The tagline for Samsung products is “The Next Big Thing” as illustrated in the YouTube video listed above. Place Some of the places where the Samsung Galaxy S4 is being sold include carrier brick and mortar retail locations (e. g. AT&T stores, Verizon, T-Mobile), major online retailers (e. g. Amazon and eBay), and electronics stores (Fry’s Electronics and Best Buy). This is just in USA locations.
The global presence of the product is in North America, Latin America, Asia-pacific, Europe, Middle East, and Africa (Samsung. com). Previous Sales Samsung’s 2012 sales of the Galaxy S3 number at 40 million units (Grush). 18 million of these units were sold between July and September 2012 (CBC News). Current Target Market Demographics The age of the ideal buyer of a Galaxy S3 is between 20-35 years of age. This is illustrated with commercials shown on YouTube poking fun at iPhone users as being older and out of touch with what’s in style today.
Income would have to be $45,000-$60,000 this would put buyers in an up and coming demographic that have a bit of disposable income. Male buyers seem to be the most targeted especially as illustrated by the actors chosen in the commercials (YouTube 2). Education would have to be college educated as the actors in the before mentioned commercials are college aged or recently graduated. The location of these buyers would have to be more urban and profession would include white-collar workers. Psychographics Some of the psychographics include more tech savvy individuals as well as individuals that are ahead of the curve.
These might include mavericks that want to get away from the homogeny of iPhones among the general populace. All of this is illustrated in the commercials put forth bashing Apple users (YouTube 2). Lifestyle of the target market might include hip yuppies that want to stay current in the technological landscape. External Environment Competitive Environment The competitive environment in the smart phone industry is vast. Different companies vie for market share and these include, but are not limited to Apple, HTC, Motorola and Microsoft.
Competition is however particularly fierce among the Apple iPhone and the Samsung Galaxy S3. The iPhone 5 as a product is different from the S4 in features some having to do with the fact that it is older and some having to do with the different visions each respective company has for their products. With the Samsung S4 being newer it is no wonder that it outpaces the iPhone 5 technologically. However the much hyped release iPhone 5S might shorten that gap (Smith). Pricing for the iPhone 5 at the moment is at $199. 99 with two-year contract with bundling with carrier (Apple. om). Retail price for the 5 is $649. 00 this is unlocked and contract-free (Apple. com). The pricing for the Samsung is a bit more competitive making it more lucrative for value-centered customers. Promotion for the iPhone 5 include celebrity commercials (YouTube 3) and back to school promotions (Apple. com). Places of sale for the iPhone include Apple retail locations as well as its website (Apple. com). The reach of the Samsung S4 especially in the global setting seems to be more expansive (Apple. com vs. Samsung websites).
Economic Environment With the worldwide recession that occurred in 2007, caused by the housing market crash in the United States consumer wealth went down by a huge degree. The repercussions of that event have not yet been fully recovered from. With less wealth comes less income and so thus less disposable income. With less money buying a new smart phone to stay current might not be the best choice of action with other expenses mounting. However according to the article Groceries or Mobile Phone, by Brad Tuttle it is stated that, “21% aid that they spend more monthly on mobile phone bills than they do on groceries, giving the indication that food is less important than iPhones and Androids to more than 1 in 5 consumers”. This quote illustrates that even with less money people were still willing to spend a sizable amount of money of their phones. However fears mount that the world may fall back into a recession due to euro-zone sovereign debt crisis (Economist). Technological Environment The biggest news in the technological environment would have to be the idea of bendable display technologies and what implications they will have on smart phones and tablets (BBC).
Samsung has been pioneering this technology so even though this will not be available to the Galaxy S4 big expectations are on the horizon for how this will be applied to smart phones. Another development would be faster forms of wireless connectivity faster than what is being offered with current carriers and how Samsung will integrate this into its products. Political and Legal The hurdle that Samsung faces in this arena has a lot to do with the Apple patent suit (Gobble). The implications this might hold for Samsung S4 and for future smart phone technologies would be greatly obstructive.
The reasons that it would be so obstructive range from the fact that features such as shape, design, all the way down to the slide functionality to unlock your phone would be infringing on Apple patents (Cusumano). However, these lawsuits are currently on appeal which have put a memorandum on changing all of these features outright, but if Apple were to succeed in its lawsuit great financial and legal trouble could hurt Samsung enough for it to exit the smart phone market for the foreseeable future (Gobble). Socio-cultural Environment The explosion in social media has explained a lot of the popularity with smart phones.
With increased integration of web ready products in daily life the ability to notify peers, family, and friends of daily activity has increased tenfold. According to the article, Social Media Dominates Smartphone Internet Time, by Gfk analysis it states, “Social sites and activities account for almost one-third (31%) of smartphone online minutes – double the proportion for email, which ranks second at 16%”. This illustrates how time is spent on smart phones and how the explosion in social media might have something to do with smart phone technology or vice-versa.
Another socio-cultural movement is the increased integration of many applications in smaller and smaller tools. A smart phone thus holds many features in its tiny body. These include GPS, e-mail, telephone use, the before mentioned ability to browse social media, banking, photos, and the list goes on and on. When these features are what makes smart phones attractive for society when will this growing miniaturization end? SWOT Analysis Strengths One of the strengths Samsung has is the fact that its previous generation of phone, the S3, sold impressive numbers numbering in the 40 million (Grush).
If history has any indication of future performance this is great news for expected future sales of its new flagship product. Another plus is the fact that Samsung has a strong organizational structure as a company with many smaller holdings (Samsung). With this comes a great amount of vertical integration with Samsung able to produce many of the products going into its phones (Samsung). This causes Samsung to be able to control its supply chain and incur less costs then competitors that might rely on outsourcing production (Bajarin).
Another aspect promotion and a huge amount spent (Olympics) on sponsorships of the Olympics and commercial airings during the Super Bowl it can be seen that the lead up to sales will be strongly in the consumers mind. When compared to other phone makers the global presence of Samsung astonishing (Samsung vs Apple). The target market that Samsung is pushing is more advantageous in the end because if you target younger consumers and win them over you can get a lot of lifetime value from these customers.
Finally the last strengthis the amount of capital that Samsung has to throw towards its marketing is substantial especially when looked at the budgeting put into place towards just marketing in the company’s financial statements (Samsung). Weaknesses One of the weaknesses Samsung faces is the horrible ratings for their customer service and warranty packages (Customer Service Scoreboard). With one scathing review saying, “Samsung has the worst customer service EVER” (Customer Service Scoreboard). Another weakness Samsung has is that it is pricing its products lower than Apple with lower pricing comes a perceived view that quality is suffering.
This coupled with the less than favorable reviews of its product after care can cause a problem. Another weakness would have to be the fact that Samsung is wholly dependent on the Android OS. Much of the profit in mobile phones has to do with the advertising aspect. In its current role Samsung is handing away a lot of its potential profits to Google (Bajarin). To rein this in it would have to develop its own mobile OS. Opportunities One of the opportunities that the Samsung Galaxy S4 has is its newness to the market. By being new it starts off strong as the most up to date product in the market (Williams).
It beats the competitors in hardware capability and software options. A technological opportunity it has is the bendable technology currently being researched that Samsung is one of the big investors of (BBC). It also has an opportunity with emerging markets with emphasis placed on the world market when compared to competitors (Apple vs Samsung websites). The fact that more consumers are using smart phones for social media showcases how if they maintain their market share more and more consumers will buy smart phones and a Samsung Galaxy S4 might be just one of them. Threats
Threats to the company and phone are the world economy. With fears mounting that the euro-zone will fall back into recession because of Cyprus this can put a dangerous halt to the progress that the world has made (Economist). Even though it has been stated that consumers spend a great deal on their mobile gadgets (Tuttle) another fall of consumer income might curb that by a great amount. The Apple patent suit is also another looming threat. If forced to pay a great deal of financial reparations Samsung might not see itself in the smart phone market anymore (Cusumano).
Competitors can also see what they’re up against since Samsung is the first to release their phone and improve on their design. Conclusion Samsung is an ambitious company with many strengths that can boost the Galaxy S4 into the biggest phone come out to date. If it can manage many of the threats and weaknesses it has and instead harness these into strengths and opportunities it can hold onto its market dominance of the mobile phone market and push away many of the doubts held by its detractors. In this field especially with the ever changing landscape one cannot stay top dog forever.
So to manage to maintain its current position it must always be looking out and forward.
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Dolcourt, Jessica. Samsung Galaxy S4 keeps calm, carries on with big screen, 8-core chip and, yes, eye tracking . 14 March 2013. 5 April 2013 ;lt;http://reviews. cnet. com/samsung-galaxy-s4/;gt;. Economist. A New Threat. 17 March 2013. 5 April 2013 ;lt;http://www. economist. com/blogs/freeexchange/2013/03/euro-crisis;gt;. Gobble, MaryAnne M. “Apple Scores a Win in the Smartphone Wars. ” Research Technology Management (2012): 4-5. Grush, Andrew. Samsung Galaxy S3 Has Now Reached 40 Million Units Sold, 100 Million Total for All Galaxy S Devices. 14 January 2013. 5 April 2013