I Recommend Investing At Samsung. Its Strengths, Financial Stability, And The Second Largest Market Share Essay

Utilizing its vertical integration, it is able to keep the costs down while also coming out with highly innovative and differentiated products, through massive spending in R&D. Samsung’s expertise in voice/data convergence, wired, wireless communications and core network technologies has produced a family of ground-breaking business communications solutions that are redefining the rules of the game. The brand loyalty is reasonable in the mobile handset market and so it can be said that switching costs for customers are reasonable. In this sense, for Samsung, it is possible to differentiate the product, switching costs for customers are reasonable, and there is huge potential for cost reduction from economies of scope.

There are many competing brands of smart phones and Samsung has reported a decline of profits in 2014. Information from GSM arena shows than Samsung released 54 new phone models in 2014 , compared with 24 by HTC , 11 Motorola and 2 by Apple, leading to increased production costs and lack focus on a specific customer segments thereby losing some of its competitive advantage (GSM Arena , 2015).The lack of popularity of its own OS (Tizen ) and dependence on Google’s Android platform makes it vulnerable on google to develop an “ecosystem”. There are component integration issues as well as loss revenue from potential App sales (Strategic Mangement insight , 2015). Negative publicity from litigation due to patents are likely to continue as technology patents are vague and Samsung with is large portfolio is likely to infringe on some of the patents (Tibken, 2014).

Apple and Samsung are the major competitors in the smartphone field. We would, like to discuss why they’re leading and conclude which one is better. In the electronic industry these two companies fight are considered as the highest massive ever. They mainly clash for brand image and brand reputation but any consequences regarding this fight, the impact should be faced by both these companies in terms of brand reputation loss and also the loss of huge amount of money over the litigations We would like to discuss the following,

In the modern world of technology, many different companies are attempting to secure their own ground in a particular market. Many companies work in many tech fields & some company focus on software, some on mobile phones, others on television but one of the most recognizable names in the technology field is that of Samsung.

Samsung products range from mobile devices, TV, audio and video, home appliances, cameras, PC and peripherals and print solutions (Samsung 2014). This essay will predominantly look closely at Samsung’s mobile phones market.

With its smart phone Samsung has achieved a status symbol for its customers. It gives good and fast services. Thus in the marketing mix of Samsung the product portfolio is one of the strongest point of it.

The smartphone industry is a very up and coming place. In the US, more than 77% of adults own a smartphone (Smith). There are many different kinds of smartphones. They can vary in shape, size, color, and brand. Two of the largest brands of smartphone are Samsung and Apple. They make two of the hottest phones on the market right now. Just recently Samsung made the Galaxy S8, and Apple came out with the iPhone 8. Both phones are reported to be top of the line. Both being high-end devices have many similarities, but they also have differences that set them far apart from each other.

Ever since 2010 there has been a battle going on. This battle has set the standard for new technology being released every year. The battle is between two companies: Apple and Samsung. Though these two companies compete against each other with almost every product they sell, the battle is between their smartphones. Apple’s smartphone is the iPhone. The iPhone was the first of its kind. It brought the aspects of an iPod, cellphone, computer, and camera into one device. Samsung’s smartphone is the Galaxy S. The Galaxy S takes all the capabilities of the iPhone and enhances them. It does that, while also allowing its user to fully customize his device how he or she pleases. Both products have their similarities and differences, but only one company can be on top. English author Francis Edward Smedley once wrote, “All’s fair in love and war”. Neither Apple nor Samsung have hesitated to use that quote in their ethics when it comes to advertisements against each other.

Throughout this essay I will explain why I believe that over time the smartphone market will become much more focused on the platform of which the devices are built around and less focused on the actual hardware of the phones. I will be explaining these points based on my understanding of economics thus far in my studies as well as researching to find points to support my arguments I put forward throughout the essay. The smartphone market is currently being dominated by many firms making this a monopolistic competitive market. The market became very popular in 2007 when Apple who, in August 2015, was recorded with a market share of 13.9% (IDC: Smartphone vendor market share) brought out the iPhone. Apples biggest rival is Samsung and Samsung was recorded with a market share of 21.4% at the same time who currently is the leader of the worldwide market. Google created the Android operating system (OS) in which Samsung currently uses. However, Samsung is not the only firm that uses Android OS as the platform for their smartphones, Google provides the operating system to other firms such as LG, HTC and Motorola.

Samsung maintained #1 leadership in the global smartphone market with a 24.6% share in 1Q15, 6.3% above Apple. This 9.7% consecutive expansion is mainly because of steady demand for the Galaxy S series flagship smartphones in general, and also heightened shipments of lower-end models, especially to areas such as Southeast Asia, the Middle East, and Africa. Samsung 's modernized sleek collection of devices, including the new premium inspired A-series, demonstrated favorable in many mid-tier markets that were typically dominated by local brands (Ma, 2015).

Smartphone market is fast-moving and very high competitive due to intense competition between two big smartphone producers, Apple and Samsung. At the beginning, Apple dominated this market solely by introducing a new innovative type of smartphone by Steve Jobs that has revolutionized people lifestyle and mobile industry. A few years after launching iPhone, a new fast following competitor, Samsung came into this market, and their sales have outperformed Apple from the year 2011 (According to Chart A1 in Appendix). In term of developing their product, Samsung has created its products by following Apple’s technology since the beginning of producing its smartphone, therefore there are many patent lawsuits between them. Since Steve Job passed away, Apple has continued to develop its core competence, which is an innovation of new type of smartphone that could help them to take back their market share from its rival, Samsung. Nonetheless, the competition between Apple and Samsung will still continue intensively in the future.

Utilizing its vertical integration, it is able to keep the costs down while also coming out with highly innovative and differentiated products, through massive spending in R&D. Samsung’s expertise in voice/data convergence, wired, wireless communications and core network technologies has produced a family of ground-breaking business communications solutions that are redefining the rules of the game. The brand loyalty is reasonable in the mobile handset market and so it can be said that switching costs for customers are reasonable. In this sense, for Samsung, it is possible to differentiate the product, switching costs for customers are reasonable, and there is huge potential for cost reduction from economies of scope.

Company Background: Samsung is a South Korean multinational company those starting its business as a small trading company and right now becoming world largest corporation. The company deals with its business in several sectors such as advance technology, finance, petrochemical, semiconductors, plant construction, skyscraper, medicine, fashion, hotels, chemical and others. The company was established in 1969 in Suwon, South Korea and known globally for its electronic products (Kelly, 2011). The company is manufacturing several latest technologies, electronic appliances such as mobile phones, tablets, laptops, TVs, refrigerators, air conditioners, washers and other products. The company runs its operations and sales its products in 61 countries with approx 160,000 employees in all over the world (SAMSUNG, 2014). Moreover, the company acquired the position of the world biggest IT maker in 2009 by beating the Hewlett-Packard (HP) previous leader. Its sales revenue in the segment of LCD and LED is the highest in the world. Furthermore, Samsung also becomes world leader in the segment of tablets, mobile phones and gadgets.

next year to regain the belief of shareholders, making an unexpected rise in its net

The intensity of rivalry is also a great threat for iPhone. Protection of the Korean mobile phone manufacturers helped the local companies like Samsung and LG to sell together about 90% of mobile phones in the country. With the opening up of the industry, competition will