The new Samsung Strategy and Innovation Center headquartered on Sand Hill Road in Menlo Park and with offices in Korea and Israel is led by Young Sohn, President and Chief Strategy Officer of Device Solutions, Samsung Electronics. “We see tremendous opportunities and transformations over the next five years driven by Big Data centered around mobility, cloud, and the Internet of Things, and Samsung will be a significant part of this revolution,” said Sohn.
“This is an exciting opportunity for us to engage with entrepreneurs and innovators and empower them to leverage Samsung’s technology and global brand presence to bring our collective visions to market.” The Samsung Strategy and Innovation Centre (SSIC), USD 100 million Samsung Catalyst Fund, and USD 1 billion Samsung Venture America Fund will complement the research done in Samsung R&D centres.
In turn, they will promote new products and ideas in crucial areas for the future of mobile devices such as cloud infrastructure, mobile health, wearable devices, mobile privacy and the Internet of Things. The strategy also aims to create a strong ecosystem of players around Samsung through strategic investments and alliances.
The Samsung innovation radar will also extend beyond technology, encouraging artists and the creative industry to participate in Samsungs research journey. The first opportunity for this broad involvement will be the Samsung Create Challenge, which SSIC will launch later this year. 1. Samsung Strategy for Smartphone in India
– Smartphone for Everyone- Provide an Open Operating System (OS)- Marketing Strategy
Samsung Has A Totally Different Strategy From Apple, And It’s Working Great: Samsung is better than anybody else at learning from its competitors.
“A market reader is sort of the classic fast follower,” “It doesn’t mean they ignore their customers, but they’re very attuned to what competitors are doing and what other people are bringing to market first and observing what seems to be gaining traction, then very rapidly coming up with their own version of that innovation.” Cit. Barry Jaruzelski, senior partner at Booz&Co The company pivots and produces quickly, coming out with a variety of devices. It sees what the market responds to, pushes successes, and kills failures.
And now, rather than just providing a cheaper and lesser iPhone, it’s differentiated itself with larger screens, different features, successful marketing, and delivering what consumers want. R&D: Apple has a huge cash pile, but Samsung seems to be more willing and able to put their money to use. Samsung’s research spend is 5.7 percent of its revenue, compared to 2.4 percent for Apple. Samsung is a diverse business with chips, displays, and other technology. This pays dividends, allowing it to compete on price and increasingly, offer features Apple hasn’t gotten to. DIVERSIFICAZIONE: Samsung is so much more than a smartphone-maker.
It is a conglomerate, a manufacturer, and the world’s largest chip-maker. It makes many of the components that go into its smartphones giving it a cost advantage and allowing it to be much more flexible in terms of what it produces and when. And though Apple is trying to move away from Samsung chips, the company’s smartphone competitors still have to buy them. In a way, they help finance its cost advantage.
FAST FOLLOWER: -> Market reader: , it doesn’t mean they ignore their customers, but they’re very attuned to what competitors are doing and what other people are bringing to market first and observing what seems to be gaining traction, then very rapidly coming up with their own version of that innovation.
Samsung’s new approach is markedly different. Its Galaxy-branded devices are already popular with consumers and now it’s offering companies a sizable set of security services aimed at easing their anxiety with consumers who bring Android devices into the workplace. INTEGRAZIONE VERTICALE – DIVERSIFICAZIONE: one of the key reasons for its success is that it is perhaps the most vertically integrated company creating consumer electronics today.
Vertical integration means a company can produce most of the actual components or software it uses in its products. It doesn’t have to rely on outside manufacturers for hardware or third-party sources to deliver core components for its products. Samsung makes its own CPUs for smartphones and tablets, as well as screens and many other components. (The Flaw in Samsung’s Mobile Strategy
Samsung must take control of several areas of its mobile business in order to rival Apple and Google, and a few recent moves tip that it’s well on its way. AREE DI MINOR CONTROLLO – FUTURE STRATEGIE: While Samsung governs most of its destiny via its vertical integration, there are a couple areas it has little control over, making it very vulnerable. First, Samsung devices run Android, which is the same OS that most of its competitors except Apple use to power their mobile tablets and handsets.
Samsung tries to add value to Android on its devices through its own UI layer and additional security features, but like its competitors, it must rely on Google for any innovations in the core of the OS itself. It has no power over what is done or how fast any new OS features come to market.
A second area that Samsung doesn’t have control over is the profit from any Android apps or ads. Apparently 90 percent of the profit on ads sold on a Samsung Android device goes to Google, while Samsung gets a paltry 10 percent of that fee. And as far as I can tell, it gets almost no revenue from apps because Google controls that money flow through Google Play.
Each vendor has the opportunity to create its own app store to earn revenue from, but this is not normally a major moneymaker. A second clue comes from Samsung’s recent decision to blend its own mobile OS, Bada, into a really powerful mobile OS called Tizen. Tizen got its start inside Intel but is now a full open-source mobile OS based on a mobile Linux core. Samsung has embraced this OS and I believe it’s more than just an experiment. Indeed, I hear Samsung and Intel are working closely to make this an even better mobile OS, and will start getting a lot of software support for it in the very near future.
Even though Samsung has become a mobile force that is challenging the competition, it knows that to become more powerful and gain more market share, it must own its OS and its ecosystem. This is the hallmark of Apple’s strategy and Samsung understands that very well. Samsung could potentially create a major mobile OS competitive with Apple’s iOS, Google’s Android, and Microsoft’s Windows Phone, giving itself exactly what it needs to bring it even closer to owning its market in entirety.
SAMSUNG STRATEGY: This report investigates how Samsung was able to build a competitive advantage in the global memory chip industry and what steps it should take to sustain its advantage in the face of the imminent threat ofChinese competition. Analysis of Samsung’s business strategy and competitive advantage
Porter’s 5 forces model in Exhibit 1 is used to analyze the global memory chip industry and Samsung’s strategy to date. Samsung had become the dominant player in the global memory chip industry and was able to increase the gap from other competitors in terms of technology and market share by following the below strategy. 1. Aggressive investments in R&D
The memory chip industry is technology driven. A significant investment is required in R&D at the product design stage. As illustrated in exhibit 1 Samsung Electronics had maintained its technology leadership by outspending its rivals in R&D by over 1.5 to 20 times from 1998 to 2003 (Exhibit 3), which was possible thanks to the Samsung group’s diversified portfolio that allowed it the take calculated financial risks.
Since Samsung was able to create and maintain technology leadership it was able to earn a very high premium at the initial stages of a new product to recover its initial investment and if competitors began producing the same product it could aggressively lower prices to make it difficult for followers to stay in the competition.
Faced with the challenge that the DRAM industry might fall into a commodity trap and therefore be subject to cutthroat price competition and price fluctuations, Samsung developed the below classification of broad product differentiation. • Frontier: Cutting edge products with the highest margins • Legacy: Current products, potentially manufactured using technology used to develop the frontier products resulting in cost savings • Specialty: Products to target niche markets
3. Cost advantage