The fast market adoption and the increasing customer demand lead to the industry is expected to continuous expanding in the next few year. However, as the prior analysis identified that the tablet industry is moderately attractive and market share stays uneven that it dominated by Apple’s pad. Rivals should seek to gain their competitive advantages and make use of them in order to being survivor or success in the fierce battles. The main concern identified in the research were: the protection of intellectual property. B}’ a thorough application of Canter’s, Samsung is strongly believed to have achieved
Continuous Improvement and Relationships, yet, a lower efficient in Time compression and not really effective Core Competencies. This can be exhibited through their product line get frequent upgraded and the strategic alliance program to attract allies from many fields. Regarding to the tablet sector, this new acquired knowledge will boost the Samsung future tablet. 0 Moreover, analysis using Day & Winless model identified that Samsung could achieve competitive advantages within the tablet sector through their superior skill in innovation and information technology.
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In addition, their superior resource in global strategy and strategic alliances also contribute to gain the advantages. These allow Samsung to provide the differentiated product, superior customer value and cost reduction. However, Samsung disadvantages of key industry success factors: relative weak brand preference compared to the market leader and inferior battery life. Samsung would benefit in building additional superior skills and resources that it could generate the sustainable and further competitive advantages. Three challenges are identified as being the most significant and pressing, that
Samsung should address to maintain and improve upon its competitive advantage in the future: their relative weak brand preference as compared to the market leader; the inferior battery life of Samsung Galaxy Tab; and defeat Apple to be the market leader specifically in the tablet Industry. In order to strengthen its brand preference, it is recommended that Samsung place more emphasis on educating consumers of the Android’s ease of use and hardware superiority. In addition, marketing campaigns and personalized customer services should be done to increase consumer awareness and brand loyalty.
In order to manage the inferior battery life of the Galaxy Tab, it is recommended that Samsung should invest heavily in research and design to further improve the mobile device battery technology. Moreover, seeking to patent its battery technology should the company have a breakthrough in increasing the battery lifespan of mobile devices. Finally, by increasing the number of operations and dealerships around the world, starting with major cities such as London, Singapore, Sydney, Johannesburg and Beijing, Samsung can increase its brand awareness and improve its global before and after-sales service.
The companies in the tablet industry that they design and manufacture these computing devices with portability, competitive price points and excellent functionality, are rapidly developing by the growing customer market. Tablet industry is currently challenging the traditional electronic products’ market and they are expanding by the increasing market demands. Analysis of industry through Porter’s five forces model (Appendix 1) demonstrated that it is moderately attractive to the potential entrants.
Not only because of the market leaders occupied the significant proportion of the market share but also the increasing competition in the tablet industry required the players to adopt the differentiation strategy to gain its competitive advantages and reduce the costs (Appendix 2). Thus, the research and development is particularly essential for the companies to be survived and to compete in the tablet industry. According to the technology research firm DC (2012), the market growth rate of worldwide tablet shipment at the second quarter in 2012 increased to 60%.
The market leader in the tablet industry, Apple still maintained its significant prevailing position by occupying over half of the market share (Tom, 2012). The other major players include Samsung, Sony, HP, Dell and Blackberry also contributed to the rivalry. However, the second large player, Samsung only accounted fro less than 10% of the tablet market sales. In addition, recent research indicated that the worldwide shipment is expected to grow over 60% in the next few years (DC, 2012) due to the increasing consumer demand and the tablet development.
According to Porter’s three generic strategies, Samsung Galaxy Tab running Android system targeted the broad market and seeks to take sustainable competitive advantages by differentiation in the table computer battle. Compared with the market leader in the tablet industry, the Galaxy Tab not only has the basic functions as pad but also employing several newly-created features to responded the customers’ needs and wants, based on the market research, such as Samsung Reader Hug for e-book (BBC, 2010).
Apparently, the smaller touchstones and lightweight design are the strengths of Galaxy Tab to compete with pad (Four, 2012). The S-Pen and Quad-core processor were genuinely impressive features of the Galaxy Note 10. 1 and significantly differentiate from the other tablet. The innovative eaters aimed at targeting the market in the education, design and business sectors. In addition, Samsung Electronics also has high reputations, positive customer satisfaction for quality and technological superiority to create differentiation (Samsung Electronics, 2011 b).
In the fierce competition environment, the Samsung Galaxy Tab also set out to be a low cost producer to increase the probability and Return of investment. (Samsung Electronics, 2010). Although the wage in developing countries increased the labor cost, the location of production transferred abroad to lower the costs in capital sources and human still attractive to manufacturers (Business Spectator, 2012). It is noteworthy that Samsung has opted for the latter with its lower price Galaxy Tab 2 7. 0 while re-christening it as a special student edition (International Business Times, 2012).
The new product demonstrated Samsung attempt to focus on the single market segment in the meanwhile. Although the porter generic strategies stated that the firm must be single-mined, the combination of those three strategies could be more effective in practices and the “stuck-in-the-middle” is not inevitable. 1. 3. 1 Global tattles over patents in the tablet industry The worldwide patent war between the two largest technology companies, Apple Inc. And Samsung Electronic raised the awareness of intellectual property protection (The Wall Street Journal, 2012).
Samsung ordered to pay Apple $1. 05 billion in lawsuit over smartened technology and its new product was delayed release to the market. The “patent infringement” could influence retail sales, customer relationship and brand identity of the company (The New York Times, 2012). Under these circumstances, the companies need to compete in the marketplace with its innovation products and they take the steps accessory to protect their innovations and intellectual property rights (International Business Times, 2012).
The increasing concerns about the intellectual property impacts the strategies decision in the company and challenge the development of the overall industry. 2. 1 . Core competencies A core competency is a distinctive skill that an organization does better than its competitors (Broodmare, 2005). To be unidentified the distinctive of skill, some factors are need to be considered, such as the relevance of skill to all of the organization’s product markets, contribution to the perceived value of product and its difficult to be imitative by competitors. As a market challenger, Samsung Electronics has adopted a frontal attack strategy on Apple.
This is evident as Samsung launched it new Galaxy Note tablet with new features such as stylus-type pen and split screen function hoping they will stand the new device apart from rival Apple’s pad (The Sydney Morning Herald, AAA). However, this distinctive skills cannot consider as core competences as Samsung only change its strategy to be better than Apple, which does not mean that Samsung can better than its competitors. Also, the stylus-pen and split screen function can be easy pop by competitors as it does not maximize the market share of core products. . 2. Time compression Time compression is the ability that an organization does things quicker than its competitors (Broodmare, 2005). It could be the ability to launch new products into the market quicker than competitors, the capability to make deliveries quicker and ability to respond market trends more quickly than competitors. Responded the customers’ needs and wants. As been analyzed from previous report, Apple is the market leader while Samsung is only in market challenger position. The Samsung Galaxy Tap 2 10. As been released on 22 August (Smith, 2012) but Apple was slower than Samsung one month in introducing Phone 5 into the market, which was on 21 September 2012 (Hill, 2012). In addition, Samsung created an CEO-design evaluation system in 2004 to evaluate and improve the environmental quality of our products and that is even ahead of Apple (Samsung, 2012). There are three categories which include resource efficiency, environmental hazardousness, and energy efficiency. By the ability of launching new product and response to market trend faster than the market leader – Apple, Samsung can then be considered with time compression ability . Continuous Improvement The process of continual upgrading to advance and develop the company’s products, services or procedure to deliver higher value and better quality of their offering to their customer is defined as Continuous Improvement in Canter’s New Wisdom. Green Products Sustainability is quite an issue for any ethical manufacturers globally, and in order to take their responsibilities towards the environment, SAMSUNG has started to endow a “Green” characteristic into its products (Digital Document Solution, 2012).
Samsung has proudly presented its CEO-design evaluation system in 2004 to examine and improve the environmental-awareness feature of its products through three aspects: Manufacturing, Recycling and Green Partnership (Samsung, 2012). Galaxy Tablet is no exception to their Green policy. In fact, besides Apple’s Pad, it is one of the rare CEO- friendly tablets featuring Scorings Gorilla Glass which is an alkali-luminosities not only providing up to four times anti-breakage but also lessen carbon emission during their manufacturing (Shims J, 2011).
Hardware and Software Upgrading phone 5 was released Just a few weeks ago causing a ruckus for Australian is so excited for the latest stylish smartened (News, 2012). Yet, SAMSUNG has beaten their competitors. A better display screen has been applied to Galaxy S Ill even though the users might not recognize the differences. According an industry expert, the screen is thinner (Apple Phone 5 is 1. 5 mm thick while SAMSUNG Galaxy S Ill so 1. 1 mm) and display better color gamut with a capacity of 100% of NETS color demonstration while Apple can do best at 72% (Charily N.
K. , 2012). Apple has been very famous for the wonderful display capacity, but now SAMSUNG has indeed, got a step ahead. The question is when SAMSUNG will apply this new display screen genealogy to its tablet series. Apart from hardware upgrading, for the inside part, SAMSUNG CEO, Mr. Swoon has announced a call to encourage the software development. He acknowledged the competitive edge of SAMSUNG advanced technology, therefore, so as to protect its selling point, a total improvement of both hardware and software must be raised (Lee 1. 2012) 2. 4 Relationships A cooperating Business-to-Business program called Samsung Enterprise Alliance Program has been up and running for a while. This program encourages firms to get involved with Samsung to create a strategic alliance so as to generate differentiated infinite to leverage its partner and Samsung themselves (Samsung Enterprise Mobility, 2012). Successfully stories can be described as follow with a case where Samsung partner up with Microsoft and many other partnerships with others technological support services.
SAMSUNG and Microsoft Firstly to prepare for the Smartened War, Microsoft and Samsung has agree upon sharing their resources, specifically their patent portfolio to confront Apple and Google for market sheer in smartness and tablets market. The deal is that Samsung will pay royalties for any smart-interfere device unit produced for their operating yester (Endow W, 2011). Moreover, Samsung future products will feature the Windows 8 of Microsoft as for slate PC’s: the Series 5 and Series 7 (Patriot A. , 2012). This Slate PC’s can be transformed easily with an attached keyboard.
These may bring Bill Gate’s dream to create a powerful tablet to fruition. With this alliance, Samsung will focus on making the hardware bit while Microsoft will do best with their software to get compatible to the piece (Eaton K. , 2011). Other Alliances Programs Besides, the company has also Joined forces with Keepsakes Lab – a prestigious anti- virus software developer. The benefit of having Keepsakes is that Samsung devices such as smartness and tablet will be protected by a world leading antivirus technology with Keepsakes Mobile Security and Keepsakes Tablet Security.
Even though there is not many infamous cases about smart-devices yet, but there are no guarantees that hackers would not hijack such devices. This is like a step ahead for better privacy and security of the consumers (Keepsakes Lab, 2012). In addition, Powerboat and Qualm alliance is trying to include a wireless charge technology to Samsung products. This technology is pretty new and not very popular, ended. Therefore, cooperating with Samsung, particularly in their latest release – the Galaxy S Ill will somehow raise the awareness of this technology in consumers’ mind (Ingram N. 2012 and Corner S. , 2012) 2. 5 Assessment based on Canter’s New Wisdom Analysis By applying Canter’s New Wisdom Theory, it can be seen that Samsung strongest points are Continuous Improvement and Relationships. Its Time Compression aspect is doing well but not well enough to become Samsung competitive advantage. On other hand, Core Competency is yet to be exploited by the firm. Specifically, its advanced technology is continuously applied to their products without fail, yet such technology is usually announced on the market by their competitors (Apple phone AS/ phone 5 Vs. Samsung Galaxy S Ill).
Additionally, unlike the other players on the field, Samsung especially concentrate on making strategic alliances with others company to benefit both sides while for instance, Apple is somehow quite conservative. Another point is that, Samsung strategy to attack the market leader and other players always pushes itself to do better than its competitor but not as creative and innovative for the fact that there has not been any trend lead by Samsung as in a case of Slate PC’s resembles the Transformer Pad Line of SASS.
Day & Weenies assert for a firm to be competitive within an industry, it must possess the Key Success Factors of the industry (Broodmare, 2005). The following Key Success Factors (SF) have been identified through careful analysis of tablet industry. Key Success Factor Issues Identified Explanation Ability to provide superior marketing, sales and services Customer Services In this industry the success of a manufacturer depends as much on its capacity to completely satisfy its customers as on the performance of its products (Broodmare, 005).
Marketing, sales and services functions are taking the lead in shaping organizations’ overall strategy for serving the tablet consumers, but the IT function is integrally involved (DATA, 2012). According to Data consultancy surveys (2012), the greatest success in winning the tablet consumers rated cross functional collaboration much higher as a key success factor than the companies with the least success to date. Advancement of technology Innovation & Continuous Improvement To be competitive in this industry, a strong commitment to continuous improvement is vital.
Firms committing themselves to extensive research and development will achieve innovation and the capacity to differentiate themselves from competitors through patents and proprietary products (Broodmare, 2005). Therefore, tablet manufacturers must have continued investment in research and development in order to remain competitive in the market place. Ability to build networks to improve ability to compete effectively Strategic Alliances & Relationships As the tablet industry is still in its infancy it is imperative to have well built strategic alliances and relationships.
An increased number of alliances and networks across al aspects of tablet research and development, production and distribution lead to cost efficiencies and greater business opportunities (Commonly, 2011). To remain competitive, or merely survive, in this industry these strategic alliances are essential. Effective Cost Control Cost flexibility Research and development costs in this industry are high (lips, 2012). It is essential for manufacturers to reduce their fixed costs and limit operational risks to survive in this industry, and one of the ways is by outsourcing (Broodmare, 2005).
According to an IIS report, the vast majority of tablets, including pad and Kindle fire, are made by entrant or outsourced manufacturers in Asia, such as Hon. Ha and Quanta in Taiwan (supply, 2012). Outsourced manufacturers in 2011 were responsible for 87. 5 percent of tablet production, compared to 12. 5 percent that were made in-house (supply, 2012). 3. 2 Assessment of Samsung Sources of Advantage Superior Skills Superior skills are defined as the distinctive capacities of personnel within the firms include engineering skills, technical skills and so on.
These superior skills may be distinguished from and competition and it allow the company to response more quickly to any change in the market (Broodmare, 2005). Apparently, Samsung superior skills are their innovations. The innovations in product design, manufacturing and marketing lead the firm access to their competitive advantages. Those advantages are facilitated and supported through the specialized employees in different fields, especially in research and development. In addition, the innovate specialists in procurement, HER management and marketing also have excellent skills to support the success of company.
Samsung was regarded as the world’s biggest information-technology firm with its annual revenue in 2011 The Economist, 2011). The company’s technology leadership position is evidenced by its high -performance mobile technology and further supported by its mass of registered technological patents (Samsung Electronics, 2011 b). The superior skills of designers, specialists and technicians generated greater performance and reliability of the products, those technological advancements in order the firm to add value to customers and also achieve their superior position in competition.
Superior Resources According to Broodmare (2005) superior resources are tangible elements for advantage that the company can exercise its capacities more readily than competitors. In order to better response to their steadily growing tablet demands, assess to wider distribution coverage and achieve larger salesrooms, Samsung are expanding their global authorized dealerships program and purchased larger scales of manufacturing facilities in several countries (Authorized Samsung Internet Dealers, 2012).
The strong information technology systems of Samsung to deal with customer services management, distribution and marketing are also considered as their superior resources. Further, the increased investment and relationship from the Samsung strategic alliances led to the firm gain competitive advantages in their research and development (Samsung Enterprise Alliance Program, 2011), further supporting their superior skills of innovation. . 3 Assessment of Samsung Positional Advantage Samsung has established a prominent position in the tablet computer market because of its superior skill and resource allowed to design and manufacture the high-performance Android-powered Samsung Galaxy Tab. Customers can distinguish superior benefits by the innovative features, product quality, more convenient action and outstanding customer services of Samsung Galaxy Tab.
The sources of advantages enabled the firm to deliver superior customer values by occupying a differentiated position in the market, where customers will pay a premium price for its tablet instead of its competitors (Broodmare, 2005). It’s worthy to note that Samsung also operating at lower relative cost for advantages as a result of the analysis of their Michael Potter’s value chain (see Appendix 3). The value chain indicated that Samsung activities have great influences on customer values and also account for a argue proportion of cost reduction.
The positional advantages will led to in turn to superior performances outcome, customer satisfaction and increase profitability ultimately. 3. 4 Match between Industry Key Success Factors and Samsung Sources of Advantage The following table illustrates how Taste Motors have successfully achieved two of the four key success factors of the electric automotive industry. Samsung Sources of Advantage Through the alliances of Samsung Galaxy Tab and Toast’s Campy vehicles, Toyota Korea was able to collect data on the vehicle’s fuel efficiency and the customer’s riving style through the BODY car diagnostics system.
With this information, the company has provided excellent, fast maintenance services, achieving improved customer satisfaction (Samsung, 2012). Samsung continuously expands its global authorized dealership program, allowing advantages on availability, efficient and timely delivery of products and spare parts, and Samsung after-sales service – a critical aspect of the tablet industry (Crypto, 2012) Advancement of technology Currently the world’s biggest information technology firm Invest much of their revenue back into ongoing R&D Own a suite of technological patents