a.m.D.g.

Albert L. Song MD-MBA140125 17 July 2017

Midterms - MarkMan Dr. Olive Lazo
Samsung Electronics Corporation (Smartphone Division)

1) Vision and Mission

Current Vision (for year 2020)
Inspire the World, Create the Future. (Samsung Electronics, 2016)

Comments on Current Vision

Samsungs vision is generally eccentric because of its shortness and it is not a complete
sentence. Using the vision criteria, Samsung focused more on the aspirational criteria where
they seek to inspire the world with their innovative products and services which would result
in creating the future. I also believe that it is realistic since Samsung is one of the worlds
top innovators in electronics more especially in mobile phones with their market leading
flagship phones. With that, they also give inspiration to other companies to innovate more as
well as to their customers to innovate by using Samsungs products. However, the last criteria,
vivid image, wasnt met since this is an abstract statement which doesnt really give us a
concrete picture of what Samsung will be in the future.

Revised Vision
In creating the future, we seek to inspire the world with our innovations in our products
and services.

Current Mission
To inspire the world with innovative technologies, products, and designs that enrich
Peoples lives and contribute to a socially responsible (and) sustainable future. (Samsung
Electronics, 2016)

Comments on Current Mission

The mission statement is also eccentric since it is also short. Their statement implies
that their customers are the people in general and also the world. Their products or services are
stated as technologies, products, and designs. However, the market is not stated in any way in
it. Meanwhile, technology is also there but not explicitly stated what specific technology is
being used. The last words, sustainable future pertains to their concern for survivability,
profitability, and growth. Their philosophy is to be inspirational to the world that enrich their
customers lives. However, there is no self-concept of their position in the market. Concern for
public image is shown as having a contribution to a socially responsible future. Lastly, there is
no mention of concern for employees.

Revised Mission
To be one of the worlds leading innovator of technologies, products, and designs
electronics, we inspire our customers through our innovations made possible by highly
dedicated and well-trained employees. Our diverse array of quality electronics makes it
possible for us to be the most distinguished in the market. We also seek to maximize our profits
by developing the most creative and innovative yet practical electronic solutions for individuals
and businesses. Part of having a sustainable future entails our commitment to be socially
responsible and to give back to society and the environment.

2) Situational Analysis
Company Analysis

1
 a.m.D.g.

Their goals currently are divided into two (Samsung Electronics, 2016):
quantitatively,
to reach USD 400B in sales and
to become predominantly number 1 in the global IT industry;
and qualitatively,
to be an innovative and respected company,
to become one of the top 10 worlds best workplaces,
to be a creative leader in building new markets, and
to be a global enterprise that attracts the worlds talents
As an aggregate, the companys objectives fall under the SMART criteria as being specific,
measurable, attainable, realistic, but not time-bound since they didnt specify a time to achieve
these objectives.

Samsungs focus or their strategic direction now is to make people great through
creativity and partnership. This means that they would use innovation and business and
customer partnership in order to attain their goals.

Samsungs current culture focuses on promoting a creative organizational culture

through 4 means: The first is being open and encouraging suggestion for work process
improvement. In this way, Samsung thinks it can promote creativity by being open to its
employees ideas. The second is adopting a flexible time program. Samsung thinks this can
maximize the creativity of its employees through this adoption compare to the old time-
management-based culture. The third is having a work-life balance. Samsung thinks that
employee happiness is one of their top priority to have successful business operations wherein
they provide vacations and tour packages for the employees and for their families. The last is
having welfare programs for its employees. Samsung says that they care for their employees
overall health and social aspects to have a better employee satisfaction thus leading to a better
working environment. (Samsung Electronics, 2016)

Customer Analysis
The exact size of the market cannot be estimated but 43% of the world utilize or possess
a smartphone (Baer, 2016). To add to that, the size of the market is growing as consumers add
up everyday and the trend of the smartphone sales are going up as much as 200 million each
year (Gartner, 2016).
Their customers are highly varied. Early adopters of Samsungs releases exhibit very
high interest in their innovative products like their smartwatches. Moreover, professionals like
in the business area, show their trust to Samsung by buying their Galaxy Note series. (Gelder
& de Guilbert, 2016) Moreover, Samsung reaches other types of customers such as in the
middle to low income class with their cheaper smartphones like the Galaxy A series, and the
Galaxy J series.
Samsung offers a diverse array of values for its customers. One of which is being
technologically updated with the latest innovations like their smartwatches, water-resistant
phones, and curved displays. Another is offering a high-quality smartphone in terms of design
and build which can be proved by just holding the newest Galaxy S8 can make you feel it is a
premium smartphone. Moreover, Samsung offers its products at a reasonable price compared
to other competitors like Apple where they give their customers more value for their money
through its smartphone features and practicality. Also, they uphold the value of being
customer-centric by listening to their customers as evident by a lot of complaints with the
removal of the expandable storage (microSD) in the Galaxy S6 which Samsung brought back
on the Galaxy S7 and S8. More importantly, they propose the value of safety for their customers

2
 a.m.D.g.

in the wake of the Galaxy Note 7 issue where it was found to have a faulty battery which can
explode. They created a dedicated department to rigorously test the batteries of their
smartphones in order to prevent the issue happening once again.
The customers decision process on buying smartphones can be based from experience
as buying smartphones nowadays is very common. Some people buy new smartphones because
of being outdated, having a broken or slow phone, or simply not having a smartphone. These
problems make customers search for information in the Internet for smartphone websites,
online blogs or tech review websites, and even in social media to gain opinions on the
smartphones. Moreover, they also go to concept stores to actually try out the smartphone.

Competitor Analysis (in number 4)

Political and Legal Environment

The Philippine government currently has a taxation system of 35% of the income for
corporations in the Philippines and also a value-added tax of 12% of goods sold to customers.
For the smartphone industry this means the companies should raise the prices of their products
to pay for the tax costs of the government. (BIR)

Economic environment
The Peso-to-Dollar exchange rate has been deteriorating since President Dutertes
inauguration. Currently it is pegged as 1 USD for 50.68 PHP (Xe.com). This can mean bad
news for all the businesses with foreign connections since the value of pesos is deteriorating.
Moreover, the inflation rate of the country is steadily rising 3.1 as of June 2017
(Bsp.gov.ph). This means that more and more customers need to earn more to be able to afford
more goods like smartphones.

Social and cultural environment

The Philippines is well-known for being the texting-capital of the world as well as being
the social-networking capital of the world where 93.9% of the population use their phones to
access Facebook and other social media websites (Russell, 2011).

Technological environment
Moores law applies in the tech industry where the innovation of technologies happen
at an exponential rate. Smartphone chips are getting smaller and smaller but more efficient
each year. The advent of high capacity high durability batteries will come soon in smartphones
by 2019. Flexible displays are being developed now by Samsung.

SWOT Analysis
Strengths
o Market leader
As stated previously Samsung is 2017 Q1s top market shareholder
o Innovative products
They now lead the trend in innovating curved displays and smartwatches
o Diverse products
They have a lot of line-ups for various kinds of customers.
o Up-to-date technology
They boast their smartphone chips as being the latest in the market
o Enriching corporate culture
The have various ways of promoting employee satisfaction and
participation in the company as stated earlier.

3
 a.m.D.g.

Weaknesses
o Slow after sales support
Their flagships firmware updates are really slow compared to Googles
phones and Apples phones
o Reliability issues with battery
The Note 7 scandal proved Samsung has not been checking the
reliability and safety of its products lately
o Corporate scandals with politics
The connection of one of the executives of Samsung with the scandal of
the impeached Korean president taints the brand
Opportunities
o The rising trend of smartphone shipments and adoption
o Innovation of other technologies
Threats
o High taxation rates
o Increasing inflation rates
o Deteriorating PHP to USD

3) Loyalty Program
Samsung should make a membership-style loyalty program where their customers get
premium benefits from the company. One of which is a 24/7 customer support service. Another
is swapping your old smartphone for a new one at a discounted price. Extended warranty
coverage for another year. Points can also be acquired by buying at Samsung stores and
redeeming them for accessories like speakers and headphones.

4) Competitors
Samsung is currently in the lead on its market positon in the smartphone industry with
26.1% of shares worldwide according to TrendForce in the first quarter of 2017. Other
competitors include Apple with 16.9%, Huawei with 11.4%, OPPO with 8.1%, BBK/vivo with
6.2%, LG with 4.6%, and others with 26.7% as an aggregate (Trendforce, 2017). The first two
of the competitors will be included in this analysis.
Apple is Samsungs number 1 rival in smartphone sales. Their strength basically relies
on premium quality built products and their innovations for the past years. This made the Apple
brand reputable and recognizable over the years with their smartphones and other electronics.
Their OS, iOS has a lot of strengths which include excellent battery management, smooth and
intuitive interface. However, Apples weaknesses also stems from their strengths. Their
premium quality built products come at a price, a very high price that thwarts out potential
buyers. Their products are not cross-platform friendly which means their core features only
works with their own products. Moreover, since the death of Steve Jobs, Apple has been
struggling with innovations compared to Samsung.
Huawei seems like a new competitor in the smartphone market but they have been in
the market for a couple of years already. They entered the top tiers of the smartphone market
thanks to their compliance with current innovations with their P9 and P10 smartphones which
focuses on premium build and quality camera. Their products are priced at very low costs
compared to the top 2 in the market shares which makes them very attractive to consumers.
However, their weakness is only the durability and reliability of the smartphones that many of
their customers are complaining of battery issues, boot loops, camera problems, and display
problems.
Samsung is different from Apple in a lot of ways. In the early years of Samsung, they
ride with the waves of Apple in their innovations which benefitted Samsung because of their

4
 a.m.D.g.

cheaper phones with almost the same feature as Apple. Due to the developments of AndroidOS,
Samsung also benefitted by being more distinct from Apple from that OS. They customized
AndroidOS in such a way that it is very user-friendly and smooth (as compared to previous
versions). Moreover, Samsung uses shotgun marketing by having a diverse array of products
for a wide range of customers with their low-end phones, middle-end phones, to their flagships.
Although they have the same OS, Samsung is also different from Huawei in terms of
innovations. Huawei just recently ramped up their smartphones so they currently dont have a
stand against Samsungs innovations and reputation. Samsungs products are more durable and
reputable than that of a Chinese brand.

5) Tag Line
Inspiring through Innovation
This tag line accommodates the vision of Samsung and their main strength
which is Innovation.

Positioning Statement
In the smartphone industry, we seek to be the number one in the market through our
innovations which the customer demands. This will inspire customers to be more creative and
innovate more with their lives.

6) Marketing Strategy
Samsung is correct about the shotgun marketing strategy where it provided products
for almost all of its market segments. This was proved to be correct due to its large market
share in the industry. This means that every marketing Samsung makes has to be targeted to all
of their market segments. For this paper, market segments are identified socio-economically.
For the low-income class, Samsung should hire celebrity endorsers to promote their
low-end productd via TV commercials, billboards, and radio stations.
For the middle-income class, they should target the functionability of their middle-
range products that it can solve some of their stresses at work.
For the high-income class, they should promote their high-end phones that will give
their customers luxury and class if they use it.

5
 a.m.D.g.

REFERENCES:
http://www.bsp.gov.ph/statistics/spei_new/tab34_inf.htm
http://www.xe.com/currencyconverter/convert/?Amount=1&From=USD&To=PHP
https://asiancorrespondent.com/2011/05/philippines-named-the-social-networking-capital-of-
the-world-indonesia-malaysia-amongst-top-10/#LtDkIMqLSXMKTqcP.97
http://pestleanalysis.com/apple-pestle-analysis/
http://press.trendforce.com/press/20170411-2803.html
http://fortune.com/2017/04/11/samsung-apple-market-share/
https://www.slideshare.net/IdevanGelder/samsung-electronics-customer-analysis-marketing-
strategy-analysis