Introduction

Samsung is a South Korean company founded by Byung-Chull Lee in 1938. The company
started as a trading company and gradually became a multinational conglomerate through many
acquisitions and mergers. Samsung Electronics Industry Co Ltd was established in 1969.
Samsung has more than 200 subsidiaries across the world. The brand’s vision is to be in the
global top 5 by 2020 and it believes that value creation and innovation will lead it to the top.
Samsung Electronics is also renowned for its innovation, receiving 30 Innovation Awards at the
Consumer Electronics Show in 2012, which is considered to be the largest consumer technology
tradeshow. The company is focusing on continued growth and hopes to become the leader in the
global IT industry. Samsung Electronics faces significant challenges in the present, as well as in
the future, including patent litigation from Apple, and a highly competitive IT market. As such, it
is essential the Samsung Electronics develops a technological position and strategy that
effectively makes use of innovation to maintain a strong position within the market and to
navigate challenges that it is faced with.

Marketing Mix
Marketing Strategy of Samsung analyses the brand with the marketing mix framework which
covers the 4Ps (Product, Price, Place, Promotion). There are several marketing strategies like
product innovation, pricing approach, promotion planning etc. These business strategies, based
on Samsung marketing mix, help the brand succeed.

Samsung Product Strategy:

The product strategy and mix in Samsung marketing strategy can be explained as follows:
Samsung invests a lot in research and development to deliver the best products to its customers.
Samsung offers a wide range of products in different product categories. The diverse offerings
come under the products of Samsung marketing mix. The products can be classified into five
categories and they are:
Mobile devices:
Samsung is one of the leading manufacturers of mobile phones. Smartphones like Samsung
Galaxy series, tablets, wearables, accessories etc. for a big part of the brands portfolio
Home Appliances:
Refrigerators, Washing Machines, Cooking appliances, Air conditioners, Vacuum cleaners etc.
are some of the consumer electronics offered by the company
Television:
Samsung Television, Audio and Video solutions & other accessories are offered by the company.
Apart from TVs, the company also has a strong portfolio in digital cameras.

Samsung Price/Pricing Strategy:

Samsung is a market leader in smart phones and is a dominant player in market for home
appliances and smartphones.
It uses two pricing schemes which are explained as follows. Pricing strategy based on
competition is a part of Samsung marketing strategy. Samsung has not succeeded in becoming
the leader in other product categories. Samsung is a trustworthy brand even in the ‘home
appliances’ segment. To prevent the flanking attacks from its competitors in the market it’s
essential for Samsung to use competitive pricing. Also, Samsung is a not a first mover in these
product categories and thus it has to defend its position in the market. All these help in
understanding the pricing strategy in the Samsung marketing mix. Samsung also uses skimming
price policy. For instance, when Samsung launches new products with different variants of
storage capacity, it prices the product higher. But when other competitors launch a smartphone
with identical features, Samsung lowers the price and easily prevents the reduction of its market
share due to the launch of the competitor. The annual revenue of the company is more than $200
billion.
Samsung Place & Distribution Strategy:
Samsung sells directly to the retailers and service dealers. And due to this strategy, only service
dealers are responsible for the corporate sales. Retailers dealing in technology generally have to
include Samsung in their offerings, because of the brand being world-famous. The distribution is
the strength for Samsung. Samsung also distributes its products using a single distribution
company in a particular location that further distributes the products to other locations.
Samsung Promotion & Advertising Strategy:
The promotional and advertising strategy in the Samsung marketing strategy is as follows:
Promotion is a strong pillar in the marketing mix of the company. Samsung believes that
advertising the best form of promotion to engage potential consumers and position the brand.
Samsung promotes new products using newspapers and digital media. To take the advantage of
the huge number of followers of celebrities, the brand has invited many celebrities to be the
brand ambassadors and promote the product. Big hoardings and posters are put up on highways.
The brand has a strong presence online via social media channels, digital marketing and online
ads. Besides advertising, Samsung also uses different promotional tactics to make customers buy
the product. Samsung is mostly famous for its product quality and user experience but Samsung
is also known for being a giant in sponsoring events. Samsung also sponsors major events.
Samsung offers heavy discounts during national festivals. This concludes the Samsung
marketing strategy and marketing mix analysis.
PORTER FIVE FORCES

Rivalry among Competitive Firms (High). 

There is a large amount of rivalry within the current industry, particularly the large and
influential companies, which includes both Apple and Samsung. Competition between these two
companies is particularly intense, because the products that they develop are similar to one
another in appearance and function. The rivalry has resulted in numerous lawsuits between the
two companies, which are discussed later in this report. Because of the significance of the rivalry
between these two firms, as well as other businesses within the industry, Samsung Electronics
must constantly be aware of the strategies of its competitors, and attempt to increase is brand
awareness, loyalty and market share.
Threat of New Entrants (Medium).
Samsung Electronics is present in a highly competitive industry, where companies are competing
against one another for not only in terms of the price of their products, but also their innovation
and uniqueness. New entrants into the industry would need to developing customer knowledge
and branding, which could be difficult, because the current brands are very well known, and
there are many established mobile companies. Companies such as Samsung and Apple produce
products that are perceived to be premium and top of the market, while any new company would
have to content with being perceived as a ‘knock-off’ and low quality. Nevertheless, the history
of Samsung Electronics itself shows that it is possible for a company to move from being
perceived in this way to a global leader. Consequently, the largest threat for Samsung Electronics
in terms of new entrants into the industry, who have the potential to develop products that are
substantially different than those already offered.
There are many barriers to entry into the industry, including the need to develop a strong
customer base and brand recognition quickly, the fact that many consumers exhibit strong brand
loyalty, the capital requirements involved in entering the industry, government regulations and
retaliation by the companies that currently dominate the industry. Samsung Electronics needs to
be aware of any new businesses that are developing within its industry, and monitor the
strategies any new firms that develop.
The Bargaining Power of Buyers (High)
The number of competitors present within the mobile device industry presents consumers with a
large amount of options. While innovation is a significant aspect for many consumers, price also
remains important. It is relatively easy for consumers to switch from one company to another
based on which offers better options and lower costs. Companies within the industry are all
appealing to the same group of consumers, which gives consumers a significant amount of
bargaining power.
One factor that limits the bargaining power of consumers is the types of products that are sold
within the industry. Consumers will not buy a large number of electronic items at one time, and
consequently, each purchasing decision is made based on the options that are available at the
time. Strong brand loyalty means that many consumers may accept higher prices and fewer
services than they could demand otherwise. 
The Bargaining Power of Suppliers (Low)
Within the mobile industry, there are many suppliers of components, and consequently, it is easy
for companies to switch from one to another if the prices of the products from one supplier
become too high. This lowers the bargaining power of suppliers, and allows Samsung
Electronics not to be driven by the demands of its suppliers. In addition, unlike most other smart
phone developers, Samsung Electronics also produces memory chips, processors and displays.
This creates the unusual situation where Samsung Electronics acts as a supplier to its largest
competitor. However, this also means that Samsung Electronics is able to supply many
components to itself, without relying on an external supplier and the changes in prices that are
associated with this.
The Potential Development of Substitute Products (Low)
Smart phones have been becoming increasingly popular as a device, offering consumers many
functions, including voice calling, applications and the ability to play music. The development of
substitute products is detrimental to Samsung Electronics, as it decreases the ability of Samsung
Electronics to control the market, as consumers can switch to another product easily. One of the
strongest factors limiting the development of substitute products is the patent centered nature of
the industry. Many of the cases between Apple and Samsung Electronics have not been decided,
however, if it is ruled that either Apple or Samsung Electronics voided patent law, then this will
make it difficult for any other companies to develop substitute products, and may even result in
injunctions against some of the products produced by Apple or Samsung Electronics.
Substitute products include anything that performs the same functions as Samsung Electronics’
smart phones and devices. This includes tablets, laptops, PDAs and non-smart phones (‘dumb
phones’). However, these are limited in their ability to act as a substitute. Tablets and laptops are
bulky compared to smart phones, and they also lack the traditional functions of a mobile phone.
This means that they cannot be considered a direct substitute. PDAs are also limited, as this is
not an area that is being extensively developed, and most PDAs lack the features of a smart
phone, or a mobile phone.
SWOT ANALYSIS

Strengths

Dominates the Smartphone Market –

Samsung has dominated the smartphone market for years. According to Gartner, in Q1 of 2020,
Samsung has maintained the No. 1 spot globally with a 18.5% market share, where as Apple is at
13.7% market share.
Research and Development 
The foundation of Samsung has always been on Innovative research and development.
Expenditure in these departments resulted in the company having a wide range of product
portfolio among its competitors. These include tablet, camcorder, mobile phone, camera,
TV/video/audio, Memory Cards, PC, and other accessories. They have 34 R&D (research and
development) centers operating worldwide. 
Ecologically Friendly Innovations 
Samsung has enhanced its brand reputation through its environmentally friendly innovations. It
secured its ranking at 9th position in the Top 30 Tech and Telecom companies of the EPA’s
2016 Green Power Partner list. It also received the Environmental Protection Agency’s (EPA)
annual ENERGY STAR Partner of the Year Excellence Award for five consecutive years. Other
companies do not share this achievement and hence increases Samsung’s appeal across all
business lines.
Stronghold in the Asian Markets 
Samsung retains a stronghold in the Asian markets, particularly India and China. Both India’s
and China’s business markets are growing substantially which is why Samsung has taken
advantage of the opportunity and incentivize in these countries accordingly.
WEAKNESS
Heavily dependent on the American Markets 
It is estimated that both Apple and Samsung sold at least 70.8% of smartphones in the USA.
While Samsung has diversified its resources and expanded its operations in Asia, it is still
heavily dependent on the American markets. The American economy is very unpredictable and
another recession could put Samsung’s revenues in jeopardy and can damage its operational
resources. That’s why Samsung needs to involve itself into the Asian and European markets to
ensure sustainability and avoid potential failures if the US economy ever collapses.
Decline in Smartphone Sales 
Samsung has been experiencing a decline in smartphone sales since 2017. A similar trend was
seen in China due to the price sensitivity of the Chinese market. They dump a lot of those
products in the Indian market at a lower cost which harms the Samsung sales. Samsung has tried
to shift more focus in India, but that strategy did not produce substantial results for the company.
Product Failures 
Any product that threatens the life of consumers erodes confidence and trust in the company.
Samsung has delivered several faulty products to the market from the exploding Samsung
Galaxy A20e to a faulty foldable phone.
Bribery Scandal 
In 2015, Samsung’s reputation was tainted by the revelation that the president of the company
bribed the government of South Korea to facilitate a merger. He was found guilty and jailed for
about one year until Feb. 2018, which eroded trust bestowed by consumers in South Korea and
the world over.
Samsung’s Opportunities

Triple Protection Proposition 

Samsung is preparing to launch its new air conditioning product called the ‘Triple Protection
Proposition’ that incorporates cutting edge technology and impeccable construction. The product
is geared towards a target customer base that would ensure maximum customer retention.
Diversification and Acquisitions 
It is critical that Samsung avoids the mistake of being limited to just one marketplace. It not only
invites risks from an economic perspective, but it also attracts unwanted political polarization
and negative media publicity. That’s why there is a business vacuum present in the Asian and
European economies in which Samsung can thrive. It needs to expand its customer base as well.
It can only be achieved through diversification and acquisitions of other businesses. Samsung is
a popular brand and can generate impressive revenues thanks to its financial standing.
5G Technology 
As the world moves to 5G, Samsung has the capacity and know-how to exploit this opportunity.
The company is already in active commercial discussions with operators in the EU to supply 5G
and 6G network equipment. Samsung is one of the top companies in the UK’s list of potential 5G
providers.
Introduce Innovative Products 
The smartphone sector is highly dynamic, with the latest trends going out of style in an instant.
Samsung can attain immense growth by setting the trend with great and innovative products like
the foldable phone.
Samsung’s Threats
Patent Infringement Controversies 
Samsung has been involved in controversies that have threatened its business. Its rival
Apple filed a lawsuit against Samsung for patent infringement which underwent a heated court
battle for seven long years until finally reaching a settlement. However, the company suffered
consequences when a jury decided that Samsung had indeed copied Apple and was to pay $1.049
billion in damages. This suit damaged the company’s reputation and its sales.
Increased Competition
Competition from opponents especially from those within the consumer electronics, smartphone
products, and computing industries has reached a record high. Whether it’s Xiaomi, Apple,
or Huawei, all the technological competitors are outmaneuvering and outperforming each other
to become the best technology company. This only increases the pressure for Samsung in both
competition and finances.
Legal and Regulatory Threats 
With the world becoming more globalized and digitally oriented, governmental authorities have
begun issuing their guidelines which are increasing legal and regulatory threats to companies
around the globe. Samsung is no exception to these rules. Laws differ from market to market,
and these strict regulations cause a hindrance in operations. Failure to comply could even result
in a complete shutdown in the respective market which may be fatal for Samsung.
Rise of Counterfeiting 
According to numerous research studies, Samsung is by far the most counterfeited phone brand.
Statistics from mobile benchmarking site AnTuTu highlight that over 36% of all
counterfeit smartphones are Samsung copies. Also, Samsung Galaxy S7 Edge holds the record of
the most counterfeited smartphone model.