Inspire the world, Create the future.”
1.0 Executive Summery
Samsung Electronics has proven to the business world that they are one of the mostprestigious technology companies in the industry. With more technology advancements thanour market can handle at this point and time, Samsung has paved the way for the future inelectronics. One of the most popular new “toys” in the market today, is the unbelievable 3D TV.The first 3D TV was launched in March of 2010, and has already had a major impact on themarket. With the release earlier this year, Samsung dominated the market, controlling nearly90% of the total share. Samsung’s product, the 9000 series TV, is incomparable to competitionwith its ultra-thin screen, measuring only 0.3 inches in width. The 9000 series also comes with afull color spectrum that makes for an incredible viewing experience.Although Samsung is dominating the 3D market, we still have very detailed strategiesand tactics that we believe will give us an increased competitive advantage over our competition. The company’s main emphasis the past couple years has been on integration,union, and encouraging innovation. Samsung is always preparing for the next big item to hit themarket, which is why their technology is so far ahead of all leading competitors. In the future,we plan to enter the 3D video gaming market with a partnership with Microsoft. This will give usaccess to all of Microsoft’s gaming technology, in which we will combine with our quality of sound and viewing stations to create the ultimate gaming experience. Of course, throughoutour journey through this market, we will continue to provide the best ad campaigns for the publicso that they will never forget our product. We will put as much prominence as possible in thesleek design and the one of a kind ultra-thin panel, only available in the Samsung 9000 series.By having an effective ad campaign, we will be able to catch the eye of many different targetgroups. Our major target groups are men around the ages of mid twenties to late thirties,Caucasian males, with a new and growing family. Studies show that this category is more likelyto buy the TV, along with a gaming system, than other aged males. We are also targeting “CubeTubers”. This is a group that consists of young people who grasp onto new technology quickly.This group is a large part of the 3D TV market right now.If the discussed strategies and tactics are successfully carried out, Samsung and the9000 series 3D TV, will hold the top spot in the television market for years to come. When thismarket starts to decline, Samsung has the technology ready for the next big wave of televisions
Situation Analysis
2.1 Samsung Electronics’ Vision Statement:
“Inspire the world, Create the future.”These six words coined the vision statement for Samsung Electronics (SE) inearly 2010 in correspondence with the release of its first 3D television. This visionstatement is a part of SE’s “Vision 2020” plan, and is considered the motto of thedecade for the industry leading organization. This new vision captures Samsung’sdedication to inspiring its communities by leveraging Samsung’s three crucial strengths:“New Technology,” “Innovative Products,” and “Creative Solutions.” It also promotesnew value for Samsung Electronics’ core networks: Industry, Partners, and Employees.Samsung’s commitment, set forth through their vision statement, is to contribute to abetter world and a richer experience for all.
2.2 Current Strategy:
Samsung’s current strategy in the 3D television market is to seize a dominantmarket share while the market is being pioneered and to maintain the majority marketshare throughout the stages of the 3D television life cycle. With the recent release of 3DTVs into the market in early 2010, the product is still considered to be in the introductionstage of the product life cycle. While Samsung introduced its new slogan, "Inspire theworld, Create the Future," the company's strongest emphasis in the last two years hasbeen on convergence and integration. Samsung has re-organized their corporation toencourage cross-pollination andinnovation.This is demonstrated by the progressive approach to the market that Samsung has taken, acknowledging the lack of immediategrowth in the market, and innovating to prepare for the potential growth in the market.The current strategy being implemented is merely preparation for the growth potential inthe 3D television market. Samsung realizes that the growth of the 3D television marketis dependent on the volume of 3D content available. Due to the market’s dependabilityon other industries to produce 3D content, Samsung has incorporated an effective planto accelerate the availability of the content. This segment of the current strategy wasaddressed by Samsung’s recent partnerships with, 3D content industry leading,partners Technicolor and DreamWorks Pictures.
22010 Marketing Pla
This current strategy has been effective, considering that, as of October 2010,the aggressive early launch plan has assisted Samsung in acquiring an 88% share of the 3D television market in the U.S. Samsung’s current strategy also includes theexpectation that their dominance and innovation in the High-Definition Television(HDTV) market will carry over as the 3D content availability increases. This currentstrategy can also be seen in Samsung’s advertising efforts, as they launched a 12.25million dollar marketing campaign in February in the UK. Currently, the strategy isestablished as progressive, meaning that Samsung is withholding the latest innovationsfro the 3D-TV market. Samsung has entered into a transitional phase, as they introducethe newest segment in the television market, and await the arrival of appealing 3Dcontent to compliment their technology. Samsung’s previous strategies have thrived inthe constantly evolving television market, innovating and pioneering new markets whiledeveloping break through products at competitive prices. Samsung has positionedthemselves throughout the past five years to dominate the next generation of 3D-TVmarket. Samsung’s dedication to innovation in the flat-panel TV market has resulted intheir ability to deliver the breakthrough products and superior values that will keep themat the forefront of the global TV market.Samsung began their dominance of the digital television market in 2005 andretained their top position until 2009 when, greenhorn to the market, Vizio took the topspot. In 2005, Samsung achieved their first No. 1 Market Share ranking in the HighDefinition television (HDTV) market. Although they lost the No. 1 market share of LiquidCrystal Display (LCD) televisions, 2005 proved Samsung to be a step ahead of thecompetition. They performed well enough that year to earn the 27th spot on the “World’sMost Admired Company” list by Fortune Magazine. 2007 brought Samsung the sixthconsecutive year with the No. 1 market share for LCD screens. Samsung pioneeredadvanced 3D technology, launching a 3D DLP TV in 2007, and a 3D Plasma-TV for 2008. In 2008, Samsung led the global TV market for the third consecutive year as theycontinued to intrigue customers with outstanding picture quality, elegant liquid-crystalbezel styling, and advanced interactive and connectivity options that allow customers toenjoy pictures, movies, and music from the Internet, their own home network, or USBdevices. In 2009, Samsung introduced the newest line of HDTV that was certain to be a global hit, the Light Emitting Diode Television (LED-TV). The LED-TV lineup Samsungoffered was the next advancement in LCD technology, replacing the conventional cold-cathode fluorescent lamp backlighting with eco-friendly LED backlighting. The result of this new market segment Samsung created was a full-featured TV with superior picturequality, stylish ultra slim enclosures, and dramatically lower power consumption. 2009also brought success for Samsung’s brand-recognition campaign as the Samsungbrand entered Fortune’s Top Ten list of the World’s Top Global Brands. Samsungforged a new market by launching their elegant and revolutionary, Light Emitting Diode(LED) television. Worldwide, Samsung sold 30 million flat-screen television sets,maintaining the No. 1 market share of Flat Panel TVs (FPTV) the fourth year running.Such achievements firmly establish Samsung’s leadership both in popular demand andin producing top-quality products. In March 2010, Samsung was the first company inthe world to market a full HD-3D LED-TV, reinforcing the organization’s leadershipwithin the industry.Although Samsung is a world leader in the television market, the product mix hasmore depth than simply home entertainment accessories and cell phones. The TVbusiness and the Mobile Phone business, are key components in the SamsungBusiness Portfolio. The TV business holds the top position in the current market. LEDTVs, which has shown explosive growth in the latest market, is a flagship product withinthe TV business. LCD TVs and Monitors have also maintained top positions in their respective categories. Samsung seeks to sustain leadership through constantinnovation and development in new technology, such as 3D. Samsung also inhibits aworld leading Semiconductor business unit, from which they transferred 300 engineersto the TV business unit. This transfer relocated the top performing engineering team inthe company, providing the employees with healthy performance bonuses every year,and keeping the TV business unit highly productive and competitive. This in houseaccess to human capital has allowed Samsung to maintain the top position in themarketplace.2010 has undoubtedly been the breakthrough year for the revolutionary 3D TVtechnology, assuring a very busy year for Samsung. With the release of Series 7000,Series 8000, and Series 9000 (LED-TV) televisions, Samsung has garnered high media and consumer praise for perfectly reproducing the range of full HD 3D images anddelivering “true-to-life” and “easy-on-the-eyes” picture quality. Samsung has beencharting the future of television through their 3D TV releases, of which include LED-TV,LCD-TV and Plasma-TV as well as 3D Blu-ray players, 3D home-theater systems andtotal 3D solutions that combine 3D active glass with 3D content. Samsung’s currentstrategy is to enrich the television experience and the power of the products bymaintaining the superior picture quality. SE has also began to enrich a deepened valueto customers by continued communications and by differentiated products, such asexpanded Internet-TV features and the launch of the Samsung application marketplace,“Samsung Apps.” These strategic efforts strengthen the premium brand imageSamsung looks to uphold and assists them in seizing and maintaining the No. 1 marketshare ranking.With competitors simply following the trend of Samsung’s breakthroughinnovations in the market, saying that Samsung is a step above the competitors wouldbe an understatement. With the 3D TV market segment being introduced, severalcompanies have identified it as the next big trend in the home entertainment market andaim to capitalize on the potential growth by entering the market. Some of the topcompetitors are Sony, LG Electronics (LG), Mitsubishi Electronics, Vizio, andPanasonic. Currently, none of Samsung’s competitors can offer a product to rival thepicture quality of the Samsung. Companies like Vizio, however, look to undercut thequality aspect of Samsung’s product by offering a cheaper, lower quality, alternativeproduct more accessible to mass market. Samsung will eventually see significantcompetition in the 3D TV market. Their greatest competition may come from their mostrecent prominent competitor, Vizio. While Samsung maintains quality as a major sellingpoint, Vizio’s focus is to appeal to the mass market by lowering their quality standardsso they can sell the product for less. Vizio is a market share leader but an innovativefollower, in a market where consumers will be forced to pay for the new technology andwill appreciate the quality due provided by Samsung, which in turn will negatively impactVizio.At Samsung, creativity, collaboration and excellence are the hallmarks of leadership. Samsung has attracted the world’s most talented managers as they work continuously evolving the company’s culture to better support their employees.Samsung fosters innovative ideas that advance technology, creates new products, andimproves the everyday life of their customers. The organizations leadership consists of veterans of the Samsung brand. Most individuals in top positions have spent well over thirty years with the organization. This employee retention indicates stability andaccelerates growth within the organization. Samsung is a very customer orientedorganization, offering product support online, by phone, or in stores.Samsung’s current strategy, taking a transitional approach to the 3D TV market,while launching several new advertising campaigns to increase awareness of the newtechnology, can be seen as very effective due to the role they play in the market.Understanding the potential growth the market will see, Samsung has taken innovationto the next level by developing several different 3D products, which could eventuallylead to them attaining complete 3D TV market dominance. The environment of theSamsung organization breeds innovation and creativity, allowing Samsung to developproducts and that will move them a step closer to there goal of maintaining dominanceof the 3D market.
2.3 Consumer Profile:
With the development of 3D TV technology, Samsung’s target market is easilyidentified as the Early Adapter. An early adapter is a consumer who has a very quickrate of diffusion, the rate at which the market accepts a new product or product idea.One Strategy Analytics Survey identified “Cube Tubers” as the most likely consumers of products available in the 3D TV market. These early adopters to new technology, areusually affluent young men who have redefined cool from having fast muscle cars, tobeing good at computer games. “Cube Tubers,” are twice as likely to express interest inreceiving 3D TV programming at home. These consumers represent a rather smalleight-ten percent of the overall population. They are most likely young, mid twenties tolate thirties Caucasian males, educated and married. They seem to be the most likelycandidates to show interest in buying the newest generation of the television market.Along with the “Cube Tubers,” the broader target market tends to be families with youngchildren. Understanding that children are more likely to show interest in the development of 3D technology, Samsung and other companies will try to appeal to thechildren with the intention of captivating the market of families with children betweenages two and fourteen. One common factor of all 3D product consumers is their likelygeographic location. The target audience for 3D TVs will mostly be found in or near bigger cities. These locations must be considered the prime market areas due to thelikelihood of the availability of 3D content in urban areas rather than away from cities inthe more technologically constrained rural areas. Most consumers of 3D TV productswill buy them via e-commerce with fewer buys being made in retail stores. Most e-commerce suppliers offer free, or cheap installation and deliveries. Supplying moreconvenience to the consumer than the average retail store. With the majority of thesales in the 3D TV market e-commerce, Samsung will still be selling a significant sharein high-end electronics stores such as Best Buy (US) and HH Gregg (US). Whendefining the psychographic segmentation of the consumers of this market, Sue Shim,Chief Managing Officer, Samsung, defined the target consumer as someone “immersedin the TV experience, an early adopter, and an individual who is a thought or opinionleader amongst peers.” The individuals Samsung looks to target, value the homeentertainment experience as prior generations would have valued an evening at thetheater.Samsung’s 3D TV product usage will increase as the content becomes moreavailable, and Samsung has taken steps to accelerate the rate at which this 3D contentarrives. In March 2010, Samsung announced partnerships with Technicolor andDreamWorks Pictures, two industry leading 3D content providers. With thesepartnerships, Samsung developed packages of products for the market incorporating3D content from DreamWorks Pictures and Samsung’s 3D TV products, offering theconsumers the full package for the ultimate at home entertainment experience. Thiscombination of content and product demonstrated the innovative practices at workwithin Samsung, and helped them achieve their goal of the No. 1 market share in the3D TV market as it was pioneered.The only deterrents from the traditional patterns of purchase in the TV market arethe decline in the current global economy and proximity of the latest transition in thetelevision market to HDTV. The transition from standard definition to HDTV is still