Introduction
Samsung is a leading electronics brand with a formidable presence in the smartphones and tablet market. Apart from that, it has also acquired a leading position in the consumer electronics market. Despite the heavy competition in the smartphone and consumer electronics industry, Samsung has maintained its leading position due to its focus on technological innovation, quality and customer experience.
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The result has been growth in popularity and sales wordlwide. Some of its core strengths include advanced technological capabilities, supply chain, marketing and brand image. However, its leading position is supported by several sources of competitive advantage. It is also a leading chip maker and its Galaxy smartphones are among the most popular that compete with Apple’s iPhone. Have a look at how its various sources of competitive advantage have helped it strengthen its position in the consumer electronics and particularly the smartphone market.
Research and innovation :-
Samsung is an innovative brand that focuses a lot on innovation to bring efficient products that are excellent in terms of performance as well as productivity. Apart from its smartphones which are both attractive and efficient, the brand is also a leader in the chip industry. Galaxy is a market leading model of smartphones whose popularity around the globe is high. It is among the leading competitors of Apple’s iPhone. The computing and smartphone industry has grown highly competitive and to remain ahead of the others, it is important to focus upon research and innovation.
Samsung invests a large sum each year in Research and development. This enables it to respond faster to changing demand patterns and buying trends as well as release new features and models. It also enables higher user engagement, better brand recall as well as higher customer retention. Samsung is also a leading innovator and invests heavy sums in modern technologies like AI, IoT, security and privacy as well as autonomous mobility and data infrastructure.
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Brand image:-
Brand image plays a central role in making a large and global business like samsung successful. Samsung is a leading technology brand with a strong presence in smartphone and tablet as well as consumer electronics and chip industry. One major reason behind the global success of the brand is its strong brand image. It is a customer centric brand that has consistently focused upon the consumers’ tastes and preferences as well as overall customer experience. All these things have together resulted in a strong brand image and brand equity.
Supply chain:-
A strong supply chain is also a determinant of the competitive strength of a brand. It enables faster production, smooth operations and faster delivery. Overall, a strong supply chain is important for maintaining your leadership position and a healthy bottom line. Global brands that have successfully managed their supply chains have been able to reduce their operational costs and pass on the savings to their customers. Samsung is a global brand and sources its raw material from thousands of suppliers from around the world. It has been able to manage its suppliers well using digital technology.
Samsung operates its supply chain with the help of around 2,500 suppliers from around the world. Apart from focusing on sustainability in its supply chain, the company has also built a code of conduct for its suppliers and provides them the necessary support for compliance. The company has also started several innovation initiatives for engaging its suppliers and for driving innovation throughout the supply chain. It conducts regular audits of supplier factories and also provides tools and training that make them more efficient and productive.
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Marketing strategy :-
The marketing strategy of Samsung is also a primary driver of its growth and profitability as well as competitiveness. Its marketing strategy is focused at the customers as well as the quality of its products. Marketing plays a central role in driving demand higher and growing the sales of a company as well as creating a strong brand image for any product or business. Samsung invests a large sum each year in marketing and promotions of its brand and products. In 2018, the advertising expenses of Samsung were around 4 trillion Korean won and sales promotion costs totalled around 7.1 trillion Korean Won. Total marketing expenditure of Samsung was higher than 9 Billion US dollars in 2018. It shows how much Samsung spends on growing the sales and demand of its products. Apart from that the brand is using digital technology heavily for marketing and customer engagement. The result is higher customer retention as well as faster growth of customer base. Overall, this has worked to make Samsung’s position in a highly competitive industry and global market stronger.
Pricing strategy:-
Samsung’s pricing strategy is also an important support behind its competitive strength and global leadership position. It has brought products for both the higher and the lower end market. Apart from the premium Galaxy models of smartphones, the company has also brought a large range of affordable smartphones to the market. This is an important reason behind the brand’s competitive strength and a reason behind its large customer base. Apart from the mobile phone segment, in the consumer electronics segment too, it has brought products in both the premium and the lower end segment.
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Customer base:
Samsung is a global company and its products are famous all over the world. Some of its market leading products like Galaxy smartphone and its range of televisions are highly popular and have a very large customer base. The company keeps releasing new features and models to keep its customers from all over the world engaged. A large customer base also means higher sales and revenue. Samsung focuses a lot on customer retention and for that purpose invests a large sum each year in marketing as well as R&D. This enables the brand to produce new market leading products and to engage its customers better. In this way, the brand has kept expanding its customer base globally.
Customer loyalty:
Apart from having a large base of customers from around the world Samsung has been successful at building high degree of customer loyalty as well. Competition in the consumer electronics industry as well as the smartphone industry has grown intense. Building customer loyalty requires a large investment in research and innovation to remain ahead of competition as well as a major investment in marketing to retain market share and for customer engagement. Samsung focuses on both promotions and customer engagement. Therefore, the brand has been able to build strong customer loyalty. It’s a major source of competitive advantage for Samsung.
FAQs
The company spends a fortune on research and development (R&D) and capital expenditures (CapEx). This pays off in the mid- and low-end markets, but the high-end products keep running into the juggernaut that is Apple. Samsung relies on vertical integration as a chief competitive advantage.
How do you answer what is your competitive advantage? ›
Your competitive advantage is the combination of marketing elements that sets your business apart. It's about the unique benefit customers get when they do business with you.
...
Ask yourself:
- why do customers buy from my business?
- why do customers buy from my competitors?
- why do potential customers choose not buy at all?
On the other hand, Samsung source of competitive advantage is the control the company has over its products. Unlike Apple, Samsung has control over its manufacturing process therefore; the company can produce and distribute into the market any new products.
What is Samsung concerned about its competitive advantage with regard? ›
Samsung is concerned about its competitive advantage with regard to its mobile devices and generates a value chain to conduct a cost analysis with Apple. Of the following, which would be the most important to consider in this analysis? Company A is negotiating a lease contract for all its sales force vehicle fleet.
What are five competitive advantages? ›
The five competitive strategies are: cost leadership, differentiation, innovation, growth, and alliance. Meanwhile, information systems could be a critical enabler of these five competitive strategies.
What are the 3 competitive advantages? ›
The three main types of competitive advantages are differentiation, cost advantages, and focus advantages.
What are examples of competitive advantages? ›
For example, if a company advertises a product for a price that's lower than a similar product from a competitor, that company is likely to have a competitive advantage. The same is true if the advertised product costs more, but offers unique features that customers are willing to pay for.
What is a real example of competitive advantage? ›
One of the most popular competitive advantage example of companies is Walmart, which sells branded items at low costs. They rely on a cost leadership strategy to minimize spending and offer 'everyday low prices' by leveraging economies of scale.
What are the 5 sources of competition? ›
According to Porter, there are five forces that represent the key sources of competitive pressure within an industry They are:
- Competitive Rivalry.
- Supplier Power.
- Buyer Power.
- Threat of Substitution.
- Threat of New Entry.
A competitive advantage is anything that gives a company an edge over its competitors, helping it attract more customers and grow its market share. A competitive advantage can take three primary forms: Cost advantage–producing a product or providing a service at a lower cost than competitors.
Multitasking
Samsung loyalists have long placed multitasking capabilities at the top of the list of reasons they prefer Galaxy devices. Galaxy devices leverage crisp, expansive screens to give users a variety of options for working across multiple apps.
What marketing strategy does Samsung use? ›
Digital Marketing Campaigns of Samsung
The promising Samsung marketing strategy focuses on leveraging the power of exceptional marketing campaigns to promote its products and appeal to the audience. Social media ads, sponsorships, and online advertising strengthened the brand.
What makes Samsung better than Apple? ›
For the most part, Samsung Galaxy phones have better hardware, cameras, battery life, and display for the price than the iPhone offers. But despite the tech in your hand being of better quality, a Samsung phone may depreciate in value faster than an iPhone.
What differentiates Samsung from other brands? ›
Supply chain and distribution
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.
How does Samsung use competitive pricing? ›
When customer demand is high due to a new release, the price is set to attract the most revenue. After the initial fervor and hype wanes, Samsung adjusts price points to suit more consumers in the market. Samsung initially leverages price skimming to take market attention and share away from their main rivals.
What makes Samsung company successful? ›
the biggest reason Samsung found more success compared to most other consumer electronics and smartphone brands is its focus on consumer oriented innovation. The company makes a heavy investment in research and development every year and does not let its focus on innovation fall.
What are 2 advantages of competitive advantage? ›
Why is competitive advantage important?
- It can contribute to higher profit margins.
- It may help attract more customers more frequently.
- It helps maintain brand loyalty.
- It can add predictability and constancy to your company's revenue streams.
- It may help attract more brand alliances, talent and potential investors.
The strongest competitive advantage is a strategy that that cannot be imitated by other companies. Competitive advantage can be also viewed as any activity that creates superior value above its rivals. A company wants the gap between perceived value and cost of the product to be greater than the competition.
What are the six competitive advantages? ›
There are six items that are considered very important to competitive advantage. They are: location, selection, service, quality, price, speed, and turnaround. If a business can focus on these six areas and develop an advantage over their competitors, they will have a safety net to protect them if the market turns.
What is a competitive give example? ›
The definition of competitive is relating to a situation for a win, or having a strong desire to win or to be the best. An example of competitive is the process in major league baseball teams play against each other. An example of competitive is a student who wants to be number one in her class.
1. Farmers' markets: The average farmers' market is perhaps the closest real-life example to perfect competition. Small producers sell nearly identical products for very similar prices.
What are the 4 competitive strategies? ›
Here are four types of competitive strategy and an example for each:
- Cost leadership strategy. ...
- Differentiation leadership strategy. ...
- Cost focus strategy. ...
- Differentiation focus strategy.
Competitive advantages are attributed to a variety of factors including cost structure, branding, the quality of product offerings, the distribution network, intellectual property, and customer service.
What company has the best competitive advantage? ›
U.S. companies with a strong competitive advantage
| Rank | Company | ROE (%) |
|---|
| 1 | Merck & Co. Inc. | 47.7 |
| 2 | Aon PLC | 87.1 |
| 3 | McDonald's Corp. | 92,800.0 |
| 4 | Vertex Pharma. | 36.1 |
6 more rowsApr 25, 2022
Samsung is the classic fast follower: they're attuned to what competitors are doing and what other people are bringing to market first. They watch like a hawk as others gain traction and then very rapidly come up with their own version.
What brand is an example of competitive advantage? ›
What are Some Examples of Competitive Advantage?
- Access to natural resources not available to competitors.
- Highly skilled labor.
- Strong brand awareness.
- Access to new or proprietary technology.
- Price leadership.
the biggest reason Samsung found more success compared to most other consumer electronics and smartphone brands is its focus on consumer oriented innovation. The company makes a heavy investment in research and development every year and does not let its focus on innovation fall.
Who is the strongest competitor of Samsung? ›
Top Samsung Alternatives
- Huawei.
- Cisco.
- Toshiba.
- NEC.
- ZTE.
Samsung's Generic Strategy for Competitive Advantage (Porter's Model) Samsung applies the broad differentiation generic competitive strategy.
What are 3 competitive advantages that make a business successful? ›
Cost advantage–producing a product or providing a service at a lower cost than competitors. Offer advantage–differentiating a product by adding features that are highly valued by customers. Niche advantage–serving a specific segment of the market better than anyone else.
Samsung attracts customers via advertising while employing the best tactics to push products through sales promotions. The company employs several marketing vehicles both during the festive season and outside of it.
What is Samsung's strategy target market? ›
In conclusion, the target market of Samsung targets both middle and low-end markets and high-end markets. It does not focus on a particular age group or gender and targets all audiences. However, considering the geographical characteristics, the Samsung market primarily targets the domestic market and Chinese market.
What is Samsung's business level strategy? ›
Answer & Explanation. Since 2017, Samsung has used a strategy that combines cost leadership and differentiation to gain an edge in the technology market. This strategy has been called the "Galaxy Transformation" because it is a major way for the company to turn things around.
What is the key competitive advantage? ›
Key Takeaways
Competitive advantage is what makes an entity's products or services more desirable to customers than that of any other rival. Competitive advantages can be broken down into comparative advantages and differential advantages.
What is the competitive advantage of a company? ›
A competitive advantage enables a company to perform better than its competitors. It refers to factors allowing a company to produce services or goods better or for less expense than the competition, which may generate more sales or higher profit margins.
What is a famous competitive advantage? ›
One of the most popular competitive advantage example of companies is Walmart, which sells branded items at low costs. They rely on a cost leadership strategy to minimize spending and offer 'everyday low prices' by leveraging economies of scale.
