Competitive Strategies Case Study

Samsung : Betting on High-end Mobile Phones

OR

Abstract:
In 2005, Samsung Electronics, the third largest mobile phone manufacturer in the world, reported operating profits worth KRW2.48 trillion compared to KRW3.09 trillion in 2004. Analysts stated that 2004 was a better year for the company and it was poised to become the second largest mobile phone manufacturer behind Nokia. However, in the wake of Samsung’s performance in 2005 and the first quarter of 2006, analysts predicted that the company was far from the second slot. They blamed the problem on Samsung’s strategy of focusing on high-end phones rather than booming low-end products. Though the company was confident that its strategy would pay-off in the long term, analysts were skeptical about it.

The case deals with Samsung’s strategy of focusing on next generation, feature-packed phones. It also discusses the recent trends in the global mobile handset industry.

Pedagogical Objectives:

• To get an overview of Samsung’s mobile phone business
• To understand the trends in global mobile phone industry
• To evaluate Samsung’s strategy of focusing on high-end, next generation phones
• To argue whether Samsung would benefit from its strategy once next generation mobile services take off

Keywords : Samsung Electronics; Nokia; Motorola; Mobile phone; Code division multiple access (CDMA); Global system for mobile communications (GSM); Sony-Ericsson; Siemens; Growth Strategies Case Study; Camera phone; 3G (third-generation cell-phone technology); Global mobile communication industry; High-end phones; Smartphone; RAZR; Average selling price of handsets

Contents : 
GLOBAL MOBILE PHONE INDUSTRY
STRUCTURE & DYNAMICS OF THE INDUSTRY
SAMSUNG: LOSING CONNECTIVITY
BETTING ON THE FUTURE
Worldwide Mobile Handset Sales