EXECUTIVE BACHELOR IN MANAGEMENT ASSIGNMENT

MODULE : STRATEGIC MANAGEMENT (INDUSTRY SEMINAR)

BASED ON SAMSUNG ANDROID SOLUTION CASES STUDY

PREPARED BY : THASARATHAN RAMAKRISHNAN

CONTENTS Question 1 Content Pages

1.1 1." 1.3 1.4

1.3 1.! 1.$ 1.).* 1.).1 Questio n2 ".1

SAMSUNG Company History Introduction Samsung Enterprise Market Introduction o# Android Market Ho% Samsung &ack'e Mo(i'e Enterprise Market Strategic Marketing +(,ecti-es . S/+& ana'ysis 1.4.1 Segmentation Strategies 1.4." 0ositioning Strategies 1.4.3 0ricing Strategies 1.4.4 0romotion Strategies 1.4.1 C2anne' Strategies 1.4.3 S/+& Ana'ysis Samsung Ac2ie-ement 0ES&4E Ana'ysis 5i-e 5orces Mode' Samsung Mo(i'e segmentation Samsung 5uture Action 0'an Introduction Samsung6s Main Competiors . S/+& Ana'ysis ".1.1 App'e 7ip2one8 S/+& Ana'ysis ".1." N+9IA S/+& Ana'ysis ".1.3 M+&+:+4A S/+& Ana'ysis ".1.4 :IM ;'ack;erry S/+& Ana'ysis Samsung6s competitors competiti-e ad-antages ".".1 App'e 7i02one8 Competiti-e Ad-antages "."." N+9IA Competiti-e Ad-antages ".".3 M+&+:+4A Competiti-e Ad-antages ".".4 :IM ;'ack;erry Competiti-e Ad-antages Samsung6s Competition Strategic 0'ans #or increase Market S2are ".3.1 App'e i02one Strategic 0'ans ".3." Nokia strategic p'ans ".3.3 Motoro'a Strategic p'ans ".3.4 :IM ;'ack;erry Strategic 0'an Refferences
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SAMSUNG COMPANY HISTORY

Unlike other electronic companies Samsung origins ere not in!ol!ing electronics "ut other pro#ucts$ In %&'( the Samsung)s *oun#er +,ung-Chull .ee set up a tra#e e/port compan, in 0orea1 selling *ish1 !egeta"les1 an# *ruit to China$ 2ithin a #eca#e Samusng ha# *lour mills an# con*ectionar, machines an# "ecame a co-operation in %&3%$ Hum"le "eginnings$ 4rom %&3( on ar#s Samsung "egan to e/pan# into other in#ustries such as *inancial1 me#ia1 chemicals an# ship "uil#ing throughout the %&56)s$ In %&7&1 Samsung 8lectronics as esta"lishe# pro#ucing other electronics #e!ices$ %&(5 *oun#er an# chairman1 +,ung-Chull .ee passe# a a, an# 0un-Hee .ee took o!er as chairman$ In the %&&6)s Samsung "egan to e/pan# glo"all, "uil#ing *actories in the US1 +ritain1 German,1 Thailan#1 Me/ico1 Spain an# China until %&&5$ In %&&5 nearl, all 0orean "usinesses shrunk in si;e an# Samsung as no e/ception$ The, sol# "usinesses to relie!e #e"t an# cut emplo,ees #o n lo ering personnel ", 361666$ +ut thanks to the electronic in#ustr, the, manage# to cur" this an# continue to gro $ The histor, o* Samsung an# mo"ile phones stretches "ack to o!er %6 ,ears$ In %&&' Samsung #e!elope# the )lightest) mo"ile phone o* its era$ The SCH-(66 an# it as a!aila"le on C<MA net orks$ Then the, #e!elope# smart phones an# a phone com"ine# mp' pla,er to ar#s the en# o* the =6th centur,$ To this #ate Samsung are #e#icate# to the 'G in#ustr,$ Making !i#eo1camera phones at a spee# to keep up "ut competitor Nokia is ahea# ith consumer #eman#$ Samsung has ma#e stea#, gro th in the mo"ile in#ustr, an# are currentl, secon# ith more than %66> increase in shares$ hat Samsung is most *amous *or1 Tele!isions1 Mo"ile Phones 9throughout &6)s:1 Ra#io)s1 Computer components an#

1.1

Introduction Samsung Enterprise Market

orl#)s largest semicon#uctor manu*acturers?

Samsung 8lectronics is one o* the

Samsung 8lectronics is also South 0orea)s top electronics compan,$ It makes man, kin#s o* consumer #e!ices1 inclu#ing <@< pla,ers1 #igital T@s1 an# #igital still cameras? computers1 color monitors1 .C< panels1 an# printers? semicon#uctors such as <RAMs1 static RAMs1 *lash memor,1 an# #ispla, #ri!ers? an# communications #e!ices ranging *rom ireless han#sets an# smart phones to net orking gear$ The compan,1 hich is the *lagship mem"er o* Samsung Group1 also makes micro a!e o!ens1 re*rigerators1 air con#itioners1 an# ashing machines$ Nearl, hal* o* sales come *rom the AsiaAPaci*ic region$ Top in#ustries *or Samsung 8lectronics Co$ are memor, chip an# mo#ule manu*acturing1 communications chip manu*acturing1 ireless telephone han#set manu*acturing$ < Samsung is no longer the compan, that it use# to "e1 it is a compan, that has put in a lot e**ort an# mone, *or changing its reputation$ To#a,1 Samsung is stri!ing an# gro ing into one o* the most success*ul companies e!er$ It has an e/tensi!e pro#uct line that caters to man, #i**erent people$ It no longer operates on lo stri!ing on the highest$ @arin#erCit Singh is @ice Presi#ent o* SamsungBs 8nterprise +usiness in Mala,sia$ He spearhea#s SamsungBs 8nterprise +usiness initiati!es *or ICT an# <igital Appliances1 co!ering Mo"ilit,1 Note"ook1 Ta"lets1 Clou#AThin Client1 Printers D <igital Appliances1 here the ne/t a!e o* inno!ation is e/pecte#$ His sales an# marketing e/perience o* =' ,ears makes him a !eteran o* the IT In#ustr,$ @arin hol#s as a i#e range o* e/perience stemming *rom careers ith companies such as Mesiniaga1 AMP1 'Com1 N8C1 an# "e*ore Coining Samsung1 <ell$ At 'Com1 "ase# out o* Silicon @alle,1 USA1 he co!ere# the 2orl# i#e Markets$ 2hile at <ell1 he co!ere# the South Asia <e!eloping Markets1 Mala,sia D Singapore$ His e/perience co!ers consumers1 SM+ an# all the 4 a, to .arge Corporate pro*its? itBs

segments$@arin gra#uate# S,stems *rom Ne The ne

ith a +achelor o* Science in Computer In*ormation

Hampshire College1 USA$ ill manage SamsungBs Mo"ile securit,1 <igital O**ice

market segmentation

D @irtuali;ation1 Retail D <igital signage1 an# smart school "usiness1 or as !ice presi#ent o* its +=+ 9"usiness to "usiness: unit @ari#erCit Singh put it1 e!er,thing that is not consumer E *acing$ Samsung has =6' o**ices an# *acilities across 53 countries1 ith annual re!enue o* USF%G$% "illion in =6%% an# ==51666 emplo,ees orl# i#e$ It set up operations in Mala,sia in =66'1 an# no has 766 emplo,ees here$ enterprise #i!ision1 ho e!er

The compan, as co, a"out its targets *or the ne

sa,ing that it oul# "e increasing hea#count across the Asia Paci*ic ", =66>$ HIn Mala,sia1 it ill "e closer to a '66> increase in hea#count$ @arin#er sai# the compan, oul# "e orking ith glo"al an# local partners1 ith the

*ormer inclu#ing giants such as Iuniper1 Cisco1 Citri/ an# Microso*t on pro!i#ing solutions *or the #i**erent !ertical in#ustries$ He a##e# that the compan, ha# a"out %1666 partners in Mala,sia1 hich the 8nterprise +usiness <i!ision into high1 me#ium or lo priorit, #epen#ing on ho enterprise market$ HThe !erticals e ha!e i#enti*ie# as ke, *ocus areas are e#ucation an# 4SI 9the *inancial ser!ices in#ustr,:1J he sai#1 a##ing that the compan, oul# also "e targeting the small an# me#ium enterprise sector$ Samsung "elie!es its lea# in the consumer #e!ice market ill position it ell to take a#!antage o* the +ring Your O n <e!ice 9+YO<: tren#1 ith 0 on sa,ing that Htogether ith our po er*ul1 inno!ati!e an# connecte# #e!ices on the market1 #eman#s o* a #i!erse mo"ile e ill #eli!er a comprehensi!e1 "est-in-class enterprise mo"ilit, solution to meet to#a,Bs ork*orce$J On the Mo"ile Securit, *ront1 *or e/ample1 it toute# its Gala/, An#roi# plat*orm as "eing Henterprise-rea#,1J ith mo"ile #e!ice 5 oul# classi*, suita"le their solutions are *or the

management1 certi*ie# #ata encr,ption an# !irtual pri!ate net ork capa"ilities "uilt in$ HCIOs 9chie* in*ormation o**icers: ha!e a num"er o* securit, challenges hen it comes to a#opting +YO<$ Also1 the Samsung 8nterprise S<0 9so*t are #e!elopment kit: allo s companies to integrate thir#-part, mo"ile securit, solutions on Gala/, #e!ices$ Samsung sai# its <igital O**ice D @irtuali;ation solutions allo users to access enterprise applications on-the-go on a single #e!ice1 securel, an# seamlessl,$ Its Retail an# <igital Signage solutions co!er its pro*essional #ispla,s1 inclu#ing .8< "acklit1 touchscreen an# !i#eo all #ispla,s$

1.2

Introduction of Android Market

2hat is An#roi#K An#roi# is a .inu/-"ase# mo"ile phone Operating S,stem #e!elope# ", Google$ An#roi# is uniLue "ecause Google is acti!el, #e!eloping the plat*orm "ut gi!ing it a a, *or *ree to har# are manu*acturers an# phone carriers ho ant to use An#roi# on their #e!ices$ An#roi# is getting most popular Smartphone Operating s,stem these #a,s$ It comes ith a range o* Google *eatures1 most nota"l, Search an# Maps1 installe# as stan#ar#$ This means ,ou can easil, search *or in*ormation on the e" an# *or #irections *rom ,our phone1 as ,ou oul# on ,our computer$ This is han#, *or checking up on things like train times an# getting #irections hen out an# a"out$ You can also access other Google ser!ices1 like Gmail1 Google 8arth1 YouTu"e an# Google Calen#ar on an An#roi# phone$ An#roi# supports a touch screen an# is #i**icult to use ithout one$ You can use a

track"all *or some na!igation1 "ut nearl, e!er,thing is #one through touch$ An#roi# also supports multi-touch gestures such as pinch-to-;oom in !ersions =$% 98clair: an# a"o!e$ An#roi# is an e/citing plat*orm *or consumers an# #e!elopers$

An#roi# phones are highl, customi;a"le an# as such can "e altere# to suit ,our tastes an# nee#s$ You can check ,our 4ace"ook an# T itter pro*iles through a !ariet, o* apps making it i#eal *or social net orking$ Through the calen#ar ,ou can set remin#ers *rom ,our #esktop or ,our phone an# on the latest !ersion o* An#roi# ,ou can sen# links to an# *rom ,our computer an# !ice !ersa$ Another neat *eature o* An#roi# is that it automaticall, "acks up ,our contacts *or ,ou$ 2hen ,ou set up an An#roi# phone ,ouBll nee# to create a Google Account or sign in "e s,nce# to ,our Google Account$ The "ene*it o* this is i* ,ou lose ,our phone all o* ,our num"ers ill "e sa!e#$ The ne/t time ,ou get an An#roi# phone an# sign in ith ,our Google Account1 all o* ,our phoneBs a##ress "ook$ contacts an# *rien#s num"ers ill "e #ispla,e# in ,our ne Google is constantl, orking on ne so1 "ut Google is looking to slo ith an e/isting one$ 8!er, time ,ou sa!e a num"er to the a##ress "ook o* ,our An#roi# phone it ill

!ersions o* the An#roi# so*t are$ These

releases are in*reLuent? at the moment the, normall, come out e!er, si/ months or this #o n to once a ,ear$ @ersions usuall, come ith a numerical co#e an# a co#ename thatBs so *ar "een name# a*ter a t,pe o* #essert? e$g$ An#roi# %$3ACupcake1 An#roi# =$%A8clair an# the most recent e#ition An#roi# =$=A4ro,o$ The ne/t e/pecte# e#ition o* An#roi# is !ersion =$' an# is co#ename# Ginger"rea#$ The #essert names o* the releases are in alpha"etical or#er$ The ne/t up#ate is e/pecte# to "e calle# Hone,com" an# the one a*ter that Ice Cream$ The !ersion histor, o* the An#roi# mo"ile operating s,stem "egan ith the release o* the An#roi# "eta in No!em"er =665$ The *irst commercial !ersion1 An#roi# %$61 as release# in Septem"er =66($ An#roi# is un#er ongoing #e!elopment ", Google an# the Open Han#set Alliance 9OHA:1 an# has seen a num"er o* up#ates to its "ase operating s,stem since its original release$ These up#ates t,picall, *i/ "ugs an# a## ne *eatures$ Since April =66&1 An#roi# !ersions ha!e "een #e!elope# un#er a co#ename an# release# in alpha"etical or#erM Cupcake1 <onut1 8clair1 4ro,o1 Ginger"rea#1 Hone,com"1 Ice Cream San# ich1 an# Iell, +ean$ As o* =6%'1 o!er &66 million acti!e #e!ices use the An#roi# OS orl# i#e$ The most recent maCor An#roi# 7

up#ate =6%=$

as Iell, +ean G$=1 hich

as release# on commercial #e!ices in No!em"er

The Timeline M

% Pre-commercial release !ersions 9=665E=66(:

o o

%$% An#roi# alpha %$= An#roi# "eta =$% An#roi# %$6 9API le!el %: =$= An#roi# %$% 9API le!el =: =$' An#roi# %$3 Cupcake 9API le!el ': =$G An#roi# %$7 <onut 9API le!el G: =$3 An#roi# =$6 8clair 9API le!el 3: =$7 An#roi# =$6$% 8clair 9API le!el 7: =$5 An#roi# =$% 8clair 9API le!el 5: =$( An#roi# =$=E=$=$' 4ro,o 9API le!el (: =$& An#roi# =$'E=$'$= Ginger"rea# 9API le!el &: =$%6 An#roi# =$'$'E=$'$5 Ginger"rea# 9API le!el %6: =$%% An#roi# '$6 Hone,com" 9API le!el %%: =$%= An#roi# '$% Hone,com" 9API le!el %=: =$%' An#roi# '$= Hone,com" 9API le!el %': =$%G An#roi# G$6EG$6$= Ice Cream San# ich 9API le!el %G: =$%3 An#roi# G$6$'EG$6$G Ice Cream San# ich 9API le!el %3: =$%7 An#roi# G$% Iell, +ean 9API le!el %7: =$%5 An#roi# G$= Iell, +ean 9API le!el %5:

= @ersion histor, ", API le!el

o o o o o o o o o o o o o o o o o

1.3

Ho

Samsung Tack!e Mo"i!e Enterprise Market

Samsung hopes to make a "ig push into the corporate market in =6%'1 targeting the market that once as #ominate# ", Research In Motion$ 2hile the South 0orean a, o* strateg,1 it is Luietl, "uil#ing corporatecompan, isnBt #isclosing much in the consumer nee#s$ This is a ise mo!e *rom Samsung1 hich recentl, took NokiaBs cro n as the orl#Bs

gra#e #e!ices running An#roi# that are more secure an# relia"le than the t,pical

largest manu*acturer o* mo"ile phones an#

hich this eek announce# the sale o*

its % millionth Gala/, S smartphone$ The mo"ile enterprise remains largel, untappe# as RIMBs grip has loosene#1 an# Samsung clearl, has the #istri"ution an# the carrier partners to take a#!antage$ To *ull, capitali;e on the opportunit,1 though1 Samsung shoul# #eli!er *our ke, itemsM

A uni*ie# An#roi# e/perience$ The *ragmentation pro"lems ith An#roi# are ell-#ocumente# 9I e/plaine# h, I a"an#one# the plat*orm last ,ear here:1 orl# i#e penetration o* an# those pro"lems are onl, getting orse as the

GoogleBs operating s,stem increases$ To make its line o* An#roi# #e!ices attracti!e to enterprise users an# IT #epartments1 then1 Samsung ill ha!e to #eli!er the same e/perience across its enterprise-centric #e!ices1 issuing An#roi# up#ates to as man, o* its #e!ices as it can as Luickl, as possi"le$

A store *or An#roi# enterprise apps$ Google recentl, intro#uce# a ser!ice that essentiall, ena"les Google Apps customers to create their o n internal stores to pu"lish an# #istri"ute their enterprise apps$ +ut as In*o2orl# points out1 the ne o**ering has some shortcomingsM +usinesses can ha!e onl, one man, #omains the, ha!e in their Google Apps store regar#less o* ho

account1 an# the, canBt pu"lish apps to speci*ic groups o* users$ Mean hile1 Samsung has seen some success #istri"uting consumer apps *or its o n +a#a plat*orm E hile Samsung Apps #oesnBt get much attention in the U$S$1 it #eli!ere# its %66 millionth #o nloa# nearl, t o ,ears ago$ Samsung coul# le!erage that e/perience an# impro!e on GoogleBs shortcomings to help

"usinesses "uil# their o n app stores1 ena"ling IT orkers to "etter manage their #e!ices an# so*t are$

Marketing a ne

"ran#$ Samsung is ell-kno n as a !en#or o* consumer "ran# #e#icate# to its mo"ile

electronics1 o* course1 so it nee#s a ne

enterprise "usiness$ That appears to "e the i#ea "ehin# SA48 E Samsung *or 8nterprise E hich the compan, rolle# out last eek$ I* Samsung in!ests hea!il, to market the ne "ran#1 it can position its SA48 lineup as a rea#,*or-prime-time !ersion o* An#roi# that can compete against +lack+err, an# iOS in the corporate orl#$

Selling #irectl, to the enterprise as ell as en# users$ SamsungBs ne initiati!e is clearl, #esigne# to le!erage the +YO< 9"ring ,our o n #e!ice: tren# that has ha# a tremen#ous impact on "usinesses an# other organi;ations in the last *e continue to gro ,ears$ +ut hile the +YO< tren# ill surel, in =6%'1 e think some "usinesses ill tr, to regain control

o* their mo"ile #e!ices ", opting *or corporate #eplo,ments rather than accepting +YO<$ ThatBs a market Samsung must "e rea#, to pounce on ", using its o n salespeople to push SA48 pro#ucts an# ser!ices$

The mo"ile enterprise market is likel, to "e more competiti!e than e!er in =6%'M Apple an# An#roi# are ri#ing the +YO< a!e1 Microso*t hopes to gain traction ith its com"ination o* 2in#o s Phone1 2in#o s RT an# 2in#o s (1 an# RIM ill attempt hat oul# "e a huge come"ack at the en# o* the month ith +lack+err, %6$ a,$ +ut Samsung has an impressi!e arsenal as it Coins the *iel# in =6%'$ I* the compan, can e/ecute1 it coul# mo!e the nee#le in the mo"ile enterprise in a "ig

1"

1.#

Strategic marketing O"$ecti%es & S'OT Ana!(sis of SAMS)N* To impro!e the sell o* all "ran#s o* the compan, *rom 33> to &6>$ To create ne customer$ market #ri!en strateg, an# also create !alua"le #esign *or their

1.#.1 Segmentation strategies Samsung 8lectronics 9Mo"ile <i!ision: operates in one o* the most competiti!e markets o* the orl#$ Accor#ing to the US 4e#eral Smartphone #e!ices are intro#uce# prices it as a"le Communication Commission 75 ne

e!er, ,ear$ Samsung tra#itionall, ha# a conser!ati!e image that *ocuse# on lo -price pro#ucts *or the lo er en# o* the market$ 2ith lo to compete in the lo er-market hereas in the upper market it ha# lesser penetration$ To penetrate the upper-market Samsung ha# to gi!e up their lo er-market position an# *ocus on inno!ation an# percei!ing a higher "ran# !alue$ The *ollo ing is the STP Anal,sis o* Samsung Mo"iles . SE*MENTATION+ One o* the *un#amental principles o* marketing is the segmentation o* the market$ Segmentation means the splitting o* the market into groups o* en# users ho areM %$ Ma/imum similarit, ithin each group =$ Ma/imum #i**erence "et een groups$ +ase# on recent Marketing #e*initions1 +eha!ioural an# Ps,chographic Segmentation are the #e*initions that "est represent SamsungBs current Segmentation Strateg,$ *EO*,A-HIC It has Samsung Guru Segment *or rural areas as ell as Gala/, segment *or ur"an areas$ Samsung is one o* the largest manu*acturers o* mo"ile phones

11

an# it shares the highest cell phone customers something *or e!er,one$ .EMO*,A-HIC

ith Nokia in In#ia$ It has

Samsung has mo"ile phones *or ,outh1 age o* %7-=&1 *or "usinessmen etc$ *or mi##leclass ,outh it has Samsung Guru hich is *or go!t$ lo er class orkers also$ Guru has man, !ariants? it is coming in 'G also$ It is a goo# option i* ,ou ant to get a cheap 'G han#set$ Samsung Gala/, is a goo# option *or ,outh as it has man, attracti!e *eatures as 2i-4i1 'G$ Gala/, is also *or +usinessmen$ Samsung has partnere# rele!ant enterprise ith IT in#ustr, lea#ers to "ring ,ou the most an# the most comprehensi!e mo"ile solutions

implementation o* 8/change Acti!eS,nc$ <eci#e#l, a#ept in securit, concerns an# the ans er to ,our e!er, "usiness nee#1 the Gala/, S II is rea#, *or serious enterprise usage$ -S/CHO*,A-HIC Samsung mo"ile is a!aila"le *or those customers too "ase# on their li*est,le$ Samsung came ho ha!e their choice ith some so *anc, mo"ile phones

speciall, *or girls an# cheaper touch screen st,lish phones so that e!er,one can enCo, touch screen The rate o* normal mo"iles$ Samsung has its range o* mo"ile phones start *rom %=66to '=1666N$

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1.#.2 -ositioning strategies -OSITIONIN*+ Positioning is a"out the customer perception a"out the "ran# as "eing #i**erent *rom the other "ran#s on speci*ic #imension inclu#ing pro#uct attri"utes$ The strategies a#opte# ", Samsung to position itsel* in the Mo"ile Phone market are as *ollo sM It *ocuses more on the real margin segments Samsung Concept Store Market making D categor, creation in small to ns 2i#er Care Net ork Access to Samsung care line Pioneering in the 'G segment o* mo"ile phones$ +ran#e# itsel* as a s,non,m *or Lualit,$ Create# a UniLue +ran# Image *or itsel* as a high en# !alue #ri!en "ran#$ A *e #a,s ago Samsung 9SSN.4$P0: launche# its ne SG smartphone *eatures hich comes *rom mi#-to-high-en#

#e!ice to a generall, recepti!e au#ience$ Most like# the ne attache# to the phone1 "ut some thought these ne

*eatures ha# no real

!alue an# some ere gimmick,$ The, ere not impresse#$ Regar#less1 the true measure o* hether this #e!ice is a success ill "e #etermine# ", the sales num"ers release# a *e months #o n the roa#$ ith man, pla,ers1 Competition in this space is *ierce to sa, the least1 An, compan, that #oesn)t keep up

#i**erentiate# market segments1 an# shorter an# shorter pro#uct li*e c,cles$ ith the others ith its o n series o* pro#uct intro#uctions can *all "ehin# an# !er, Luickl,$ .ook hat happene# to +lack+err, 9++RY: an# Nokia 9NO0:$ These t o companies ere lea#ing e#ge an# #arlings o* the in#ustr, Cust a *e 13 ,ears ago$ No "oth are

struggling to sta, rele!ant an# losing large market share to the ne +oth are no This at the !irtual "ottom looking up$

lea#ers$

ill look at the state o* the market1 the le!el o* competition amongst the hich is in the "est position

maCor pla,ers1 the relati!e competiti!e a#!antages each ma, possess1 strategic alliances *orme#1 an# seek to #etermine presentl, to #ominate the smartphone market mo!ing *or ar#$

1.#.3 -ricing strateg( Marketing - Pricing approaches an# strategies There are three main approaches a "usiness takes to setting priceM Cost-"ase# pricingM price is #etermine# ", a##ing a pro*it element on top o* the cost o* making the pro#uct$ Customer-"ase# pricingM here prices are #etermine# ", hat a *irm "elie!es customers ill "e prepare# to pa, Competitor-"ase# pricingM in*luence on the price set here competitor prices are the main

Approaches? Cost "ase# pricing This in!ol!es setting a price ", a##ing a *i/e# amount or percentage to the cost o* making or "u,ing the pro#uct$ In some a,s this is Luite an ol#*ashione# an# some hat #iscre#ite# pricing strateg,1 although it is still i#el, use#$ A*ter all1 customers are not too "othere# hat it cost to make the pro#uct E the, are intereste# in hat !alue the pro#uct pro!i#es them$ Cost-plus 9or Hmark-upJ: pricing is i#el, use# in retailing1 here the retailer ants to kno ith some certaint, hat the gross pro*it margin o* each sale ill "e$ An a#!antage o* this approach is that the "usiness ill kno that its costs are "eing co!ere#$ The main #isa#!antage is that cost-plus pricing ma, lea# to pro#ucts that are price# un-competiti!el,$ Here is an e/ample o* cost-plus pricing1 here a "usiness ishes to ensure that it makes an a##itional O36 o* pro*it on top o* the unit cost o* pro#uction$

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U#$% &'(% M*+,-./ S122$#3 /+$&1

)1"" 5"0 )15"

Ho high shoul# the mark-up percentage "eK That largel, #epen#s on the normal competiti!e practice in a market an# also hether the resulting price is accepta"le to customers$

Customer-"ase# pricing
Penetration pricing You o*ten see the tagline Hspecial intro#uctor, o**erJ E the classic sign o* penetration pricing$ The aim o*penetration pricing is usuall, to increase market share o* a pro#uct1 pro!i#ing the opportunit, to increase price once this o"Cecti!e has "een achie!e#$ Penetration pricing is the pricing techniLue o* setting a relati!el, lo initial entr, price1 usuall, lo er than the inten#e# esta"lishe# price1 to attract ne customers$ The strateg, aims to encourage customers to s itch to the ne pro#uct "ecause o* the lo er price$ Penetration pricing is most commonl, associate# ith a marketing o"Cecti!e o* increasing market share or sales !olume$ In the short term1 penetration pricing is likel, to result in lo er pro*its than oul# "e the case i* price ere set higher$ Ho e!er1 there are some signi*icant "ene*its to long-term pro*ita"ilit, o* ha!ing a higher market share1 so the pricing strateg, can o*ten "e Custi*ie#$ Penetration pricing is o*ten use# to support the launch o* a ne pro#uct1 an# orks "est hen a pro#uct enters a market ith relati!el, little pro#uct #i**erentiation an# here #eman# is price elastic E so a lo er price than ri!al pro#ucts is a competiti!e eapon$ Price skimming Skimming in!ol!es setting a high price "e*ore other competitors come into the market$ This is o*ten use# *or the launch o* a ne pro#uct hich *aces little or no competition E usuall, #ue to some technological *eatures$ Such pro#ucts are o*ten "ought ", Hearl, a#optersJ ho are prepare# to pa, a higher price to ha!e the latest or "est pro#uct in the market$ Goo# e/amples o* price skimming inclu#e inno!ati!e electronic pro#ucts1 such as the Apple iPa# an# Son, Pla,Station '$ There are some other pro"lems an# challenges ith this approachM Price skimming as a strateg, cannot last *or long1 as competitors soon launch ri!al pro#ucts hich put pressure on the price 9e$g$ the launch o* ri!al pro#ucts to the iPhone or iPo#:$ <istri"ution 9place: can also "e a challenge *or an inno!ati!e ne pro#uct$ It ma, "e necessar, to gi!e retailers higher margins to con!ince them to stock the pro#uct1 re#ucing the impro!e# margins that can "e #eli!ere# ", price skimming$ 1.#.# -romotion Strateg( 15

Pro#uct promotion is one o* the necessities *or getting ,our "ran# in *ront o* the pu"lic an# attracting ne customers$ There are numerous a,s to promote a pro#uct or ser!ice$ Some companies use more than one metho#1 hile others ma, use #i**erent metho#s *or #i**erent marketing purposes$ Regar#less o* ,our compan,)s pro#uct or ser!ice1 a strong set o* promotional strategies can help position ,our compan, in a *a!ora"le light ith not onl, current customers "ut ne ones as ell$ Contests : Contests are a *reLuentl, use# promotional strateg,$ Man, contests #on)t e!en reLuire a purchase$ The i#ea is to promote ,our "ran# an# put ,our logo an# name in *ront o* the pu"lic rather than make mone, through a har#-sell campaign$ People like to in pri;es$ Sponsoring contests can "ring attention to ,our pro#uct ithout compan, o!ertness$ Social Media : Social me#ia e"sites such as 4ace"ook an# GoogleN o**er companies a a, to orl# o* potential customers promote pro#ucts an# ser!ices in a more rela/e# en!ironment$ This is #irect marketing at its "est$ Social net orks connect ith a that can !ie ,our compan, *rom a #i**erent perspecti!e$ Rather than seeing ,our

compan, as Ptr,ing to sellP something1 the social net ork can see a compan, that is in touch ith people on a more personal le!el$ This can help lessen the #i!i#e "et een the compan, an# the "u,er1 hich in turn presents a more appealing an# *amiliar image o* the compan,$ Mail Order Marketing: Customers ho come into ,our "usiness are not to "e o!erlooke#$ These customers ha!e alrea#, #eci#e# to purchase ,our pro#uct$ 2hat can "e help*ul is getting personal in*ormation *rom these customers$ O**er a *ree pro#uct or ser!ice in e/change *or the in*ormation$ These are customers ho are alrea#, *amiliar ith ,our compan, an# represent the target au#ience ,ou pro#ucts to$ ant to market ,our ne

16

Product Giveaways: Pro#uct gi!ea a,s an# allo ing potential customers to sample a pro#uct are metho#s use# o*ten ", companies to intro#uce ne to entice the "u,ing pu"lic into tr,ing ne pro#ucts$ *oo# an# househol# pro#ucts$ Man, o* these companies sponsor in-store promotions1 gi!ing a a, pro#uct samples

Point-of-Sale Promotion and End-Cap Marketing: Point-o*-sale an# en#-cap marketing are en# cap1 a,s o* selling pro#uct an# promoting items in stores$ The i#ea "ehin# this promotional strateg, is con!enience an# impulse$ The hich sits at the en# o* aisles in grocer, stores1 *eatures pro#ucts a store pro#ucts or ants to promote or mo!e Luickl,$ This pro#uct is positione# so it is easil, accessi"le to the customer$ Point-o*-sale is a a, to promote ne pro#ucts a store nee#s to mo!e$ These items are place# near the checkout in the store an# are o*ten purchase# ", consumers on impulse as the, ait to "e checke# out$ Customer Referral ncentive Program: The customer re*erral incenti!e program is a re*er ne a, to encourage current customers to customers to ,our store$ 4ree pro#ucts1 "ig #iscounts an# cash re ar#s

are some o* the incenti!es ,ou can use$ This is a promotional strateg, that le!erages ,our customer "ase as a sales *orce$ Causes and C!arity: Promoting ,our pro#ucts hile supporting a cause can "e an e**ecti!e promotional inA in situation$ You get the strateg,$ Gi!ing customers a sense o* "eing a part o* something larger simpl, ", using pro#ucts the, might use an, a, creates a an# the sense o* helping a cause$ One customers an# the sociall, conscious image? customers get a pro#uct the, can use a, to #o this is to gi!e a percentage o* pro#uct pro*it to the cause ,our compan, has committe# to helping$

17

"randed Promotional Gifts: Gi!ing a a, *unctional "ran#e# gi*ts can "e a more e**ecti!e promotional mo!e than han#ing out simple "usiness car#s$ Put ,our "usiness car# on a magnet1 ink pen or ke, chain$ These are gi*ts ,ou can gi!e ,our customers that the, ma, use1 hich keeps ,our "usiness in plain sight rather than in the trash or in a #ra er ith other "usiness car#s the customer ma, not look at$ 1.#.0 C1anne! Strategies A #istri"ution channel strateg, ena"les ,ou to sell to customers in geographical areas or market sectors that ,our #irect sales team cannot reach$ You can choose *rom a num"er o* #istri"ution channels1 inclu#ing holesalers1 retailers1 #istri"utors ith customers an# the Internet$ 8ach channel gi!es ,ou #i**erent options *or #ealing

an# prospects$ Ho e!er1 to ensure that ,our #istri"utors operate e**ecti!el, on ,our "ehal*1 ,our strateg, must incorporate the right le!el o* control an# support$ Reach I* ,our strateg, is to gro geographical areas ,ou ,our "usiness regionall, or nationall,1 highlight the ant to reach through a #istri"ution channel an# i#enti*, a

net ork o* #istri"utors or retailers that pro!i#e e/isting co!erage o* the territories$ I* ,ou are planning to e/port pro#ucts1 *ocus on esta"lishe# #istri"utors ith #etaile# local market kno le#ge$ Consi#er marketing ,our pro#ucts on the Internet so that ,ou can e/ten# co!erage to customers here there is no suita"le ph,sical #istri"ution net ork$ Cost Although a #istri"ution strateg, gi!es ,ou a rea#,-ma#e plat*orm *or e/pansion1 itBs important to compare the cost o* #ealing through in#irect #istri"ution channels ith the cost o* setting up ,our o n net ork or #irect sales operation$ 2ithout a #istri"ution net ork1 ,ou ill ha!e to commit resources to or#er processing1 stockhol#ing1 #eli!er,1 in!oicing an# customer ser!ice$ Compare that ith the lo er

margins ,ou

ill make ", gi!ing #istri"utors a #iscount *or pro!i#ing a similar le!el o*

ser!ice an# pro!i#ing them ith a program o* marketing an# training support$ Contribution Your strateg, shoul# also take account o* the potential contri"ution o* each #istri"ution channel$ Concentrate on an a##itional customer "ase1 ,our "usiness in ne Support Support an# control are critical *actors in ,our #istri"ution strateg,$ Appointing a manager to ork ith #istri"utors ena"les ,ou to monitor their per*ormance an# i#enti*, their support nee#s$ <e!elop marketing support programs to meet the nee#s o* #i**erent channels$ Options inclu#e *un#s *or a#!ertising or #irect marketing campaigns or templates that ena"le partners to #e!elop their o n campaigns$ I* channel sales represent a signi*icant proportion o* ,our "usiness1 #e!elop a#!ertising an# marketing campaigns to #ri!e "usiness to ,our channel partners$ Operating a training program ill impro!e #istri"utorsB pro#uct an# marketing kno le#ge an# ena"le them to #eli!er a higher stan#ar# o* ser!ice to customers$ Customer Service ItBs important to i#enti*, the t,pes o* customers ,ou these ish to ser!e #irectl,$ T,picall,1 ith large oul# "e ,our largest customers or customers that #eman# le!els o* technical orking ith #istri"utors that gi!e ,ou access to ith no a##itional #irect sales an# marketing costs$

<istri"utors also pro!i#e ,ou ith local market kno le#ge1 ena"ling ,ou to esta"lish markets ithout incurring hea!, market entr, costs$

support "e,on# ,our partnersB capa"ilit,$ Use channel partners to #eal resources on ,our ke, accounts

num"ers o* smaller customers cost e**ecti!el, so that ,ou can concentrate ,our

1!

1.#.2 S'OT Ana!(sis S2OT Samsung S'OT ana!(sis 2313 Strengths %$ Har# are integration so*t are =$ 8/cellence in engineering an# pro#ucing har# are parts an# consumer electronics '$ Inno!ation an# #esign G$ 4ocus on en!ironment 3$ .o pro#uction costs 7$ .argest share in mo"ile phones an# = place in smartphones sales 5$ A"ilit, to market the "ran# Opportunities %$ Gro ing smartphone market =$ Gro ing mo"ile a#!ertising in#ustr, '$ Gro ing #eman# *or Lualit, application processors G$ Gro th o* ta"lets market 3$ O"taining patents through acLuisitions Strengths %$ Hard are integration it1 man( open source OS and soft are. Samsung ith most o* the is *ocuse# on pro#ucing #e!ices hich can "e integrate# 2" Threats %$ Saturate# smartphone markets in #e!elope# countries =$ Rapi# technological change '$ <eclining margins on har# are pro#uction G$ +reache# patents 3$ AppleBs iT@ launch 7$ Price ars ith man, open source OS an# 2eaknesses %$ Patent in*ringement =$ Too lo pro*it margin '$ Main competitors are also largest "u,ers G$ .ack its o n OS an# so*t are 3$ 4ocus on too man, pro#ucts

so*t are an# OS$ This gi!es Samsung pro#ucts an e#ge o!er AppleBs 9its arch ri!al: #e!ices1 especiall, as An#roi# an# other OS are gaining market share hen iOS an# OS Q are losing it$ =$ E4ce!!ence in engineering and producing 1ard are parts and consumer e!ectronics. Samsung is the num"er % ", market share in tele!isions an# mo"ile phones sales an# some o* the har# are parts 9processors1 memor, chips1 etc$:$ This as largel, achie!e# #ue to e/cellence in engineering an# "oth e**icient an# e**ecti!e pro#uction$ '$ Inno%ation and design. In =6%%1 Samsung ranke# secon# on the list o* US top patent assignees$ More patents strengthen Samsung position among its competitors$ The *irm also on man, a ar#s *or the #esign o* its pro#ucts1 pro!ing the superior a#!anatage o!er the competitors$ G$ 5ocus on en%ironment. Samsung *ocuses on pro#ucing en!ironment *rien#l, pro#ucts that are *ree *rom P@C an# +4Rs 9currentl, onl, MP' an# mo"ile phones:$ It also #e!elops !arious rec,cling programs that are a ar#e# *or their success$ Thus1 SamsungBs *ocus on en!ironment gi!es it an e#ge o!er its competitors in the e,es o* its customers$ 3$ 6o lo production costs. The compan, has set up its pro#uction *acilities in cost countries$ This allo s pro#ucing goo#s ith lo pro#uction cost an#

"ene*it Samsung as it can o**er lo er price an# earn higher margins$ 7$ 6argest s1are in mo"i!e p1ones and 2 p!ace in smartp1ones sa!es in t1e or!d. Samsung 8lectronics ha!e achie!e# large market share in man, pro#ucts the, sell1 especiall, in mo"ile phones1 smartphones1 semicon#uctors an# tele!ision sets$ .arge market share has its a#!antage1 "argaining po er1 that Samsung can use to *urther re#uce costs an# #eman# *or "etter contract con#itions$ 5$ A"i!it( to market t1e "rand. Samsung is name# as top rising "ran# ", Inter"ran# an# is the &th most !alua"le "ran# ith !alue nearl, F'' "illion$ It has risen ", G6> *rom =6%% to =6%=$ This as mainl, achie!e# #ue to compan,Bs a"ilit, to market the "ran# in sporting e!ents an# social contri"utions$ 2eaknesses

21

%$ -atent infringement. Samsung is in*ringing AppleBs an# some other *irmsB patents1 thus1 #amaging its reputation an# ha!ing to pa, a huge amount o* mone, in #amages$ =$ Too !o profit margin. Samsung 8lectronics is the largest technolog, orl# in terms o* re!enues "ut it has a lo gross pro*it an# net "usiness in the

pro*it margins$ Although its smartphones "usiness is Luite pro*ita"le1 SamsungBs pro*it margin is lo aggressi!e price cuts$ '$ Main competitors are a!so !argest "u(ers. Apple1 Son,1 <ell1 HP are the main "u,ers o* Samsung 8lectronics pro#ucts as ell as the *irmBs main competitors$ Such situation oul# "e *a!ora"le to Samsung 9i* competitors oul# *orm a relati!el, lo share coul# not *in# complementar, pro#ucts an# #ue to its semicon#uctors sales an#

SamsungBs re!enues: "ecause it coul# use its "argaining po er o!er competitors$ <ue to re!erse con#itions 9competitors can *in# complements an# the, *orm a relati!el, high share o* *irmBs re!enues: Samsung cannot use its "argaining po er o!er competitors as it can easil, lose its customers an# sales$ G$ 6ack its o n OS and soft are. So*t are an# OS pro#uction has a high pro*it margin1 can increase integration o* compan,Bs pro#ucts an# "ran# lo,alt,$ 2ithout strong so*t are an# OS Samsung is at #isa#!antage o!er its competitors$ 3$ 5ocus on too man( products. Samsung 8lectronics ser!es G #i**erent in#ustries ith man, #i**erent pro#ucts in them$ Samsung is at #isa#!antage o!er its competitors "ecause it loses a *ocus hen competing in too man, in#ustries an# too man, pro#ucts$ Opportunities %$ *ro ing India7s smartp1one market. In#iaBs smartphone market is one o* the least penetrate# among AsiaAPaci*ic countries$ Samsung has a strong presence in In#iaBs market an# coul# use this opportunit, to e/pan# its sales$ =$ *ro ing mo"i!e ad%ertising industr(. The compan, coul# #e!elop a#!ertising plat*orm *or its mo"ile #e!ices an# signi*icantl, "ene*it *rom this lucrati!e market$

22

'$ *ro ing demand for 8ua!it( app!ication processors. Samsung is one o* the ke, manu*acturers o* application processors *or smartphones an# ta"lets$ The gro ing #eman# *or these pro#ucts reLuires more "est Lualit, application processors that onl, Samsung pro!i#e$ G$ *ro t1 of ta"!ets market. Ta"lets market is e/pecte# to gro #igits o!er the ne/t *e in #ou"le ,ears$ Samsung "usiness has a strong position in

ta"lets market an# coul# e/pan# it ", intro#ucing ne er1 "etter Lualit, ta"let mo#els1 such as its current gala/, line$ 3$ O"taining patents t1roug1 ac8uisitions. The ke, to SamsungBs competiti!e a#!antage is the large port*olio o* patents$ Patents can "e #isco!ere# ", engaging in costl, RD< or through acLuisitions o* other *irms$ Threats %$ Saturated smartp1one markets in de%e!oped countries. Smartphones market in the #e!elope# economies is saturate# an# the sales ill not "e gro ing at a high rate$ =$ ,apid tec1no!ogica! c1ange. The serious threat that Samsung an# the other tech companies are *acing is a rapi# technological change$ Companies are un#er the pressure to release the ne pro#ucts *aster an# *aster$ The one that cannot keep up ith the competition soon *ails$ This is especiall, har# hen the "usiness ants to intro#uce something ne 1 inno!ati!e an# success*ul$ '$ .ec!ining margins on 1ard are production. Samsung is the secon# largest semicon#uctors pro#ucer here the pro*it margins are !er, thin1 thus eakening the hole compan,)s *igures$ G$ 9reac1ed patents. Samsung 8lectronics has man, patents hich are o*ten use# ", its man, competitors$ Such situation makes it har# to *in# out hich companies "ene*it *rom SamsungBs technolog, "ut #o not pa, *or the rights to use it$ 3$ App!e7s iT: !aunc1. AppleBs iT@ is the ne/t "ig lunch *rom Apple1 hurt SamsungBs T@ sales$ 7$ -rice ars. Samsung has a !er, lo gross margin on man, o* its pro#ucts an# is alrea#, selling some o* them ith signi*icant price cuts$ Competitors hich ma,

23

coul# *ollo

price cutting strateg, too an# in#uce price

ars1 hich oul#

ero#e SamsungBs pro*it margin to 6>R 1.0 Samsung Ac1i%ements

4rom its inception as a small e/port "usiness in <aegu1 0orea1 Samsung has gro n to "ecome one o* the orl#)s lea#ing electronics companies1 specialising in #igital orl# recognise#$ the appliances an# me#ia1 semicon#uctors1 memor, an# s,stem integration$ To#a, Samsung)s inno!ati!e an# top Lualit, pro#ucts an# processes are compan, e/pan#e# its pro#uct lines an# reach1 gre This timeline captures the maCor milestones in Samsung)s histor,1 sho ing ho an# has *ollo e# its mission o* making li*e "etter *or consumers aroun# the -ioneering t1e .igita! Age The #igital age has "rought re!olutionar, change E an# opportunit, E to glo"al "usiness an# Samsung has respon#e# pro#ucts an# constant inno!ation$ The #igital age has "rought re!olutionar, change E an# opportunit, E to glo"al "usiness an# Samsung has respon#e# pro#ucts an# constant inno!ation$ At Samsung1 e see e!er, challenge as an opportunit, an# "elie!e positione# as one o* the Our commitment to "eing the e are per*ectl, orl#)s recognise# lea#ers in the #igital technolog, in#ustr,$ orl#)s "est has on us the No$% glo"al market share ith a#!ance# techno-logies1 competiti!e ith a#!ance# technologies1 competiti!e

its re!enue an# market share orl#$

*or %' o* our pro#ucts1 inclu#ing semicon#uctors1 T4T-.C<s1 monitors an# C<MA mo"ile phones$ .ooking *or ar#1 e)re making historic a#!ances in research an# #e!elopment o* our o!erall semicon#uctor line1 inclu#ing *lash memor, an# nonmemor,1 custom semicon#uctors1 <RAM an# SRAM1 as ell as pro#ucing "est-inclass .C<s1 mo"ile phones1 #igital appliances an# more$ 1.2 -EST6E ANA6/SIS

24

Political 8n!iroment

O!er the past se!eral ,ears1 there has seen a plethora o* patent la suits ithin the smartphone in#ustr,$ In the highl, competiti!e en!ironment1 manu*acturers o* han#sets ha!e "een aggressi!e in protecting their intellectual properties ", suing competitors ", claiming in*ringements on patents$ 4or e/ample1 in March =6%61 Apple sue# HTC *or allege#l, in*ringing on =6 Apple patents 92eil1 =6%6:$ Apple also sue# Nokia in =6%6 *or similar patent in*ringements9PPatent arsP1 =6%%:$ Ho e!er1 in April =6%% the International Tra#e Commission recommen#e# that neither HTC or Nokia shoul# "e *oun# lia"le *or an, in*ringements$ 4urther Microso*t reache# a licensing agreement in April =6%6 ith HTC to pa, ro,alties on An#roi# "ase# han#sets 9PPatent arsP1 =6%%:$ More recentl,1 Apple launche# a la suit against Samsung in April =6%% claiming Samsung copie# #esign *eatures o* the iPhone in its Gala/, line o* An#roi# phones 9Suigle,1 =6%%:$ These are Cust a *e e/amples o* legal challenges *ace# ", smartphone manu*acturers$ Mentioning all la suits in the past se!eral ,ears is "e,on# the scope o* this anal,sis1 "ut it is important to recogni;e that manu*acturers are using their patent port*olio)s to make it more #i**icult *or their competitors to gain larger market shares$ 8!en i* the maCorit, o* cases are *oun# to "e )#u"ious)1 the costs associate# ne competiti!e$ 8conomic 8n!iroment ith legal "attles can hamper or slo #o n the release o* han#sets an# hence making it more #i**icult *or the manu*acturer to sta,

The North American econom, is still reco!ering *rom the *inancial crisis o* =66($ MaCor *actors to consi#er are the unemplo,ment rates1 consumer spen#ing$ In Septem"er =6%% the unemplo,ment rate in the US as &$%> hich is ell a"o!e the national a!erage o* 3$5> "et een %&G( an# =6%6 9PUnite# States Unemplo,mentP:$ The current high unemplo,ment rate in the US is likel, ha!ing an impact on re#ucing smartphone sales$ A &$%> unemplo,ment rate represents appro/imatel, =( million Americans out o* ork$ In Cana#a1 the unemplo,ment rate in Septem"er =6%% as 5$%> hich represents its lo est point since <ecem"er =66( 9PCana#a Unemplo,mentP:$ 25

Since Ianuar, =6%61 Cana#a has "een e/periencing a #o n ar# tren# in unemplo,ment 9PCana#a Unemplo,mentP:$ The high unemplo,ment rate in the US has "een negati!el, impacting consumer con*i#ence an# has resulte# in a #ecrease in consumer spen#ing$ +loom"erg reports consumer spen#ing #roppe# 6$=> in Iune =6%% pro!i#es e!i#ence the #ecrease in hiring an# age increases "elo hich the

in*lation rate are a**ecting consumer spen#ing 9Chan#ra1 =6%%:$ Consumer spen#ing accounts *or 56> o* the US econom, 9Chan#ra1 =6%%:? an, *luctuation in this area ill ha!e a signi*icant impact on the o!erall econom,$ In Cana#a1 the opposite is true$ Consumer spen#ing increase# ", '$(> *rom %st Luarter =6%6 to the en# o* %st Luarter =6%% 9PCana#ian Consumer Spen#ingP:$ Consumer con*i#ence is Cana#a seems to "e higher than the US likel, resulting *rom lo er unemplo,ment rates an# Cana#a)s *aster pace# reco!er, *rom the glo"al *inancial crisis$ Social cultural 8n!iroment recepti!e a

The rise o* the in*ormation age has ma#e telecommunication more important *or "oth "usiness an# pleasure$ It is important to #etermine ho societ, is to ne a#!ancements in technolog,1 particularl, smartphone

a#option in this case$ +, measuring smartphone a#option ", age #emographics1 a "etter un#erstan#ing o* ho the primar, target groups can "e gaine#$ Insights into ho *eatures$ At the en# o* =6%61 there ere 7'$= million smartphone su"scri"ers in the US #i**erent groups o* smartphone users use their *eatures or impro!ements in esta"lishe# #e!ices can pro!i#e insights into ne

9comScore Inc1 =6%%:$ The a#option rate has "een increasing annuall,? in <ecem"er =66&1 %7$(> o* Americans o ne# a smartphone1 hile in <ecem"er =6%6 the a#option rate increase# to =5> 9comScore Inc1 =6%%:$ +, March =6%%1 '=$=> o* Americans a#opte# a smartphone ;ref 2<$ The increase o* Cust o!er %6> o!er a one ,ear perio# along ith o!er a 3> increase *rom <ec$ =6%6 an# March =6%% sho s that the US population is !er, recepti!e to 26

ne

smartphone technologies resulting in rapi# market e/pansion$ +reaking

a#option #o n into #emographic groups1 %=$7> o!er the age o* 331 %7$5> age# %( to =G1 an# =5$=> age# =3-'G o ne# a smartphone in <ecem"er =6%6 9comScore Inc1 =6%%:$ Accor#ing to comScore1 the *astest gro ing age segments in smartphone a#option are %' to %5 ,ear ol# an# those age# 33 an# up 9comScore Inc1 =6%%:$ Tecnological 8n!iroment

The most important aspect o* the technological en!ironment in this case is the cellular net ork in*rastructure$ +oth the US an# Cana#a ha!e in*rastructure in place hich supports "oth !oice an# #ata trans*ers$ Ho e!er1 rural regions ma, ha!e poorer Lualit, o* ser!ice1 an# #o not al a,s support #ata trans*er$ Ho e!er1 most o* the population is concentrate# in ur"an an# su"-ur"an regions o* "oth countries? these regions ha!e the ireless in*rastructure in place to support all uses o* smartphones$ The in*rastructure in "oth Cana#a an# the US is pri!ati;e#1 hich means the net ork carriers maintain an# upgra#e it since it is in their "est interest to retain an# keep cellular su"scri"ers happ,$

.egal 8n!iroment
Iust ran#om i#eas right no *or this section

ireless communication regulations

electronic #e!ice sa*et, regulationsK #eregulation o* the telephone in#ustr, Tra#emark an# Patent .a s Currentl, there is a large num"er o* patent an# intellectual propert, litigationsAla suits in the US1 particularl, in the smartphone in#ustr,1 inclu#ing a #ispute "et een Apple an# Samsung$ Apple claims Samsung copie# iPhones #esign *eatures1 packaging1 an# user inter*ace components$ Patent )trolling) has "ecome a "ig issue in the US$

27

8conomic 8n!iroment 9 Natural:

1.=

5I:E 5O,CES Mode! entrants 9.o :

The threat o* potential ne

High capital is reLuire# to enter into the mo"ile in#ustr,$ It is #i**icult to start up in an in#ustr, here the e/isting *irms alrea#, operate on cost an# #i**erentiation strategies 9Chan et al1 =6%%1 p$%=:$ Ho e!er1 ith the commo#iti;ation o* parts1 *in#ing !anilla solutions *or a simple alternati!e pro#uct might "e possi"le$ <i**erentiation1 ho e!er1 is another stor,$ Ne entrants oul# ha!e issues ith entrant to esta"lish a o!ercoming patent issues i* the, #i#nBt plan on in!esting in their o n RD< to create a uniLue pro#uct$ These things together oul# reLuire a ne competiti!e "ran# name hile achie!ing economies o* scale !ia in!estments in a

suppl, chain process an# #e!eloping a #istri"ution in*rastructure to remain competiti!e$ The costs o* accomplishing these things make a !er, strong "arrier to entr,$ 8!en then1 o!ercoming issues such as customer lo,alt, an# s itching costs oul# "e another large "arrier to entr,$

The threat o* su"stitutes 9High: 4or Samsung1 almost an, phone that per*orms the same *unctions as a Samsung phone coul# "e consi#ere# a su"stitute$ This inclu#es other #e!ices running the An#roi# OS an# not ma#e ", Samsung1 9Motorola <roi# comes to min#: as ell as other #e!ices like the Apple iPhone or +lack"err,$ All o* these are in high a"un#ance ith similar cost an# highl, competiti!e$ The threat o* su"stitute pro#ucts ithin the in#ustr,1 ho e!er1 is lo $ Although there is an increase# popularit, o* Ta"lets1 the, are generall, too "ulk, to "e consi#ere# as straight su"stitutes$ The, #onBt o**er tra#itional mo"ile phone 2

capa"ilities1 hich makes them ina#eLuate$ .aptops ha!e the same pro"lem$ P<As are no longer a !ia"le su"stitute in =6%%$ 4or some time the, ha# pro#ucti!it, *eatures that the a!erage mo"ile phone #i#nBt ha!e1 "ut no lo $ As *or things like relati!e price per*ormance1 percei!e# le!el o* pro#uct #i**erentiation an# the num"er o* su"stitute pro#ucts a!aila"le in the market1 most o* these issues "ecome irrele!ant as neither laptops1 ta"lets or P<As o**er enough o* the same ser!ices to "e a"le to replace Samsung smart phones$ The onl, other !ia"le su"stitute oul# "e H#um" phonesJ hich1 #ue to the lack o* mo"ile phones ha!e all those capa"ilities an# more$ 2ith that sai#1 the "u,ersB propensit, to su"stitute is

*eatures an# capa"ilities1 come as a !er, cheap or e!en *ree su"stitute to the a!erage smart phone$ The, are a su"stan#ar# pro#uct$ +u,er s itching costs are noticea"l, lo er1 "ut pro#uct #i**erentiation onl, comes in the lack o* *eatures$ To#a,1 e!en lo er-en# smart phones can "e purchase# at !er, cheap prices1 an# sometimes come *ree ith certain contracts$ The "argaining po er o* "u,ers 9High: +u,ers ha!e goo# le!erage in*ormation an# ho hen it comes to "argaining "ecause o* their access to

competiti!e the mo"ile phone in#ustr, is$ 2ith so man, similar

pro#ucts *rom other carriers1 "u,ers ha!e se!eral points on hich the, can "argain$ 2hether it is ", OS1 price1 tech specs such as camera Lualit, or screen resolution1 carrier a!aila"ilit,1 or something more$ +u,ers easil, s itch cost ith the increase# o* choices o* mo"ile companies an# *urthermore their pro#ucts are Luite similar to one another? the, ill s itch to those ho ha!e "etter *eatures or price points$ S itching costs1 ho e!er1 can "e !er, high in some cases$ Usuall, a phone come at a lo er cost to a "u,er i* it is purchase# ill

ith a = or ' ,ear contract !ia a

ser!ice pro!i#er$ Shoul# this agreement "e terminate# "e*ore the contract is up1 e/tremel, large *ees can "e incurre# ", the customer$ Shoul# the customer ant a 2!

ne

phone "e*ore the en# o* the contract1 the, ill nee# to pa, *ull price *or it1

assuming their carrier e!en allo s a non-contract purchase 9 hich is not the case *or high-en# smart phones in Cana#a:$

The "argaining po er o* suppliers 9.o : In SamsungBs case1 the "argaining po er o* suppliers is lo ra materials$ "ecause Samsung is its

o n supplier o* most components$ Samsung also happens to "e its o n supplier *or

In the in#ustr,1 ho e!er1 the "argaining po er o* suppliers is high "ecause suppliersB goo#s are critical to the "u,ersB marketplace success 9Hu!ar# et al1 =6%%1 p$(:$ This means the, are more important to the consumers than the mo"ile carriers themsel!es$ A mo"ile phone manu*acturer coul# al a,s integrate *or ar# into the in#ustr, ithout the mi##lemen such as Rogers1 +ell or Telus$ 9In *act1 Samsung has alrea#, #one this ithin 0orea---source:$ Presence o* su"stitute inputsM none The intensit, o* competiti!e ri!alr, 9High: The smart phone in#ustr, has man, competitors that are eLuall, "alance#1 an# thus ri!alr, is high$ The market *or smart phones has slo e# in gro th since its "oom1 so pressure to take customers *rom competitors is also high$ <i**erentiation in the smart phone in#ustr, is also at a point here it is !er, short-li!e# 9Hu!ar# et al1 =6%%1 p$&:$ Sustaina"le competiti!e a#!antage through inno!ation is an unkno n$ 2hile Samsung has "een #oing great keeping up ith the in#ustr, an# e!en lea#ing in some areas1 e!er,thing is short-li!e# #ue to the e/treme le!el o* competition$

1.>

SAMS)N* Mo"i!e Segmentation 3"

Samsung 8lectronics 9Mo"ile <i!ision: operates in one o* the most competiti!e markets o* the ne orl#$ Accor#ing to the US 4e#eral Communication Commission 75 Smartphone #e!ices are intro#uce# e!er, ,ear$ Samsung tra#itionall, ha# a prices it as a"le to compete in the lo er-market hereas in the

conser!ati!e image that *ocuse# on lo -price pro#ucts *or the lo er en# o* the market$ 2ith lo upper market it ha# lesser penetration$ To penetrate the upper-market Samsung ha# to gi!e up their lo er-market position an# *ocus on inno!ation an# percei!ing a higher "ran# !alue$ The *ollo ing is the STP Anal,sis o* Samsung Mo"iles$

SE*MENTATION+ One o* the *un#amental principles o* marketing is the segmentation o* the market$ Segmentation means the splitting o* the market into groups o* en# users ho areM %$ Ma/imum similarit, ithin each group =$ Ma/imum #i**erence "et een groups$ +ase# on recent Marketing #e*initions1 +eha!ioural an# Ps,chographic Segmentation are the #e*initions that "est represent SamsungBs current Segmentation Strateg,$ T *EO*,A-HIC

It has Samsung Guru Segment *or rural areas as ell as Gala/, segment *or ur"an areas$ Samsung is one o* the largest manu*acturers o* mo"ile phones an# it shares the highest cell phone customers ith Nokia in In#ia$ It has something *or e!er,one$ T .EMO*,A-HIC

31

Samsung has mo"ile phones *or ,outh1 age o* %7-=&1 *or "usinessmen etc$ *or mi##leclass ,outh it has Samsung Guru hich is *or go!t$ lo er class orkers also$ ant to get Guru has man, !ariants? it is coming in 'G also$ It is a goo# option i* ,ou attracti!e *eatures as 2i-4i1 'G$ Gala/, is also *or +usinessmen$ Samsung has partnere# ith IT in#ustr, lea#ers to "ring ,ou the most rele!ant enterprise solutions an# the most comprehensi!e mo"ile implementation o* 8/change Acti!eS,nc$ <eci#e#l, a#ept in securit, concerns an# the ans er to ,our e!er, "usiness nee#1 the Gala/, S II is rea#, *or serious enterprise usage$ T -S/CHO*,A-HIC ho ha!e their choice "ase#

a cheap 'G han#set$ Samsung Gala/, is a goo# option *or ,outh as it has man,

Samsung mo"ile is a!aila"le *or those customers too

on their li*est,le$ Samsung came ith some so *anc, mo"ile phones speciall, *or girls an# cheaper touch screen st,lish phones so that e!er,one can enCo, touch screen The rate o* normal mo"iles$ Samsung has its range o* mo"ile phones start *rom %=66to '=1666N$

TA,*ETIN*+ A*ter segmenting the market "ase# on the #i**erent groups an# classes1 the targets nee# to "e chosen$ Samsung mo"iles ha!e the *ollo ing target customersM U Tren#, ,oung people$ U Pro*essionals$ U .arge "usinesses$ U The common cellular phone users$ U Organi;ations such asM ser!ices to pu"lic sa*et,1 the go!ernment1 an# "oth utilit, an# manu*acturing enterprises$ U Institutional sales *or colleges$ U Target is not onl, num"er #ri!en "ut also a"out acLuiring an# retaining customers$

32

-OSITIONIN*+ Positioning is a"out the customer perception a"out the "ran# as "eing #i**erent *rom the other "ran#s on speci*ic #imension inclu#ing pro#uct attri"utes$ The strategies a#opte# ", Samsung to position itsel* in the Mo"ile Phone market are as *ollo sM It *ocuses more on the real margin en# segments Samsung Concept Store U Market making D categor, creation in small to ns U 2i#er Care Net ork U Access to Samsung care line U Pioneering in the 'G segment o* mo"ile phones$ U +ran#e# itsel* as a s,non,m *or Lualit,$ U Create# a UniLue +ran# Image *or itsel* as a high en# !alue #ri!en "ran#$ hich comes *rom mi#-to-high-

1.?

SAMS)N* 5uture Action -!ans ill launche# storage technolog, aime# at replacing computer har#

Samsung

#isk #ri!es as it targets the rapi#l, e/pan#ing memor, #e!ices market to o**set slo ing sales gro th *or smartphone memor, chips$ Samsung is the orl#)s top maker o* the NAN< *lash memor, chips commonl, use#

in smartphones an# soli# state #ri!es1 or SS<s1 hich are *aster1 lighter an# consume less po er than har# #isk #ri!es *oun# in most personal computers$ Glo"al #eman# *or SS<s is e/pecte# to gro units1 "rokers Nomura sai#1 are e/pecte# to increase G% per cent1 ", 53 per cent this ,ear to 5( million

hile shipments o* NAN< chips *or use in smartphones eakening *rom GG per cent last ,ear an# 3( 33

per cent in =6%%1 as smartphone sales gro th starts to SS<s are #i**erence$ The % tera",te SS< Samsung launche# costs F736

ane$

i#el, use# in high-en# ultra-thin laptops such as Apple)sMac+ook Air "ut

har# #isk #ri!es remain PC maker)s #ominant choice "ecause o* the huge price

hile a same-capacit, har# #isk

#ri!e ", "iggest manu*acturer 2estern <igital sells *or less than F%66$ Some anal,sts1 ho e!er1 e/pect har# #isk #ri!e usage in PCs to *all "elo cent ", =6%3 as SS< prices *all an# h,"ri# solutions emerge$ Chipmakers are also "etting on SS<s to "ecome a *resh earnings #ri!er in the F=G "illion *lash memor, market1 hich is currentl, "ooming thanks to strong #eman# *or cut-price ta"lets an# smartphones in China$ Samsung is "uil#ing a F5 "illion chip plant in China1 hile Toshi"a an# S0 H,ni/ are also "oosting pro#uction$ SS<s are likel, to account *or nearl, a Luarter o* total *lash memor, sales this ,ear *rom %3 per cent this ,ear1 accor#ing to <ae oo Securities1 an# this proportion is set to rise to G3 per cent ", =6%3$ Samsung accounts *or aroun# G6 percent o* glo"al NAN< *lash market an# competes ith Toshi"a1 Micron Technolog, an# S0 H,ni/$ In the SS< market1 it competes ith Toshi"a1 San#isk an# Intel$ 36 per

34

SU8STION = =$% Introduction Samsung7s Main Competitors & S'OT Ana!(sis Introduction Competitor Anal,sis is an important part o* the strategic planning process$ This re!ision note outlines the main role o*1 an# steps in1 competitor anal,sis '1( "ot1er to ana!(se competitors@ Some "usinesses think it is "est to get on competition$ Others "ecome o"sesse# ith their o n plans an# ignore the ith tracking the actions o* competitors 9o*ten

using un#erhan# or illegal metho#s:$ Man, "usinesses are happ, simpl, to track the competition1 cop,ing their mo!es an# reacting to changes$ Competitor anal,sis has se!eral important roles in strategic planningM V To help management un#erstan# their competiti!e a#!antagesA#isa#!antages relati!e to competitors V To generate un#erstan#ing o* competitorsB past1 present 9an# most importantl,: *uture strategies V To pro!i#e an in*orme# "asis to #e!elop strategies to achie!e competiti!e a#!antage in the *uture V To help *orecast the returns that ma, "e ma#e *rom *uture in!estments 9e$g$ ho ill competitors respon# to a ne Auestions to ask 2hat Luestions shoul# "e aske# hen un#ertaking competitor anal,sisK The *ollo ing is a use*ul list to "ear in min#M V 2ho are our competitorsK 9see the section on i#enti*,ing competitors *urther "elo : V 2hat threats #o the, poseK V 2hat is the pro*ile o* our competitorsK V 2hat are the o"Cecti!es o* our competitorsK V 2hat strategies are our competitors pursuing an# ho strategiesK 35 success*ul are these pro#uct or pricing strateg,K

V 2hat are the strengths an# V Ho "usinessK

eaknesses o* our competitorsK a, e #o

are our competitors likel, to respon# to an, changes to the

Sources of information for competitor ana!(sis <a!i#son 9%&&5: #escri"e# ho groupe# into three categoriesM V ,ecorded data+ this is easil, a!aila"le in pu"lishe# *orm either internall, or e/ternall,$ Goo# e/amples inclu#e competitor annual reports an# pro#uct "rochures? V O"ser%a"!e data+ this has to "e acti!el, sought an# o*ten assem"le# *rom se!eral sources$ A goo# e/ample is competitor pricing? V Opportunistic data+ to get hol# o* this kin# o* #ata reLuires a lot o* planning an# organisation$ Much o* it is Hanec#otalJ1 coming *rom #iscussions ith suppliers1 customers an#1 perhaps1 pre!ious management o* competitors$ Samsung Telecommunications is one o* *i!e "usiness units ithin Samsung 8lectronics1 "elonging to the Samsung Group1 an# consists o* the Mo"ile Communications <i!ision1 Telecommunication S,stems <i!ision1 Computer <i!ision1 MP' +usiness Team1 Mo"ile Solution Centre an# Telecommunication RD< Centre$ Telecommunication +usiness pro#uces a *ull spectrum o* pro#ucts *rom mo"iles an# other mo"ile #e!ices such as MP' pla,ers an# laptop computers to telecommunication net ork in*rastructure$ Hea#Luarters is locate# in Su on1 South 0orea$ In =665 Samsung Telecommunication +usiness reporte# o!er G6> gro th an# "ecame the secon# largest mo"ile #e!ice manu*acturer in the orl# Its market share as %G> in SG =6651 gro ing up *orm %%$'> in SG =667$ At the en# o* No!em"er =6%%1 Samsung sol# more than '66 million mo"ile #e!ices hich as a close secon# a*ter Nokia ith '66$7 million mo"ile #e!ices sol# in the *irst three Luarter o* ith a G7> market share$ =6%%$ As o* S' =6%=1 Samsung is the largest manu*acturer o* #e!ices running Google An#roi# the sources o* competitor in*ormation can "e neatl,

36

The main competitors o* Samsung *or mo"ile market inclu#ing M %$ Apple 9iPhone: =$ Nokia '$ Motorola G$ RIM +lack+err, =$%$% App!e ;i-1one< S'OT ana!(sis Apple Inc$ is an American multinational corporation1 hich #esigns1 manu*actures an# sells personal computers1 consumer electronics an# so*t are1 an# pro!i#es relate# ser!ices$ The "usiness has e/perience# a tremen#ous gro th *rom =66% hen it has intro#uce# its iPo# mp' pla,er$ Apple Inc$ is consi#ere# to "e the most success*ul electronics compan, in the STR8NGHTS Customer !o(a!t( com"ined change#$ 4irst1 Apple no supplements it1 e4panding c!osed ecos(stem. 2hile at orl#$

*irst AppleBs close# ecos,stem as a eakness *or the "usiness1 this has no has a *ull range o* apps1 so*t are an# pro#ucts that pro#ucts an# are interlinke# an# support each other$ Secon#1 ne Thir#1 Apple has a strong customer lo,alt,1

ill "e release# soon 9iT@:1 hence e/pan#ing the ecos,stem$ hich increases #ue to AppleBs

close# ecos,stem1 hich1 in turn1 is supporte# ", customer lo,alt,$ So the com"ination o* AppleBs e/pan#ing close# ecos,stem an# customersB lo,alt, increases *irmBs competiti!e a#!antage$ App!e is a !eading inno%ator in mo"i!e de%ice tec1no!og(. Apple has "een chosen as the most inno!ati!e "usiness in the orl# *or the 'r# time in =6%=$ Compan,Bs core competenc, o* pro#ucing inno!ati!e pro#ucts is the strength the compan, "uil#s upon an# is a"le to "ring the most inno!ati!e pro#ucts to the market$

37

Strong financia! performance ;B13C333C333C333 cas1C gross profit margin #3.?D and no de"t<.AppleBs *inancial per*ormance is one o* the "est among man, companies$ Compan, currentl, 9en# o* =6%=: hol#s a"out F%6166616661666 in cash1 hich can "e use# *or acLuisitions1 "u,ing "ack compan, shares an# other matters$ It also has higher gross pro*it margin than its main competitors1 hich is eLual to G'$&>$ Compan, has no #e"t an# is ell #esigne#1 orl# not #irectl, a**ecte# ", interest rates or cre#it markets$

9rand reputation. Apple has a reputation o* highl, inno!ati!e1 is !alue# at F57$3 "illion an# in =6%=$

an# ell-*unctioning pro#ucts an# soun# "usiness per*ormance$ Apple "ran# as the secon# most !alua"le "ran# in the

,etai! stores. AppleBs retail stores ensure high Lualit, customer e/perience? pro!i#e #irect contact ith kno le#gea"le sta** an# increases "ran# a areness$ +esi#es1 AppleBs stores are one o* the most pro*ita"le in terms o* salesA*t=$

Strong marketing and ad%ertising teams. Marketing is one o* the strongest *unctional areas Apple has$ It can sell pricier pro#ucts1 "uil# superior stores 9the, are more or less "uilt to achie!e marketing goals: an# a#!ertise their pro#ucts in a compelling manner$

28A0N8SS Hig1 price. App!e7s products cost muc1 more t1an its competitors de%ices. Some critics argue that the price is not Custi*ie#$ 2hen thereBs such a *ierce competition1 Apple pro#ucts price "ecomes a pro#ucts$ Incompati"i!it( it1 different OS. The iOS an# OS Q are Luite #i**erent *rom other OS an# uses so*t are that is unlike the so*t are use# in Microso*t OS$ <ue to such #i**erences1 "oth in so*t are an# har# are1 users o*ten choose to sta, ith their accustome# so*t are an# har# are 9Microso*t OS an# Intel har# are:$ eakness "ecause consumers can easil, opt *or similar Lualit, "ut lo er price

.ecreasing market s1are. The less market share Apple has1 the less it can in*luence its potential customers an# persua#e them to Cump into using AppleBs close# ecos,stem pro#ucts$

-atent infringements. The *irm is o*ten accuse# o* in*ringing other companiesB patents an# has e!en lost some trials$ This #amages Apple "ran# an# its *inancial situation$

5urt1er c1anges in management. Apple has lost Ste!e Io"s in =6%= an# Tim Cook "ecame the ne C8O$ Scott 4orstall an# Iohn +ro ett 9chie* o* ill "e negati!e$ eakness "ut one that retail: le*t the compan, too an# this ill ha!e an impact on compan,Bs management1 hich1 as man, think1

.efects of ne

products. This is not current Apple

Cumps out time to time$ Some o* AppleBs iPo# an# iPhone releases ha# clear *aults an# thus #istur"e# sales o* the pro#ucts an# *irmBs reputation o* superior pro#uct per*ormance$ 6ongEterm gross margin dec!ine. Current AppleBs gross margin is one o* the highest in the tech in#ustr, "ut anal,sts *ear that #ue to increasing component prices an# competition current margins ill not "e sustaine#$ Hence1 glooming *irmBs *uture *inancial per*ormance$

OPPORTUNITI8S Hig1 demand of i-ad mini and i-1one 0. iPa# mini sales

ill increase

AppleBs market share in the ta"let market an#1 ill strengthen *irmBs competiti!e a#!antage$ iT: !aunc1. iT@ launch ecos,stem$ Emergence of t1e ne pro%ider of app!ication processors. Samsung1 the source *or the component "ut coul# manu*acturers ith superior ill support Apple T@ sales an# the pro#uctsB

main AppleBs competitor1 is also the onl, pro!i#er o* application processors *or AppleBs pro#ucts$ Apple has to *in# a ne not *in# a suita"le one ,et$ Nonetheless1 ne

engineering capa"ilities are arising an# itBs Cust a matter o* time1 hen Apple 3!

ill sei;e upon the opportunit, o* "eing less #epen#ent on its #irect competitors$

*ro t1 of ta"!et and smartp1one markets. Gro th o* ta"let an# smartphone markets is a goo# opportunit, to e/pan# *irmBs share in these markets$

O"taining patents t1roug1 ac8uisitions. Apple lacks o* some patents to sustain its gro th an# the "est a, to acLuire those patents is to acLuire the *irms hol#ing them$ In a##ition1 Apple coul# #e!elop ne competencies$ skills an#

.amages from patent infringements. Apple patents are o*ten in*ringe# ", its competitors$ Thus1 collecting the #amages *rom the companies that #o so is a !ia"le opportunit, to not onl, increase the cash reser!es "ut to #amage the competitorBs reputation an# sales as ell$

Strong gro t1 of mo"i!e ad%ertising market. Apple has #e!elope# iA# a#!ertising plat*orm1 hich allo s a#!ertising on Apple iPhone1 iPa# an# iPo# touch$ The gro th o* mo"ile a#!ertising market is an opportunit, hich coul# "e *urther sei;e# upon$

Increasing demand for c!oud "ased ser%ices. Apple coul# e/pan# its range o* iClou# ser!ices an# so*t are as the #eman# *or clou#-"ase# ser!ices is e/pan#ing$

THR8ATS ,apid tec1no!ogica! c1ange. One o* the most se!ere threats Apple an# the other tech companies are *acing is rapi# technological change$ Companies are un#er the pressure to release ne pro#ucts *aster an# *aster$ The one that cannot keep up ith the competition soon *ails$ This is especiall, har# hen a "usiness ants to intro#uce something ne 1 inno!ati!e an# success*ul$ Apple as a"le to "ring !er, inno!ati!e pro#ucts to the market so 4"

*ar "ut *or the moment1 e!en Apple hasnBt un!eile# an, plans *or the ne pro#ucts 9e/cept iT@: an# ma, lack ne competition$ 2313 ta4 increases. Ta/ increases in USA in =6%' Apple$ ,ising pa( !e%e!s for 5o4conn orkers. Pa, le!els *or 4o/connBs orkers alrea#, rose ' times *rom =6%6 to =6%=$ 4o/conn is the main manu*acturer o* Apple pro#ucts an# the rising pa, le!el *or 4o/connBs orkers ill likel, raise the prices *or Apple pro#ucts$ 9reac1ed I- rig1ts. The companies that "reach Apple patents might not "e #isco!ere# soon an# ma, "ene*it *rom it1 time$ -rice pressure from Samsung o%er ke( components. Samsung has alrea#, aske# Apple to pa, higher price *or its application processors$ <ue to intense competition an# no !ia"le su"stitutes1 Apple ma, "e aske# to pa, e!en more$ Strong do!!ar. Apple earne# more than hal* o* its re!enues *rom outsi#e US$ <ollar appreciation against other currencies re#uces potential pro*its *rom those countries$ Android OS gro t1. An#roi# OS is the main competitor *or iOS in mo"ile #e!ice market$ The #omination o* An#roi# #ecreases iOS po er o!er in*luencing consumers to Coin Apple$ Competitors7 mo%es in on!ine music market. Apple *aces threat *rom online music stores1 such as Ama;on1 2al-Mart an# online music su"scription companies1 such as Spoti*,$ =$%$' MOTO,O6A S'OT ANA6/SIS Strengt1s

intro#uctions to keep up

ith

ill negati!el, a**ect

hile eakening Apple at the same

Reacting to the situations an# challenges !er, Luickl, Weal to lea# the orl# o* electronics ", launching inno!ati!e #esigns an# !arious no!el technologies$ 41

Motorola e/iste# as strong competitor in the market "ecause o* ha!ing strong alliance1acLuisitions an# mergers$

'eaknesses

An out-#ate# management st,le o* Motorola is one o* the

eaknesses as it

can e**ect important #ecisions relate# to compan, operations$

Sualit, o* the pro#uct is not up to the mark hen compare# to its competitors$ Customer ser!ice is one o* the "iggest eaknesses1 man, complaints registere# sa,ing that He/ecuti!es #oesnBt react a*ter the saleJ$

Opportunities

Ne

!entures1 "usiness partners an# alliances can increase the #ealings o* pro#uct categories into market can make Motorola more

Motorola$

Intro#ucing ne competiti!e$

T1reats

All other competitors like Nokia1 Samsung are pro!i#ing high Lualit, pro#ucts at lo prices$ ,ears$ Net ork eLuipments 9semi-con#uctor: "usiness is gra#uall, #ecreasing *rom past *e

=$%$' NOFIA S'OT ANA6/SIS STR8NGHTS Nokia has largest net ork o* #istri"ution an# selling as compare# to other mo"ile phone compan, in the orl#$ It is "acke# ith the highl, Lualit, an# pro*essional team in HR< #epartment$ The *inancial aspect is !er, strong in case o* Nokia as it has man, more pro*ita"le "usiness$ The pro#uct "eing user *rien#l, an# ha!e all the accessories one ant that is h, is in great #eman# making it No-% selling mo"ile phones in the orl#$ 2i#e range o* pro#ucts *or all class$ The re-sell !alue o* Nokia phone are high compare# to other compan,Bs pro#uct$ 28A0N8SS 42

Some o* the pro#ucts eakness o* Nokia is the price selling ", the compan, are Luite high$ Some o* the pro#ucts are not user *rien#l,$ Not concern a"out the lo er class o* the societ, people$

OPPORTUNITI8S Nokia has ample o* opportunit, to e/pan# its "usiness$ 2ith the o!er competitors aroun#$ THR8ATS Nokia has man, threat to tackle to maintain its position as market lea#er$ The threats like emerging o* other mo"ile companies in the market$ The companies like Motorola1 Son, 8riksson1 alcatel etc$ these companies ha!e come into the stan#ar# on its o n an# stan# o* tough competition Threats can "e like cheap phones1 ne ith Nokia in the *iel# o* Mo"ile carriers$ st,le an# t,pe1 goo# a*ter *eatures1 ne i#e range in pro#ucts1 *eatures an# #i**erent price range *or #i**erent people1 it has an a#!antage

sales ser!ice etc$ Nokia has to keep in min# the gro ing competition aroun#$ Nokia has to make strategies to tackle pro"lems in the present an# the near *uture1 The gro ing #eman# o* high-spee# net ork can cause #rop in sales *or Nokia1 as Nokia pro!i#e man, less C<MA phones to customer$ =$%$G MOTO,O6A S'OT ANA6/SIS Strengt1s

Reacting to the situations an# challenges !er, Luickl, Weal to lea# the orl# o* electronics ", launching inno!ati!e #esigns an# !arious no!el technologies$ Motorola e/iste# as strong competitor in the market "ecause o* ha!ing strong alliance1acLuisitions an# mergers$

'eaknesses

An out-#ate# management st,le o* Motorola is one o* the

eaknesses as it

can e**ect important #ecisions relate# to compan, operations$ 43

Sualit, o* the pro#uct is not up to the mark hen compare# to its competitors$ Customer ser!ice is one o* the "iggest eaknesses1 man, complaints registere# sa,ing that He/ecuti!es #oesnBt react a*ter the saleJ$

Opportunities

Ne

!entures1 "usiness partners an# alliances can increase the #ealings o* pro#uct categories into market can make Motorola more

Motorola$

Intro#ucing ne competiti!e$

T1reats

All other competitors like Nokia1 Samsung are pro!i#ing high Lualit, pro#ucts at lo prices$ ,ears$ Net ork eLuipments 9semi-con#uctor: "usiness is gra#uall, #ecreasing *rom past *e

=$%$3 RIM +.AC0+8RRY S2OT ANA.YSIS %$ Hig1!( secure p1ones. The primar, RIMBs competiti!e a#!antage is its !er, secure mo"ile phones$ The compan, release# its phones ith secure encr,pte# net ork that allo e# sen#ing emails "et een phones ithout possi"ilit, o* stealing the in*ormation$ This "ecame the USP 9uniLue selling proposition: o* +lack"erries an# as a !er, attracti!e *eature *or corporates an# go!ernments that other phones #i#nBt ha!e$ As a result1 +lack+err, "ecame no$% choice *or enterprises an# go!ernments$ =$ Strong focus on narro customer segment. Unlike other mo"ile phones an# smartphones companies1 +lack+err, tries to appeal *or a narro customer segment E go!ernments an# corporates$ The result is a more *ocuse# approach to satis*,ing the nee#s o* this narro that other "usinesses rarel, #o$ 2eaknesses %$ Ina"i!it( to market t1e "rand. +lack+err,Bs "ran# as kno n *or the market long "e*ore AppleBs iPhone launch or SamsungBs Gala/, success$ 2hen the 44 segment1 something

iPhone

as launche#1 RIM ha# a "etter Lualit, +lack+err, phone in the

market1 enCo,e# larger sales an# greater "ran# reputation "ut as una"le to "uil# on that #ue to poor marketing e**orts$ It spent an# continues to spen# signi*icantl, lo er amounts 9FG%$' million: on marketing1 a"out %6 times lo er than Apple 9FG66 million: an# ( times lo er than Samsung 9F''G million: in =6%=1 accor#ing to CN8T$ 8!en ith "etter Lualit, pro#ucts1 the compan, oul# "e una"le to HsellJ them to consumers as it oul# "e o!ersha#o e# ", SamsungBs an# AppleBs marketing spen#ing$ Ina"ilit, to market the "ran# also resulte# in #eclining "ran# reputation an# lo customer lo,alt,$ Accor#ing to Inter"ran#1 +lack+err,Bs "ran# as one o* as the top #eclining "ran#s in =6%= out o* the top %66 "est glo"al "ran#s$ It !alue# lo er than AppleBs1 SamsungBs or NokiaBs "ran#s$ <eclining "ran# !alue in#icates #ecreasing "ran# appeal to consumers an# lo er sales$ =$ 9!ack9err( OS. 9!ack9err( p1ones and ta"!ets are po ered "( ,IM7s o n OS. 2hile1 in AppleBs case this ,iel#e# some competiti!e a#!antage1 +lack+err, e/periences #i**erent e**ects$ 4irst1 +lack+err, customer "ase is too small to "e pro*ita"le *or maCor application #e!elopers$ .o amount o* apps in store #eters customers *rom "u,ing the phone or the ta"lets$ Secon#1 the compan, lacks enough *un#ing an# coor#ination to #e!elop its OS properl,$ The compan, has alrea#, su**ere# *rom using the out#ate# !ersion o* OS on its phone an# multiple #ela,s o* ne OS intro#uction$ '$ .ependent on go%ernment and corporate contracts. +lack+err, is highl, #epen#ent on go!ernment an# corporate contracts as these make up the largest compan,Bs customer "ase$ Although +lack+err, o**ers the most attracti!e phones *or go!ernments an# corporates #ue phones high securit, *eatures1 the compan, is not guarantee# to recei!e long-term contracts *rom the go!ernment an# a loss o* contract ith at least one go!ernment agenc, or corporate results in su"stantiall, lo er sales$ G$ -oor presence in t1e ta"!et market. RIMBs +lack+err, Pla,+ook ta"let as an unsuccess*ul e**ort to enter the ta"let market an# the pro#uct capture# onl, the small market share1 resulting in losses *or the compan,$ Poor presence in the ta"let market #ecreases compan,Bs chance to success*ull,

45

compete ith Apple or Samsung gro th #ue to the ta"let sales$ Opportunities

ho enCo, signi*icant income an# pro*it

%$ *ro t1 of ta"!et and smartp1one markets. Ta"let market is e/pecte# to gro ", 36> annuall, *rom =6%% to =6%3$ Accor#ing to estimates1 it ill "e orth F%66 "illion ", the en# o* =6%3$ +lack+err, has a great opportunit, to strengthen its position in this *ast gro ing market an# capture larger market share$ =$ Strong gro t1 of mo"i!e ad%ertising market. The gro th o* mo"ile a#!ertising market is an opportunit,1 hich coul# "e e/ploite# ", +lack+err, on its smartphones an# ta"lets$ '$ Increasing demand of c!oud "ased ser%ices. Clou#-"ase# ser!ices market is e/pecte# to gro signi*icantl, until =6=6 an# reach F=G6 "illion orth$ +lack+err, has an opportunit, to e/pan# its clou#-"ase# ser!ices an# "ene*it *rom the gro ing #eman#$ G$ O"taining patents t1roug1 ac8uisitions. The ke, competiti!e a#!antage in technolog, sector is strong patent port*olio$ Patents can "e #isco!ere# ", engaging in costl, RD< or through acLuisitions o* other *irms1 hich is the "est option a!aila"le *or +lack+err, no $ Threats %$ ,apid tec1no!ogica! c1ange. One o* the most se!ere threats +lack+err, an# the other tech companies are *acing is rapi# technological change$ Companies are un#er the pressure to release ne The one that cannot keep up pro#ucts *aster an# *aster$ ith the competition soon *ails$ This is especiall, times hen it coul#nBt

har# hen a compan, ants to intro#uce something ne 1 inno!ati!e an# success*ul$ RIM has "een su"Cect to this threat a *e release its ne to the market$ =$ Saturated smartp1one markets in de%e!oped countries. Smartphones market in the #e!elope# economies is saturate# an# e/perience slo Cana#a$ gro th rate$ This a**ects +lack+err,Bs a"ilit, to e/pan# its market share in US an# +lack+err, OS on time an# hen it rushe# its Pla,+ook ta"let

46

'$ Increased competition for go%ernment contracts. Go!ernment rene s its contracts ith suppliers e!er, *e ,ears an# +lack+err, has to compete ith such *ormi#a"le pla,ers as Samsung an# Apple *or contract rene al$ Although +lack+err, has an a#!antage o!er competitors in pro!i#ing highl, secure mo"ile #e!ices1 it has to compete on other phone *eatures 9at hich the compan, competes poorl,: as ell$ +lack+err, has alrea#, "een outcompete# ", Samsung on rene ing some o* US go!ernment contracts last =$= Samsung Competitors Competiti%e ad%antages =$=$% Ip1one 2hen anal,sts an# tech in#ustr, e/perts tr, to gauge the lasting strength o* Apple)s "urgeoning smartphone #ominance1 the, usuall, take the o"!ious route1 comparing suspecte# a#!ancements ith the iPhone against competitors inclu#ing An#roi# an# +lack"err,$ The compare smartphone to smartphone1 tr,ing to pick the inner$ +ut the, are missing Apple)s secret eapon in comparing Apples to Apples1 so to speak$ The comparison o* smartphone to smartphone is onl, one reason Apple is pulling a a, in the smartphone market1 ith roughl, %=6 million units sol# since the iPhone *irst ent on sale in =665$ The iPhone is o"!iousl, popular on its o n merits1 a touch-screen1 app-"ase# pro#uct that clearl, has a#!antages o!er the clunkier1 more #ate# +lack"err, ma#e ", Research in Motion$ +ut so man, e/perts suggesting that Apple)s competiti!e a#!antage ma, ane in the near *uture in the *ace o* ne smartphones *rom +lack"err, an# others like Google)s An#roi# miss the point$ Apple recentl, reache# thir# place in personal computer sales in the U$S$1 selling more Macs the past *e Luarters than anal,sts e/pecte#$ Also1 Apple is the lea#er in the ta"let space ith its popular iPa#$ In its most recent Luarter1 *or e/ample1 Apple sol# &$3= million iPa#s1 an# the pro#uct has onl, "een a!aila"le *or roughl, a ,ear$ Man, iPa# "u,ers are *irst-time Apple customers$ Iust as man, o* the nearl, *our million "u,ers ho purchase# Mac computers in the most recent Luarter are *irst 47

time Apple customers$ The reason *or Apple)s compoun#ing1 gro ing success is a simple multiplier *actor in!ol!ing customers$ Once the, "u, one pro#uct1 like an iPa#1 Apple)s other pro#ucts like the iPhone or a laptop computer "ecome a natural$ +ecause the compan, has *ocuse# o!er the ,ears on seamlessl, t,ings its har# are an# applications together ith an integrate# operating s,stem1 one orks !er, much like the other$ An# man, apps run on one pro#uct Cust as the, run on the other$ To #ate1 no compan, has as e**ecti!el, corrale# customers to other seemingl, #i**erent pro#ucts ", getting them to purchase Cust one$ +e*ore Apple1 mo"ile communication #e!ices ere ma#e ", one compan, an# laptop computers ere ma#e ", another compan,$ The pro#ucts ha# !er, little in common$ +ut no 1 Apple customers can "arel, tell the #i**erence e/cept *or the si;e o* the pro#uct$ The laptop is "ig1 the ta"let is smaller an# the smartphone is e!en smaller$ Other ise1 ho the pro#ucts operate1 an# ho the, share *unctionalit, an# in*ormation seamlessl, through connecti!it,1 continuousl, up#ating customer)s li!es through simple plug-in1 is !er, much the same$ That)s h, the +lack"err, an# manu*acturer Research in Motion ha!e a #eci#e# #isa#!antage going *or ar#$ The compan, talks a"out ho ith ne it happen1 success ma, "e har# to *in#$ Iust t o ,ears ago that asn)t the case$ Apple ha# Mac customers$ Apple ha# iPo# customers$ Apple ha# iPhone customers$ +ut no 1 ith each a#!ance1 particularl, in regar# to the iPhone)s e!olution an# the iPa#)s launch1 Apple mo!es closer to market #omination across all three spaces like e)!e ne!er seen *rom one compan, "e*ore$ The unilateral strengh is the #i**erence-maker1 an# some anal,sts #on)t ,et seem to kno ho to *actor that in$ Sure1 it oul#n)t happen i* customers #i# not like the iPhone on its o n merits$ It oul# not happen i* customers #i# not like the iPa# *or its o n merits$ An#1 it oul# not happen i* customers #i# not like the Mac computer *or its o n merits$ +ut put the three together1 as millions o* more consumers are #oing an,time soon$ ith e!er, passing Luarter1 an# Apple has a#!antage that ma, "e har# *or competitors to touch it ill up#ate pro#uct1 e/citing o**erings in the near *uture1 "ut unless it orks ith Apple to make

=$=$= Nokia Nokia is searching *or #i!ersi*ication o* re!enue streams an# map #ata is one o* their most signi*icant assets E a*ter all the,B!e acLuire# Na!teL 9one o* the #oing so orl# "iggest mapping #ata an# solutions pro!i#er: *or F($% "ln "ack in =665$ Competition is not ell in the area o* in#oor mapping an# Nokia is possi"l, "uil#ing its orl#Bs largest mapping compan,$ 4rom the other orking on a##ing in#oor positioning to their H8R8 plat*orm an# competiti!e a#!antage as one the han# Nokia is also

ith com"ine# o**er on in#oor API an# large num"er o* "uil#ing maps the, might attract #e!elopers to "uil# in#oor location-"ase# apps *or 2in#o s Phone ( ecos,stem an# gain competiti!e a#!antage in that area$ An, a, it seems to "e smart strateg, as Xin#oorB has a huge potential on moneti;ation o* location-"ase# ser!ices especiall, in the *iel# o* location-"ase# marketing$ 2hile Xthe out#oorB .+S is alrea#, prett, straight *or ar# an# mature Xthe in#oorB is still in its in*anc, 9ma,"e alrea#, a kin#ergarten?: an# it generall, lacks o* common stan#ar#s o* positioning technologies1 APIs1 routing solutions an#Y openl, a!aila"le "uil#ing maps$ Although there are initiati!es like In-location AllianceY succee#s *irst1 that one ill "uil# a signi*icant competiti!e a#!antage o!er the competitionY an# Nokia is a are o* that$ =$=$' MOTO,O6A It is important *or Motorola to "e strategicall, a#apta"le to the *orces an# tren#s happening in the in#ustr,$ Motorolais strateg, in regar# to 2iMa/ has "een to get in earl, on the research an# #e!elopment o* communications eLuipment to *acilitate the technolog,$ Motorola is not onl, a manu*acturer o* the 2iMa/ chip the compan, also manu*acture cell phone an# other pro#ucts that ill "e use# port*olio$ ith 2iMa/$ Motorola ill continue to in!est in research an# #e!elopment1 an# retain a #i!erse technolog, ho

4!

Motorola is current not *acing an, "arriers to entr, ith the current technological a#!ances$ Motorola has a chip that the compan, manu*acturers an# is *orming alliances ith SprintANe/tel an# other ser!ice pro!i#ers in an e**ort to use the 2iMa/ technolog, an# create competiti!e a#!antage$

The intensit, o* ri!alr, ill not a**ect Motorola in the in#ustr,$ Although the compan, sa a #ecline in re!enue ith the sell o* cell phones1 the compan, can make up *or this ", re-!amping its pro#uct mi/ an# o**erings$ Motorola has historicall, "een a strong competitor ith man, *irsts in the in#ustr,$ Motorola ill stick ith #e!eloping strategic plans "ase# on the remote1 in#ustr,1 an# operating en!ironments$ Continue# in!estments in technological a#!ances ill keep Motorola a glo"al lea#er *or pro!i#ing an# inno!ating communications eLuipment$ =$=$G ,IM 9!ack9err( Competiti%e ad%antages +lack+err, comman#s a %G$(> share o* orl# i#e smartphone sales1 making it the *ourth most popular plat*orm a*ter Nokia)s S,m"ian OS1 Google)s An#roi#1 an# Apple)s iOS$Z=[ The consumer +lack+err, Internet Ser!ice is a!aila"le in &% countries orl# i#e on o!er 366 mo"ile ser!ice operators using !arious mo"ile technologies Presentl, in Nigeria1 there is a "lack"err, 9++: cra;e seen as a signi*icant impro!ement to ,our status Luo The compan, as *ocuse# on ho to gi!e "usiness an# go!ernment clients a *ast an# secure means o* sen#ing an# recei!ing sensiti!e in*ormation$ As the smart-phone market E once populate# almost entirel, ", RIM)s "usiness customers E shi*ts to a consumer *ocus1 RIM)s strateg, is starting to look goo# again *or an entirel, #i**erent reason$ At a time iPa# hen ireless carriers are "eginning to *ret a"out all the "an# i#th that #e!ices such as Apple Inc$)s iPhones an# the upcoming ill eat up1 RIM)s phones gi!e them *e er hea#aches$ technolog, *ocuses on installing a pro/, ser!er on in#i!i#ual The compan,)s ne here ha!ing a "lack"err, is

#e!ices$ The ser!er oul# sen# an# recei!e compresse# #ata$ 5"

Such a mo!e

oul# gi!e RIM phones the a"ilit, to loa# 2e" pages an# other here the compan, ten#s to oul# also #ecrease the o!erall amount o* ireless

ireless #ata much *aster E 2e" "ro sing is an area lag "ehin# its competitors E an# tra**ic1 hich is appealing to ireless companies$

RIM)s multiple securit, *eatures E

hich are perhaps more comprehensi!e than on

an, other smart phone E make it an i#eal tool *or sen#ing sensiti!e e-mails$ +ut as consumers look *or phones that o**er a i#e selection o* applications1 some #e!elopers ha!e complaine# that stringent securit, makes it #i**icult to #e!elop so*t are *or +lack"err,$ 2.3 SAMS)N*7S COM-ETITO,S ST,ATE*IC -6ANS 5O, INC,EASE MA,FET SHA,E =$'$% Apple iPhone Strategic Plans Apple C8O Tim Cook hea#line# a recent three-hour strateg, meeting in hich he

outline# plans to "ring a higher percentage o* iPhone sales to the compan,)s retail stores$ At the present time1 onl, a"out =6 percent o* all iPhones are sol# through Apple Stores1 ith the remaining (6 percent o* sales coming *rom online purchases1 other retailers 92almart an# +est +u,1 *or e/ample: an# cellular carriers$ 2hile the maCorit, o* customers are purchasing their iPhones !ia other outlets1 the, rel, on Apple Stores *or trou"leshooting1 repair or replacement$ Cook apparentl, lai# out the a#!antages o* more in-store purchases to top retail managers *rom aroun# the orl#1 inclu#ing the nee# to e/pose customers to other Apple technolog, ithin ho ma, recei!e incenti!es *or the stores an# to keep potential customers *rom "eing steere# a a, *rom the iPhone ", P"iase# an# "ri"e#P emplo,ees at other outlets selling competing phones$ To lure customers to the stores1 Cook reporte#l, hinte# at a series o* incenti!es$ The recentl, announce# P+ack to SchoolP program that pro!i#es a USF36 gi*t car# to stu#ents ho purchase an iPhone at an Apple Store is apparentl, part o* the plan1 an# it)s e/pecte# that more i#eas ill "e *loate# at a Iul, =(th sales meeting$ I#eas such as an iPhone tra#e-in plan -- here customers can tra#e in an ol# or #amage# 51

iPhone *or a re*ur"ishe# iPhone 3 -- an# a a, *or Apple Stores to #irectl, match #iscounte# pricing o**ere# ", other retailers like Ra#ioShack$ iOS 5 as apparentl, on the #ocket *or the meeting as ell1 ith Cook stressing the criticalit, o* the up#ate# mo"ile OS to the compan,)s *uture *ortunes an# e/ecuti!es #iscussing ho "est to promote the ne !ersion hen it ships this *all$ =$'$= Nokia Strategic plans 2ith #i**erent mo"ile stan#ar#s aroun# the orl#1 Nokia shoul# #e!elop a strateg, to

cater to #i**erent net ork #eman#s$ As a group1 e recommen# that Nokia "uil# strategies *or The Unite# StatesB an# Asian markets$ The #e!elopment o* NokiaBs strategic plan ma, inclu#e one o* the *ollo ing o"Cecti!esM

Nokia can sell

ireless net ork eLuipment or "ecome a Coint partner in this area$ ireless pro#uct o**erings$ ith an

Nokia currentl, *ollo s its competitors in this area$ Other companies ant to merge ith *irms seeking to e/pan#

4ocus on core "usiness1 ith e/pansion o* the GSM net orks along increase# in!estment in 'G technologies$

Select partnerships to #e!elop market potential in the U$S$ an# Asian markets$ Research potential alliances ith Intel or Microso*t in or#er to meet gro ing customer #eman#s$ <e!elop net orks in South American an# A*rica un#er the GSM stan#ar#$ 4ocus on the manu*acturing an# #esign o* inno!ati!e mo"ile #e!ices$ These are some o* the strategic #ecisions that Nokia can pursue$ Our team strongl, a#!ocates that Nokia push *or a net ork in Asia an# in 8urope that utili;es a GSM s,stem1 since consumers are more concerne# emphasis interacting ith the out*it an# the *unction o* the mo"ile #e!ice$ There is no #ou"t that Nokia shoul# place more ith consumers an# grasping consumer tren#s$ Mean hile ith the emergence o* 'G ser!ices1 Nokia can #e!elop more applications on mo"ile 52

phones to meet customer #eman#s$ 2ith the #e!elopment an# stan#ar#i;ation o* GSM1 Nokia can ha!e more in*luence on the gro th o* the in#ustr, an# continue to hol# the lea# position$ In North America1 "ecause o* se!eral stan#ar#s *loating aroun# the market1 Nokia nee#s to create a partnership compan, can pro!i#e1 along ith se!eral large companies to sell its pro#ucts$ 2ith ith its clarit, an# its price$ There*ore1 Nokia shoul# a #i**erent stan#ar#1 customers are more concerne# a"out hich ser!ice plan a push *or the stan#ar#i;ation o* net orks so that their core competencies in #esign an# manu*acturing can "e ma/imi;e#$ =$'$' MOTO,O6A Strategic -!an To#a,1 Motorola is harnessing the po er o* ireless1 "roa#"an# an# the Internet to #eli!er em"e##e# chip s,stem le!el an# en#-to-en# net ork communication solutions *or in#i!i#uals1 ork teams1 !ehicles an# homes$ Our goal is to make "usiness an# li*e simpler1 smarter1 s,nchroni;e# an# sa*er ", creating lea#ership pro#ucts an# ser!ices that put intelligence e!er, here$ Our Lualit, program has e!ol!e# to support this goal an# is no a program o* Per*ormance 8/cellence1 "ase# on the +al#rige mo#el$ This mo#el #eman#s a commitment to Lualit, across the "oar#--through !isionar, lea#ership1 organi;ational learning1 compan, agilit,1 emplo,ee engagement1 shre # management an# a *ocus on results$ 2hile Si/ Sigma remains at the heart o* our internal processes1 our !ision has i#ene# to ensure that e/cellence is permeate# through e!er, aspect o* our "usiness$ +e*ore Si/ Sigma1 Lualit, le!els ere measure# in percentages1 or parts per hun#re#$ Ho e!er1 as mo#ern technolog, gre more comple/1 it "ecame clear that ol#er stan#ar#s o* Lualit, no longer applie#$ Motorola in!ente# Si/ Sigma to raise the "ar an# *ocus the Lualit, #e"ate on parts per million1 an# in some cases1 parts per "illion$ To#a,1 through Si/ Sigma1 our Lualit, target is &&$&&&77>1 or '$G #e*ects per million opportunities$ In other or#s1 e stri!e to optimi;e our pro#uction processes ", ensuring that there are si/ or less stan#ar# #e!iations ithin the speci*ications o* an, gi!en process$

53

As in the %&76s1 Motorola still

orks to "uil# Lualit, into our pro#ucts up *ront$ Ho -

e!er1 the Si/ Sigma approach encompasses all o* Motorola)s internal processes ", pro!i#ing a structural approach to continuous impro!ement$ 2e think o* this as Psi/ steps to ar# e/cellence$P The, inclu#eM

I#enti*, the t,pe o* pro#uct or ser!ice ,ou pro!i#e I#enti*, ,our customers an# their reLuirements <etermine ,our nee#s an# suppliers <e*ine the process *or approaching an# #oing Continuousl, impro!e the Sigma le!el$ ork 8liminate #e*ect sources an# optimi;e processes

Using the Si/ Sigma approach1 Motorola is continuousl, orking to ar# capturing1 measuring an# eliminating #e*ects in e!er, process$ Si/ Sigma also allo s us to maintain our *ocus on the processes1 not the people$ 2e "elie!e that i* processes are #esigne# to "e *la less1 people ill per*orm *la lessl, using the process$ Motorola !ie s Lualit, *rom a customer perspecti!e1 meaning e ha!e onl, one opportunit, per each pro#uct e #eli!er to *a!ora"l, impact a customer$ I* the pro#uct #oesn)t meet e/pectations1 e run the risk o* losing that customer$ It isn)t enough to simpl, meet in#ustr, a!erages--e!er, single pro#uct that reaches a customer shoul# e/hi"it a uni*orm stan#ar# o* Lualit,$ 4rom %&(5 to %&&&1 the *irst t el!e ,ears o* Si/ Sigma at Motorola1 our "usiness sa signi*icant results$ +, %&&&1 Motorola ha# eliminate# &&$5> o* all in-process #e*ects$ The Cost o* Poor Sualit, as re#uce# ", more than (G> on a per unit "asis1 an# cumulati!e manu*acturing cost sa!ings totale# more than F%( "illion$ At the same time1 emplo,ee pro#ucti!it, increase# #ramaticall,--up %=> annuall,$ Tota! Customer Satisfaction Si/ Sigma is !ital to ensuring a commitment to Lualit, throughout our internal processes1 "ut it)s onl, the *irst step$ To ensure that Motorola is a"le to continuousl, impro!e customer satis*action1 e take a holistic approach to Lualit, an# ha!e looke# *or a,s to "uil# it into the entire *a"ric o* the organi;ation$ This means not onl, meeting customer e/pectations ", #eli!ering high-Lualit, pro#ucts that are price# competiti!el,1 "ut also shaping customer perceptions ", creating an en!ironment o* trust through customer communication an# engagement$ 2e call this 54

Total Customer Satis*action$ +ecause Lualit, is #ri!en *rom the outsi#e ", the !oice o* the customer1 e regularl, measure customer satis*action an# ask *or customer input in #e!eloping action plans an# implementing proce#ures that ill #eli!er a superior e/perience to customers$ This commitment has pai# o**1 an# our stu#ies sho that customer satis*action rates remain high$ Currentl,1 5&> o* our customers sa, the, oul# continue to purchase Motorola pro#ucts an# ser!ices in the *uture1 an# 53> sa, the, oul# recommen# Motorola to colleagues$ 4urther1 7'> report that the, are !er, satis*ie# ith the ease o* #oing "usiness ith Motorola$ +, anticipating customer nee#s1 #emonstrating inno!ation an# gaining customer lo,alt,1 Motorola is continuousl, stri!ing to "uil# relationships ith customers that are "uilt on a soli# *oun#ation o* trust$ 5ocused on t1e future As technolog, continues to a#!ance an# the economic lan#scape "ecomes more challenging1 Motorola ill continue to *ocus on pro!i#ing customers ith pro#ucts that make their li!es smarter1 simpler1 s,nchroni;e# an# sa*er$ 2e "elie!e the "est a, to accomplish this is through the success*ul implementation o* the Per*ormance 8/cellence +usiness S,stem$ The program changes the a, e manage our organi;ation ", "ecoming e!en more *ocuse# on the customer an# ", placing rene e# emphasis on #eli!ering "usiness results$ The !ision o* Per*ormance 8/cellence is reali;e# through se!en ke, areasM .ea#ership$ A commitment to Lualit, at the top o* the organi;ation is crucial to our success$ Strategic Planning$ Sualit, is a ke, *actor in #e!eloping Motorola)s "usiness strateg,$ Customer an# Market 4ocus$ Our customers an# the Lualit, the, #eman# are at the heart o* an, strategic plan Motorola #e!elops$ 4act-+ase# <ecisions$ Motorola)s #ecision-making processes are #ri!en ", *acts that are #eri!e# through o"taining an# anal,;ing the correct in*ormation$ 55

Human Resources$ Attracting an# retaining goo# emplo,ees an# creating a ork en!ironment that emphasi;es commitment to customers is !ital to maintaining high le!els o* Lualit,$

Process Management$ Through Si/ Sigma1 e maintain our *ocus on continuous impro!ement o* all o* our internal processes$

+usiness Results$ <eli!ering results "ene*its Motorola1 our customers an# our sharehol#ers$

Motorola)s Lualit, Courne, has not "een Lualit,$ These inclu#eM

ithout "umps$ Along the

a,1

e)!e

learne# some !alua"le lessons that ha!e helpe# us impro!e our commitment to Top #o n commitment an# in!ol!ement$ 4irst an# *oremost1 corporate lea#ers must sho a strong commitment an# in!ol!ement in Lualit, initiati!es$ The, must set the *irst e/ample an# take an acti!e role in au#iting processes an# searching *or a,s to impro!e the "usiness$

Measurement s,stems to track progress$ At "oth macro an# micro le!els1 Motorola must al a,s remain committe# to *in#ing an# tracking measura"le results$

Tough goal setting$ To ensure that e are esta"lishing the highest stan#ar#s *or our organi;ation1 Motorola regularl, "enchmarks "est-in-class companies to assess our pro#ucts an# ser!ices against those o* the competition$

Pro!i#e the reLuire# e#ucation$ 8mplo,ee in!ol!ement in the Lualit, process cannot "e o!eremphasi;e#$ 8mplo,ees must "e traine# in the P h,sP an# the Pho -tosP o* Lualit, an# hat it means to customers$

Sprea# the success stories$ Successes are as important to un#erstan# as *ailures$ Communicating organi;ational successes is a crucial step in ensuring that Motorola can "uil# upon them in the *uture$

Ne!er lose sight o* the customer)s priorities$ 2e must al a,s remem"er that customers are our *irst reason *or e/istence$ An# *inall,1 ne!er "e satis*ie#$ To sur!i!e1 Motorola must al a,s stri!e *or continuous impro!ement$ 56

=$'$G RIM- +lack+err, Strategic Plan Research in Motion)s *uture gro s i**ier each Luarter as it signs on *e er ne customers an# has ha# to #iscount large num"ers o* +lack+err, smartphones an# Pla,+ook ta"lets to clear in!entor,$ The compan, re!eale# to#a, that its re!enue #roppe# =3 percent in the last *iscal Luarter !ersus a ,ear earlier1 a #ecrease o* F3$7 "illion1 ith the #ecline in re!enues accelerating a*ter it launche# its +lack+err, 5 smartphones in *all =6%% an# ha# to #eepl, #iscount the poorl, selling Pla,+ook ta"let in the same perio#$ Ne C8O Thorsten Heins sai# he oul# re!eal a maCor reorgani;ation o* RIM tomorro an# sai# the compan, oul# a"an#on most consumer markets an#

re*ocus on its historic area o* strengthM the "usiness market it has largel, trie# to escape *rom through a series o* unsuccess*ul e**ortsto trans*orm the +lack+err, into a gaming or social #e!ice *or ,oung a#ults$ Z Get e/pert a#!ice a"out planning an# implementing ,our +YO< strateg, ith In*o2orl#)s =&-page PMo"ile an# +YO< <eep <i!eP P<4 special report$ \ 0eep up on ke, mo"ile #e!elopments an# insights ith the Mo"ili;e ne sletter$ [ +ut O!um anal,st Ian <a son sa,s1 PI)m not con!ince# that)s "est a, *or ar#$$$$ I)m not sure Heins ,et un#erstan#s1 or at least isn)t a"le to articulate1 that consumer appeal is ke, to *uture )enterprise) success$P That across-the-spectrum approach is hat Apple use# to make iOS the ne plat*orm *or choice *or "usiness an# hat ith An#roi# #e!ice makers like Samsung an# Motorola Mo"ilit, are tr,ing to #o An#roi#$ In its presentation to#a, to in!estors1 RIM e/ecuti!es sai# the, ere illing to e/plore other "usiness mo#els1 such as licensing all or some +lack+err, technologies to other companies$ Some in!estors ha!e suggeste# that RIM license or sell access to its secure messaging net ork or its +lack+err, Messenger instant messaging ser!ice$

57

2hate!er it #oes #i**erentl, in terms o* getting re!enues *rom its +lack+err, technolog,1 the compan, inten#s to continue to make an# sell +lack+err, #e!ices$ PIt oul# "e a "ig mistake *or RIM to shut #o n the #e!ices "usiness1 hich #ri!es the !ast maCorit, o* re!enues to#a,1P <a son sai#1 supporting RIM)s #ecision to not a"an#on its #e!ice "usiness as some in!estors ha!e suggeste# it #o$ RIM continues to e/press con*i#ence that its *orthcoming +lack+err, %6 OS -e/pecte# to hit the market in the *all -- ill rein!igorate the compan,)s *ortunes$ +ut the, arne# in!estors to e/pect no turnaroun# "e*ore then an# in *act sai# the, oul# no longer pro!i#e in!estors ith gui#ance on *inancial per*ormance1 a sign o* a trou"le# compan,$

It took less than three months last summer *or more than one million Cana#ians to sign up *or Song;a1 a popular *ree music streaming application *or smartphones an# ta"lets$ Un*ortunatel, *or Research In Motion .t#$1 there +lack+err, users$ as no Song;a app *or its

.ike man, o* the most popular mo"ile applications1 Song;a as a!aila"le on Apple Inc$Bs iOS #e!ices 9iPhone1 iPa#1 iPo# Touch: an# those running on Google Inc$Bs An#roi# plat*orm1 "ut the compan,Bs #e!elopers #i#nBt make a !ersion *or users o* RIMBs +lack+err, smartphones$ HThe app store1 the app ecos,stem asnBt a #e*ining attri"ute o* that e/perience1J 8lias Roman1 co-*oun#er an# chie* e/ecuti!e o* .ong Islan# Cit,1 Ne York-"ase# Song;a Me#ia Inc$ sai# o* the #ecision not to #e!elop an app *or +lack+err,$ HThatBs not the case no $J O!er the past *e months Song;a has orke# ith RIM to #e!elop an app that ill ork on the 2aterloo1 Ont$-"ase# compan,Bs +lack+err, %6 plat*orm1 the ne operating s,stem that ill po er its ne/t generation o* +lack+err, smartphones an# is set to launch ne/t eek on Ian$ '6$ 8!er since Apple launche# the App Store in =66(1 one o* the primar, #ri!ing *orces o* smartphone an# ta"let a#option has "een the a!aila"ilit, o* applications that users can #o nloa# to customi;e their #e!ices$

As RIMBs share o* the smartphone market ero#e#1 #e!elopers turne# their "acks on the compan, in *a!our o* Apple an# An#roi#1 to the point here +lack+err, "ecame something o* an a*terthought *or man, application creators$ RIM *ell "ehin# its ri!als in the app race as #e!elopers *locke# to iOS an# An#roi#$ To#a,1 there are more than 5531666 apps a!aila"le in AppleBs App Store an# Google Inc$Bs marketplace *or its An#roi# apps U Google Pla, U hit the 7531666 mark last Septem"er$ Mean hile1 RIMBs +lack+err, App 2orl# "oaste# a meagre &61666 applications at the en# o* the thir# Luarter o* =6%=1 accor#ing to #ata *rom Strateg, Anal,tics1 ith man, #e!elopers a"an#oning the plat*orm as RIMBs sales in the U$S$ #ecline# an# its share o* the smartphone market # in#le#$ As RIM o**icials #re up their strateg, *or +lack+err, %61 it "ecame clear that *or the as orth supporting an# coul# pro!i#e a !ia"le thir# plat*orm to ha!e an, chance o* success1 RIM oul# nee# to con!ince thir#-part, #e!elopers that +lack+err, %6 plat*orm "ehin# iOS an# An#roi#$ ThatBs here Alec Saun#ers1 RIMBs hea# o* #e!eloper relations came in$ O!er the past %( months1 Mr$ Saun#ers an# his team ha!e "een on a mission to reach out to as man, #e!elopers as possi"le aroun# the orl# in an attempt to *oster the #e!eloper communit, that as lacking ith RIMBs legac, so*t are plat*orm$ H2hen I *irst starte#1 there as a lot o* skepticism a"out +lack+err, an# a lot o* skepticism *rom #e!elopers1J Mr$ Saun#ers sai# in an inter!ie $ HAt the time1 e ere reall, preaching to the *aith*ul$ +ut eB!e gotten out in *ront o* a, ,ou ork ith this communit, is ,ou #e!elopers1 an# IBm a *irm "elie!er that the something that nee#s to "e nurture#$J To help "ring #e!elopers on "oar#1 RIM stage# #o;ens o* H+lack+err, IamJ #e!eloper con*erences in cities ranging *rom Toronto an# Ne an# +angalore$ No 1 ith the launch o* +lack+err, %6 Cust aroun# the corner1 RIM e/pects to ha!e kno n as +lack+err, at least 561666 applications in its application store U no like 4ace"ook Inc$1 T itter Inc$ an# .inke#In Corp$ York to Cape To n

go out there an# ,ou meet themY An ecos,stem1 a communit, o* #e!elopers1 is

2orl# U at launch1 inclu#ing man, o* the most popular applications *rom companies

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2hat change# Mr$ RomanBs min# a"out making a Song;a app *or ++%6 man, e/pecte# to upgra#e to the ne

as not Cust

the si;e o* RIMBs user "ase 95& million1 accor#ing to its last Luarterl, report1 ith #e!ices: or the Lualit, o* the plat*orm$

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