Samsung’s Retail Strategy

In the modern world of technology, many different companies are attempting to secure their ground in a particular market.  Some companies focus on software, others on mobile phones, some on televisions, and many other companies work in many other tech fields.  Perhaps one of the most recognizable names in the technology field is that of Samsung.  This conglomerate has a diverse spread of products in the tech market and has expanded its influences into many fields.  How is Samsung so successful?  The answer is quite simple.  Samsung, through the use of its vast resources and innovative strategies, is able to implement an effective business plan that allows the company to hold its place as one of the leading tech companies in the world especially through its largest branch of operation, the electronics division. 

One of the ways that Samsung has been able to hold its place of dominance in the business world is through the effective use of its market by the means of distribution, as well as pricing.  Samsung utilizes the strategy of using intensive distribution in order to have its products available to the largest amount of potential consumers.  This strategy makes particular sense for a company such as Samsung because their brand name has become both well recognized and received by the consumer population, which allows potential buyers to feel safe in knowing that the company’s products all meet a certain level of expectations regardless of where they may be originally purchased.  This is backed by the wild success of Samsung’s mobile phone, the Galaxy S III.  According to reports, this phone in 2012’s 3rd quarter sold more units than either of its leading competitor’s (Apple) top two products.  Samsung sold roughly 18 million S III’s, while Apple sold 16.2 million iPhone 4S’s and 6 million iPhone 5’s (McGrath, 2012).  Clearly, the strategy of flooding the market with their product has been successful for Samsung, however, the competition is attempting to hinder the company’s further success.

  In response to such a wildly successful marketing, pricing, and retail strategy, Samsung’s leading competitor Apple has pressed charges on Samsung claiming that their own product stole ideas and copyrights of Apple’s iPhone.  The lasting implications of these charges have yet to be fully felt, however, they could reach as far as having the Galaxy S III being banned from sale in the US.  This would be a crippling blow to Samsung as that mobile unit now forms the backbone of its profits in the mobile phone industry.  This could not come at a worse time for Samsung, who have seen their market share increased dramatically over the last year from 18% to 36% of the 2nd quarter of 2011 (Trefis, 2012).  

To combat these potential losses from the Apple lawsuit, Samsung has attempted to try a new strategy in terms of its mobile phone business ventures, diversify its mobile phone operating platforms.  Unlike Apple's marketing strategy which exclusively produces units that run on one operating system, Samsung produces phones that run on currently 3 operating systems and may license a fourth.  If they do so, the company would have its corporate fingerprint in Android, Windows Phone 7, Bada OS (an operating system creating by Samsung itself) and webOS.  By having products that run all of these different platforms, the company allows itself to operate with the flexibility so that they can focus on producing products that run on the most widely accepted operating system for the general public.  

It is through the coupling of both an effective marketing and retail strategy that Samsung has found itself in a position of positive financial returns.  The wild success of their mobile phone the Galaxy S III has formed the backbone of their profits and marketing success, but the company has not stopped there.  By electing to remain both innovative and competitive in the pursuit of new technology, Samsung has placed itself in a position that will allow it to run on whichever future operating system proves to be the most effective.  By doing so, Samsung will remain one of the most successful and financially lucrative companies in the business world.       

References

McGrath, D. (2012). Samsung Galaxy S3 top smartphone in Q3. EE Times. Retrieved from http://www.eetimes.com/electronics-news/4400894/Samsung-Galaxy-S3-was-best-selling-smartphone-in-Q3.

Trefis Team. (2012). Samsung's market-flooding strategy may not work much longer. Forbes. Retrieved from http://www.forbes.com/sites/greatspeculations/2012/09/06/samsungs-market-flooding-strategy-may-not-work-much-longer/>.