Game Theory of Introducing

Galaxy M Series
The Phone made as a new rival in low-end price smartphone market

Moh. Irzat Choirun Nawaz

(1606822011)
Arrifa Vassily K
(1606910286)
Rizqi Triputranto B
(1606883120)
Introduction

● Samsung is a multinational electronics company based on South Korea.

Through relentless innovation and research, the company continued
successful growth and became market leader
● Recently, samsung has new competitor came from China, Xiaomi. in
India, Xiaomi already catch samsung’s gross sell (Look Next Slide)
● The fierce competition in the mid and low-end smartphone segment
would be expected to lead samsung to losing it owns profit
● Samsung try to catch up with its new product, Samsung M-Series. Our
team try to predict the game between Samsung and Xiaomi.
 Samsung-Xiaomi Market Share in India

Xiaomi share increase in

Q3 2017 to Q4 2017 by
3% from 22 %to 25 %, in
the next Quartil
increase by 6%
 Samsung -
Xiaomi
Market
Share in
Indonesia
through it massive increase in
growth of sale, Xiaomi almost
beat Samsung share market in
Indonesia, while in India
samsung already defeat.
Main reason is Xiaomi can
provide “great” smartphone
cheaper
Smartphone sales in Indonesia

47% of smartphone
in Indonesia
dominated by Low-
end price.

Samsung
continuously
becomes number 1 in
share market but it is
dominated in high-
price smartphone
miss-match with
large demand from
Indonesia
Literature Review

1. Samsung has a vast product portfolio and its presence is in several different product categories, the
product categories that Samsung is present is from Camera, television, Smartphone, and others.
2. The benefit that Samsung Product has is that their products has gained trust because of the way
Samsung Products has performed in recent years and also services for their products Samsung has
been known to be fast in its service for any product. Thus, in the marketing mix, the product
portfolio is one of the strongest points for Samsung .
3. Because of its presence in different categories, Samsung use various pricing strategies, skimming
price is pricing strategies that is used for smartphones while for other products other than
smartphone Samsung uses competitive pricing.
4. Samsung is present through various channels in the market. It works on the channel marketing
concept wherein there are three segments. Sales and service dealers, Modern retail and
Distributors
5. Samsung uses multiple form of promotions, and also use strong tactics to push the products to the
customer through sale promotion. Thus, Samsung use various marketing across the year covering
festive season as well as no festive time.
Literature Review

1. Xiaomi is known to have smartphones in the low price, that’s part of a reason why Xiaomi
is becoming more known in the smartphone community because of its low price.
2. There are a couple of reasons why Xiaomi smartphones can be cheaper than other
smartphone products, the first is that Xiaomi does not indulge in advertisements which
save a lot of money and also it does not approach mediators like retailer, it usually sells at
e-commerce site.
3. Another reason is that the company does flash sales which means that it sells at a limited
number of products in order to prevent the storage and maintenance cost.
4. Another reason is that the phones was build locally and it is known that China has a low
cost in labour and Xiaomi took advantage of it.
Propose Method

A game is defined by three elements: players, strategies that may

be used by each player, and payoffs.

Stackelberg Game - one player (the leader) moves first, while the
other player (the follower) moves second after observing the
action of the leader.
 Propose Method
Players:

N = {X, S} Strategy for Samsung:

X - Xiaomi S = {E, S}
S- Samsung E - Enter
S - Stay Out
Strategy for Xiaomi:

X = {F, A}
F - Fight by giving discount and new
product
A - Accommodate means let Samsung
takes market share in Low-End Price
Smartphone
Propose Method
Stackelberg Model Fight

Xiaomi

Enter

Accommodate
Samsung

Stay Out

1. Defines samsung option

2. Define Xiaomi options regarding the option by Samsung
3. Backward Induction
Refrences

● http://www.ottilieandlulu.com/why-xiaomi-phones-are-so-cheap/
● https://www.isrgrajan.com/why-is-xiaomi-or-mi-smartphones-so-cheap-even-with-high-
specs.html
● https://techcrunch.com/2015/01/19/xiaomi-secret-sauce/