Samsung Mobile

Market Share & Profitability in Smartphones

Submitted by: GROUP 4

Aditya M Bhilkar MBA19168 || Arti Patidar MBA19181 || Deva Nikhil MBA19188
Harshita Kushwaha MBA19193 || Sadhvi Gupta MBA19251 || Sumit Anand MBA19234
Tanmay Wadhwa MBA19236
 Case Summary
• December 2015, Samsung announced new head, DJ Koh to its mobile division
• It was a challenging year for Samsung, mobile division income at Samsung for the
second quarter of 2015 dropped 38%
• At the end of second quarter in 2015, Samsung accounted for 21.4 % of all new
smartphones sold versus Apple at 13.9 %
• Samsung accounted for approximately 14% of Smartphones profit while Apple held
the remaining 86%
• Samsung dominated the overall Market Share while Apple ruled the Profitable high-
end Market
• There was modest growth in Developed Economies whereas the Developing
Economies were forecast to be the major source of new smartphone customers
• At the end of the second quarter of 2015, top three selling Smartphones brands in
China were Xiaomi (16.6%), Huawei (15.9%) and Samsung (10.8%)
• In India, top 3 selling brands were Samsung (23% ), Micromax (17%) and Intex (11%)
 Case Summary…
• Main question for Samsung was
• “Is there Android phones significantly different from other Android
phones?” (answer-”absolutely”)
• “Are Consumers aware of that difference?” (answer- Some are
and Some are not)
• Customization to the android OS by Samsung were only recognized by
higher involvement customers
• Lower involvement customers viewed all Android operating system as
being the same
• Samsung deserves a lot of credit for Innovation and has developed
very thoughtful, user-centric features to its phones
• Samsung is product-focused whereas Apple is platform-focused
• Samsung is the preeminent designer and manufacturer of
smartphones in terms of Market
Share ie at “Enviable position” but still dwarfed by Apple in terms of
profitability
• So, had the time come for Samsung to focus on profits or should it
focus on growing its customer base for future profitability?
 Case Dilemma
Profitability or Market Share?
Dilemma is whether Samsung must focus on Profits or should it focus on
growing its customer base for future profitability? Are these Mutually
Exclusive?

 If the Priority is Profitability

What are the means for Samsung Mobile to maximize its profits in the
Commoditized Industry
 If the Priority is Market Share
How could Samsung achieve this goal and how can it justify the near-term
sacrifice

Can Samsung mobile implement a single, undifferentiated strategy

worldwide in pursuit of its Goal?
Where is the smartphone in its
product life cycle, and how should
that position inform Samsung’s
strategy going forward?
 PRODUCT LIFE CYCLE
The smartphone is in Maturity stage and is moving
towards Decline stage. The global smartphone
industry has reached saturation and even the people
in lower income groups are holding a smartphone in
their hands now.

Samsung, in 2015 in terms of market share was a

leader but in terms of profitability Apple was more
profitable. This is because of a perceived lack of
differentiation in Samsung products which is due to a
variety of reasons including OS platform. Many
companies compete in the space of Android OS
whereas the iOS is proprietary to Apple. 
Its marketing strategy should focus on:
• Building loyalty and on the uniqueness of the product.
• Declining sales should be taken care of.
• Emotional appeals may be used.
• Innovations should be continued.
• It must continue working on creating high end product with
excellent features and on product quality.
• Pricing should be competitive.

Strategy going ahead

Should Samsung pursue
profitability, even at the expense
of market share? Justify your
response with examples.
 Profitability or Market share
No, Samsung should not pursue profitability at the expense of market share
● Customers in developing economies were overwhelmingly value driven
● Even though Samsung had the highest market share, Apple was improving its
profit share for example in China Apple saw a 71% rise in revenue in second
quarter of 2015
● Focus should be on improving market share in (mid range devices) in
developing countries
● As the market is value driven and high competition, increasing profitability will
not help
● There is very less differentiation ( majority of low involvement customers)
● Another option is to start working towards creating a Samsung ecosystem
● Samsung should focus on diverse product offerings
● For example: easy data transfer between samsung mobiles, laptops and other
devices
● Focus on retaining the customers by offering discounts/offers on upgrading
● Marketing efforts towards conveying the difference amongst other Android
devices
Similar examples: Mi in India
● Initially launched cheap smartphones to gain market share in India
● Now, launching a relatively costlier phones like Redmi k20 pro
Another example is of Jio
● Initially focussed on cost leadership & gaining market share
Are Samsung smartphones
differentiated products?
If so why? If not, what should
Samsung do about it?
 Internal Differentiation
Product List Average Prices Differentiation Major
Competitor

Galaxy S series S20, S20+, S20 50,000 - 95,000 Design, Screen OnePlus, Apple
Ultra, S10 5G, (refresh rate,
S10 lite aspect size, etc)

Galaxy A Series A30, A50, A51 15,000 - 25,000 Price Mi, Oppo, Vivo
differentiation

Galaxy Z Series Z flip, Zflip 5G, 80,000 - Foldable Moto Razr,

Zfold 2 1,50,000

Galaxy Note Note20, 35,000 - Stylus (S pen), Huawei, Lg (if

Series Note20+, Note20 1,10,000 DeX, Efficient with stylus)
Ultra Microsoft OnePlus, Apple
integration

Although the products are internally differentiated, there

is no product differentiation in Samsung from competitors
 What should Samsung do about it?
Differentiation
◈ Unique OS is not a sufficient differentiation point
◈ Samsung should offer application programs and other services
unique to samsung. For example, ITunes for Apple to develop
bond with customers
Customization
◈ Samsung can customize products to suit particular markets and
not try to be jack of all Spades
◈ They have high end like Galaxy and Note, also low end like A and
M series
◈ They should ensure that there is sufficient differentiation b/w the
two ends and also that both the end are competitive in the
market
Benchmarking
◈ Samsung should also benchmark with other players such as
Apple & OnePlus
◈ Apple’s model of providing hardware, Software & software
services creates customer loyalty as well as expanding revenue
streams
◈ Samsung should also develop similar apps to foster
competitiveness and expand revenue
Should Samsung pursue a
multi-segmented strategy or
a globally undifferentiated
strategy? If the company
should pursue multiple
segments, by what criteria
should it segment?
• Samsung should go for multi-segmented strategy
• Serving its diversifying customer base – low, middle and high end of Market
• Differentiating from all other android competitors by providing special features
in different segments of the products.
Ex: Knox, smart devices control, Samsung pay
• The company should pursue demographic segmentation and use the following
two criteria:
 Demographic factors (Average income level of people, spending level, per
capita usage of smartphone users)
 Psychographic Factors (Occupation, social class, comfort seeking level)

It should segment based on price range:

Low End Market Middle end market High end market

• Smartphones (Samsung • Smartphones • To tap on customers
ranges from $144 to (Samsung ranges from with lower platform
$768) $144 to $768) switching rate
• Minimal necessary • Appropriate trade off • Targeting premium
features between advanced customers through
• Subsidized purchase features and price special services
model • Memory and Storage • Digital Cameras
• Memory and Storage Devices • Home Appliances
Devices • Personal Computing • Personal Computing
• Personal Computing • Tablets & Televisions • Hubs, Sensors &
Outlets
THANK YOU