Samsung’s generic strategy and intensive growth strategies continue to push for technological innovation as a critical factor for competitive advantage. Headquartered in Korea, the conglomerate competes against technology-intensive firms, such as Apple, Google, Lenovo, LG, Sony, Intel, and other firms that create strong competitive forces, as determinable through a Five Forces analysis of Samsung. The industry environment imposes aggressive competitive behavior that typically involves rapid technological innovation for product differentiation, as seen in the evolution of smartphones available in the global market. To effectively compete, Samsung’s generic strategy and growth strategies must involve investment in technological innovation. The resulting competitive advantages enable the company to keep its competitive position as one of the best performers in the semiconductors, consumer electronics, and home appliances industries. Samsung’s generic competitive strategy and intensive strategies for growth are suited to the current business environment and the strategic positioning of the multinational organization’s operations.
Samsung Electronics Co.’s generic strategy and intensive growth strategies are similar to those of its parent company, the Samsung Group. Such similarity is based on the unitary leadership that influences corporate strategic direction and competitive advantages of the conglomerate’s and its subsidiaries’ operations. Samsung Group’s generic competitive strategy and intensive growth strategies are observable in product design, marketing strategies, and the business organizational development direction of Samsung Electronics and other subsidiaries.
Samsung’s Generic Strategy for Competitive Advantage (Porter’s Model)
Samsung applies the broad differentiation generic competitive strategy. Based on Michael E. Porter’s competitive strategy model, the strategic objective of broad differentiation is to maintain competitive advantage by providing unique (or differentiated) products targeting a wide market, which in this case is industry-wide, involving practically every person or group that buys smartphones, laptops, and other equipment. To achieve Samsung’s strategic plans for growth and expansion in the global market, this generic strategy requires the application of product development as a main intensive growth strategy to compete against technology firms like Apple, Google, Sony, and LG.
Samsung’s investments in product development are a strategic implication of the broad differentiation generic strategy. For example, the company invests in technological innovation to support the competitive advantage of its products in the consumer electronics market. Another implication of this generic competitive strategy is Samsung’s marketing mix and strategies that promote products as unique or different alternatives to the majority of competitors. This marketing approach and technological innovation sustain the corporation’s competitive advantages and value chain effectiveness in satisfying customers’ needs in consumer electronics, computing technology, and home appliances. Other generic competitive strategies, such as cost leadership, differentiation focus, and cost focus, are also applied in Samsung’s operations, but to a limited extent. Cost focus leads to the company’s being a best cost provider in some segments of the semiconductors and electronics components markets. The limited application of cost focus still comes with innovation standards that reflect Samsung’s main generic strategy of broad differentiation. These generic strategies align with the company’s intensive growth strategies to succeed in sustaining the technology firm’s competitive advantages.
Samsung’s Intensive Strategies for Growth (Ansoff Matrix)
Market Penetration (Primary). Samsung’s revenue growth depends on market penetration as the primary intensive strategy. In Igor Ansoff’s matrix, the strategic objective of market penetration is to grow the technology business by increasing its revenues from the sale of current products in current markets, such as the European Union’s consumer electronics market, where the corporation already has operations. Competitive advantages and business strengths identified in the SWOT analysis of Samsung combat negative forces from competition in these markets. As an intensive growth strategy, market penetration depends on the effectiveness of the broad differentiation generic strategy, in terms of how the company creates technologically innovative products that are differentiated enough to attract target customers in current or existing markets.
Product Development (Secondary). Considering the emphasis of product superiority in Samsung’s corporate mission and vision statements, product development is a major intensive growth strategy of the enterprise. A strategic objective of product development in this case is to grow the business through new products, such as new electronic gadgets. Also, this intensive strategy grows Samsung’s operations through iterative innovation, which leads to improved versions or variants of existing products. For example, the company regularly rolls out new smartphone models, similar to what Apple Inc. is doing in its product development strategy. The implementation of product development as an intensive growth strategy is based on Samsung’s differentiation generic competitive strategy, which requires product development for uniqueness that differentiates the business from the competition. Economies of scope based on the conglomerate’s various subsidiaries support product development and competitive advantage by providing technological expertise and material inputs from the subsidiaries. Samsung’s organizational culture affects the operational effectiveness, value chain efficiencies, supply chain management, and other business activities that fulfill the strategic objectives of product development.
Market Development. The global scale of Samsung’s operations makes market development a minor intensive strategy for business growth. Market development’s strategic objective is to enter new markets using the company’s existing products, such as introducing new Galaxy tablets in Latin American markets after these products’ introduction in the United States. As an intensive growth strategy, market development’s success depends on product value and competitive advantage, which in this case comes with Samsung’s differentiation generic strategy via technological innovation. For example, effective innovation for cutting-edge technological design makes the corporation’s products more competitive when rolled out in target markets. With this intensive growth strategy, introducing products to new markets may come with changes in Samsung’s organizational structure.
Diversification. Samsung Group’s diversified business operations maintain multiple revenue channels and spread risk across industries and markets. This intensive growth strategy’s implementation is infrequent in the technology conglomerate, considering regulatory hurdles and other barriers. With the strategic objective of establishing new profitable businesses, the diversification strategy grows Samsung typically through acquisitions of smaller firms, such as Harman International Industries. The minor role designation of this intensive growth strategy limits the risks of establishing new business operations. In implementing diversification, the differentiation generic competitive strategy is also applied for competitiveness and strategic alignment among Samsung subsidiaries’ business operations.
Conclusion – Samsung’s Generic Strategy & Intensive Growth Strategies
Samsung’s generic strategy and intensive growth strategies direct the organization’s growth and development. Differentiation plays a major role in building the company’s competitive advantage, although other generic competitive strategies, such as cost leadership and focus strategies, also support the technology enterprise and its competitiveness. Samsung’s operations management strategies and administration must align with the differentiation generic strategy and the intensive growth strategies to support business growth while competing against Apple, Google, Sony, and other aggressive multinational companies.
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