2.Where is Samsung vulnerable? What should they watch out for?

Samsung vulnerable are:

Samsung’s weaknesses such as a lack of innovation, a fear driven culture and weak smart phones. While Sony became a household name through innovations such as the transistor radio and the Walkman, Samsung’s strength lies in disciplined manufacturing and playing catch up. They called for more tolerance, diversity, communication and creativity. All are traditional weak areas. They might be weak when it comes to the consumer devices they produce, but when you look at their R&D you see that their strength lies in scientific development, not in stylish consumer products.

Developing a Samsung is not an innovative path to wander down and Samsung management knows this though some of their PR people have spouted any number of notions in the past. Having a piece of most cool digital products is better than owning one thing out right that soaks up much marketing effort, R&D and all the angst and fiscal responsibility that goes with keeping a consumer product on the edge of a buying public’s tongue.

Weak pricing power, oversupply, and an unfavorable exchange rate were among the reasons given for unfavorable figures when Samsung Electronics released its first quarter earnings report.

Although Samsung focuses innovation but it is not proactive to introducing new products, it waits to attack the competitors. It also lacks in product differentiation. Samsung caters mass market instead of niche market so for this purpose it sets low prices of products and low price products seem as low quality products, so Samsung products perceive as low quality as compared to competitors’ products. Most of the Samsung products are not user friendly which is a hurdle for Samsung to make it market leader.

They should watch out for:

In this first case we deal with a relatively simple mode of segmentation analysis. The most
productive way of analyzing the market for watches turns out to be segmentation by value. This approach discloses three distinct segments, each representing a different value attributed to watches by each of three different groups of consumers:

1. People who want to pay the lowest possible price for any watch that works reasonably
well. If the watch fails after six months or a year, they will throw it out and replace it.
2. People who value watches for their long life, good workmanship, good material, and good
styling. They are willing to pay for these product qualities.

3. People who look not only for useful product features but also for meaningful emotional
qualities. The most important consideration in this segment is that the watch should suitably
symbolize an important occasion. Consequently, fine styling, a well-known brand name, therecommendation of the jeweler, and a gold or diamond case are highly valued.Approximately the buyers bought for lowest price 

 Approximately bought for durability and general product quality
 Approximately bought watches as symbols of some important occasion

Defining and quantifying such segments is helpful in marketing planning especially if a
watch company's product happens to appeal mostly to one segment or if the line straddles the three segments, failing to appeal effectively to any. Without such an understanding, the demographic characteristics of the market are most confusing. It turns out, for example, that the most expensive watches are being bought by people with both the highest and the lowest incomes. On the other hand, some upper income consumers are no longer buying costly watches, but are buying cheap.(By.TONHA YIM)

Posted in: SAMSUNG Case Studies(MBA)