Samsung: The Global Marketing
TGM 503 - Global Marketing
Arizona State University
April 5, 2024
Executive Summary
Samsung remained the biggest smartphone maker in the world until
Huawei surpassed it in April 2020. The market share of the North Korean
company dropped only to 17%, which is enough to stay ahead of Apple and
Xiaomi, who are their main global rivals (Singh, 2020). Such changes can be
explained by the Covid-19 pandemic that at the time severely hit American,
Indian, and European smartphone markets, while China, where Huawei has
a dominant position, is already rebounding. Offering the wide product line
that addresses the needs of many different target groups is the main idea
of Samsung’s global strategy. Nevertheless, the leading technology
enterprise should make some changes to its marketing strategy, especially
regarding African countries. Diversification strategy would help to
introduce more mid-range smartphones for a reasonable price supported
by proper local advertisement campaigns.
Environmental Analysis
Environmental analysis is an essential strategic tool designed to assess a
company’s global performance. The PESTEL analysis, which comprises
political, social, economic, technological, legal, and cultural factors, will be
further used to evaluate the current business environment of Samsung
(Schlegelmilch, 2016). In general, Samsung Electronics (SE) had gone
through challenging times to transform from a small local company to a
multinational conglomerate and the brand that is known everywhere.
Political
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
It is challenging to maintain proper activity and avoid losses when a country
is under rapid political transformation accompanied by instability. Today,
Samsung is present in 80 countries while its devices can be purchased
almost in every country (Razdan, 2017). SE plays a vital role in domestic
politics and economics; thus, the 2016 corruption scandal that involved
Samsung’s successor Jay Y. Lee and then-president Park Geun-hye
adversely impacted the brand. According to Kim (2020), Lee ultimately
apologized for the bribery following all procedures and voiced his intention
to became the last conglomerate’s heir from his family. Moreover, SE faced
political pressure from South American and African states, whereas they
received mild complaints from India. Nevertheless, emerging markets
currently offer a business-friendly environment. Such issues, like terrorism
and the Covid-19 pandemic, also affect the performance and strategy of
the conglomerate.
Economic
The financial health of any company is usually determined by exchange
rate fluctuations and the high stock market volatility. SE recently overcame
the crisis of their home country’s economy when domestic debt surpassed
the company’s revenues of KRW 200 billion (Shamout & Elayan, 2020).
Samsung is highly dependent on the American and European market share;
thus, the company’s strategy has been aimed at aggressive expansion into
emerging countries. These aggressive pushes, together with an extensive
product line, help to make up losses in developed states and compensates
long breakeven of their luxury offerings. In terms of competition, Google,
Apple, and Huawei remain the main global rivals of SE, while companies
like Oppo locally overpass the leader in terms of sales.
Social
Covid-19 recently influenced this dimension that is about change in
consumers’ preferences. People turn to online marketplaces to buy
electronic appliances instead of conventional physical sites. According to
Razdan (2017), today’s shoppers value instant satisfaction; hence, impulse
purchasing is currently increasing. People still perceive product price as an
essential factor for purchasing. SE lost its status as a cheap but high-quality
brand to Chinese manufacturers, and it also fails to deliver software to its
customers.
Technological
The recent strategy of SE tells about their intention to become a first mover
in the industry. For instance, the Galaxy Fold series have been recently
presented to impress the tech world. Massive investment in research and
development (R&D) became a competitive advantage of the South Korean
company. The leadership in the electronic industry can be maintained only
with the help of continuous technological innovation. Such mistakes as
faulty batteries of Galaxy Note 7, which lead to several explosions, should
be avoided in the future as it adversely impacts consumers’ loyalty.
Environmental and Legal
SE’s strategy perceives environmental issues not as a challenge but rather
as a competitive advantage because customers prefer to purchase eco-
friendly brands. In regards to sustainability, Samsung established energy
management systems and chemical product management policies
designed to reduce gas emissions and energy/water consumption. For
instance, the conglomerate reduced gas emission by almost 250 tons and
energy consumption by 40% (Shamout & Elayan, 2020). The main legal
issues are property rights and disputes over patents. Some scandals
negatively impacted Samsung’s reputation, especially those that emerged
between Apple and SE. This legal war is still ongoing, while Huawei accused
the Chinese department of Samsung of patent infringement in 2016.
Situational Analysis of Kenya
Kenya was chosen to be more targeted among African countries because
of its business-friendly environment. Doing Business rating saw Kenya
taking 56th place in 2020, which is better by 57 spots than it was before
thanks to a wide range of successful reforms (World Bank, 2020). A stable
macroeconomic environment and higher investments provided a 6%
annual growth of the economy in 2019. The population of this multi-ethnic
country is approximately 53 million. Rural areas are more populated than
urban ones; hence, only 30% of its inhabitants live in cities. Moreover, 75%
of Kenyans are people under 35 years who are highly interested in
advanced technologies (Gitogo, 2020). Many people, especially young
unemployed citizens, perceive multinational companies as new colonizers
because of their policy that marginalize local professionals, who usually
lack management skills.
Kenya is known for its ongoing reforming process that influences the
business environment. For instance, the government adopted a law that
eases access to credits for enterprises and enforced minority investor
protections (World Bank, 2020). Such legal reforms, together with modern
technological solutions, make Kenya a promising country for further
expansion. Kenya has been a democratic republic since 2010 when the new
constitution was adopted.
SE seemingly should focus on the local demands of Kenyans and provide
cheaper and more basic products to the rural and low-income populations.
Robust information systems allow the company to turn collected data into
organizational knowledge. It is especially crucial for the company that
enters Africa that is both region of opportunity and high-risk market,
because of political instability, exchange rate volatility, and limitations of
wire transfer (Park & Kim, 2019). Big data that comprises information
about consumer behavior and preferences should be used to define which
goods will be popular in the region.
General Strategy
The marketing strategy that aims at targeting a specific region or country
should be based on a proper segmentation approach. According to Green
and Keegan (2020), market segmentation variables include demographic,
psychographic, behavior, benefit, and ethnic segmentation. A company
utilizes it to determine if its business will be successful in a particular
market, possible cultural conflicts, and who should be targeted. In terms
of SE, demographic segmentation would be used to identify the number of
potential Samsung customers and their purchasing power.
The benefits of using Samsung devices should cater to the needs of local
citizens what is a reasonable price for good quality instead of fancy design
and luxury status. For instance, Samsung has started selling A-series
smartphones in Kenya in 2019, which became a successful move, as these
mid-range devices had an acceptable price for the given specifications
(Otieno, 2019). Concentrated targeting seems to be the best choice to
enter Eastern Africa. The market is currently saturated by cheap products
offered by Transsion and Huawei. Thus, it is time for Samsung to become
a leader both in terms of luxury and mid-range offerings. The positioning
strategy must focus on the establishment of the image that Samsung’s
devices have higher quality and reasonable price in comparison to ones
offered by rivals.
Samsung is known for its strategic geocentric orientation, accompanied by
a high standardization of products marketed in different regions around
the world. Moreover, SE is already present in Kenyan’s market and is one
of the most admired brands. The company allegedly had applied direct
exporting what is selling directly of its devices from the national markets
(Almutairi et al., 2019). SE should establish more offices and construct an
assembly plant in the country to increase its presence and oust Infinix and
Tecno out of key market segments. Moreover, the dual sourcing approach
that is about using two different suppliers for the same component is the
best choice. It allows Samsung to cut costs and lead competitive pricing in
different regions of the world. For instance, Samsung Galaxy S10 models
had different chipsets depending on the market. To cut costs, the company
uses in-house Exynos processors to target Asian and European markets,
while the US-based Qualcomm chipsets feature devices in North America
and Europe.
Specific Plans and Strategies
Competitive Advantages Strategies
Porter’s Five Forces is a simple but essential tool to analyze the market
competition. In terms of competitive rivalry, the smartphone industry has
rigid competitiveness, especially between Samsung, Apple, LG, Lenovo,
Huawei, and Xiaomi. Although Apple enjoys one of the largest supply
chains in the industry, it incurs minimal expenses to Samsung and Huawei
(Shamout & Elayan, 2020). It can be explained by the low bargaining power
of suppliers because there is high competition between them.
Nevertheless, smartphone software makers, such as Microsoft and Google,
possess more power than component makers.
The consumer’s power of bargaining that is the ability to influence the
price and quality of the products, is moderate. Consumer demands usually
are price-conscious and flexible; thus, smartphone vendors have to meet
them to increase profit. There is a moderate threat of product substitution
because such devices as laptops, tablets, phablets, and flip-phones offer
similar functionality, applications, and interfaces. On the contrary, the
threat of new entrants in the smartphone industry is high, and they
influence the attractiveness and profitability of the sector. To address all
previously mentioned issues, SE should apply a competitive approach
based on red ocean strategy, and simultaneously lay more emphasis on
innovation. It seems that the strategy of differentiation would help to gain
a foothold both in the global and African market by developing a unique
product or service that are not similar to the competitor’s ones.
Product and Brands
Samsung focuses mostly on the product element of its marketing mix (4Ps).
The multinational electronics company has 34 R&D centers and more than
50 production sites (Razdan, 2017). SE manufactures different mobile
devices, including smartphones, wearables, tablets, and accessories. The
Samsung Galaxy S series are the company’s flagships, the Samsung Galaxy
A series are mid-range devices, and the Samsung Galaxy M lineup can be
defined as entry-level one. Such differentiation is one of the organization’s
advantage; thus, more entry-level and mid-range devices should be
developed to target Africa successfully. The company would better off to
continue the policy of manufacturing different devices under the same
brand.
Price
In general, Samsung uses two common strategies of pricing; one of them
is skimming that is selling the product at the highest possible price. This
policy is usually implemented during the launch of a new product and helps
to recover costs and reach a high-profit margin (Almutairi et al., 2019).
Nevertheless, such prices would be challenged by a competitor’s cheaper
offerings who already launched products with similar features. In that case,
SE turns to a competitive pricing strategy and sells its products according
to the competition. This strategy is a superior one and should be used
further because it brings a competitive advantage over Apple.
Place and Distribution
Samsung sells directly to retailers and customers; that is another
advantage. There is no wholesaler between manufacturer and consumers,
and the company does not use country tiers; hence, SE is free to choose
which market they want to saturate with their devices. The electronics
manufacturer uses all available distribution channels from its existing
businesses. Samsung does not need much to enter markets with its new
devices. Today, it is vital to improve the online method of distribution that
becomes more and more popular and apply blockchain technology.
Promotion
Vivid TV commercials usually accompany the Samsung Galaxy S line’s
promotion. For instance, the Galaxy S20 advertisement involves a young
girl that demonstrates the technical features of the flagship by taking
photos of her friends at the party (Samsung, 2020). Promotional materials
often appear on the pages in popular newspapers. Such advertisements
usually have a maximum of images and a limited number of words telling
about the main improvements. Today, the best way to promote a new
product is to launch a social media campaign. Moreover, sales promotion
programs, as one dedicated to the Olympic Games 2020, when specially
designed line of Galaxy S20 + smartphones were released, highlight the
company’s strategy to sponsor significant events (Bonifacic, 2020). This
approach attracts people who like sports and creates a positive brand
image. The current integrated marketing communication strategy (IMC) of
Samsung is almost standardized as its products. It means that the company
strives to disseminate the same message and brand image among different
regions using all available channels.
CSR Strategies
The main difference between Kenyan’s local companies and Samsung lies
in the way the latter capitalizes on the growing technology cluster in East
Africa. South Korea dedicates more than 4% of its GDP to invest in
technology development (Park & Kim, 2020). It is one of the reasons for
SE’s dominance in the region, while an excellent brand image should be
credited to successful social responsiveness activities. In 2016 Samsung
Electronics Africa intensified its cooperation with local governments to
help the region achieve its sustainable development goals (Standard
Reporter, 2016). The main ways to fulfill it are providing better access to
education, new healthcare facilities, reducing the impact on the
environment, and conducting skills development and training for youth.
For instance, in 2017, SE partnered with Karura Forest to plant more than
10 000 trees by 2020 (Samsung, 2017). It eventually boosted the country’s
forest cover by 10% and proved the efficiency of CSR initiatives both for
brand image improving and sustainable development.
References
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strategies implemented to generate an effective positioning of its brand
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athletes. Endadget. Web.
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Kim, S. (2020). Samsung billionaire apologizes for succession scandal.
Bloomberg. Web.
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