Contemporary Corporate Strategy - Case Study Example

Running Head: Strategic Marketing Plan Strategic Marketing Plan: Samsung Galaxy Tab Name Student number Name of the unit Unit coordinator Word Count: 1779 Table of Contents Table of Contents 2 Executive Summary 3 Introduction 4 Mission relevance and SMART objectives 4 Business’ Hierarchy of Strategies 5 Industry’s Porter’s Five Forces 6 Entry barriers 6 Threat of substitute products 6 Buyer power 7 Supplier power 7 Rivalry 7 Industry attractiveness 8 Significance of marketing research 8 Significance of overall segmentation, targeting, differentiation and positioning strategies 9 Conclusion 10 References 11 Executive Summary Samsung Galaxy Tabs are Android-based tablet computers, whose manufacture and marketing is done by Samsung. The 7-inch tab was the initial model, which was followed by several other models. The mission of the strategic marketing plan will be to increase company’s sales of galaxy tabs. The SMART objectives of the plan include increasing awareness of the Samsung galaxy tabs among young people, increasing market share by 10 percent and increasing sales by 15 percent in the coming three years. The strategic marketing plan of Samsung Galaxy Tab will discuss the business’ hierarchy of strategies, Porter’s five forces analysis of the tablet market and the attractiveness of the market and industry. It will also talk about the importance of marketing research to the company’s strategic decision-making. Lastly, it will discuss the significance of segmentation, targeting, differentiation and positioning strategies to the business. Introduction The Samsung Galaxy Tab refers to a range of tablet computers that are Android-based and are manufactured and marketed by Samsung. The company launched the 7-inch Galaxy Tab as its initial model in the tab series in September 2010 during the IFA, which took place in Berlin. After that, Samsung has released a number of models, including those with displays of 10.1, 8.9 and 7.7 inches. The 4G/3G tabs have phone capability while the Wi-Fi ones have a GPS system (Samsung, 2013). This essay will include a strategic marketing plan for Samsung Galaxy Tab. The plan will comprise of mission, SMART objectives, business’ hierarchy of strategies, and a definition of the industry in which the Galaxy tab will compete. It will also include a discussion of attractiveness of the market and industry, significance of marketing research in strategic decision-making and significance of segmentation, targeting, positioning and differentiation strategies to the business. Mission relevance and SMART objectives Samsung’s galaxy tab is facing stiff competition in the tablet market from other similar products such as Apple’s iPhone, RIM’s Blackberry and HTC’s smartphones, which are performing almost similar functions. However, Samsung’s variety of galaxy tablets surpasses its competitors’ range (Bonnington, 2013). The mission for this strategic marketing plan will be to increase the company’s sales through increased awareness of current and potential customers on Samsung Galaxy tabs. The awareness will revolve around the special features and wide range of galaxy tabs compared to other companies’ tabs. The intended marketing campaign will aim at reminding current customers on the various uses of the tabs that matches their various needs. It will also inform potential customers about what is special about Samsung galaxy tabs and the benefits of buying them. This is crucial since it will facilitate the retention of current customers and drawing of new ones. Moreover, increased sales will increase the business’ profitability level. The first SMART objective of the marketing plan will be to increase awareness of Samsung galaxy tabs among young users. According to Samsung (2013), the features of the Galaxy Tab 10.1, which is the latest release of Samsung’s galaxy tabs include, a big screen, web browsing, music, high speed connections, instant messaging, email, Polaris office, Full HD playback, and in-built cameras for video chatting or taking photos, among others. These features match the needs of young people who want a device that they can use to do several things. Moreover, the marketing plan aims at increasing the company’s market share in the youth’s market segment by 10 percent. This will be made possible by attracting new young customers to buy the tabs. Once increased awareness and market share has been achieved, it is believed that this will increase the company’s sales of galaxy tabs. Hence, the plan intends to increase sales by 15 percent in the coming three years. Business’ Hierarchy of Strategies The business’ strategies fall under three groups including corporate, business-level and functional strategies (Saee, 2007). The business’ corporate strategy entail focusing on the manufacture and marketing of a range of galaxy tabs and ensuring that enough resources are available for R&D, marketing and production. At the business level, the business will differentiate its tabs based on price and product features, which will present it with a competitive advantage over its rivals. Furthermore, the business’ functional strategy will revolve around ensuring effective and extensive marketing of its tabs in order to attain its objectives of increasing sales and market share. Industry’s Porter’s Five Forces The Samsung Galaxy Tab will compete in the tablet industry. Porter (2008) maintains that, the Five Forces Model evaluates an industry in order to establish whether it is less competitive, not competitive or intensely competitive, which in turn determines its attractiveness. The five forces include entry barriers, threat of substitute services or products, buyer power, supplier power and rivalry. Entry barriers Tablet industry’s threat of entrants is low. The market is currently dominated by major competitors such as Samsung, Apple, HTC and RIM, which is likely to put off potential new firms from venturing into the market (Bonnington, 2013). In addition, the industry requires substantial investments in R & D in order to develop new products on a continuous basis, as well as huge start-up costs for manufacturing and workforce. Moreover, big companies have the ability to manufacture their products at lower costs due to economies of scale, whereby their unit costs will be less due to their large scale manufacturing. Firms attempting to venture into the industry will have lower production initially and will thus, experience high costs. Threat of substitute products Drawing from Fern (2012), threat of substitutes in the tablet market is very high. First, customers can easily switch to mobile phones or laptops, which perform some of the functions that a tablet can perform. Currently, personal computers and laptops offer several unique applications and match most of the software compared to tablets, and thus they can easily substitute tablets. Though it is hard for a new participant to enter the tablet industry, there exist other growing markets, which are expected to impact tablet sales. Buyer power The buyer power in the tablet market is medium. Customers have increasing options to tablets. Smartphones, iPad and iPods have a bigger percentage of similar capabilities as tablets (Fern, 2012). Thus, due to sleekness, trendiness and availability of the devices, these alternatives are presenting customers with a wide a range of products to choose from and thus, they may delay purchasing the galaxy tab. Supplier power Supplier power in the tablet market is low. Suppliers in this market fall under three categories, including software suppliers, hardware suppliers and service providers. The products are standardized and suppliers compete by aiming at providing more advanced, better products at affordable prices rather than through their efforts to differentiate them (Fern, 2012). Thus, companies in the tablet market can easily switch amid suppliers. Rivalry According to Finalle (2011), competition in the tablet market among leading manufacturers of tablets, such as Samsung, Apple, RIM and HTC, is very fierce. The companies specialize in various fields so as to compete amid their rivals. A number of them concentrate on innovation and try to present their customers with newest technology before their rivals do, while other firms focus on service quality and distribution channel. Nevertheless, price competition constitutes the fiercest area. From the above industry analysis, the ideal circumstances for a strategic fit among prospector/analyzer/reactor/defender strategies, include enhanced R&D, low production costs through economies of scale and manufacture of highly differentiated products to avoid substitution. Other conditions encompass having several but reliable suppliers for software and hardware and offering fair prices to customers. Industry attractiveness Macro and micro level analyses reveals several features about the market and industry attractiveness. One of the business’ strengths is a strong brand name for the Galaxy tab, which presents it with a competitive advantage, especially over upcoming tab manufacturers. Additionally, the business enjoys low production costs because of economies of scale. On the contrary, the business does not have its own software and OS, which is a main weakness. In the legal arena, the business faces risk of patent infringement, which may ruin its reputation. In terms of opportunities, the tablet market is growing and thus, there are increased growth chances for the business (Jones, 2012). However, price wars constitute a big threat for the business. Moreover, fast technological change places the galaxy tab at a risk of obsolescence. The strategic challenges to be addressed by the business include pricing policies, overdependence on software suppliers and changes in technology. Significance of marketing research Marketing research denotes the gathering, recording and analysis of information regarding customers’ needs, participants, probable business opportunities and threats in a given market niche (Klose & List, 2001). Through such information, a firm’s managers are able to assess its performance against that of other participants in the industry or market. In this case, marketing research is significant because it will facilitate the formulation of proper strategies for survival in the market. For instance, by comparing a company’s product or service features with those of its competitors, it is able to decide on the appropriate basis of differentiation in order to gain competitive advantage. In other words, marketing research will guide the making of decisions by providing the management with all the necessary information (Parasuraman, Grewal, & Krishnan, 2007). According to Ferrell & Hartline (2013), product, promotion, pricing and distribution policies will play a central role in marketing decisions. Product strategies will help the business to decide the ideal product or service to focus on. Promotion policies will influence marketing decisions regarding how to tell customers about the product or service that the business is offering. Moreover, pricing strategies will help in deciding the type of pricing to use in fixing the price for the business’ products, which will depend on the reason for entering the market. Lastly, distribution policies will help the management in deciding the supply chain to use to deliver the company’s product to the end user (Reynolds & Lancaste, 2013). Significance of overall segmentation, targeting, differentiation and positioning strategies Lamb, Hair, & McDaniel (2008) assert that, segmentation is all about dividing the market into different customer groups. By doing so, the business will be in a position to make decisions regarding the market segment or customer group to target its Samsung Galaxy Tab. After segmenting the market, targeting strategies will guide the business in identifying the specific needs of the selected segment, which will in turn help in designing a tab that will fully meet those needs. In addition, differentiation relates to a company’s source of competitive advantage over its competitors. The business’ basis of differentiation is important since it will help it manage competition in the tablet market. Drawing from Lamb (2012), positioning relates to presenting customers with a good reason for choosing your product or service over that of competitors. Thus, positioning strategies for the business will enable it to persuade customers into buying its galaxy tab, especially due to its special features and enhanced usability. Conclusion The current strategic marketing plan relates to Samsung Galaxy Tab. The objectives of the plan include increasing awareness of the tab among youngsters, to increase market share by 10 percent and sales by 15 percent. In the tablet market, threat of entrants is low, buyer power is moderate, supplier power is low, threat of substitute products is high and rivalry is fierce. The market is attractive, but the business faces the challenges of technological change, lack of individual software and price wars. Marketing research is important to the business since it will provide its managers with the necessary information to make marketing and general business decisions. References Bonnington, C. (2013, June 26). Samsung's scattershot product strategy explained. Wired News. Fern, M. (2012, February 17). Apple and Industry Forces. Retrieved August 5, 2013, from http://fernstrategy.com/2011/02/17/apple-and-industry-forces/ Ferrell, O. C., & Hartline, M. D. (2013). Marketing strategy: text and cases. Mason, OH: Cengage Learning. Finalle, P. (2011, August 2). Competition Intensifies in the Tablet Market. Retrieved August 5, 2013, from http://www.frost.com/sublib/display-market-insight.do?id=239335328 Jones, C. (2012, May 2). Tablet Market Forecast To Grow Almost 5x By 2017. Forbes. Klose, L., & List, B. (2001, June). Using Market Research to Make Strategic Decisions. Retrieved August 5, 2013, from http://www.asaecenter.org/Resources/AMMagArticleDetail.cfm?ItemNumber=5203 Lamb, C. W. (2012). Marketing. Toronto: Nelson Education. Lamb, C. W., Hair, J. F., & McDaniel, C. D. (2008). Essentials of marketing. Mason, Ohio: South-Western. Parasuraman, A., Grewal, D., & Krishnan, R. (2007). Marketing research. New York: Houghton Mifflin Co. Porter, M. E. (2008). Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Simon and Schuster. Reynolds, P., & Lancaste, G. (2013). Marketing. London: Routledge. Saee, J. (2007). Contemporary Corporate Strategy: Global Perspectives. . London: Routledge. Samsung. (2013). It's time to Tab. Retrieved August 4, 2013, from http://www.samsung.com/global/microsite/galaxytab/10.1/feature.html Read More