Assessment 3: Executive Summary (Individual)
Samsung’s strategy for success: Exploring
5G connectivity and product ecosystem
Word Count: 974 words
Executive Summary
Samsung has the second largest smartphone market share (27%) in Australia, after Apple
(58,42%) (Law, 2024). This analysis explores Samsung’s current market strategy, where
the expansion of 5G network coverage and the integration of AI has created an
opportunity for the company to lead the technological revolution (Law, 2023). Samsung
is implementing a differentiation based on technological leadership and the introduction
of AI. Samsung has launched AI enhanced text, voice, image and video tools to enhance
user experience (Gibbs, 2024). At the same time, improvements on the screen, battery and
camera have been made (Gibbs, 2024). Samsung is trying to appeal to the tech savvy
millennial market and to cater to their desire to post quality videos and images on social
media (Buckle, 2019). Above market improvements are important to justify a price
premium to the price sensitive consumers (Law, 2024). Other technological innovations
have been made, such as the introduction of Galaxy Fold, the best foldable phone (Law,
2024). Consumer awareness of the benefit of 5G to connectivity is high 31% claim they
will switch to 5G as soon as they renew their mobile contract (Buckle, 2019). Samsung
with an expansive line of 5G smartphones and high technology adapts to the modern
consumer preferences. The communication strategy aims to reach a millennial and gen-z
market using high quality videos that reflect authentic technological experiences shot
through their smartphones showcasing the product accessories, options to customize user
experience and, sometimes, the brand support of popular young celebrities.
The main threat that Samsung faces is the intense competition. The market is
characterized by constant technological innovation, changes in consumer behaviour and
high sensibility to price changes (Imarc, 2024). The competitive environment regarding
innovation makes it harder for Samsung to maintain their technological leadership
position and differentiate themselves. Another factor of concern is brand loyalty. 51% of
premium smartphone owners are loyal to their currently used brands. When compared
with the 31% of agreement in the mid-range market, it indicates that there is more
opportunity for new customers acquisition in this market (Buckle, 2019). Brand loyalty
has an impact on other related products because of the product ecosystem brands create
that makes it easier to share information between personal devices, which increases
productivity and creates a product experience. Quality and premium features at a modest
price is crucial on the mid-range market. Samsung tries to appeal to this market through
a diverse product range, from mid-range to premium. This is a strength because it allows
the brand to appeal to a wider audience and a risk to their strategy because it dilutes the
exclusivity surrounding high-tech in the premium market. The slow sales cycles add to
the competitiveness of the market and the need for advances to motivate purchases. The
main reason for a smartphone upgrade is related to a performance issue (Fenech, 2023).
72% of Samsung users keep their phones for more than 2 years. In contrast with 69% of
Apple users (Fenech, 2023). This could mean that Apple consumers are more sensitive to
technological upgrades than Samsung users.
Customer awareness and interest in 5G connectivity must be considered when drafting
the brand communication strategy to maintain their image as a technological forward
firm. The relationship between 5G and the Samsung products ecosystem must be formed
in the minds of the consumers to associate their brand with the future of technology and
connected devices (Buckle, 2019). The 5G wave represents a new global wireless
standard that has the purpose of creating a more integrated digital world where people,
devices, objects and vehicles will be more connected (Law, 2024). This allows a higher
data transfer speed that allows for a smoother simultaneous use of devices (Samsung,
2024). 5G enhances the smartphone experience and is one of the reasons the market size
is expected to grow 1,60% between 2024-2032 (Imarc, 2024). Samsung has a great line
of products that include smartphones, tablets, smartwatches and even home appliances
that are interconnected and which its simultaneous use offers a brand experience. These
products can integrate and improve the user satisfaction by monitoring aspects of interest
such as health, fitness, home management and entertainment. Samsung should
communicate to the public the impact 5G can have on these ecosystems and how it can
make people’s lives more efficient. The variety of products are an advantage to Apple,
which lacks a home management aspect. The inclusion of the connection between
products in the smartphone communication strategy can reaffirm Samsung as a
technological leader and increase the uniqueness of their value proposition, given that
other competitors don’t have such a wide range of aspects that can be optimized using a
smartphone. This aspect can have an impact on the premium market because it represents
an alternative to those clients that seek an integrated technological experience in nonconventional aspects. A focus on high quality and futuristic technology can help mitigate
the threat regarding lack of exclusiveness previously mentioned. It also appeals to the
general consumer interest because of the customer awareness and interest in 5G
connectivity, where only 7% of customers are not aware of what it is (Buckle, 2019).
Another aspect that must be communicated to the customer is the open system that
Samsung has that allows for a connection between Samsung and non-Samsung products.
Allowing an easier transition for the customer if they decide to switch brands. This is a
key difference with Apple, which has a close system where the data sharing of personal
devices, that represent a great advantage when working on different devices at the same
time, is limited to their own products (Tech Journeyman, 2023). Samsung has a product
openness and a product range advantage over its main competitor, Apple. There is a need
to communicate this to the public in a way that positions Samsung as an innovative
technological leader that embraces modern living using its ecosystem.
References
Buckle, C. (2019, January 9). Which Smartphone Features Really Matter to Consumers?
GWI.
https://www.gwi.com/?_ga=2.227074968.404288814.1728214178-
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Fenech, S. (2023, August 2). One in three Australians upgrade their smartphones within
two years. Techguide. https://www.techguide.com.au/news/mobiles-news/one-in-threeaustralians-upgrade-their-smartphones-within-twoyears/#:~:text=This%20equates%20to%20five%20million,months%20(2%20per%20ce
nt).
Gibbs, S. (2021, January 18). Samsung bets heavily on AI tricks to boost Galaxy S24
appeal. The Guardian. https://www.theguardian.com/technology/2024/jan/18/samsungbets-heavily-on-ai-tricks-to-boost-galaxy-s24-appeal
Imarc. (2024). Australia Smartphone Market Report by Operating System (Android, iOS,
and Others), Display Technology (LCD Technology, OLED Technology), RAM Capacity
(Below 4GB, 4GB - 8GB, Over 8GB), Price Range (Ultra-Low-End (Less Than $100),
Low-End ($100-<$200), Mid-Range ($200-<$400), Mid- to High-End ($400-<$600),
High-End ($600-<$800), Premium ($800-<$1000) and Ultra-Premium ($1000 And
Above)), Distribution Channel (OEMs, Online Stores, Retailers), and Region 2024-2032.
https://www.imarcgroup.com/australia-smartphonemarket#:~:text=In%20essence%2C%20the%20confluence%20of,evolving%20smartpho
ne%20market%20in%20Australia.
Law, D. (2024, April 9). Australian Mobile Phone Statistics 2024. Red Search.
https://www.redsearch.com.au/resources/australian-mobile-statistics/
Tech Journeyman. (2023, December 23). Apple Ecosystem Explained 2024. Tech
Journeyman. https://techjourneyman.com/blog/apple-ecosystem-explained-2024/
Samsung. (2024).
Expansive Line-Up of Galaxy Devices Powered by 5G.
https://www.samsung.com/au/explore/brand/expansive-line-up-of-galaxy-devicespowered-by5g/?srsltid=AfmBOorIkG8210XlFUvTfxeaXlonNZ_OvB1quak82p1E09gfTmvt841