IB DP Business & Management SL
Internal Assessment
How can Samsung increase its market
share in Korean premium smartphone
market among younger (18~29 aged)
customers?
Key Concept: Change
May 2024
Word Count: 1796
Student Number: krg652
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Table of Contents
INTRODUCTION
3
RESEARCH FINDINGS
4
SWOT ANALYSIS
5
FORCE FIELD ANALYSIS
7
FINANCIAL STATEMENT ANALYSIS
8
CONCLUSION
11
LIMITATION
11
References
12
Supporting Document
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Supporting Document 1
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Supporting Document 2
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Supporting Document 3
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2
INTRODUCTION
Samsung is a prominent multinational company based in South Korea with a diverse portfolio
of products and services. Renowned for its consumer electronics products, Samsung
successfully got hold of the leading position as one of the largest premium smartphone
manufacturers in the world. However, despite the strong global market share, Samsung has
been facing fierce competition from Apple’s iPhone. According to a survey on smartphone
preference among different ages, 32% of the younger generation, aged 18 to 29, favor
Samsung’s smartphone while 60% of younger generation favor Apple’s smartphone. Although
Apple has a lower proportion among consumers older than 30 years, Apple is occupying 60%
for 18-29 ages. As Apple’s main products are mainly premium smartphones, Apple generates
more profit than Samsung. This is because Apple only sells premium smartphones. The
rationale of this report is to make possible plans and strategies that Samsung can implement to
increase its premium smartphone market share in its domestic country among the younger
generation.
The key concept chose for this research is CHANGE. In the context of business, CHANGE
refers to the modification or transformation in the way business is conducted as a response to
internal factors or external influences. This specific key concept is chosen after considering the
unique nature of high-tech industry which demands fast-paced innovation. Having observed
Samsung’s continuous efforts to CHANGE, the observation inspired my curiosity to explore
deeper into possible CHANGES that can help Samsung to attract younger consume
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RESEARCH FINDINGS
Figure 1: Survey showing that Younger Koreans favor iPhones over Samsung
A recent survey by the Korea Herald (2023) reveals insights into consumer preferences and
market dynamics within this demographic (SD1). The study indicates a significant shift in the
preferences of younger Koreans (18-29 years old), with a majority (65%) favoring iPhones
over Samsung Galaxy (32%) (SD1). This shift represents a 13 percent increase in iPhone use
from last year (SD1).
The survey further underscores a high degree of brand loyalty, with 85% of young consumers
likely to remain with their current brand (SD1). That is, as the younger consumers who prefer
Apple will grow, the preference toward Apple among 30+ and 40+ years old will be gradually
occupied with those younger consumers. Hence, it poses a significant challenge for Samsung
in attracting new users and converting existing iPhone users.
While Samsung showed increased efforts to enhance direct engagement with younger
consumers, such as launching flagship stores in popular districts, the overall effectiveness of
their strategy still remains questionable. Hence, this report will discuss potential strategies for
Samsung to explore in regard to increasing premium market share in its domestic market
among younger consumers.
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SWOT ANALYSIS
Strength:
Weakness:

Strong brand image: Samsung is already
well-known and has a positive brand image
in the smartphone industry (SD1).

Diverse product range: Samsung offers a
wide variety of smartphone models with
different features and price points, catering
to various consumer segments (SD1).

Effective advertising: Samsung allocates a
significant portion of its advertising budget
to online marketing, which helps in raising
awareness among consumers (SD1).


Limited online advertising reach: Despite
allocating a portion of the advertising budget to
online marketing, the article suggests that only
a small percentage of respondents have seen
internet advertisements for the Samsung Galaxy
Series, indicating potential limitations in online
reach (SD1).

Differentiation of software integration
compared to Apple: Although Samsung has
high quality techniques in its electronic
products, those products, such as smartphone,
laptop, and other devices, doesn’t have good
compatibility as Apple’s device does.
Product quality: Samsung is known for
producing high-quality electronic products
beyond just smartphones, which adds to its
reputation (SD1).
Opportunity:
Threat:

Innovation and creativity: Samsung can
leverage creativity and innovation to
enhance its product offerings and
differentiate itself further in the market.

Expanding product features: Consumers
are attracted to features such as the
Android operating system, camera quality,
connectivity, and screen quality. Samsung
can focus on improving and introducing
innovative features in its products (SD1).

Intense competition: The smartphone market is
highly competitive, with many other major
players. Samsung faces the threat of losing
market share to competitors.
Table 1: SWOT analysis on Samsung
Table 1 indicates the SWOT analysis about Samsung to analyze on how Samsung can increase
its market share in the domestic premium smartphone market among younger consumers.
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For its Strengths, Samsung has strong brand image, diverse product range, effective advertising,
and high product quality. As Samsung has a strong brand image, Samsung can consistently
rank among the top smartphone manufacturers globally as well as Apple does and has a loyal
customer base that trusts its products (SD2). For its advertising, Samsung put efforts impactful
in building brand awareness. One notable example is Samsung's sponsorship of major events
like the Olympics. Hosting such events increases brand visibility which can have a viral
marketing effect (SD2).
Another strength would be Samsung’s segregation of flagship models and affordable models
to capture different geographical regions (SD2). This brings several advantages to Samsung’s
global exposure including but not limited to higher global market share in the smartphone
industry (SD2).
However, for its Weaknesses, Samsung is lacking in inter-product software integration
compared to Apple. Although Samsung also supports software integration between its range of
electronic devices, it is not as smooth and convenient as Apple’s system. As Apple’s integration
is supported under their own cloud system, Icloud, it offers a more consistent and unified user
experience. As younger consumers prioritise a tightly-knit and user-friendly ecosystem, they
prefer Apple’s products more than Samsung’s. Samsung should be aware of its lack of
compatibility between Samsung devices and improve the technique as Apple does.
For the Opportunities, Samsung has innovation and creativity on its products. Samsung has a
history of innovation, such as the introduction of the Galaxy Fold, a foldable smartphone.
Innovations can attract consumers looking for cutting-edge technology, providing an
opportunity to differentiate from competitors (SD2). Samsung can also invest in improving
camera technology and software and collaborating with software developers. This will affect
its expertise in display technology to provide better visual experiences and to optimize user
experiences on its Android-based devices (SD2).
For its Threat, Samsung has an intense competition. Apple's iPhone lineup competes directly
with Samsung's Galaxy series, and other manufacturers like Xiaomi and Huawei also offer
compelling alternatives. This competition threatens Samsung's market share and requires
constant innovation to maintain a competitive edge.
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FORCE FIELD ANALYSIS
Figure 2: Force Field Analysis on the “Impact of Aggressive Product Innovation on
Younger Consumer Base”
Although subjective, Force Field Analysis is crucial in this business report as it
provides a structured approach to understanding which factors drives and restrains what causes
the impact of Aggressive Product Innovation on Younger Consumer Base. By analyzing
driving and restraining forces, it offers insights into how Samsung can strategically increase its
market share among younger customers, focusing on factors that facilitate CHANGE and
restrain CHANGE.
The rating of "5" for both "Technological Appeal" and "Changing Consumer
Preferences" is based on the insights from Samsung's NEXT Innovation team. This team
focuses on predicting future consumer behaviors on technology trends, thus emphasizing the
importance of technological appeal to younger consumers (SD3). Additionally, the changing
consumer landscape, with a growing desire for personalized products, further underscores the
critical role of evolving consumer preferences (SD3). These factors suggest a strong influence
on Samsung's market strategy on product innovation, warranting the highest rating.
The rating of "4" for "Social Media Influence" and "Market Trends” is because while
being significant, those factors may not make the utmost influence compared to "Technological
Appeal" and "Changing Consumer Preferences." Samsung's focus on personalized experiences
and adapting to evolving market trends, as well as the impact of social media in shaping
consumer decisions, are crucial. However, these factors are slightly less dominant than the core
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appeal of technology and rapidly evolving consumer preferences, which are more directly
linked to the decision-making of younger consumers (SD3).
The "5" rating for "Market Saturation" reflects the intense competition in the
smartphone industry. This saturation makes it particularly challenging for Samsung to
differentiate its products and increase market share in the Korean premium smartphone sector
among younger consumers, as indicated in the Samsung Newsroom article discussing market
trends and the challenges faced by major brands (SD3).
The rating of "4" for "Risk of Misalignment," "Quality Assurance Challenges," and
"Price Sensitivity of Younger Consumers" reflects significant, yet not the highest, impact on
Samsung's market strategy. The risk of misalignment acknowledges the potential disconnect
between Samsung's innovations and the actual needs of younger consumers. Quality assurance
challenges highlight the importance of maintaining high performance in rapid innovation. Price
sensitivity emphasizes the consideration that younger consumers, despite their interest in
technology, might be deterred by premium pricing (SD3).
As the driving force scores 18 and restraining force scores 17 in total, this analysis
suggests that although there is more force to CHANGE, Samsung must carefully balance by
considering market saturation, price sensitivity, and ensuring that align with the actual needs
and preferences of younger consumers.
FINANCIAL STATEMENT ANALYSIS
Figure 3: Revenue by in MX/Networks Segment (Samsung, 2022)
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Figure 3 shows the revenue of the mobile segment (MX/Networks) of Samsung. From 2020
to 2022, the graph indicates that the revenue in the MX and Networks segment has increased.
The graph shows that the market performance has been increasing during the past 3 years,
maintaining a steady uptrend. However, it is important to gain further insight into the
composition of this uptrend.
Figure 4: Portion of Revenue in South Korea (Samsung, 2022)
Contrast with the trend of the graph of the revenue of mobile phones, Figure 4 shows remaining
no change on the revenue in Korean market during the recent 3 years (2020, 2021, 2022).
Although it shows a stable demand in its domestic region with no risky fluctuations, it shows
that there are no aggressive or innovative changes enough to capture additional market share.
This is a red signal because the graph shows there are no positive changes in its domestic region,
which is supposed to be the region that has to keep increasing. In this aspect, Samsung needs
a strategy for its presence in its domestic market, especially for younger consumers.
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Figure 5: Total Assets Trend (Samsung, 2022)
The increasing total assets may indicate the growth of Samsung and showing the ability to
invest in its future with plenty of resources to do so.
Current Ratio
Dec, 31
Dec, 31
Dec, 31
2022
2021
2020
279%
248%
262%
Table 2: Current Ratio in 2020, 2021, and 2022 (Earnings Release Q4 2022 Samsung
Electronics, 2023), (Earnings Release Q4 2021 Samsung Electronics, 2022)
Current Ratio is calculated by dividing the company’s current asset by its current liability
(Current Asset/Current Liability). Samsung’s current ratio is maintaining above 240% for the
past three years. As Samsung has a significantly big amount of current assets compared to its
current liabilities, Samsung has a condition to invest for its marketing or products to catch
younger consumers’ interest.
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CONCLUSION
In conclusion, the findings and above analysis indicates that Samsung should adopt
CHANGE to their existing marketing strategies/ mix and products to increase their market
share in smartphone industry among young consumers.
Despite Samsung’s continuous efforts to CHANGE through aggressive product
innovation and marketing partnerships over the last few years, Samsung still struggles to attract
younger consumers in its domestic smartphone market. This is an on-going concern as the
current young consumers will eventually become the older age groups and influence the future
young consumers. Therefore, while the analysis showed noticeable success in the overall
smartphone market share, Samsung must consider additional CHANGES addressing younger
consumers to avoid loss of future consumers.
Also, the qualitative analysis clearly exposed the shortcomings that younger
consumers felt missing from Samsung. As the SWOT analysis suggests, Samsung should
consider diversifying their online platforms used for advertising. On top of that, certain features
such as product compatibility and integrated cloud software may need further investment to
persuade young iPhone users to jump ship. Considering the fact that Samsung has sufficient
current assets to invest and healthy current ratio to back it up, the actual execution should be
feasible without any immediate financial burden.
LIMITATION
The smartphone industry consists of rapid innovation and introduction of new
technologies. This rapidity is constantly increasing, thus affecting the relevance of the research
findings over time. It was pertinent for the analysis at the time of writing this business report.
However, the research of findings can quickly become irrelevant in the future due to the rapid
developments which might change the findings. In other words, the interval between carrying
out research and implementing its conclusions may cause the research to be less useful in
guiding present decisions.
Primary research was not utilized in this research paper, thus are limitations due to
relying on secondary research. Secondary data is often broad in scope and may not explain
deeply. This can result in a lack of detailed insights specific to your research question. In
addition, secondary data may not align perfectly with your specific research question or
objectives.
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References
Consumers are Changing. Brands Need to Change with Them. (2020, June 23).
Samsung US Newsroom. https://news.samsung.com/us/consumers-changing-brandssamsung-next/
Earnings Release Q4 2021 Samsung Electronics. (2022).
https://images.samsung.com/is/content/samsung/assets/global/ir/docs/2021_4Q_conf
erence_eng.pdf
Earnings Release Q4 2022 Samsung Electronics. (2023).
https://images.samsung.com/is/content/samsung/assets/global/ir/docs/2022_4Q_conf
erence_eng.pdf
Hoon, M. K. (2023, July 20). Young Koreans favor iPhones over Samsung Galaxy: survey. The
Korea Herald. https://www.koreaherald.com/view.php?ud=20230720000592
Huang, J. (2022). The Marketing Strategy of Samsung: Analysis Based on Consumer Behavior.
BCP
Business
&
Management,
34,
761–768.
https://doi.org/10.54691/bcpbm.v34i.3094
Samsung. (2022, May 23). Financial / Valuation Sanpshot │Financial Information │ Investor
Relations
│
Samsung
Global.
Samsung
https://www.samsung.com/global/ir/financial-information/financial-valuationsnapshot/
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Global.
Supporting Document
Supporting Document 1: https://www.koreaherald.com/view.php?ud=20230720000592
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Supporting Document 2: DOI: https://bcpublication.org/index.php/BM/article/view/3094
Download link for SD2: https://bcpublication.org/index.php/BM/article/view/3094/3047
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Supporting Document 3: https://news.samsung.com/us/consumers-changing-brandssamsung-next/
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