Case 9, Samsung: Overtaking Philips, Panasonic, and Sony in Consumer Electronics

            How Phillips Become the Electronic Leader in the Industry of Electronics

            Phillips began its general business in Eindhoven in 1892 with the basic product as the light bulb.  The corporation was more focused on light bulb production at the beginning and this allowed it to specialize and develop innovations.  The industrial leader research rapid growth helped in broadening the product life of the company.  The Philips Corporation gained success during the era of post-war and this helped the company in adapting to the specific country market situation. This was essential to the company as it was able to expand its market to different countries which generated increased volumes of sales (Dyer, Godfrey, Jensen & Bryce 2015).

            Additionally, Phillips was able to develop national organizations in distinct countries which were essential in helping serve the different markets with simplicity (Dyer, Godfrey, Jensen & Bryce 2015).  The national organizations formed after the Second World War helped in the distribution of produce to the clients while incorporating the needs of the consumers, the country’s needs as well as the needs of the market.  This was essential in increasing sufficiency for the organization because it was able to serve a large segment of consumers with fewer resources thus earning loyalty and developing their market segment.  This therefore secured a competitive advantage for the company because unlike other firms which had not developed their distribution and marketing strategies Phillips was fully able to distribute its products in different countries. This boosted the level source of the corporation as its volume sales were increasing rapidly. The company was able to acquire resources from the generated funds and therefore it held the capability of meeting the needs of the growing consumers segment without constraints.  Moreover, the change of Phillips Corporation into a multi-national corporation in the 1930’s era also contributed to the company becoming a market leader. This is mainly because Phillips was the leading corporation in productions of electronics as well as in consumption (Dyer, Godfrey, Jensen & Bryce 2015).

            The company becomes successful because it prioritized on generating technological innovation based on local responses.  The developed common market in the European nations helped in eradicating barriers for the corporation although it caused several in competencies for the organization (Dyer, Godfrey, Jensen & Bryce 2015). The company operated in a decentralized chain of value as it struggled in its attempts to act as a sole business. The product management division of the corporation lost control of assisting and coordinating the activities of the growing numbers of national organizations.  Due to Phillips Corporation lost the coordination strength in implementing and developing fresh innovative products and manufacturing as its operations.  Additionally, the company suffered from its inabilities of lowering the costs of manufacturing with the scale of the economies.  This, therefore, resulted in the customers substituting the company’s products for the products that were being offered at a lowered price.  This resulted in a decrease of the sales volume as well as a reduction in the consumers segment this became the major incompetence of the Phillips Company as its lack of coordination and facilitation of activities meant that the company would not be able to produce a high level of production.  This was mainly because customer’s satisfaction was not met through the company’s pricing strategy which was a bit high for the consumers (Dyer, Godfrey, Jensen & Bryce 2015).

            How Panasonic Overtook Phillips

            Panasonic overtook Phillips due to its capability to fully meet the needs the needs of the customers through innovative products (Dyer, Godfrey, Jensen & Bryce 2015). The corporation was offering cheaper products when the Phillips was facing coordination issues. During this period, consumers began to utilize Panasonic products as a substitute.  The company gradually developed its sales volume which enabled it to become more innovative in order to maintain the customers base.  This resulted in the cooperation overtaking Phillips because it was struggling with trade issues as well as customer relation which hindered its general growth.  Panasonic cooperation focused on standardized and low-cost products which resulted in rapid growth of product as well as the process of innovation. Due to the direct market access that the company had created, it began to trend in different markets through the developed customer’s relation (Dyer, Godfrey, Jensen & Bryce 2015).

            How Samsung Overtook Panasonic

            Samsung, however, overtook Panasonic Company because it gave more focus on innovative products.  The competitiveness of Samsung was based on standardized, high quality, and satisfactory products that had been derived from innovation (Dyer, Godfrey, Jensen & Bryce 2015). This was effective because the consumers were in search for products that would satisfy their innovational needs.  Process innovation for the cooperation was fast as it focused on exporting its sales to the international markets which helped I gathering research on market trends as well as innovative opportunities on products development.  The company adopted divisional structure before Panasonic and Phillips which enabled every division to define its responsibility based on profit.  The structure was essential as it created small surrounding of maintaining flexibility and growth. These provided divisions’ competitions as the involved divisions were responsible for product centralization and well as the innovational processes of the corporation (Dyer, Godfrey, Jensen & Bryce 2015).

            The Firm’s Competencies and in-Competencies

            The companies were characterized with different competencies and in competencies.  Phillips competencies included its capability to adapt to local situations in the market, stronger national organizations, the centric value of its employees, product division, and technical development capabilities. However, it had too many innovations, no manufacturing scale in the economy and also its marketing capability was low (Dyer, Godfrey, Jensen & Bryce 2015).  The company failed additionally in reorganization itself after the occurrences of the growing issues. The Panasonic Company had a broader line of products, faster strategy of followers and a more centralized structure.  The company was however characterized by tough leadership, competition inabilities and lack of adequate resources in developing fresh products. The Samsung cooperation was characterized with adequate resources for product development, high level of   coordination due to good leadership, centralized structure, innovativeness, differentiation and economy of scales.  However, the company was faced with the issue of highly priced products which made it difficult in increasing the customers segment (Dyer, Godfrey, Jensen & Bryce 2015).

            Challenges Faced By the Firms

            Phillips cooperation was faced with the inefficiency issue due to the many divisions that it had developed. This was mainly because coordination becomes difficult due to resources inadequacy.  The Panasonic cooperation, on the other hand, was faced with the issue of resources as it lacked adequate resources in maintaining its innovations.   Samsung was faced with the issue of growing the market segment because although its products were characterized with high innovative and technology their pricing strategy was higher (Dyer, Godfrey, Jensen & Bryce 2015).

            Key Success-Factors in the Industry during the 1920-1980 and How They Changed   After Panasonic and Samsung Over Took Phillips

            The essential success factor during the period which Phillips was the leading in the electronic market was innovativeness, product development, and product research. This helped the cooperation in attaining a competitive advantage as the products were fully able to meet the needs of the customers. The company additional developed products divisions were products were able to distribute products globally.  However, these factors changed when Panasonic and Samsung got involved because they were able to develop products in more innovative strategies. Additionally, the companies based their innovativeness on the needs of the customers which helped in handling the innovative demands (Dyer, Godfrey, Jensen & Bryce 2015).

            Firm’s Recommendations

            Phillips Company should focus on developing products and introducing them into the market as this formed the basis of their incapability before.  They should, therefore,  focus on developing better relationships with national organizations, they are headquartered and the PDs which will help in introducing new technologies in the market this will help the company in attaining a competitive advantage as they hold more capabilities than the competitors.

            Panasonic cooperation is necessitated to decentralize organization to reduce issues and increase the responsiveness of the market. In order to sustain their market competitive advantage, they should focus on developing the global market. The Samsung Company should give priority to low-cost manufacturing to ensure that it incorporates all the consumers in its products. Offering high quality and innovative products at a lowered price will increase their market base thus enable the company in maintaining the competitive position.

 

 

            Reference

Jeffrey H. Dyer, Godfrey P., Jensen R., & Bryce D. (2015). Strategic Management Concepts and             Cases. Wiley Binder Version.