Strategic Management
Assignment on Ansoff Matrix of Samsung
Submitted To: Submitted By:
Prof. Sanjeev Sareen Manas Chitransh
19BSP1476
Section- G
Introduction
Samsung is a South Korea-based multinational with headquarters in the Seocho District of Seoul,
South Korea. The company was founded in 1939 by Lee Byung-Chul in South Korea. It started as a
trading company and later entered into consumer electronics, chemicals, medical equipment,
computers, construction machinery, home appliances, and much more. The company also provides
services related to construction, advertisement, entertainment, hospitality, and various other
avenues. During 2018, the company earned revenue of $208.49 billion and had more than 320,000
employees across the globe. The company operates in 80 countries across the globe. Semiconductor
products and consumer electronics earn the greatest revenue for the company. The company has
manufacturing units in South Korea, China, and several other Asian states. Based on revenues, it is
the largest manufacturer of semiconductor and consumer electronic devices as well.
Ansoff Matrix of Samsung
The Ansoff Matrix, also called the Product/Market Expansion Grid, is a tool used by firms to analyze
and plan their strategies for growth. The matrix shows four strategies that can be used to help
Samsung grow and also analyzes the risk associated with each strategy.
Below are Four Strategies in Ansoff Matrix that Samsung can adopt in the market:
Market Penetration
Market penetration is carried out by Samsung whenever it promotes its existing products in its
existing markets. The first strategy that Samsung applies is offering discounts or simply lowering
prices. Samsung does this a few months before it is about to launch a new version of the product.
This strategy helps to increase market share, increase sales, and get rid of the inventory of the
product before launching the new version. The company also promotes increased usage by offering
products in different variants, accessories to go along with the products, software updates, and so
on. The simultaneous launch of products across all markets also increases entry barriers for
competition. The company also forms strategic alliances with local brands to promote products.
Samsung is also known to aggressively promote its products through all possible marketing channels
such as television ads, social media ads, and print media ads. It also sponsors various technology
events to promote its brand. All of these measures help Samsung boost the sales of its products in its
existing markets.
Market Development
Whenever Samsung launches its existing products in new markets, it is developing its market.
Samsung does this in a number of ways. The primary way is to expand geographically into new
markets. These include nations that it has not tapped into yet and expansion inside nations that it is
already in. The company creates attractive packaging of its products when it launches them in new
markets. At the same time, the company advertises its products with the help of local celebrities and
sportsmen when entering into new markets to create a brand reputation and loyalty amongst
customers. The company also uses various distribution channels such as retail sales, online sales, and
so on. It has to price its products according to the local currency which is a great concern for the
company as it measures its revenues in terms of US dollars. However, despite this being a risky
venture, Samsung has seen success in various international markets it has expanded into boosting its
revenues.
Product Development
Samsung consumer electronics division is the market leader in product development. Unlike Apple
that operates only a single Smartphone model, Samsung operates numerous Smartphone models
and regularly launches new versions of these products that offer improved functions and
specifications. This is also applicable to various other divisions such as construction machinery, home
appliances, and entertainment systems. The company carries out extensive research and
development to create new products that offer exceptional functionality and durability. Samsung
also improves the existing products it offers by launching slightly different variants of the already
existing products to create new products. The company launches new products gradually across its
various markets. This allows the company to take advantage of greater sales and revenues
associated with new products.
Diversification
Samsung follows a conglomerate diversification strategy. Its extensive product portfolio of numerous
industries shows that Samsung has not limited itself to horizontal diversification (Martin, 2019). It
has expanded into unrelated industries various times and succeeded. The company does detailed
research and spots industries with growth potential and enters them. This allows the company to
serve greater markets and offer diverse products and services. The name Samsung is associated with
different products and lines that may even confuse customers that lack knowledge. The diverse
portfolio is not seen very often in other brands.
