Sony vs Samsung

Q1. How would you characterize the global consumer electronics industry? Is it an attractive industry to be in?

• Highly competitive industry leading to

 High degree of innovation and product R&D  increasing product complexity and connectivity

 Fast product obsolescence, short product life cycles

 Rapidly falling prices of old models, new products can command price premium only for brief period.

• Fast convergence due to digital technologies

 Merging with computer industry or internet world

 Combining elements of many consumer electronic items

 Availability of digital content drives functionality of consumer products to build it connectivity.

• Continuous improvements in performance and specifications

• Increasing consumer focus on style/design factor.

• Highly volatile industry : many near death to super success companies!

• Fast time-to-market  first on market generates profits

• High degree of globalization across product development, suppliers, manufacturing and end user markets.

• Outsourcing is common

While the consumer electronics industry is one of the largest and fastest growth industry (in terms of global expenditures), it is also an extremely tough one to be in since profit margins are low. To do well, the company or products must be in a market leader position. Even fast second position might not generate the required level of returns to cover the high product development investment.

Q2. How would you characterize positioning of Sony and Samsung in this industry?

Sony Samsung

Driven by new product development (focus on R&D) OEM + Aggressive and focused investment on general purpose technology

Proprietary technology (develop own standards) Invest and introduce commodities with cost advantage

Strong focus on creativity – always pursuing and introducing new products (marketing strategy) Strong focus on speed (time-to-market)

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