An article in Businessweek online edition describes how Samsung has used differentiation to become a leading smart phone manufacturer. First of all, Samsung does a better job of learning from the competition than its competitors. Samsung closely follows what its competitors are doing and then adopt only those competitors’ strategies that are working (Nisen, 2013). Samsung is also differentiating itself from the competition by being quicker at introducing new products. In addition, it provides a wide variety of options to the customers. Samsung also quickly eliminates products that may be failing (Nisen, 2013).
Samsung has also been using market research to identify customer needs that may not have been met by others. In addition, the company also invests heavily in innovation, being only behind IBM in U.S. patents filings last year (Nisen, 2013).
Samsung also differentiates itself through better prices because the company enjoys several cost advantages. First of all, the company produces many inputs itself such as chips. Similarly, it is also able to exploit economies of scale due to huge volume (Nisen, 2013).
This article shows how successful companies like Samsung compete in monopolistic competition. Samsung knows the offerings by competition such as Apple and Nokia are close though not identical substitutes. As a result, it follows several strategies to set itself apart from the competition. The first strategy to differentiate itself is through greater options to the customers. Samsung makes sure there is something for everyone. The second strategy is through shorter product cycle which means Samsung keeps introducing new products quicker than the competition to keep consumers excited. Samsung also differentiates itself on the basis of lower price than major competitors like Apple and as a result, benefits from greater product value. This article shows that Samsung differentiates itself on the basis of factors other than the product itself as is usually the case in monopolistic competition.
- Nisen, M. (2013, March 15). Samsung Has A Totally Different Strategy From Apple, And It’s Working Great. Retrieved November 16, 2013, from http://www.businessinsider.com/samsung-corporate-strategy-2013-3