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Monday, July 17, 2006

Samsung - business dilution leading to losses

Samsung Electronics experiences what every company experience that diludes its business model. Instead of strongly focusing on the part of the sector that they are strong in - high-class mobile phones - they started to target the medium part of the market.

This is the same strategy that still endangers the existence of General Motors and Ford or DaimlerChrystler. Now Samsung is struggling and losing market share. "The South Korean company has posted an 11 percent drop in second-quarter profit. Samsung seems to have suffered from lowering the prices of their mobile handsets to compete against rival mobile phone makers." In this sense they alienated its core customer group.

Toyota however did a masterpiece in the sense that instead of marketing the Lexus under the Toyota brand, they created a totally new marketing channel.

As such, its hope to become a world champion even in the mobile business is a bit out of reach in the moment.

(By Asia Business Consulting)