Samsung is one the renowned company which has been operating in electronics industry. Samsung owns various business units which can be analyzed using BCG matrix. The analysis of the company is presented as follows:
Cash Cows
An organization having a business unit that is a part of mature industry can be identified as a cash cow. The key feature for the business or product to qualify as a cash cow is that it would not be a resource intensive production process, while the return on investment is high. The slow pace of expansion of the industry indicates that the businesses in this environment are not likely to gain major market share. Nevertheless, the existing market share is large enough to bring in high sales for the organization. The home appliances segment is a cash cow for Samsung. The company has able to reach a large number of regions in the global market, selling its various home appliances in different areas. The management has recognized the potential for establishing a strong hold in the domain of global home appliances, which has led to the decision to promote these items across the international market. The main area of consideration which makes the home appliances by Samsung a cash cow is that this business unit doesn’t warrant a high investment in terms of creativity and offering new technology frequently (Grobart, 2014). Samsung has invested in creating new product features though, which has helped in achieving a greater market share. For instance the refrigerator carries the feature of adjustable temperature in different compartments, making it an appealing product for the target market. Based on these factors, the home appliances can be identified as a cash cow for the organization.
Stars
Products or businesses that are considered as star in the BCG matrix are a part of evolving industry which offers growth prospects to the businesses. As a result, companies are interested to invest in developing these units further to gain a larger market share and attain a stronger position in the market. The product manufactured by Samsung that can be seen as a Star is the mobile phones and tablets. In an effort to deal with the competitive pressure from other mobile phone manufacturers, Samsung has invested its resources to expand its market presence. The management has been able to achieve this objective, making the company one of the major mobile phone suppliers in the international market (Gibbs, 2015). The mobile phone industry is marked by rapid technological changes which indicates that the market is in the growing phase. The introduction of new technology in the market results in the incorporation of new features in the mobile phones and tablets.
Samsung manufactures new mobile phones, adding new features to make it more appealing for the target market. The plasma television is also a star for the company as it has been able to attain large sales in the global market. Arthur (2012) has recognized the strong hold the company had over the TV market, suggesting that investment in smart TV can become a source of long term profits for the company. Similar to the mobile phones, the technology used in TV production and design is evolving, propelling the companies to adapt.
Question Marks
There are products that formulate a part of the industry that is still in the phase of development, yet the organization has not been able to create a significant position in that industry. The small market share obtained by the organization makes the future outlook for the product uncertain, therefore investing in such domains is seen as a high risk decision. The investment can either make the business grow into a star, or the product can remain at the position of question mark, bringing no significant sales to the firm. In the segment of IT, Samsung products such as printer are not able to be a main source of earning for the company. Improvements can be made to make the printer and IT related products obtain a larger market share.
Another example of a product that can be identified as a question mark for Samsung is the Galaxy 7. The product has gained negative reputation due to the battery becoming overheated and in some cases leading to sever consequences for the phone users (Spence, 2016). Furthermore, the issue with the battery is likely to result in recall of the Galaxy 7 that has been purchased by the consumers, owing to the safety issues of the battery. The negative brand image has made the future sales of Samsung Galaxy range uncertain as the consumers may refrain from purchasing a mobile phone that is viewed as carrying the risk of explosion while being charged. This problem can create a challenge for Samsung, however proper remedial action can bring the Galaxy 7 back into the category of stars if the situation is handled appropriately. The individuals who have purchased the product were advised by the company to switch off their Galaxy 7 and replace it with another mobile phone model. Despite this offer, the negative publicity that has been created due to the cases of battery explosion has made the position of this product weak in comparison to other Samsung mobile phones.
Dogs
The BCG matrix has further identified those business units that have become a source of continuous loss for the organization. Moreover, these business units or products are not likely to offer any significant growth to the organization in terms of sales or market share. Such future prospects makes this category a focal point for liquidation. Galaxy smart watch is one such example in this regard as the product has not been able to gain adequate attention from the target market. The smart watch has some evident flaws in the functionality, making it a low preference for the market. For instance, the requirement of charging the watch on a daily basis can be seen as an unappealing aspect. Moreover, the bulky appearance of the watch has resulted in low popularity of the product among the potential buyers (Rogowsky, 2013). Even though interactive devices and smart technology is a developing area, Samsung smart watch has failed to take benefit from the growing industry.
References
Arthur, C., 2012. CES 2012: the rise of smart TV. The Guardian, [online] January 13. Available at: <https://www.theguardian.com/technology/2012/jan/13/ces-2012-smart-tv> [Accessed 9 September 2016].
Gibbs, S. (2015). Samsung back on top as world’s biggest smartphone manufacturer. The Guardian, [online] April 29. Available at: <https://www.theguardian.com/technology/2015/apr/29/samsung-worlds-biggest-smartphone-manufacturer> [Accessed 9 September 2016].
Grobart, S., 2014). Samsung Wants to Be the World’s Biggest Appliance Maker by 2015. Bloomberg, [online] January 9. Available at: <http://www.bloomberg.com/news/articles/2014-01-09/samsung-wants-to-be-the-worlds-biggest-appliance-maker-by-2015> [Accessed 9 September 2016].
Rogowsky, M., 2013. Samsung’s Galaxy Gear Smartwatch Intrigues, But Fails To Answer ‘Why?’ Forbes, [online] September 4. Available at: <http://www.forbes.com/sites/markrogowsky/2013/09/04/samsungs-galaxy-gear-shows-why-its-hard-to-get-a-smartwatch-right/#52a4963d1ae3> [Accessed 9 September 2016].
Spence, E., 2016. Stop Using Galaxy Note 7, Samsung’s Exploding Battery Nightmare Continues. Forbes, [online] September 10. Available at: <http://www.forbes.com/sites/ewanspence/2016/09/10/stop-using-the-samsung-galaxy-note-7/#e28d2e84a16c> [Accessed 9 September 2016].
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