Samsung V/S Sony, The Competitive Collaboration

SAMSUNG V/S SONY, THE
COMPETITIVE COLLABORATION
PRESENTED BY
ANKIT GUPTA
ALANKAR GUPTA
SHEKHAR SRIVASTAVA
AMIT KUMAR JHA
YATENDER MOHAN SINGH
ROHIT PAUL
WHAT IS COMPETITIVE COLLABORATION?
TO BE DEFINED IN SIMPLE TERMS, COMPETITIVE
COLLABORATION MEANS THAT COMPANIES MERGE TOGETHER,
SIMULTANOEUSLY COMPETITING WITH ONE ANOTHER AND AT
THE SAME TIME COLLABORATING THEIR SERVICES WITH ONE
ANOTHER.
Collobaration For LCD
. Samsung and Sony will reportedly spend 1.8 trillion South Korean won (about
$1.9 billion USD) to buy a new facility to upgrade their S-LCD Corporation joint
venture.
The new upgrade will allow the companies to produce enough 8G LCD panels to
meet “increasing global demand.”
The Wall Street Journal adds that the “new manufacturing line will be located in
the Tangjeong complex southeast of Seoul, where production will start in 2009.
Monthly output is initially expected to reach 60,000 units, versus 50,000 sheets
currently.”
Samsung recently reported a robust first quarter flat-panel division profit of about
1.01 trillion South Korean won. The company also reported that margins were at a
four-year high.
Both companies expect LCD TVs to be in high demand globally in preparation for
the Summer Olympic Games in China
INTRODUCTION
IN 2004, SONY THE ICONIC CONSUMER ELECTRONICS GIANT, FORMED

S-LCD, A JOINT VENTURE WITH SAMSUNG ELECTRONICS TO
MANUFACTURE LARGE SIZED LCD(LIQUID CRYSTAL DISPLAY) PANELS
FOR ITS TELEVISION DIVISION.
PRIOR TO SONY, SAMSUNG HAD ALSO ENTERED INTO STRATEGIC

ALLIANCES WITH OTHER COMPETITORS LIKE APPLE, INTEL,
MOTOTROLA, DELL, ETC. WITH HUGE INVESTMENTS IN RESEARCH AND
DEVELOPMENT, SAMSUNG WHOSE PORTFOLIO DOES NOT INCLUDE BIG
BRANDS LIKE SONY’S TRINITRON AND APPLE’S IPOD, AIMS TO DISPLACE
ITS COMPETITORS FROM THEIR LEADERSHIP POSITION.
CONT….
FOR A LONG TIME SAMSUNG ELECTRONICS HAS BEEN CONSIDERED AS A

CLONE OF SONY, BUT WITH THE RESTRUCTURING AFTER THE ASIAN
FINANCIAL CRISES IN 1997, SAMSUNG ELECTRONICS HAD UPGRADED ITS
PRODUCT LINE TO COMPETE WITH SONY IN THE PREMIUM MARKET.
SONY’S ELECTRONICS DIVISION HAD DECREASED THE COMPANY’S
PROFITS. IN 2004, SONY HAD TURNED TO SAMSUNG ELECTRONICS FOR
SUPPORT IN ITS LCD TV BUSINESS.
IT WAS QUOTED:
“SAMSUNG IS LIKE THE OLD SONY. SAMSUNG HAS MUCH OF THE SPIRIT
OF SONY 10 YEARS AGO.”
Objective Of The Case
• To understand the strategy of competitive

collaboration
• To discuss how Samsung is using this
strategy to gain a leadership position in
the global consumer electronics industry
SAMSUNG GROUP WAS ESTABLISHED ON 1ST MARCH 1938 BY BYUNG
CHULL LEE. IT WAS FOUNDED IN TAEGU, KORES WITH AN INVESTMENT OF
30,000 WON. THEY STARTED WITH EXPORT BUSINESS SLOWLY MOVING
INTO SUGAR INDUSTRY.
SAMSUNG FORAYED INTO THE ELECTRONICS INDUSTRY IN JANUARY 1969

BY INCORPORATING SAMSUNG ELECTRONICS MANUFACTURING. ITS
BUSINESS ON MASS PRODUCTION, FOLLOW-THE-LEADER STRATEGY AND
DEPENDENCE ON FOREIGN TECHNOLOGY.
CONT…..
THE LATE 1970S AND EARLY 1980S MARKED DIVERSIFICATION AND GLOBAL
GROWTH OF COMPANY’S CORE TECHNOLOGY BUSINESSES. SAMSUNG
ELECTRONICS MANUFACTURING REPORTED EXPORT SALES OF $100
BILLION IN 1978 AND BECAME A MAJOR MANUFACTURER OF THE KOREAN
MARKET.
ALTHOUGH SAMSUNG ELECTRONICS MADE MEMORY CHIPS AND OTHER

COMPONENTS FOR PRODUCTS OF JAPANESE AND AMERICAN COMPANIES,
• ITS OWN BRAND FOCUSED MORE ON
MANUFACTURING PRODUCTS AT A LOWER COST.
IN 1995, KUN-HEE LEE, THE REIGNING CHAIRMAN,
DISTRIBUTED SAMSUNG MOBILE PHONES TO HIS
FRIENDS AND KEY WORKERS. HOWEVER, HE
SOON BEGAN TO RECEIVE COMPLAINTS
REGARDING DEFECTS IN THE MOBILE PHONES.
THIS DIVERTED THE COMPANY’S FOCUS MORE ON
QUALITY OF ITS PRODUCTS.
• THUS, IT MARKED THE BEGINNING OF SAMSUNGS

TRANSFORMATION INTO A GLOBAL BRAND.
The Sony Group is primarily focused on the Electronics (such as AV/IT products &
components), Game (such as PlayStation), Entertainment (such as motion pictures and
music), and Financial Services (such as insurance and banking) sectors. Not only do
they represent a wide range of businesses, but remain globally unique.
Their aim is to fully leverage this uniqueness in aggressively carrying out

convergence strategy so that they can continue to emotionally touch and excite their
customers.
CONT……
Major Japanese manufacturer of consumer electronics. Founded by Ibuka Masaru

and Morita Akio in 1946 as Tokyo Telecommunications Engineering Corp.,
It adopted its present name in 1958. It began by making voltmeters, sound

generators, and similar devices. Its first major consumer item was an audio tape
recorder, introduced in 1950.
Since then it has pioneered new technology for consumer products marketed
worldwide, including the first pocket-sized transistor radio (1957), a colour
videocassette recorder (1969), and the Walkman portable tape player (1979). In
1994 Sony released the PlayStation video game console. Its entertainment
divisions include motion-picture firms Columbia TriStar and Sony Pictures and
recording labels Epic and Columbia.
The complexities of operating a truly multinational corporation, however, began
taking their toll on Sony. Most of the world's largest economies (Europe, Japan,
and the United States) were experiencing a slowdown in the early 1990s. This
factor created what Sony called 'an unprecedentedly challenging operating
environment.' Although sales in most of Sony's businesses increased in 1992,
operating income dropped 44 percent to ¥166 billion ($1.2 billion). Net income
increased slightly to ¥120 billion.
Sony's success had been a direct result of the wisdom of its founders, who had
the talent to anticipate the demands of consumers and to develop products to
meet those demands
SAMSUNG SONY COMPETITIVE COLLABORATION
SAMSUNG SONY COMPETITIVE COLLABORATION
SONY’S ALLIANCE WITH SAMSUNG STARTED IN 2001, WHEN THE TWO

COMPANIES SIGNED A MEMORANDUM OF UNDERSTANDING FOR
SHARING INFORMATION ON MEMORY STICK TECHNOLOGY.
IN 2003 THE COLLABORATION FURTHER STRENTHENED WHEN SAMSUNG

ELECTRNICS OBTAINED THE LICENSE FROM SONY TO MANUFACTURE
AND SELL MEMORY STICK.
AFTER SPONSORING THE FOOTBALL WORLD CUP IN JAPAN AND SOUTH

KOREA IN 2002, SAMSUNG ELECTRONICS BECAME A POPULAR NAME IN
SEMI CONDUCTOR, TELEVISION, MUSIC PLAYERS, ETC. ON THE OTHER
HAND, BY THEN SONY HAD FALLEN BEHIND THE COMPETITION IN FLAT
PANEL TVs AND COMPUTER DISPLAYS.
THE JOINT VENTURE MOVE WAS INITIATED BY SONY FOR STRENTHENING
ITS PRESENCE IN FLAT PANEL TVs THAT EMPLOYED LCD AND PLASMA
DISPLAY PANELS. SONY AND SAMSUNG ELECTRONICS ARE EXPECTED TO
SHARE HALF THE OUTPUT FOR THEIR USE AND SALE TO OTHER
COMPANIES.
THE JOINT VENTURE IS EXPECTED TO SUPPLY SONY WITH A STEADY

SUPPLY OF LCD PANELS WHILE MAKING SAMSUNG ELECTRONICS’
SCREENS THE INDUSTRY STANDARD BY INCREASING THE CUSTOMER
BASE.
• SONY IS CONSIDERED AN APT PARTNER
FOR SAMSUNG ELECTRONICS.
• IN ADDITION TO LCD PANELS SONY AND

SAMSUNG HAVE ALSO PARTNERED IN THE
BLU RAY GROUP. BLU RAY CATERS TO THE
NEXT GENERATION OPTICAL DISC FORMAT
OR DVDS AND PLAYERS.
ALTHOUGH JAPANESE AND SOUTH KOREAN COMPANIES HAD
WITNESSED ENMITY WITH EACH OTHER. SONY AND SAMSUNG
ELECTRONICS OBSERVED LESS FRICTION BETWEEN THEM AS THEY
HAD BEEN CONDUCTING INFORMAL TALKS WITH ONE ANOTHER
RELATED TO TECHNOLOGIES.
THE DEAL ALSO MARKED THE EMERGENCE OF SAMSUNG

ELECTRONICS AS A GLOBAL PLAYER WITH PROWESS IN
MANUFACTURING, FINANCE, AND POPULAR PRODUCTS THAT HAD
ENABLED IT TO OVERTAKE SONY- ITS PRESTIGIOUS RIVAL IN SOME
KEY SEGMENTS,
COLLABORATING WITH SONY WOULD ALSO HELP SAMSUNG

ELECTRONICS TO GAIN FROM SONY’S EXPERTISE IN POWERFUL
DESIGN AND MARKETING EXPERTISE.
S-LCD, THE JOINT VENTURE COMPANY FORMED TO CARRY OUT MASS
PRODUCTION OF LCD PANELS STARTED THE SHIPMENTS OF LCD IN
2005. AFTER OBTAINING THESE PANELS FROM S-LCD DEVELOPED BY
SAMSUNG ELECTRONICS, SONY ASSEMBLES LCD TV BY INSERTING ITS
OWN KEY COMPONENTS SUCH AS SEMICONDUCTORS AND
BACKLIGHTS.
THE LOW COST HIGH QUALITY PANELS ARE EXPECTED TO HELP SONY
IN COMPETING MORE EFFECTIVELY.
IT WAS OPINED THAT THE COLLABORATION OF SONY AND SAMSUNG

CAME AT A TIME WHEN SONY REQUIRED COST-CUTTING IN IN ITS
ELECTRONICS SECTOR.
• SAMSUNG ELECTRONICS WAS CONSIDERED
A GOOD FIT FOR SONY TO REGAIN ITS ITS
LEADING POSITION IN FLAT PANEL LCD TVs
WHERE SONY HAD FALLEN BEHIND ITS
RIVALS.
• WITH THE TECHNICAL COOPERATION OF

SAMSUNG ELECTRONICS IN THE LCD AND
SEMICONDUCTORS SECTORS, SONY IS
FURTHER EXPECTED TO CUT ITS COSTS.
SWOT ANALYSIS OF SAMSUNG
STRENGHTS
• Samsung is technologically very advanced; it has heavy assets of

technology. It is known for its technologically advanced products.
• Samsung crushed new product concepts in five months. It is strong

corporate brand and known for its quality products and advanced
technology use.
• It attracts customers by offering new and innovative design through

understanding the customers that which type of designs are suitable to
customers and what they want or asked about.
• It heavily invest in technology, product design and human resource,
because for the success of every organization human resource plays a
major role, with out human resource no product can be made that’s why
Samsung gives more important to the human resource.
• Samsung focuses more towards the innovations and try to keep

improving the products to attract more customers and capture more
market share.
WEAKNESSES
•Although Samsung focuses innovation but it is not proactive to introducing new

products, it waits to attack the competitors. It also lacks in product differentiation.
•Samsung caters mass market instead of niche market so for this purpose it sets
low prices of products and low price products seem as low quality products, so
Samsung products perceive as low quality as compared to competitors’ products.
•Most of the Samsung products are not user friendly which is a hurdle for Samsung
to make it market leader
OPPORTUNITIES
•Through make itself distinctive from competitors, it can gain more market share.
By providing distinguish services it can increase its customer base.
•Another opportunity is product variation, by introducing unique products and

existing products with variety; it can attract its target market and can get more
market share.
•As the demand for the cell phone is increasing as compared to other electronic
market, Samsung has the great chance to introduce user friendly mobile phones
at affordable price. It would help to beat customers and also to lead market share
THREATS
•Samsung competitors in electronic market are more dominant e.g. Sony,

Panasonic, LG etc in home appliances and Nokia, rim, 3G, etc in mobile phones
market so it has to struggle a lot to be the market leader.
•Telecommunication industry is growing day by day so the no. competitors also

increasing so it is difficult for Samsung to establish in that industry, it is more behind
in this industry as compared to other electronic items.
•Samsung advertisement is not excessive while the competitors advertise their

products excessively which can take away the existing customers of Samsung
SWOT ANALYSIS ON SONY
STRENGHTS
•ABILITY TO CREATE HIGH QUALITY PRODUCTS FOR ITS CUSTOMERS
• BUSINESS IS REPUTABLE
• HAVE LEARNT FROM PAST FAILURES TO PRODUCE AND WORK BETTER
• COMPETITIVE TOWARDS OTHER COMPANIES
• ABLE TO EXPAND ITS MARKET AND PRODUCE VARIOUS PRODUCTS

WEAKNESSES
•HAS BEEN MAKING A LOSS FOR THE PAST FEW YEARS IN SOME
SEGMENTS.
• SALES OF PRODUCTS HAVE SEEMINGLY STARTED TO SLOW DOWN
• COMPANY IS NOT BEING MANAGED
• FUNCTIONAL DEPARTMENTS ARE NOT COMMUNICATING WITH EACH

OTHER THUS PRODUCTIVITY IS BEING AFFECTED.
OPPORTUNITIES
•T
•HE ENGINEERING DEPT. HAS INCREASED SIZE RESULTIN IN MORE

HARD WORK
• IS NOT KNOWN TO COPY COMPETITORS THUS LEADING IN REPUTE
• ADVERTISING TECHNIQUES HAVE BEEN INCREASED TO ATTRACT

NEW CUSTOMERS
• IS TRYING TO SELL THEIR HIGH QUALITY PRODUTS CHEAPER
• MAY DECIDE TO EXPAND OVERSEAS

THREATS
• HAS POWERFUL COMPETITORS LIKE MICROSOFT
• REPORTS SHOW THAT PRODUCTS ARE BEING DUPLICATED
• LACKS DIRECTION IN STRATEGY

CONCLUSION
APART FROM SONY AND SAMSUNG, MANY OTHER COMPANIES SUCH AS

PHILIPS AND LG HAVE ENTERED JOINT ALLIANCES
THE PARTNERSHIP WITH SAMSUNG PROVED THAT SONY NOW

REQUIRED THE SUPPORT OF A COMPETITIVE FIRM TO OPERATE
EFFECTIVELY
THE DEAL WITH SAMSUNG ALLOWED SONY TO TAKE ADVANTAGE OF

SAMSUNG’ EXPERTISE IN THE CORE BUSINESSES SUCH AS MEMORY
CHIPS AND LCDS.

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SAMSUNG V/S SONY, THE

TO BE DEFINED IN SIMPLE TERMS, COMPETITIVE

COLLABORATION MEANS THAT COMPANIES MERGE TOGETHER,

SIMULTANOEUSLY COMPETITING WITH ONE ANOTHER AND AT

THE SAME TIME COLLABORATING THEIR SERVICES WITH ONE

IN 2004, SONY THE ICONIC CONSUMER ELECTRONICS GIANT, FORMED

PRIOR TO SONY, SAMSUNG HAD ALSO ENTERED INTO STRATEGIC

FOR A LONG TIME SAMSUNG ELECTRONICS HAS BEEN CONSIDERED AS A

• To understand the strategy of competitive

SAMSUNG FORAYED INTO THE ELECTRONICS INDUSTRY IN JANUARY 1969

ALTHOUGH SAMSUNG ELECTRONICS MADE MEMORY CHIPS AND OTHER

• THUS, IT MARKED THE BEGINNING OF SAMSUNGS

Their aim is to fully leverage this uniqueness in aggressively carrying out

Major Japanese manufacturer of consumer electronics. Founded by Ibuka Masaru

It adopted its present name in 1958. It began by making voltmeters, sound

SONY’S ALLIANCE WITH SAMSUNG STARTED IN 2001, WHEN THE TWO

IN 2003 THE COLLABORATION FURTHER STRENTHENED WHEN SAMSUNG

AFTER SPONSORING THE FOOTBALL WORLD CUP IN JAPAN AND SOUTH

THE JOINT VENTURE IS EXPECTED TO SUPPLY SONY WITH A STEADY

• IN ADDITION TO LCD PANELS SONY AND

THE DEAL ALSO MARKED THE EMERGENCE OF SAMSUNG

COLLABORATING WITH SONY WOULD ALSO HELP SAMSUNG

IT WAS OPINED THAT THE COLLABORATION OF SONY AND SAMSUNG

• WITH THE TECHNICAL COOPERATION OF

• Samsung is technologically very advanced; it has heavy assets of

• Samsung crushed new product concepts in five months. It is strong

• It attracts customers by offering new and innovative design through

• Samsung focuses more towards the innovations and try to keep

•Although Samsung focuses innovation but it is not proactive to introducing new

•Another opportunity is product variation, by introducing unique products and

•Samsung competitors in electronic market are more dominant e.g. Sony,

•Telecommunication industry is growing day by day so the no. competitors also

•Samsung advertisement is not excessive while the competitors advertise their

•ABILITY TO CREATE HIGH QUALITY PRODUCTS FOR ITS CUSTOMERS

• HAVE LEARNT FROM PAST FAILURES TO PRODUCE AND WORK BETTER

• COMPETITIVE TOWARDS OTHER COMPANIES

• ABLE TO EXPAND ITS MARKET AND PRODUCE VARIOUS PRODUCTS

• SALES OF PRODUCTS HAVE SEEMINGLY STARTED TO SLOW DOWN

• COMPANY IS NOT BEING MANAGED

• FUNCTIONAL DEPARTMENTS ARE NOT COMMUNICATING WITH EACH

•HE ENGINEERING DEPT. HAS INCREASED SIZE RESULTIN IN MORE

• IS NOT KNOWN TO COPY COMPETITORS THUS LEADING IN REPUTE

• ADVERTISING TECHNIQUES HAVE BEEN INCREASED TO ATTRACT

• IS TRYING TO SELL THEIR HIGH QUALITY PRODUTS CHEAPER

• MAY DECIDE TO EXPAND OVERSEAS

• HAS POWERFUL COMPETITORS LIKE MICROSOFT

• REPORTS SHOW THAT PRODUCTS ARE BEING DUPLICATED

• LACKS DIRECTION IN STRATEGY

APART FROM SONY AND SAMSUNG, MANY OTHER COMPANIES SUCH AS

THE PARTNERSHIP WITH SAMSUNG PROVED THAT SONY NOW

THE DEAL WITH SAMSUNG ALLOWED SONY TO TAKE ADVANTAGE OF

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