INDIA’S
MOST RESPECTED COMPANIES 10 SAMSUNG INDIA
CONSUMER DURABLES Sectoral Rank: 1
Company: Samsung India Electronics CEO, South-West Asia:
Today,
it is nearly impossible to get through a day without coming across a cellphone
made by Samsung. But less than 5 years ago — just before India got bitten by
the touchscreen bug — the same could be said for Nokia.
Given the pace at which the Indian handset market is slipping away from Nokia, it’s not surprising that it has lost the top spot among consumer durables companies in this year’s BW Most Respected Company Survey to Samsung India Electronics. Nokia, incidentally, won the award four times in a row.
Samsung, which has been in India for 18 years now, was voted ahead of competitors such as Nokia, LG Electronics and Sony. It has also made an appearance in the overall list of Top 10 Most Respected Companies for the first time. “The success of Samsung emanates from the fact that all our businesses have together contributed to the growth. And the one thread that binds this growth together is our thrust on innovation,” says Samsung’s president and CEO of South-west Asia, B.D. Park.
Even though Samsung continues to grow its marketshare in the flat panel television (it’s already a market leader in the category) and refrigerator segments, it is the mobile handset business where it has made the maximum impact. “Mobile played a fundamental role because it has scale and reach that the consumer durables segment does not have,” says Vineet Taneja, country head of the mobile business at Samsung Electronics.
Three to four years ago, Samsung introduced its dual-SIM cellphone models (Nokia didn’t have one for a long time after). “We quickly realised the smartphone opportunity in India. That is what gave us a huge jump since 2011,” says Taneja.
Today, Samsung is doing what Nokia did in the lower end of the phone market: creating demand for its products by giving consumers many options. Once it sensed an opportunity, Samsung deployed a disproportionate — 90 per cent — share of resources behind smartphones when the market was just beginning to take off. “We drove the entire smartphone category at a scale that had not been done before by any company,” says Taneja. Samsung’s strategy in India has been to introduce a vast portfolio of products.
While opting for Android was a strategic decision taken globally, in India, the move came much before anyone had predicted the operating system’s (OS) success. Samsung is, however, fairly open to any operating platform that the consumers want to adopt. “Tomorrow, if there is a Windows opportunity, we will be ready. We are not dogmatic about a platform,” says Taneja.
And, even though its proprietary OS, Bada, proved to be a disappointment, Samsung does not rule out having its own someday.
Industry analysts say one of Samsung’s most admirable traits is the company’s response time to market needs. “Product innovation coupled with the time that a company takes to roll out any product gives it an edge over its competition,” says Gaurav Gupta, senior director at Deloitte in India. “Customers today are looking for freshness in products. So, a company should be able to refresh its product portfolio from time to time.”
Samsung launches about 35-40 mobile handsets and 40 televisions every year. “We are obsessive about VOC (voice of consumer). If consumers demand something, you can be assured it will be launched in 3-6 months,” says Taneja.
Samsung, at a global level, spends nearly 8 per cent of its topline on R&D. “Innovation is our DNA. In the past two years, we have focused a lot more on consumer needs,” says Atul Jain, senior vice-president of the consumer electronics division at Samsung India.
In televisions, Jain believes 40-inch sets are the new rage, as opposed to 32 inches till sometime ago in India, and so the company has introduced more options in the 32+ range. It will soon be launching 55- and 65-inch televisions, while continuing to offer the lower price range models that give it traction in the hinterland.
Samsung’s aggression is evident in other categories as well. To push its refrigerator sales and increase consumer confidence, the company is offering a 10-year warranty on all products. In home appliances, Jain says Samsung’s latest range of microwaves allows oil-free frying.
Another big reason behind Samsung’s success is its network — it has over 150,000 retail outlets across the country, versus LG Electronics’s 20,000.
Marketing to and reaching consumers is necessary given the neck-and-neck competition it faces from LG, Sony, Panasonic and Hitachi in consumer durables. Then, there are local players such as Micromax, Karbonn, Lava and Xolo, which are fast catching up in the smartphone race.
“Anybody is just one model away from success. So, one big innovation from the guy you are not watching can cause disaster,” says Taneja, who keeps a close eye on competition and often turns around ad campaigns in 24 hours to respond to rivals.
Shrutika Verma BW130909
Given the pace at which the Indian handset market is slipping away from Nokia, it’s not surprising that it has lost the top spot among consumer durables companies in this year’s BW Most Respected Company Survey to Samsung India Electronics. Nokia, incidentally, won the award four times in a row.
Samsung, which has been in India for 18 years now, was voted ahead of competitors such as Nokia, LG Electronics and Sony. It has also made an appearance in the overall list of Top 10 Most Respected Companies for the first time. “The success of Samsung emanates from the fact that all our businesses have together contributed to the growth. And the one thread that binds this growth together is our thrust on innovation,” says Samsung’s president and CEO of South-west Asia, B.D. Park.
Even though Samsung continues to grow its marketshare in the flat panel television (it’s already a market leader in the category) and refrigerator segments, it is the mobile handset business where it has made the maximum impact. “Mobile played a fundamental role because it has scale and reach that the consumer durables segment does not have,” says Vineet Taneja, country head of the mobile business at Samsung Electronics.
Three to four years ago, Samsung introduced its dual-SIM cellphone models (Nokia didn’t have one for a long time after). “We quickly realised the smartphone opportunity in India. That is what gave us a huge jump since 2011,” says Taneja.
Today, Samsung is doing what Nokia did in the lower end of the phone market: creating demand for its products by giving consumers many options. Once it sensed an opportunity, Samsung deployed a disproportionate — 90 per cent — share of resources behind smartphones when the market was just beginning to take off. “We drove the entire smartphone category at a scale that had not been done before by any company,” says Taneja. Samsung’s strategy in India has been to introduce a vast portfolio of products.
While opting for Android was a strategic decision taken globally, in India, the move came much before anyone had predicted the operating system’s (OS) success. Samsung is, however, fairly open to any operating platform that the consumers want to adopt. “Tomorrow, if there is a Windows opportunity, we will be ready. We are not dogmatic about a platform,” says Taneja.
And, even though its proprietary OS, Bada, proved to be a disappointment, Samsung does not rule out having its own someday.
Industry analysts say one of Samsung’s most admirable traits is the company’s response time to market needs. “Product innovation coupled with the time that a company takes to roll out any product gives it an edge over its competition,” says Gaurav Gupta, senior director at Deloitte in India. “Customers today are looking for freshness in products. So, a company should be able to refresh its product portfolio from time to time.”
Samsung launches about 35-40 mobile handsets and 40 televisions every year. “We are obsessive about VOC (voice of consumer). If consumers demand something, you can be assured it will be launched in 3-6 months,” says Taneja.
Samsung, at a global level, spends nearly 8 per cent of its topline on R&D. “Innovation is our DNA. In the past two years, we have focused a lot more on consumer needs,” says Atul Jain, senior vice-president of the consumer electronics division at Samsung India.
In televisions, Jain believes 40-inch sets are the new rage, as opposed to 32 inches till sometime ago in India, and so the company has introduced more options in the 32+ range. It will soon be launching 55- and 65-inch televisions, while continuing to offer the lower price range models that give it traction in the hinterland.
Samsung’s aggression is evident in other categories as well. To push its refrigerator sales and increase consumer confidence, the company is offering a 10-year warranty on all products. In home appliances, Jain says Samsung’s latest range of microwaves allows oil-free frying.
Another big reason behind Samsung’s success is its network — it has over 150,000 retail outlets across the country, versus LG Electronics’s 20,000.
Marketing to and reaching consumers is necessary given the neck-and-neck competition it faces from LG, Sony, Panasonic and Hitachi in consumer durables. Then, there are local players such as Micromax, Karbonn, Lava and Xolo, which are fast catching up in the smartphone race.
“Anybody is just one model away from success. So, one big innovation from the guy you are not watching can cause disaster,” says Taneja, who keeps a close eye on competition and often turns around ad campaigns in 24 hours to respond to rivals.
Shrutika Verma BW130909
(This story was published in BW | Businessworld
Issue Dated 09-09-2013)
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http://www.businessworld.in/news/business/corporate/faster-bigger-newer-better/1044542/page-1.html#sthash.bADklgEP.dpuf
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