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Analysis of Nokia and Samsung Strategies and Models

Introduction

Assessment of financial viability of a business organization is very vital in the determination of which business entity to invest in (Cheung, 1999). Assessment of the company’s financial viability should incorporate factors like the scale of the business, scope and the relative risks involved in the proposed project. When assessing the financial sustainability of a business entity, it is important for the investors to take care of factors like level of complexity of the firm (Ting-Peng, Chen-Wei, Yeh & Lin, 2007). Projects requiring lengthy and complex procedures for example projects with extended payroll services or even centralized IT services; such projects have relatively higher risk than projects that use simple procurement process. To some great extent, more complex projects with a high value attached to them are usually very viable projects and thus they are subjected to risk management process which involves looking at the need and the scope of the financial viability of the project (Snowdon & Stonehouse, 2006). Other factors to consider when assessing the financial sustainability of a business entity to invest in are like economic factors like inflation rates, the level of competition, the market share of the company, profit margins of a particular industry among many other factors. This paper seeks to analyze Samsung and Nokia companies regarding their financial liabilities to determine which company is worth investing much money as an investor.

Explanation of keywords

A model in the business context represents various core value aspects of a business entity that incorporates business purpose, strategies, the organizational structure of business, trade policies among other areas of the firm. In basic terms, a business model is a tool or a method of conducting business through which a business organization can sustain itself in the market

Strategies refer to business development methods that an entity may use to gain a competitive edge over its rivals in the market they involve marketing, management, production and many other business techniques (Bouwman, Zhengjia & Limonard, 2008).

Business process model refers to the various systems in the mobile phone industry that defines and represent business operations of an organization aimed at improving the current business situation. The business process involves the collection of various interrelated and well-structured business activities that are intended to producing a particular product for a certain group of customers (Hakansson & Ford, 2002).

Analysis of the two mobile phone companies (Nokia and Samsung Companies)

Nokia Company

The company of Nokia has its origin from Finland and over the time, it has been operating from its headquarters in Espoo as one of the leading information and Technology Company (Luke, Verreynne & Kearins, 2007). It is one of the largest vendors of mobile phones following companies like Samsung Company. However, the market share of Nokia has been going down following the introduction of smartphones like Apple, galaxy among many other touch screen smartphones from other mobile phone vendors like Samsung.

Regarding marketing strategies, Nokia Company has diversified its customers through its well-planned marketing strategies around the global markets (Khanna, 2011). Nokia products are used widely by both low-income earners and even the high-income earners living both in towns and even rural setups because of the right method of standardizing its products within the industry. The company of Nokia tends to standardize and even customize its products when needed following the fact that markets for cellular phone products are going through various growth stages. Nokia Company is using aggressive marketing strategies in around the international markets and therefore has been increasing become very competitive in the global markets (Seccareccia, 2014). The company has been increasing its sales through its all markets following its strong positioning strategies, competitive pricing strategies and even through its excellent promotional activities.

Samsung Company

Samsung Electronics is one of the world’s leading companies manufacturing a wide array of consumer electronics, home appliances, IT products and many other telecommunication infrastructural devices. The company also produces components like LED and LCD panels, flash memories, storage and fiber optic devices and many other electronic accessories. Samsung Company is also the world leader in terms manufacturing mobile phones, smartphones and it is the largest provider of tablet computers (Khanna, 2011). Other than providing electronic appliances, Samsung Company has also played a bigger role in offering a broad range of solutions to other sectors like education health care and even finance sectors. Through its many subsidiaries, Samsung Company operates in very many countries around the world namely America, Africa, Europe and many other nations in the Middle East and Asia-Pacific.

Samsung Company has managed of time to establish several mobile phone subsidiaries so as to increase of its brand promotional methods throughout the global markets. Providing advanced technology products and the ability of the company to position itself on various technology platforms will greatly help the company to some great extent in marketing its products to different groups of customers (Khanna, 2011). The company has adopted several techniques in marketing its products for example advertisement, celebrity endorsement among many other marketing techniques.

Marketing techniques used by Nokia

Pricing

Regarding pricing of goods, the pricing strategies used by Nokia Company varies from day to day and from situation to situation and from one product to another (Calia, 2012). For products that are cutting through different edges of technologies and are newly introduced into the market,      

Promotion

Company uses skimming marketing technique which is followed by a price reduction of the products. The cost-effective commodities of the company that is more focused on the economic situation of different markets, the company tends to use penetrating pricing strategies to reach out to its customers.

Place

The distribution network of Nokia Company is localized in very many countries close to 150 countries, and the company tends to use aggressive marketing strategy to reach out to all its customers in those countries.

Product

Marketing efforts of Nokia Company are mainly focused on enhancing manufacturing of Nokia handsets only, and it is boosting its product portfolio only through investing in new market models.

Samsung Company, on the other hand, has its presence in various product categories thus over time; the company has been forced to put into action different pricing strategies (Daft, 2016). The products of Samsung Company, for example, its smartphones are some of the best around the world and therefore the company of Samsung serves as a market leader when it comes to the product features and the USP’s they offer to their customers.

Pricing

Samsung Company for a very long time users skimming price for most of its products as it works to get high value for its customers before competitors catch up with it in the market (Snowdon & Stonehouse, 2006). In case the model becomes worn out (old) or is launched by any other market competitor, the company decides to drop the prices of such products to outcompete favorably in the industry.

Place

The presence of Samsung Company is felt through very many channels of global markets as it operates through various marketing channel concepts like modern retail and distributors, sales and service dealers among many other market channels. Most of the dealers who are involved in the sales and service operations of the company handle key accounting issues for the company and sometimes, they involve themselves in corporate sales (Williams & Martinez, 2014).

Promotion

Regarding promotion, the company of Samsung uses various promotion techniques as it believes on pulling and attracting customers to themselves through various sales promotion methods like an advertisement, after sale services, product promotion among many other marketing techniques.

Products

On different market segments and the company’ brand image, Samsung Company has several options that are available especially to top-end smartphone market segment with popular products like Samsung Galaxy 5, Samsung Wave Series and even Samsung Focus. For the case of Nokia, it has only one brand product called Nokia N8 that has been widely criticized for its common software that for many viewers are outdated. Samsung for a very long time has won myriads of accolades from the general public and even among the critics following its wide range top-end products like smartphones (Williams& Martinez, 2014).

Recommendations

When assessing the financial sustainability of a business entity, it is important for the investors to take care of factors like level of complexity of the business operations of the company (Bleuel & Stanley, 2007). Companies with relatively lengthy and complex procedures for example Nokia Company with extended payroll services or even centralized IT services are characterized higher risk than projects that use simple procurement process like Samsung Company (Laitinen, 2011).

Investing in Samsung Company is worthwhile and may make one realize his or her value for money as compared to Nokia this is because Samsung has a relatively wider market share, excellent financial management skills and above all good customer base (Hakansson & Ford, 2002). The Samsung Company has done a great job through the provision of the technical support that has helped in the creation of the customer loyalty for the products of the company. Samsung Company has maintained its productivity for a long time without ever making down any of their products, and as a result, they gain a significant market share with low prices of the products. This market attribute is very much important for the companies like Samsung because it allows them to devise methods to outcompete most of its principal market rivals like Nokia and many others who are also involved in the stiff market competition with Samsung Company (Rochford, 2010). Because of industry rivalry, Samsung cannot take its position in the market for granted since many other companies are coming up into the market thus creating an intense competition. Samsung Company has tried to put measures that will help to meet the expectations of their customers so that they can achieve the majority of the market share through different segments that are based on the level of education, age and the income standards of the customers.

When more companies enter the market, then it means that the market share for the Samsung Company is reduced. The company can maintain its market shares and even generate more profits through establishing strong market strategies through measures like differentiating its products and brands (Mulla, 2003). Differentiation makes a bit difficult for the new companies to compete companies like Samsung in the market since they have established a strong Image brand and even perceived excellent customer service and value. Markets for the white goods are highly saturated with many substitutes. Therefore, it is important for companies like Samsung to take due precautions when deciding on the appropriate marketing strategies. Because of the substitute threats in most of the global markets, Samsung Company may be forced to adopt differential pricing so as to attract most of the consumers from different income pyramids to wean them completely from the cheaper substitutes (Ligthelm, 2012).

Regarding low-cost strategy, Samsung Company should provide its products and services at a relatively lower price compared to its key market rivals; this will enable the company to attract new customers following the fact that most of the consumers are more sensitive to price changes. For many of the customers, Samsung brands are unique and are of higher quality thus they have unique benefits over the competition, and therefore customers are willing to purchase those products despite the price changes.

Conclusion

Over the last few years, the mobile phone industry has witnessed a tremendous change with upcoming of several unbelievable products into the industry. Samsung Company has established itself in various markets through its many subsidiaries to increase the visibility of its brand promotion. Samsung has adopted various marketing strategies to ensure that it optimizes its sales volume and as a result increasing its profit margins. To achieve this successfully, Samsung has opted to use several promotional techniques to reach out to many customers in various global markets for example corporate advertisement, celebrity endorsement among many other technologies. Following the fact that popularity of Nokia Company as compared to that of Samsung Company is quite scarce, Samsung Company has gained a competitive advantage over Nokia this is partly because of the popularity of Samsung’s products among the teenagers and even old persons. Secondly, Samsung Company has continued to tailor its strategies to follow the needs and requirements of the target markets thereby increasing its chances of succeeding in the industry than Nokia Company thus it is worth investing in Samsung than Nokia.

 

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