ubi - december 2004 - rodenberg.nl vs samsung... · digital still camera video camera car personal...

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UBI - December 2004

Ilker Korkut / Yu Zhang

Background & Objectives

History & BackgroundSony Samsung

• 1946 Established in Nihonbashi,Tokyo,named Totsuko, with start-up capital of YEN190,000 for the research and manufacture.

• 1958 Company name changed to Sony Corporation. • 1960 Sony Corporation of America established in US• 1960 World's first transistor TV, the TV8-301, launched.• 1963 World's first compact transistor VTR, PV-100, launched.• 1965 World's first home-use VTR,CV-2000, launched.• 1968 Trinitron color TV, the KV-1310, launched.• 1971 3/4-inch color video cassette player, VP-1100, launched.• 1979 First personal headphone Walkman, TPS-L2, launched.• 1982 World's first CD player, the CDP-101, launched.• 1985 8mm camcorder, the CCD-V8, launched.• 1988 CBS Records Inc., the records group of CBS, acquired. It

was renamed Sony Music Entertainment Inc. in January 1991. • 1989 Passport-sized 8mm camcorder, CCD-TR55, launched.• 1989 Columbia Pictures Entertainment, Inc. acquired. It was

renamed Sony Pictures Entertainment Inc. in August 1991 • 1993 Sony Computer Entertainment Inc. established.• 1994 New company structure introduced at Sony Corporation. • 1996 Sony China established• 1997 Introduction of Corporate Executive Officer System• 2000 "Playstation 2" SCPH-10000 launched • 2001 Sony Bank established in Japan • 2001 Sony Ericsson Mobile Communications established • 2002 Sony Dream World 2002 held in Yokohama • 2002 Sony absorbed AIWA by merge

• 1938 Established.Samsung means “three stars” and resemble the characters that mean “Let it be large, strong, and last forever.”

• 1953 a number of subsidiaries began importing manufactured goods from the West and making domestic fabrics.

• 1969 Samsung Electronics established to replicate imported electronics goods for the domestic market.

• 1974 Samsung moved into heavy industry when it formed Samsung Petrochemical Co. and Samsung Heavy Industries Company.

• 1974 Samsung Precision Company (now Samsung Aerospace Industries) was established .The group became a key player in the semiconductor industry during the 1980s.

• 1985 Samsung Data Systems (now Samsung SDS) was established,

• 1986 Samsung Economic Research Institute was established. • 1987 Samsung Advanced Institute of Technology (SAIT) was

established. • 1988-90 SAIT expanded into electronics, semiconductors, high

polymer chemicals, genetic engineering, and the aerospace industry.

• 1992 Samsung shifted its strategy away from low-priced bulk copies of other manufacturers‘ products and set up design offices in the US and Europe to focus more on the high end of the market.

• 1977 Samsung acquired Daesung Heavy Industry Company and renamed it Samsung Ship-Building Company.

• 1999 Dell and Apple both concluded 5-year deals to purchase several billion dollars‘ worth of LCD displays from Samsung..

• 2001 Korean government pressured Samsung abolished the central management structure and now operates as a group of 27 separate but interlinked companies without a single parent.

• 2002 low cost RDRAM became available.

Dia 3

p1 presentation by YUpc; 4-12-2004

Sony

Company overview

Samsung

Revenue (mil $) 72,081 54,252

Revenue Change (1 yr) 13.90 % 9.30 %

Net Income (mil $) 851 4,900

Net Income Change (1 yr) 13.0 % 15.1 %

Employee 162,000 88,447

Brand Equity (rank) #20 (#21 last year) #25 (#34 last year)

Brand Equity (mil $) 13,200 10,900

Employee Change (1 yr) 0.60 % 76.90 %

Brand Equity Change (1 yr) - 5.04 % 31.17 %

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Brand: A strategy on its own

Brand Mapping2002

SpecialistGeneralist

Enhanced

DenonB&O

Technics

Bose

Schneider

Sony

Siemens

Panasonic

JVC

Samsung

Kenwood

Sharp

Aiwa

Ord

inar

y

Philips

Toshiba

LG

Pioneer

Telefunken

Hitachi

Daewoo Grundig

Dia 6

p3 presentation by ADELpc; 4-12-2004

Brand Mapping2003


Enhanced

DenonB&O

Technics

Bose

Schneider

Sony

Siemens

Panasonic

JVC

SamsungTrust Bush

Kenwood

Sharp

Canon

Aiwa

Ord

inar

y

Philips

Apple

Medion

Nokia

Toshiba

LG

BBK

Pioneer

Telefunken

Hitachi

Daewoo Grundig

Premium Specialists

Specialists Mainstream

Local Discount Brands

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Brand Mapping2003


Enhanced

Denon

B&O

Technics

Bose

Sony

Panasonic

Apple

Nokia

JVC

Kenwood

Canon

Aiwa

PioneerPremium Specialists


Samsung

Trust Bush

Sharp

Ord

inar

y

Philips

Medion

LG

BBK


Dia 8


Brand Mapping2004


Enhanced Denon

B&O

Technics

Bose

Sony

Panasonic

JVC

Samsung

Kenwood

Sharp

Canon

Aiwa

Ord

inar

y

Philips

Apple

Nokia

LG

Pioneer

Premium Specialists


Tesla Bush

Medion


HP

IT Specialists

LoeweOlympus

Nikon

Creative

iRiver

APA Specialists

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Brand Mapping2004


Enhanced Denon

B&O

Technics

Bose

Sony

Panasonic

JVC

Samsung

Kenwood

Sharp

Canon

Aiwa

Ord

inar

y

Philips

Apple

Nokia

LG

Pioneer

Premium Specialists


Tesla Bush

Medion


IBM

Dell

HP

IT Specialists

Creative

iRiver

APA Specialists

LoeweOlympus

Nikon

Dia 10


Core Business vs. Strategic Areas

Business FieldsSony (Product Category) Samsung (Product Category)

ElectronicsVideo ProductsAudio ProductsTelevisionDigital Still CameraVideo CamePersonal AudiSet-top boxe

c1

ra

s

o (Mp3)s

Information TechnologyComputerDisplayPDAPrinter

Telecommunication Networkhome network systemsmobile phonesinfrastructuresoffice network systems

Digital Appliance

ElectronicsVideo ProductsAudio ProductsTelevisionDigital Still CameraVideo CameraCarPersonal Audio (MP3)

Information TechnologyComputerDisplaysPDARecording MediaOptical Storage

TelecommunicationCell(mobile) Phones

Semiconductor

air conditionersmicrowave ovensrefrigeratorsvacuum cleanerswashing machines

SemiconductorCMOS image sensorsDRAMs, flash memory, hard disk drives, LCD driver ICs, MCPs, optical disk drives, smart cards,SOCs and SRAMs

Entertainment Gaming Console

Movies (Sony Pictures)Music (Sony Music)E-commerce (Sony Style)Personal Robot (Aibo)BroadcastingFinance or Banking *(JAPAN ONLY)Life Insurance *(JAPAN ONLY)Internet Service Provider

Dia 12

c1 Insert - Ilker - 30/11/04compaq; 30-11-2004

p8 presentation by ILKERpc; 4-12-2004

Strategic Fields

Samsung - Sony

TelevisionMobile Phone

Gaming

Music

IT

Semiconductor

Dia 13


Future?

Numeric Convergence or Digital Entertainment

2004-2009

Samsung - Sony

Television

Mobile Phone

Gaming

Music

IT

Semiconductor

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Product Categories

Brand MappingHome Entertainment/TV

Special competencein category

Brand also offers products in category

Ord

inar

yEnhanced

B&O

Local Discount

Premium TV

JVC

United

Loewe

Philips

Panasonic

Sony

Samsung

Thomson

Pioneer

Kenwood

LG

Medion

In the brand mapping we see a general shift of brands towards the top right hand corner

BoseDenon

Premium Audio

Mainstream Specialists

harman/kardon

http://www.ehomeupgrade.com/archives/000343.php

TV Analysis Key Questions

Samsung

Key Questions

• TV sets: Flat panel TV transition• Digital Television and HDTV

Sony, Toshiba and Matsushita allplan to stop CRT production in Japanduring 2004.

2004 2005 2006 2007

Sony

TV Technology Evolution

« There are numerous signs that the flat panel TV is finally becoming the mass market consumer electronics product which will transform the industry and lead to annual global revenues of $41bn by 2008 »

Source: Strategy Analytics Insight 2003

C T V M a r k e t R e p o r t W o r ld w id e (O c to b e r 2 0 0 4 )

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2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8

F o r e c a st

Sale

s (

S -C R T

Plasma Global Production

Samsung SDI remained the world’s top PDP (plasma display

PDP (plasma displaypanel) modulemarket is dominatedby 5 major suppliersaccounting for 97% of capacity.

panel) supplier in the third quarter of this year ... shipped 216,700 PDPs in the third quarter, up 16% sequentially, and its marketsharerose from 22.8% in the second quarter to 24.1% in the third quarter.

Source: market research firm DisplayBank

Fujitsu-Hitachi Plasma Display (FHP)

LCD Q1 FY04 Global Production

LG.Philips23.8%

Sharp23.6%Samsung

16.6%

Chi Mei12.3%

Fujitsu1.9%

BOE Hydis2.1%

Hitachi3.8%TMDisplay

4.3%AU Optronics

9.1%

CPT0.8% Others

1.6%

Globally the two Korean firms LG and Samsung have more than 50 per cent of the total LCD production capacity.LG Philips LCD is a 50-50 joint venture between South Korea's LG Electronics and Dutch conglomerate Philips

Chi Mei Optoelectronics (CMO) is likely to overtake Sharp and become the world’sleading above-20-inch LCD-TV panel supplier in the fourth quarter of this year, according to the Chinese-language Economic Daily News (EDN).

Samsung Electronics Co., South Korea's biggest electronicsmanufacturer, cemented its top spot in worldwide TFT-LCD shipments thisyear, by shipping 53.93 million TFT-LCD panels (In thenine months to September), wayahead of rivalsLG.Philips LCD Co. and AU OptronicsCorp. of Taiwan.

Source: DisplaySearch

Samsung

Sony

Corp Strategies

Manufacturers are diverting resources to support increasing global demand

• Matsushita is spending Y400m ($3.3m) retooling its plant at Pilsen in the Czech Republic to produce 200,000 plasma TVs a year for the EU market. It is currently also evaluatingNorth American production. It plans to produce four million FPTVs annually by 2005.• Sharp will cease CRT TV production at its Spanish plant next year, replacing it with capacity to product 500,000 LCD TVs a year. It will also increase LCD TV production in Mexico and China.• Hitachi will produce plasma TVs in China and Mexico. Itwill use a Turkish manufacturer to supply the Europeanmarket.• LG.Philips LCD Co. has approved plans to invest 5.0 billion dollars in its 7th-generation LCD manufacturing plant in Paju, north of Seoul.

Sony and Samsung will form a $2bn 50-50 joint venture « S-LCD » in Q104 to produce7th-generation LCD panels in Korea. Sony already manufactures LCD TVs in Japan,

Spain, Mexico and China.

The race to Digital TV

G lo b a l S e t-T o p B o x S h ip m e n ts

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its ( 0 0

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) c a b le s a tt e rre s t r ia ls a t e l l i t e

W o r ld w id e T V H o u s e h o ld s b y ty p e

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A n a lo g S a t e l l i t eA n a lo g C a b leA n a lo g T e rre s t r ia lD ig i t a l S a t e l l i t eD ig i t a l C a n leA n a lo g S a t e l l i t e

2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7

Total semiconductor revenues from set-top box applications were estimated

The race to Digital TVSet-Top Box Semiconductor Content

to have fallen by 15.5% in 2002, by a further 4.4% in 2003, to $3.74 billion.For the remainder of the forecast period, the total semiconductor revenues are forecast to grow slightly,

the increases in memoryto reach $3.88 billion by 2007.Only Flash and DRAM memory are forecast to have a positive CAGR, as requirements offset the declines in price.

TV Strategy

• Conclusions:

– CRT is over (past) -- > Sony to stop production

– Flat will be commodity• PFM short term growth till 2006• LCD long term growth -- > Alliance

– Digital is the future• Set top box usage• Semi conductor required

SamsungSony

Shipments of PDAs and similar handheld devices declined

IT Analysis Key Questions

for the third consecutive quarter, according to the latest data fromIDC. Third-quarter global PDA shipments fell 8.7 percent compared to the same period last year. Competition fromsmartphones is to blame, the research firm says

With slower growth rates and reduced profit margins, theindustry will face vendor consolidation, with three of the

PC top

10 PC manufacturers exiting the market by 2007, accoGartner

rding to

Notebook computer sales have doubled since 1998, frommillion to 7.2 million, according to IDC. They now represent23.8 percent of total computer sales, and IDC has predicted

3.6

that percentage will increase as corporate spending rebounds.

IT A hardware story

Samsung

Sony

This year, Sony decided to pull back from theinternational PDA market to focus on Japan. Sony hadlong occupied the third position in the global PDA market, but its shipments fell by 81.5 percent in the thirdquarter. Despite this decline, Sony is still one of the topfive vendors worldwide, in fifth position, according to IDC.

No PDA

The Samsung YH-999 Windows Mobile™- based Portable Media Device is a revolutionary handheld entertainment devicethat makes it easy to store and play recordedTV, movies, home videos, music and photostransferred from a PC with Windows® XP. Youcan watch and listen to your favoriteentertainment anytime and anywhere - in thepalm of your hand or through a TV or stereo. Store and play up to 80 hours of video, up to 5000 songs or tens of thousands of pictures.

VAIO Pocket™ Digital Music Player

VAIO Pocket™ Digital Media Player

IT All in One story

Samsung

Sony

Next year, Sony will porbably pull back from the desktop PC market to focus on „all-in-one“ PC segment.

No Desktops

IT Notebook Booming category

Leading notebook vendors: 2003-2005 notebook shipments (million units)

2003 shipments 2004 projectedshipments

2005 projectedshipments

Volume Market share Volume Market share Volume Market share

Dell 5.95 15.3% 8.50-9.00 18.7% 11.00-12.00 21.1% Quanta, Compal, Wistron and Samsung Electronics

HP 6.50 16.7% 8.00-8.50 17.7% 11.00-12.00 21.1% Compal, Inventec, Quanta, Wistron and Arima Computer

Toshiba 4.90 12.6% 5.00 10.4% 6.00 10.5% Compal, Inventec and Quanta

IBM 3.45 8.8% 4.00-4.50 9.4% 5.50-6.00 10.5% Wistron and Quanta

Acer 2.00 5.1% 3.20-3.50 7.3% 5.00-6.00 10.5% Quanta, Wistron and Compal

Vendor

Source: Taiwan mak

Major contract makers

es, November 2004.ers and IDC, compiled by DigiTim

Samsung

Sony

IT The PC Market War Heats Up

IBM will begin pilot production of Cell microprocessors at its 300mm wafer fabrication facility in thefirst half of 2005. Sony expects to launch home servers for broadband content as well as high-definition television (HDTV) systems powered by Cell in 2006. Sony also is preparing the next-generation PlayStation 3 system that will run on Cell.

Sony and IBM have introducedthe first workstation based on the Cell processor, which theyjointly developed in partnership with Toshiba. TheCell processor is designed to take advantage of high-speedbroadband network access forapplications in digital media content creation

Brand MappingIT

Special competencein category

Brand also offers products in category

Ord

inar

yEnhanced

HP

The Individualists

Apple

Dell

Sony

Samsung

Value for MoneyBrands

Work Brands

Medion

IBM

Toshiba

AcerLG

Vaio

Mobile Phone The 3G EffectsSamsungSony

It produces a range of mobile phone handsets and offers professional communications solutions such as smartphones with corporate communications capabilities.

2003 $11,856.5 million in sales and $2,257.4 million in operating profits.(Multimedia,PDA,GSM,CDMA,satellitereceiver,VOD phone,

Number 5 in the world(2002)5.2% (2002)

Number 2 in the world (2003)CDMA Mobile Phone 23% 1 st (2003)Mobile Phone 10% 3 th (2003)

Before Ericsson – After Ericsson

Intends to earn world leadership and secure overwhelming competitive strength in this area.Continue to invest in R&D and by increasing design power, improve procurement and enhance quality and productivity.The integration of creativity and design make its mobile products acceptable.It also set itself the goal of being a pioneer in the integration of new technology in the phones.

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p20 presentation by YU - Mobile Phonespc; 4-12-2004

Gaming Console – PC – Mobile warSamsungSony

Key Questions• What dynamics are governing the evolution of the game industry?• What is driving industry revenues through the remainder of the hardware cycle?• How large will emerging distribution opportunities be?• How are economics changing over the platform cycle?

Sales: Playstation1 and Playstation2. Very popular in the world.Holding the 75% marketing share in this area. The games division, anchored by the PlayStation 2, produced 10 percent of revenue and $650 million in profit.

NON -till now.But in the future… ...

Vision: Digital TVs, movies, music, game and digital contents will be the core future businesses for Sony.Sony will introduce the PSP, a portable PlayStation, in Japan at the end of this year and in the U.S. and Europe early in 2005. The console will play music videos and games and will compete with Nintendo Co.’s Game Boy. PSX is to be released, was used as an example. the souped-up version of the PlayStation 2 offers games, DVD, TIVO, and CD/DVD burning capabilities as well as the ability to download media from the Web and access content from Sony's memory sticks. In this manner.

Objectives: Sony aims to integrate its game and electronics technology to compete at a different level than the competition.Furthermore Sony will hold the whole market of game console and portable game market.

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p21 presentation by YU - Gamespc; 4-12-2004

Gaming Console – PC – Mobile war

Last Full Fiscal Year

CompanyHome GameBusiness Revenue

Previous YearRevenue

Game RevenueChange FromPrevious Year

Sony $7,093 $8,682 -18%

Nintendo $4,680 $4,582 2%

Electronic Arts $2,957 $2,482 19%

Microsoft* $2,876 $2,748 5%

Take-Two Interactive** $1,145 $1,034 11%

Activision $948 $864 10%

Atari $844 $1,190 -29%

Konami $841 $795 6%

Vivendi Universal $688 $957 -28%

THQ $641 $468 37%

UbiSoft $612 $546 12%

Sega Sammy*** $599 $675 -11%

Square-Enix $575 $565 2%

Namco $407 $386 5%

Capcom $308 $437 -30%

Total Game Sales $25,580 $26,909 -5%

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p42 presentation by YU - Gamespc; 4-12-2004

Music Digital distribution

Key Points• Increase of music piracy, P2P (Napster, KaZaA), Standards (MP3, MP4, AAC)

• Will Sony’s Connect succeed to cope with Apple? Why was Sony late to react? Unlike Apple, Sony has a giant media arm with a global presence in movies, music and television. "So why didn't [Sony] do iTunes

• High-speed internet connections become more and more common

Intention to beat Apple’s iPodSony came with Vaio Pocket almost 2.5 years after Apple.The executives were so concerned about music piracy, they could not agree with the designers on the kind of player to create.

Collaboration with Napster (No software available of its own)

Intention to beat Apple’s iTunesSony came with Connect almost 1 year after Apple.

Napster’s brand awareness is an advantage, however its legality is a question

Using a different file standard (attract) which is not mp3An advantage?

Co-promotion with Napster

Music and music video from Sony’s own EMI, Columbia and EpicFeature-length films from Columbia via Connect (next year)

Sony Samsung

iPod (Apple) iTunes (Apple)

Vaio Pocket (Sony) Connect (Sony)

Samsung’s digital audio products Napster

Hardware Software (Online music stores)

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p22 presentation by Ilker - Musicpc; 4-12-2004

Semiconductor Nano-tech

Key Points• In electronics, added value has migrated from finished products to key components.• The business is capital-intensive, yet the demand for technological upgrades is constant. As such, no sooner had semiconductorcompanies recovered their investment in one level of technology, than new investments in a higher level were required.• Global semiconductor market to fall 2% in 2005

Sony regards the semiconductor business as one of its most important R&D priorities

"One of the strategies is to deploy the development of chips into the consumer electronics products to make it different from the competitors,"

In the short and medium terms, central R&D themes will concentrate on functional components, particularly CCDs, where Sony holds the number one worldwide market share, and semiconductor lasers

Number one worldwide in flash memory. Number one worldwide in DRAMs and SRAMs. Number one worldwide in LDI (LCD Driver ICs) for two consecutive years.

Another priority is System-on-Chip (SoC) components, which integrate an enormous number of processors and memories. Components incorporating these technologies play a central role in enabling Sony to supply highly distinctive digital consumer electronics and game products with increasingly sophisticated functions.

Working together enables one division to take advantageof the strength of the other. "One of the strategies is todeploy the development of chips into the consumerelectronics products to make it different from thecompetitors,"

This year Sony intends to spend $1.8 billion to develop microchipsfor household devices that will receive, record and play music, video and other content without the use of a computer. The new microchips will reduce the $10 billion a year that Sony spends on semiconductors from outside vendors.

Samsung uses its knowledge of chips to design morecompetitive electronics products which use these chips.

Sony Samsung

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p23 presentation by Ilker - Semiconductorpc; 4-12-2004

Competitive Context

Competitive Fact Sheet

Mission Solidifying Sony as the Strongest Consumer Brand through the Convergence of Electronics and Content

Mission of SAMSUNG Electronics is "Digital - εCompany”. A company that leads the digital Convergence Revolution through Innovative DigitalProducts & - ε Process ”

Vision

“Sony products are enablers. They allow consumers to immerse themselves in whatever form of entertainment and communication takes their fancy.

Sony is about freedom, no limits, empowerment, innovation, imagination, autonomy, creativity and choice”.

Leading the Digital Convergence Revolution

“to make everyone's life more convenient, abundant and more enjoyable through the development of innovative and multi-functional products.”

Core slogan: "SAMSUNG DIGITall, everyone's invited"

Objectives

•Solidify Sony’s number one position in AV products•Create an entirely new category through thecombination of Electronics and Game•Heighten Sony’s stature in IT and communications•Become even stronger in the semiconductor field•Focusing on Profitability

•To be globally-focused, restructured and streamlined, and more committed than ever to true innovation.•To be market leader in all its product segments by2005 and to be the most profitable of all its peers•Shareholder value would be adequately served if wepursue the course of long-term profit maximization.

Sony Samsung

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Competitive Assessment

Research & Development

Global Presence

Growth Strategy

Operations

Market Image

Organizational Structure

p32

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Growth Strategy

“Sony’s strategy is based on continuous innovation, creating new audio, video, communications and IT products for both the consumer and professional markets and with its music, pictures, game and on-line businesses it is positioning itself to become a leading personal broadband network company.

Samsung's main business now is electronics - it is the world's leading manufacturer of memory chips, and produces a wide variety of products including mobile phones, televisions, microwaves and computers.

Continue to Promote Electronics Convergence StrategyConverge technology and resources in home and

mobile electronicsInvest in semiconductors and key devices as core

engines for differentiation and added valueStrengthen operations (Demand & Supply Chain

Management)

Business Structure InnovationBusiness Portfolio- Stand alone → Total solution provider• Strategic Business Synergies- Home, Mobile, Office Networkand Core components• New Growth Engine-LCD TV, Mobile Multi-media

Implement Structural Reform ProgramCut workers (13%)Reduce factory capacity by closing plants (30%)Hire new executivesIncrease profit margins (10% by 2006)

Enhance Entertainment BusinessFurther Promote Group Management

Management Process EnhancementMarket Driven ChangeBrand equity enhancement

Products and accessories that are not interchangeable withnon-Sony equipment (strategic brilliance?)

Sony Samsung

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Global Presence

Sony Samsung

Selling products in more than 200 countries

Selling 14 product categories in more than 200 countries (so many combinations of product category-country)

Strengthen global leadership via segmentation regionally

Electronic Sales by AreaJapan: 23% (-5%)Europe: 26% (+11%)USA: 24% (-9%)Other: 27% (+21%)

North AmericaIncrease GSM Shipment to Cingular, AT&T,

T-MobileHigh/Mid-end Camera & PDA

EuropeBar Type Camera & ColorFocus Eastern Europe / CIS

ChinaPremium Camera & Color

Maintain High Brand ImageExpand Distribution Channel

Dia 40


Sony Samsung

“Sony brands symbolizes quality, reliability, attractiveness, andinnovation throughout the world.

“Holistic brand campaign” strategy to reposition the brand in consumers’ minds

Positive brand image due to customer experience (people already used and liked it)

To develop brand recognition, performs aggressive marketing campaigns especially in North America and Europe

Advertising expenses: $1,500 M (#10 worldwide) Advertising expenses: $500 M (#54 worldwide)

UEFA Sponsor (Champions Leaugue)

The attention to entertainment marketing is seen as a way to“enhance brand familiarity.”

Product placement in movies such as the The Matrix: Reloaded, Olympic Games Sponsorship (Sydney 2002, Athens 2004)

Sony is busy transforming itself into a “personal broadband network solutions company.” Its intent is to bring together hardware, content and services into a seamless entertainment experience for consumers, which is delivered through a “ubiquitous value network.”

As a PR, Samsung works with the Boomer Esiason Foundation to extend the lives of children with Cystic Fibrosis in the US.

Market Image

Dia 41


Consumer Preference by Product Category

15,4

5,1

12,8

2,6

12,8

2,6

7,7

2,6

5,1

2,6 2,6 2,6 2,6 2,6 2,6

TV DVD Player Stereo EntertainmentCenter

WirelessPhone

GeneralElectronics

Computer Playstation CD Player Audio

Consumer Preference (%)

Sony

Samsung

Source: al berrios & co. Sony vs. Samsung Consumer Preference Micro-Study Jan 04

Dia 42

p44 presentation?pc; 4-12-2004

Operations

Sony’s operations are not efficient which in turn results in higher product costs. (vital competitive disadvantage)

Operationally, Samsung is one of the best managedcompanies which makes them a profit leader

Cutting fixed costs through resource managementReduction of personnel in high cost-impact

regions (Japan, North America, Western Europe)Shift of personnel resources to growth areas,

optimal global personnel deployment

Management Process EnhancementSupply Chain ManagementCore Technology

- Nano, F/P/M-RAM, 12”, Gen 7

Rationalization of production / distribution / service centers

10% reduction of production / distribution / service points and space (2003)

Supply Chain ManagementIntegration & SynchronizationComponent standardization

-(focus on economy of scale, quality, lead time)

Strategic procurement of materialsReducing number of suppliers Strategic procurement of parts

Strategic procurement of non-production materialsRationalization of operations resulting in reduced

costs for general purchasing. Projected saving ¥50 billion (FY2004)

Business Portfolio RestructuringDesignConvergenceNetworking

Business Process InnovationSpeedSimplicity

Sony Samsung

Dia 43

p27 presentation by Ilkerpc; 4-12-2004


Sony Samsung

In the past, Sony had been ruled autocratically. Managers derived authority from their relationships to the founders. It was a family business.

Highly centralized command-control system. Decision making and control performed centrally (typical Asian)

Transforming is more difficult because people do not want to change their jobs or their lifestyles. Sony’s delay in jumping into flat-panel TVs and DVD recorders are two examples of that inertia.

Because Samsung is a relatively young company, people are more open to transformation and changes.

Group management, high level of bureaucracies Move from Geographic model towards global category teams.

Promoting to upper levels depends heavily on seniority


Dia 44


Research and Development

Sony Samsung

R&D Investment: $ 4,400 M (7.5% of sales). R&D Investment: $ 2,900 M (8% of sales).

Creator of the first : transistor radio, battery-powered TV, the CD payer, the PlayStation game console

In the last four years, Samsung was first to introduce Flat Panels, first with LCDs and first with DLP Projection sets. Made similar advances with Mobile Phones, PDAs andNotebook PCs.

Sony is focusing on semiconductors, displays and homeservers as its key strategic fields for R&D over the nextthree years

Last year, Chip Development Team came up with 2 new breakthrough products:the world’s first 70nm 4GB NAND Flash Memory and an

80nm DRAM.

Long-term research fields:The shift from inorganic to organic materialsImitating living organisms and brain functions

In 2004, Samsung won 5 design awards at the IDEA (Industrial Design Excellence Awards) – more than any other company

Sony and Samsung embark on a Joint Venture makingamorphous silicon LCDs. S-LCD Corp. will produceseventh-generation LCD panels for large TVs.

Sony together with IBM and Toshiba developed semiconductor called ‘Cell’. (it will run PS3 as well)

Collaboration with MIT’s Renowned Media Lab with the goal of Ubiquitous Computing

Research and Development

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Competitive Assessment

Research & Development

Global Presence

Growth Strategy

Operations

Market Image


p35

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Competitive Analysis

Consumer Preference by Reasons

Future purchase power groups

SWOT Analysis

•Branding and sub branding•Music industry•Entertainment industry•Alliances

•Technology drive•Speed of reaction•Organizational Structure•No Profit transfer•Flexibility

•BluRay vs HD-DVD•Convergence race•Semiconductors

•Fast moving industry•Chinese brands

SamsungSony

Strengths

Weaknesses

Opportunities

Threats

•Technology drive•Prospecting industries: LCD, Semiconductor, Telecom •Strategic collaborations•Efficient operations and price

•Brand differentiation•Lack of proven past success•Lack of customers’ experience

•Gaming industry•Music industry

Alliances or Acquisition

•Korean competition (Gov Invest)•Chinese brands like Konka, TCL, Ningbo Bird, Lenovo

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Conclusions & Recommendation

Semiconductor

Components

VideoTV

Telecom

GameAudio

Music

TelecomSemiconductor

LCD

Appliances

Digital Media

-5

0

5

10

15

20

-20% 0% 20% 40% 60% 80% 100% 120%

Annual Growth/Fall (%)

Sal

es $

(bill

ion)

Sony Samsung

Where to invest? Competitive Positioning

SAMSUNG MAKES THINGS HAPPEN

SONY WATCHES THINGS HAPPEN

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p40 presentation by ALLpc; 4-12-2004

Questions

ubi - december 2004 - rodenberg.nl vs samsung... · digital still camera video camera car personal...

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