Strong increase of sales and profit in CE According to its investor relations, Samsung shows the strong increase of both sales and profit, especially in Consumer Electronics.More specifically, sales in […]
Strong increase of sales and profit in CE
According to its investor relations, Samsung shows the strong increase of both sales and profit, especially in Consumer Electronics.More specifically, sales in Q2 of 2021 was 13.4 trillion KRW and 32% increase compared to the same period in 2020. When it comes to profit, it was 1.06 trillion KRW and 45% increase compared to the same period in 2020.
Of course, the results in Consumer Electronics were smaller than other businesses including Smartphone or Semiconductor. However, the business accounts for 21% of total business and it generates cash (profit) stably. In other words, Consumer Electronics is “Cash Cow” in the Growth Share Matrix or BCG Matrix. BCG Matrix has four quadrants divided by two axes, which are market growth and share. “Cash Cow” is a quadrant that is low market growth rate but high market share. It is exactly what Consumer Electronics is.
In fact, the TV market in the world has around 100 billion USD, but its growth rate is low. However, Samsung has around 30% market share and this ratio is No.1 in the market. What’s more, LG and Sony have the second and third market share, and the ratio are around 15% and 9%, respectively.
Who is Samsung?
The Samsung Group is a South Korean multinational conglomerate and its head office is in Samsung Town, Seoul. It comprises numerous affiliated businesses, most of them united under the Samsung brand. In fact, the group is the largest South Korean chaebol (business conglomerate).
No.1 in multiple markets
Samsung has strong presence in several markets. In fact, it is a major manufacturer of electronic components including lithium-ion batteries, semiconductors, image sensors, camera modules and displays. More specifically, clients of displays are Apple, Sony, HTC and Nokia. The Korean company is the world’s largest manufacturer of mobile phones with the popularity of its Samsung Galaxy line of devices.
Samsung is a major vendor of tablet computers, particularly its Android-powered Samsung Galaxy Tab collection. It has also developed 5G capable smartphones including the Galaxy S20 and Galaxy Note 20. What’s more, foldable phones including the Galaxy Fold are popular as well.
Samsung has been the world’s largest television manufacturer since 2006, and the world’s largest manufacturer of mobile phones since 2011. It is also the world’s largest memory chip manufacturer. Furthermore, Samsung had been the largest semiconductor company in the world from 2017 to 2018 as well.
The secret of success in the TV market
We have already seen Samsung’s strong growth in Q1 2021. At that time, the strong demand of semiconductor affected the result positively. In the Q2 of 2021, why was Consumer Electronics successful?
The secret of its success is a business insight. Samsung’s TVs have had their feature to connect with online streaming services including Netflix before the pandemic. During the pandemic, more people in the world stay in their home to watch TVs or online streaming services. Thus, Samsung’s TVs have a good fit for this trend.
In addition, the South Korean company has made much effort on localization. From marketing’s perspective, this strategy really works. This is because culture, life style and custom are different from country to country. Thanks to these efforts and insight, Samsung keep its No.1 market share in several markets.