In the 1950s, the economy of the Japanese consumer electronics sector expanded quickly. Japan ranked among the top nations in the decades that followed for the number of commodities it exported and the number of new technology patent filings. The most coveted status symbols for Japanese inhabitants underwent a rapid shift due to technical improvements, going from electric refrigerators and black-and-white TVs in the late 1950s through digital cameras and DVD recorders in the 2000s to robot vacuums and smartphones today. Japanese electronics manufacturers are no longer the industry leaders they once were. Due to its excessive diversification—making everything from chips to undersea cables—high production costs, greater competition from outside, and exorbitant costs all contribute to their problems (Fruin,1992).
Japanese electronic companies received a boot from South Korea in the memory chip sector and from Taiwan in the flat-panel display business. Since they produce everything from chips to undersea cables, rising production costs are the burden, increased outside competition, and extensive diversification (Fruin,1992). Taiwan beat Japan’s electronic companies in the flat-panel display industry, and South Korea beat them in the memory chip sector. Due to its excessive diversification—making everything from chips to undersea cables—high production costs, greater competition from outside, and exorbitant costs all contribute to their problems (Fruin,1992). Taiwan beat Japan’s electronic companies in the flat-panel display industry, and South Korea beat them in the memory chip sector.
Chip, computer, and telecommunications equipment costs fell in 2001, which had a significant negative impact on Japanese electronic industries. In the fiscal year 2001–2002, the Big Five electronic companies (NEC, Toshiba, Hitachi, Fujitsu, and Mitsubishi Electronics) reported losses of $12 billion. They experienced restructuring due to becoming bloated and losing business to Asian competitors. The needs of the end-users have not received as much attention in Japan as product features have. We “lost sight of the products from the consumers’ point of view,” as Panasonic President Kazuhiro Tsuga put it. One of the leading causes of this is that hooked Japanese business on their once-dominant strength, the monozukuri, or “art of manufacturing things,” which is being practiced today (Trapolini,2014 pp.119-145). Because of this, these Japanese companies have turned away from what their market actually need. This is one of many instances when individuals mistakenly believe that a lack of technology development is the main issue.
As a result, the true consumer pain points were concealed and improperly identified. Due to the discrepancy between the market’s needs and the product’s attributes, it is difficult to commercialize these items; as a result, the true value of the products was not fully realized. Japanese electronics technology lagged behind in terms of economics, which has been a major contributing factor. When leading-edge innovations from Japanese companies were unveiled, the yen ruled the currency market at a record high. Due to the fact that these businesses can only sell their goods domestically, the profitability of these products when sold internationally was significantly reduced. The market could not afford these offerings, despite the fact that the technology is promising, because the value to price ratio of their products has decreased as well. Due to these economic problems, possible investments became more difficult to complete (Kogut & Chang,1991,.401-413).
Japan’s timing wasn’t exactly right. Their research and development wasn’t as quick as that of their competitors, and as a result, their products were released at a time when the value of the yen was surging. To gauge the market’s preparedness for the technology a company has to offer, timing is crucial in entrepreneurship for a number of reasons.
Ineffective marketing tactics must be to blame for the difficulty in making these products commercially viable. Sony was the first to offer LED technology, which superseded the use of fluorescent backlit TVs in the television industry, according to (Chang, 2011); nonetheless, the product was financially unaffordable for customers. Profitability is therefore not that promising. Samsung, on the other hand, debuted the same technology a year later, emphasizing “LED as unique TV technology” as part of their marketing plan. The promotion was successful, and Samsung’s sales have increased significantly.
Rival manufacturers of Japanese electronics have increased their expenditures on product development. Although Japan was the first to offer these outstanding technologies, the competitors did a great job of improving them so that they are more beneficial and useful to the end consumers at lower costs. Sadly, Japanese electronics manufacturers have been developing technology that provide rivals a competitive advantage. As a result, it is crucial to understand the value of the goods and services a business provides because this information can only be gleaned from the customers’ actual demands.
With the goal of fusing its historic low-cost manufacturing expertise with the capacity to quickly bring high-quality, high-margin branded products to market, Samsung has been grafting Western business methods onto its primarily Japanese system for the past two decades. It was impossible to imagine two sets of business methods being more incompatible. Samsung injected a focus on innovation into a business that prioritized continual process improvement. Samsung integrated outsiders who couldn’t speak the language and weren’t familiar with the company’s culture into an already homogeneous workforce. Samsung implemented merit pay and promotion, placing some young individuals in positions of control over their seniors, into a Confucian tradition of respect for elders. It’s been a journey marked by both dizzying imbalance and exhilarating excitement (Raketic & Rasevic, 2017, pp. 48-55).
Like Samsung, today’s up-and-coming behemoths—Haier in China, Infosys in India, and Ko in Turkey, for example—face a paradox: To maintain their success, they must abandon the factors that made it possible. It is unlikely that their future in international markets will be assured by the tightly integrated business systems that have been successful in their home markets. They must remake themselves in ways that can seem incongruous in order to advance. Additionally, they will have to repeat the process when they hit new plateaus (Chang,2011).
We have followed Samsung’s development over the past seven years as it has successfully overcome this contradiction and advanced beyond its first domestic market success. We think this tale has a lot to teach the current crop of up-and-coming behemoths hoping to achieve the same. While other firms concentrate on supporting just one operating system, Samsung used a variety of operating systems in their phones on the market. Additionally, the Galaxy S supports competing operating systems like Symbian, Microsoft, Linux-based LiMo, and Samsung’s exclusive Bada in addition to Google Android as its core operating system (Yu 1998, pp. 57-72).
In 2010, Samsung sold 280 million smartphones, accounting for 20.% of the market. In terms of global sales during the third quarter of 2011, The Company outsold iPhone Apple with a total market share of 23.8%, as opposed to Apple’s market share of 14.6%. With sales of 45 million smart phones from January to March, Samsung overtook Nokia as the leading manufacturer of mobile phones in the world in 2012. As the second-largest handset market in the global mobile market, Samsung has implemented several strategies. Business-level strategy and corporate strategy the business was named as the top worldwide brand in electronics by Branding Finance in January 2007 (Raketic & Rasevic,2017, pp. 48-55). Samsung was aware that it needed to match Apple’s design in the handset industry to be successful. The manufacturer of the Galaxy S3 produces models with huge displays and a slender design. Samsung has advanced further by creating smartphones with a huge display. The big display of the Samsung Galaxy S3 and Note is important to both consumers and business users.
You (1998) claims that Samsung sponsored the Olympics as one of its primary global branding initiatives. Samsung used the Olympic Games as a stage to present brand-new goods and innovations. Publicity is the most effective technique to launch new products and technologies. It is more credible, as well as effective. The device from Samsung Electronics has surpassed Motorola, making it the second-largest market for mobile phones worldwide. Samsung’s deft marketing tactics were crucial to building its reputation and propelling it to the top of the global digital technology industry. At the Sydney 2000 Olympic Games, Samsung delivered its most recent wireless communications technology. The company also took part in the Salt Lake 2002 Olympic Winter Games’ mobile telecommunications equipment category.
Additionally, movies now play a big part in Samsung’s marketing. For instance, Samsung has used product placement in numerous Hollywood films to showcase its products, including its monitors, TVs, mobile phones, etc. And Samsung actively contributed to the creation of the “Matrix Phone” for the well-known film “Matrix: Reloaded.” Samsung promotes its products through television, the internet, and other media such as sponsorships with the Texas Motor Speedway, the Samsung Cup, the Chelsea football club, and the NASCAR Nextel Cup (Yu 1998, pp.57-72). Samsung’s business plan Samsung’s aim is to quickly flood the market with mobile devices. Despite having years of success in the handset market and being very successful in the low end, Samsung has just recently started to increase its sales there. Samsung had a high market share for smartphones. From April to June of 2011 and from April to June of 2010, Samsung’s share increased by a factor of two to 36%. Because it offers a greater variety of devices than Apple and other rivals, Samsung has a rapidly growing market share in the handset industry. The corporation makes a variety of tech items, including cellphones, phones, and tablets, and at least one of them will be appealing to a person (Baketic & Rasevic, 2017, pp. 48-55).
In the second quarter of 2012, Samsung sold twice as many smartphones as Apple. The Galaxy S3 was the key to Samsung’s success, selling more than 10 million smartphones in just two months. Samsung uses both the Windows operating system and Google’s android platform. While Apple exclusively supports iOS, Samsung is not constrained by these restrictions. Samsung’s market approach is successful since it continues to support a wide variety of operating systems. In comparison to Apple’s five years, Samsung sold more goods in a single year.
For the first time in 14 years, Samsung Electronics Corporation has surpassed Nokia as the largest manufacturer of mobile phones worldwide. Samsung has a strategy to dominate the smartphone market, and it is employing all available resources to accomplish it. Samsung Corporation focuses on both engineering and electronics.
Japan’s consumer electronics manufacturers are engaged in an increasingly dangerous struggle for relevance and, in some cases, survival as electronics titans Apple and Samsung compete for market supremacy through fiercely competitive product releases and tit-for-tat patent battles. The sector was once dominated by firms like Sony, Panasonic, and Sharp, which outperformed and outsold their American competitors (Kogut & Chang, 1991, pp. 401-413). However, they now stand as the most concerning sign of corporate Japan’s two-decade-long struggle with adaptation, downsizing, and innovation..
Inability to compete in the digital age of tablets and smartphones has sent consumer electronics industries into an accelerated free fall, as the Japanese economy sputters. In addition to firing workers and changing executives frequently, many companies are also seeing their stock prices fall to 10-year lows. Sharp recently announced plans to reduce its employment by over one-fifth. The businesses have also embarked on an unconventional quest for revenues, inventing everything from solar panels to medical equipment, while they are hemorrhaging money on their once-profitable televisions. Tech analysts claim that the businesses continue to produce some of the highest-quality hardware products in the world while still maintaining their well-known brand names. But they have a major issue: It has been years since they have produced goods that consumers feel they must have.
Other times, Japanese businesses simply took too long to translate cutting-edge technology into useful technology. Sony, for instance, adopted e-book technology early on but struggled to connect it with user-friendly software or a wide variety of books that were simple to download. The businesses also entirely missed the explosive growth of cellphones, with Apple and Samsung of South Korea capturing the lion’s share of the market. Even customers no longer have the desire to pay more for quality. One example is televisions, which Sharp, Sony, and Panasonic consistently rank among the best in the world. However, Korean rivals LG and Samsung have developed techniques to produce goods that are nearly as excellent but cost much less (Trapollini 2014, pp. 119-145).
According to Michael Gartenberg, an industry analyst at technology research firm Gartner, there used to be a significant gap between the best of breed and second best. Even yet, most consumers won’t be able to tell the difference between a Sony high-definition screen and an LG panel. And if the majority of customers cannot see it, it is not there. 119–145 (Trappolini 2014) Japanese businesses, Gartenberg continued, “were occupied with defending outdated business methods that the world had already abandoned.”
Since Sony didn’t turn a profit for four years, issues have become worse faster. The last three months have seen losses for Panasonic. According to Bloomberg, Samsung and Sharp together have a market value of $32 billion, which puts them one-fifth and one-twentieth the value of Apple and Samsung, respectively. Though these businesses have always been broad and created everything from microwaves to cameras, a more drastic move is now starting to take shape: they are now turning away from the consumer electronics goods that gave them their notoriety. Convergence is the process of combining these things in this way. the coming together and integration of distinct digital audio, video, and information technology markets. As a result, there is now a higher demand for consumer goods with multiple uses. It’s also crucial to remember that the revolutionary development of digital technology has helped the consumer electronics sector’s global sales rise.
Sony started converting its ideas for movies and music to digital formats. This was done to get ready for the era of broadband. Sony has already digitized a thousand films, 33,000 hours of television, over 500,000 songs, and 33,000 hours of music during the 2002 annual report. As a result, the Movielink was founded in collaboration with other film studios. In the end, Sony had plans to use these websites for online movie, game, and film downloads (Trappolini 2014, pp. 119-145). This was done primarily to gain a competitive advantage over Sony’s rivals who were vying for market dominance. In essence, this company’s entire strategy was to make sure that it integrated creativity and innovation with the then-emerging technical trends.
Finally, a sound strategy should be pursued to build a format that will continue to be dominant, as Sony did, from the standpoint of a corporation pioneering a new technology standard in a market where network effects and positive feedback loops exist. Sony created a format that quickly set the foundation for its standard, capitalizing on the favorable response to enhance its technology.
Reference
Yu, S. (1998). The growth pattern of Samsung electronics: a strategy perspective. International Studies of Management & Organization, 28(4), 57-72.
Trappolini, D. (2014). A Tale of Three Companies: The Survival Strategies of Sony, Hitachi, and Canon. In Case Studies in Asian Management (pp. 119-145). World Scientific.
Raketić, O., & Rašević, I. (2017). The comparative analysis of competitiveness between Samsung and Apple. Serbian Journal of Engineering Management, 2(2), 48-55.
Kogut, B., & Chang, S. J. (1991). Technological capabilities and Japanese foreign direct investment in the United States. The review of economics and statistics, 401-413.
Fruin, W. M. (1992). The Japanese enterprise system: competitive strategies and cooperative structures. Oxford university press.
Chang, S. J. (2011). Sony vs Samsung: The Inside Story of the Electronics Giants’ Battle For Global Supremacy. John Wiley & Sons.
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