Samsung Generic and Intensive Growth Strategies

Author- | Posted- | Updated: March 12, 2020 |

Samsung is one of the leading smartphone brands in the world. It is a South Korean electronics brand that has brought a large range of other electronic products also to the market ranging from home appliances to computer chips. Samsung is a highly innovative brand that invests a large sum each year in research and development, The company has seen enormous growth in recent years primarily driven by higher smartphone sales.  Samsung is also one of the leading competitors of Apple Inc and its Galaxy smartphone range competes with Apple’s iPhone. Samsung’s focus on product excellence and technological innovation has turned it into a globally famous brand of electronics. The company has achieved enormous popularity worldwide and sells a wide range of electronic products, smartphones and home appliances in the global market. 

This is a discussion of the generic and intensive growth strategies employed by Samsung and how they have supported its growth and market expansion worldwide.

Generic Strategies used by Samsung:

Samsung is an innovative brand and has used a mix of cost leadership and differentiation cleverly to grow market share and achieve stronger financial results. Instead of leading only on the basis of costs, it has used some elements of cost leadership alongside differentiation to reach a larger audience segment worldwide which has led to higher sales and revenue. 

Cost Leadership:

Cost leadership is the strategy of leading on the basis of lower costs. However, Samsung does not rely entirely on this strategy but uses it only to a limited extent in its business model to grow sales. It constantly focuses on innovation to achieve cost efficiency and create products that are efficient and yet competitively priced. Cost leadership is the secondary generic strategy used by Samsung and in various product segments including smartphones and home appliances, it has also brought a large range of products that are priced competitively.

The smartphone industry has grown highly competitive and there are several influential brands that are competing for market share there. To beat the competitive pressure, apart from its higher-priced Galaxy smartphones, the company has brought a large range of other smartphones that are priced affordably. Unlike Apple, which relies exclusively on its range of premium iPhones, Samsung has brought a wider mix with products in varying price ranges and catering to the different needs and preferences of a wide segment of consumers. 

Differentiation:

Innovation is one main source of competitive advantage for Samsung which is among the leading investors in research and development in the entire industry. In the smartphone industry mainly due to the overcrowding of brands, achieving differentiation has become difficult. However, Samsung and its flagship product, Galaxy smartphone stand out easily from among the crowd. In several other product categories too including televisions, the company has achieved strong differentiation through technological innovation.

While product innovation is the main source of differentiation for the company, it has also focused on marketing and promotions to build a differentiated image and create a unique identity in the market. In this way, product quality and marketing both have helped the company differentiate itself from the other brands in the market. However, the most important thing is that the level of competition in the smartphone as well as the home appliances industry has grown too high. So, companies like Samsung have to invest a large sum each year in R&D to maintain their competitive edge.

Intensive Strategies used by Samsung:

There are three intensive strategies that businesses can use to grow market share and expand their customer base in the global market. The market penetration strategy focuses on growing product sales in the existing markets through increased penetration and by achieving increased usage of the existing products through extensive marketing efforts. Market development strategy, on the other hand, focuses on growing sales by entering new markets or introducing the existing products into new geographic areas to grow the customer base and revenue. The product development strategy, on the other hand, tries to grow sales by growing the attractiveness of the product portfolio through research and development and by improving existing products or adding new ones. The brands that rely on this strategy invest large sums in research and development. It is the leading intensive strategy used by Samsung and also one of the leading reasons that the company has been able to achieve enormous success and growth globally.

Market Penetration:

This is the strategy that Samsung has employed very well to grow its customer base and achieve higher sales and profitability. The company has expanded globally and sells its products to a large base of customers in all corners of the world. The company has formed strong brand equity through a consistent focus on product quality and technological innovation as well as customer experience. Higher brand equity led to higher sales and the company benefited through growing sales in all the leading markets globally. As a seller of smartphones and home appliances, Samsung has always focused on customer experience and brand image which has led to strong customer loyalty. This helped its further growth in the later years since increased reliability led to higher penetration of existing markets.

Product Development:

Product development is the strategy of growing sales through the release of new products in the existing markets. This is a leading growth strategy followed by technology as well as home appliances and smartphone brands. Apple which is one of the leading competitors of Samsung in the smartphone segment also employs this strategy very well and keeps making improvements to its iPhone model in order to grow sales and customer loyalty. The company enjoyed its strongest performance in a quarter during the first quarter of 2020. However, to stay competitive and retain its market share Samsung has also kept growing its investment in research and development and releases new Samsung galaxy smartphone models every year to retain existing customers as well as to encourage switching. Product development is considered to be one of the most growth strategies when the smartphone market has grown highly competitive and for extra growth, companies need to focus on product quality as well as prices.

Market Development:


Market development is the growth strategy that brands employ when their level of global expansion is low. They employ this strategy to enter new markets and then through sales and distribution as well as marketing grow their sales and customer base. However, mature brands that already have a large and global sales and distribution network and which have penetrated nearly all the major markets of the globe use the first two strategies to achieve more growth. Samsung has employed this strategy in the past to grow sales globally but now it has managed to build a strong position in nearly all the leading markets of the world and strong global manufacturing, sales and distribution capabilities as well as a large and global supply chain. So, instead of market development, it relies on the first two strategies to maintain its growth momentum and grow market share.

Abhijeet Pratap

Abhijeet has been blogging on educational topics and business research since 2016. He graduated with a Hons. in English literature from BRABU and an MBA from the Asia-Pacific Institute of Management, New Delhi. He likes to blog and share his knowledge and research in business management, marketing, literature and other areas with his readers.