Redefining a Band

1. Redefining a Band Group Members: Dito Abuladze David Gelashvili Levan Losaberidze Levan Lomtadze Tea Mandjavidze Tako Khucishvili

2. 1) Why has the Samsung brand increased in value more quickly than other electronic brands? Samsung’s emergence as a leading global consumer brand was regarded as one of the great success stories of the past decade. Samsung had been name the world’s fastest growing brand during last two years. 1st Question

3. During that period , the estimated value of Samsung brand had risen from 6.37$ billion to 14.3$ billion. As we know from the case a major factor behind this impressive growth had been Samsung's efforts to redefine itself as a vendor of cutting edge. 1st Question

4. Of course such growth is can provoke several problems associated with a company's structure and management. But we know that company has one of the best decision making process and we think that such advantage is vital in electronic industry, the clear example of it is Motorola needs about 12-18 month to change product line when Samsung do this in 9 month. 1st Question

5. The first resume of the question would be that structure and decision making system is one of the key success factor by which company achieved such success. 1st Question

6. Another success factor we think is that Samsung had introduced a serious of innovative consumer offerings that were world’s first, including a mobile telephone handset with voice activated dialing, an internet enabled handset, a wireless telephone that incorporated an MP3 player, a wireless telephone with a built in global positioning system and a fully integrated PDA mobile telephone device. 1st Question

7. So, the resume of this answer would be that company several times achieved first mover advantage, which we think is one of the important factor in electronic industry, which in the future made leading company in industry. 1st Question

8. 2) Why has SONY became such a successful brand? Can Samsung realistically expect to compete with SONY? Of course there is no match between Sony and Samsung. Sony is really leader of the industry more than two decade. But we must admit that Sony is the leader in the different segment, particularly in premium segment. And the Samsung is the leader in medium segment. Of course the size of medium segment is big, but the profit margin in premium segment is big. 2nd Question

9. So if we match companies revenues, Sony’s is on the first place. But, if Samsung manages in the future enter premium segment and launch premium quality product, than there is a serious chance to achieve success. Of course, changing brand segment and brand image is associated with the serious marketing and structural changes, which needs funds and professional employees. If you began change strategy and make first step, than there wouldn’t be way to go back. In business history there are many examples not only failure of changing brand image, but also companies, which cancelled changing strategy because of fund limit. 2nd Question

10. If Samsung manage to change segment and brand image, than Sony would face in the future serious competitor. We think Samsung has quite big chance to achieve, because it has perfect structure and team. As we know from the case company increase marketing budget with 35%, we think as the first step this is quite good beginning. 2nd Question

11. 3) What specific actions, if any should be take to build the brand? In this case, we think that Samsung isn’t building the brand. They already create it. In this case we are talking about changing brand image and segment. And We think these are different cases. There are several steps in Re branding. The first steps are preparation. Management and company should clearly understand what they are going to do, because, they are not only face serious problems from investment and structural change, but also they can lose many customers. 3rd Question

12. As we mentioned there are many examples of failures in the business industry. One of the examples are Kodak brand image change, when they failed to enter medium segment. They not only face failure in the new segment, but lost many customers from the premium segment. Similar situation is in the Samsung Case. So, company should clearly understand and decide what they are going to do. Changing strategy not only need funds and investment, but also tough managers and leaders. It the preparation step company also should count what it would cost such brand image change. To count this amount of money, we are sure that it is very difficult. It includes not only marketing and advertising budget increase but also product line and quality change. So if Samsung has all of this, than they have serious chance to achieve success. 3rd Question

13. 4) What are the short term costs associated with your plan, be sure to consider both financial and non financial cost? Partly we have already answered this question. As mentioned, changing strategy need serious investment not only in marketing, but also in production. To count the amount of such investment is quite difficult. As we know from the case, the first step investment is about 400million. And all this amount would go in marketing. We think that this is only 25-30% of total investment. Also, we must admit that the process would take several years. There are many examples of such cases, and we can say that in Samsung case, changing strategy would take 3-4 years. 4th Question