Samsung’s Innovation Strategy in Smart

Phones market
Farshad Madani; Mimie Abdulai; Jejung Ha; Rachanida Koosawangsri

Abstract
The Smart Phones Market has been fast evolving in terms of innovation. Samsung’s ‘Fast Follower’
innovative strategy as proved to be successful so far. However, even with higher sales in smart phones as
compared to its competitor and market leader, apple, Samsung is now competing mainly on sales rather
than innovation. In this study, we considered factors of innovation such as: innovative Strategy,
Resources for innovation, Innovation Capabilities and Processes to analysis Samsung’s current situation.
The study then looks at Samsung’s opportunity to gain Smart Phones Market innovative leadership based
on the 5G emerging technology. The same factors of innovation are analyzed based on existing gaps to
suggest ways in which Samsung can leverage its domination in the mobile industry patents as well as the
resources for innovation to gain competitive advantage and set market standards with 5G technologies.

1 Introduction
The evolution of mobile phone technology begun in 1983 when Motorola first introduced their
commercial cellular portable phones, the Motorola DynaTAC phone. [1] Mobile phones evolved over
decades from chunky designs to sleek and light weight, and from keypad to touch screen. Either Apple or
Samsung did not first introduce the idea of smartphone. Back in 1994, IBM launched their cellular
phone/PDA (Personal Digital Assistance), Simon. The claim was that Simon is the first smartphone
which had a touch LCD screen option, and also users could use wireless fax, paging and e-mails which
are similar to smartphones nowadays. [2] The following picture shows the first commercial mobile phone
from Motorola and first smartphone, Simon from IBM.

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 Figure 1: a) DynaTAC phone from Motorola (1984), b) Simon from IBM (1994), c) SH-100 from Samsung (1988)

The big players who dominate market share nowadays were obviously not the one who developed the
technology. Samsung first entered the cellphone market in 1988 with their first analog phone, SH-100. [3]
Unfortunately, their first model only sold about 100-200 units. [4] Samsung mobile started picking sales
in 2002 when the model known as pebble-like design sold 10 million units. After that, Samsung’s sales
continued to grow until 2012 when Samsung became the world largest market share in unit shipped
surpassing Nokia, one of the big competitors in mobile phone market. [5] As is evident in Figure 2 which
shows the mobile phone market share in 2012.

Figure 2: Worldwide Mobile Phone Market Share by Vendor in 2012 [5]

1.1 Background
Before Samsung established their company in mobile phone industry, the founder, Lee-Byung-Chull
started the business as a small export company within Korea in 1938 and was originally called Samsung
Sanhoe. Then, in late 1960s, Samsung decided to join the electronic industry. [6] After that, the company

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became a pioneer in digital era from 2000-2010, which was also the time of revolutionary change.
Samsung responded well to this need in technology with competitive products and price. Nowadays,
Samsung does not only have businesses in electronic. Samsung expansion can be seen in other industries
such as information, healthcare and biotech, environment energy, and convenience and comfort. [7]

1.2 Mission & Vision

The company mission is “To enrich people’s lives and social responsibilities, to contribute to sustainable
future innovative technologies, product, and the aspiration for the design inspiration for the future society.
“ This mission is related to their vision that is “Inspired the World, Create the Future.” It is the company’s
belief that aligning their business with the company’s vision and mission can help Samsung survive in the
market, maintain the market share, and become a top five brands of the world by 2020. [7]

1.3 Business Culture

Company culture is very important in terms of innovation driver because it helps shape up the productive
community within the organization. Moreover, business culture is also powerful to the company because
it creates a behavior pattern inside the companies. [8] Samsung has a strong culture in their organization
because in order to become an innovative company and world leader, their employees need to have the
same understanding about their business and also business direction. Some of the business cultures that
make Samsung a pioneer in the technology era are:

- The company has their own institution, Changjo Kwan to shape their employees’
understanding about their business.

- Only the CEO who has the power to control the company’s direction.

- Becoming the supplier before going into business.

- Creating costly barriers by investing massive money in plants and technology to limit the
competition.

- Trying everything to capture various market types by producing at different sizes,

specifications, and models and selling at different prices.

These business cultures not only make Samsung a market leader, but they also teach lessons in struggle
and success. One of the lessons thought is that after the company’s world tour, Lee-Byung-Chull noticed
that their product sales had not met the expectation because the sale representative did not pay attention to
their brand. Thus, the founder, Lee, called all his executives and had a meeting in Frankfurt, Germany.
This meeting became the most importing event in Samsung business because the principal book of the
New Management had occurred during the meeting as known as “The Frankfurt Declaration of 1993.”

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After establishing the company’s New Management book, Lee traveled throughout the world to give a
lecture to his employees, which had a central slogan, that, “Fostering the individual “and “Change begins
with me.” Moreover, Quality Management becomes the most important idea for their production part
because one of the stories shows that Samsung’s executives would not be reluctant to burn all phones they
thought were not good enough to commercialize. [9]

1.4 IM Division
In 2012, Samsung Electronics launched an exhaustive program of organizational reform. As a top priority
of the organizational reform, Samsung refined management structures in each business area to optimize
capabilities throughout the entire company. Samsung’s new organizational structure reflects the
company’s refocused emphasis on three key business sectors: Consumer Electronics (CE), IT & Mobile
Communications (IM), and Device Solutions (DS).

CE division includes visual display business (UHD, Smart TV, AV system), digital appliances business
(refrigerator, washer, air conditioner), printing solutions business (printer), health & medical equipment
business (digital X-ray, ultra sound diagnostics). IM division is mainly divided into 3 business area such
as mobile communication business (smart phone, tablet pc, computer), network business (3G, LTE
network infrastructure system), digital imaging business (digital camera). DS division takes charge of
semiconductor business (memory, system LSI) including LED business. [10]

Figure 3: Samsung Organization Chart [10]

This study focuses more in the IT & Mobile Communication (IM) because this is a very important
division that is evolving very fast with many innovations in only the past decade. Also, the IM division
produces huge revenue for Samsung that translate in being a market leader. Additionally, the smartphone
market has a stronger growth over the past few years after Apple came to the market in 2007. Both

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Samsung and Apple together accounted almost half of the market share in the third quarter of 2013.
Below is the IM contribution in revenue to Samsung. [11]

Figure 4: Samsung Revenue by Segment [12]

Another point that make IM division more interesting is that in this division Samsung’ success has been
built on ‘fast follower’ strategy for design and manufacturing. The idea of fast follower is not try to be a
technology leader, or come up with radical innovation product, but to be ready to change when the market
demands. [13]

As mentioned earlier, Samsung will learn the business from others before starting to compete in that area.
They also create huge barriers to protect their business. Even after they become the market leader,
Samsung is continually learning from their competitors to improve their product and technology.
Moreover, Samsung will produce their product quicker and with more variety in terms of design, features
and prices to capture the market demand faster and better than their competition.

In the beginning of feature phone business, Samsung used to follow the low-end market leader, which
was Nokia. Samsung tried to keep the trend by differentiating its products with design, function, and
feature. In 20120, Samsung exceeded Nokia to become a market leader while Nokia struggled to convert
their portfolio to smartphone market. Samsung did not only follow the market leader. The company also
looked at market environment and other competitors. Thus, while Nokia had a problem, Samsung started
to catch up in another areas such as the smartphone market.

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 Figure 5: Worldwide Smartphone Sales to End Users [14]

2 Literature Review
About how Samsung manages innovation, several studies have been published. Song and et al [15] have
explored the trajectory events in innovation of Galaxy of Samsung and iPhone of Apple. They measured
the degree of innovativeness of products and services, and figured out trajectory of innovation of iPhone
is steeper than that of Galaxy; the innovativeness of both are the same; product innovation is as effective
as service innovation. Also they discussed that Apple has taken ‘technology innovation’ strategy while
Samsung follows ‘marketing innovation’ strategy meaning Apple has few model of iPhone and makes its
own operating systems as well as hardware when as Samsung offers a wide range of prices and
specifications in various smart phones. Cho and et al [16] discuss that companies like Samsung must
change their innovation strategy to get ready for ‘smart era’ when high speed mobile telecommunication
is available. They focused on operating systems, device, and telecommunication services by applying a
dynamic network model. They revealed companies need to establish industrial platforms to have high
productive and healthy ecosystem.

Hong [17] has introduced five modes for combinative innovation. The modes are dynamic combination
mode, open combination mode, vertical combination mode, functional combination mode, and multiple
combination mode. At the end, based on analyzing Samsung’s case, he concluded dynamic and functional
modes are more important for architectural innovation. In another research, Xie and Liang [18] have
applied Enterprise Innovation Index framework for four companies: Samsung, Apple, Xiaomi, and Nokia,
and generated a scorecard. They have shown that each company is leader in different segments in terms of
innovation. Samsung is leader in ‘mass market’, Apple in ‘high-end’, and Xiaomi in ‘middle-end’.

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Emerald Publishing has published a view point article [19] discussing how Samsung has been ahead in
innovation by 2006.

3 Methodology
As mentioned before, the main purpose of this research is realizing how Samsung can change its
innovation strategy from ‘fast follower’ to ‘leadership’ for the next era of communication systems, 5G
technology. To do so, ‘gap analysis’ is considered as the main method to analyze Samsung’s current
situation and Samsung’s ideal situation, be leader in 5G era. To organize the data and analyses, a simple
model [20] illustrated in Error! Reference source not found., is applied. The model contains four
components involved in innovation strategy:

- Strategy: it comprises current accepted strategy including ‘targets’, existing innovation efforts,
end the environment where the strategy must be implemented.
- Resource: refers to all available preferential and secured assets of a firm to be innovative.
- Capabilities: guide and enable the resources to be assessed, configured and reconfigured.
- Processes: means all innovation processes used to have the outcomes.

Based on the model, innovation strategy means how a company develops and deploys the resources,
capabilities, and processes to meet the corporate objectives.

Innovation
Strategy

Innovation
Innovative
Process
Capabilities

Resources for
innovation

Figure 6: Model of Innovation Strategy [20]

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To realize Samsung’s future innovation strategy to transit from ‘follower’ to be ‘leadership’ in 5g
technologies era, in the next sections, the gap analyses are fulfilled for strategy, resources, capabilities,
and processes.

4 Innovation Strategy Analysis

4.1 Innovative Strategy

Samsung’s IM division is part of its DMC, Digital Media and Communications unit. This division
contains various products such as the 3G phone and smart phone, telecommunications systems, printers
and computers. [21]

Recent and continuing economic recession has forced the global IT industry to undergo major change. As
consequences, Samsung is strengthening its soft power capacity by merging with promising new
businesses and proactively nurturing new businesses to become the new leader of the IT industry. This is
a move in a positive direction by Samsung as the company has already established its excellence in
hardware manufacturing. [21]

Samsung’s need to continually innovate in the IM division is often seen in the risk the company takes by
launching products which have an initial luke-warm to not so good reviews in the technical world. An
example of such innovativeness is the phablet Galaxy Note. This product can be seen as a mutation
between a smartphone and a tablet but not quite either one. At the 2012 product launch, the phablet sold
more than 10million units making it one of the most successful smartphone launches in history. [22] That
success was followed by the Galaxy Note II, which sold 5 million units at its fall 2012 launch.

Samsung’s strategic management revolves around creativity, partnership and talent. The same strategy is
applied throughout all the company’s divisions including the smart phones devices. Samsung opts to
diversify its portfolio in order to keep innovating and creating products that reflects customers’ needs.
Samsung is what is referred to as a market reader. Samsung’s has established itself as the fast follower to
apple when mobile devices are concerned. Samsung waits for the market to be established and go for it
aggressively. [22]

Samsung wants to inspire the world and create a sustainable environment for a better future. The
company listens to its customers and one thing that is loud coming from customers is the concern for the
environment. Samsung’s innovation strategy for the future includes creating the Eco-Management 2013
plan. This plan is to reduce greenhouse gas emissions from manufacturing facilities by 50% and reduce
indirect greenhouse gas emissions from all products by 84 million tons over 5 years. [23]

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Samsung’s executive vice president Kim Hyun-suk stated that the company‘s intent is not to drive the
market, but to get ideas from the market. The statement may sounds like the company does not innovate.
Far from the statement being real. Samsung is a huge risk taker even when choosing to let the market lead
the company. Products such as the Galaxy camera and Galaxy note which created two new products
categories; the connected camera and the phablet. [24] The company strategic vision also involves hiring
the best talent available. The company employs great people who have passion for excellence and an
unfaltering commitment to develop the best products and services on the market. The company belief is
that change is constant and innovation is critical to a company’s survival. Long term success in the future
consists in anticipating market needs and demands. [25] According to Forbes, what makes Samsung such
an innovative company is the use of the TRIZ also known as TRIPS method for patent strategies. The
method is employed to obtain competitive patent strategies, strengthening your own patent and
development of other patent claims. [26] Another strategy Samsung uses in the smart phones is based on
securing patents through partnership. Samsung allies itself with the best players in the market. Partners
in cross license partnerships including such well-established and renowned companies such as Toshiba,
Qualcomm, Kodak, IBM and Microsoft. [27]

4.2 Innovative Capabilities

The competitive Supply chain
Samsung is unusual among mobile manufacturers in that it tends to use its own hardware components to
produce its handsets, rather than sourcing them from third parties, as it actually has the resources to
achieve this. Approximately 70% of the major components used in Samsung Electronics smartphones
come from in-house production. Samsung is so much more than a smartphone-maker. It is a
conglomerate, a manufacturer, and the world's largest chip-maker. It makes many of the components that
go into its smartphones giving it a cost advantage and allowing it to be much more flexible in terms of
what it produces and when. This table from JP Morgan makes it clear how much Samsung produces on its
own. [28] The company’s supply chain is a combination of outsourcing and in-house production – a
major difference from its main competitor, Apple which relies entirely on contract manufacturers.
Samsung has indicated its approach as a competitive advantage for the company. Samsung manufactures
more than 90% of our products internally and only relies on contractors for peripheral products such as
components, feature phones and handset cases.

Samsung believes this approach allows it to adapt quickly to changing market conditions. Industry
analysts cite Samsung’s vertical integration as a competitive advantage for the company. It designs and
manufactures four of the most valuable components in handsets: application processors, DRAM, NAND
flash and displays – which together constitute about two-thirds of a phone’s bill of materials. [29] Apple,

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on the other hand, though it has a diverse, well-managed, and futuristic supply chain, relies on external
partners, which can lead to delays and difficulties. [28]

Samsung believes this approach allows it to adapt quickly to changing market conditions. industry
analysts cite Samsung’s vertical integration as a competitive advantage for the company. It designs and
manufactures four of the most valuable components in handsets: application processors, DRAM, NAND
flash and displays – which together constitute about two-thirds of a phone’s bill of materials. [29] Apple,
on the other hand, though it has a diverse, well-managed, and futuristic supply chain, relies on external
partners, which can lead to delays and difficulties. [28]

The rigid relationship with mobile carrier from feature phone

Samsung also has a huge advantage in distribution. Especially, Samsung already had relationships with
wireless carriers. It’s exceedingly hard to get your product in people’s hands without the help of carriers.
They become your marketing assistant, your sales force, and your customer-support division. Samsung
already had relationships with more than 500 carriers around the world. It says that Going from feature
phones to smartphones was a flip of the switch for them.

Leadership of Top management

There was ordered from top management in March 2010 to develop the smart phone to compete with I-
phone. Samsung concentrated on their all resource to release the Galaxy S with same day of I-Phone 4.

They hired s/w experts by 2 times comparing last year and the R&D investment used to develop the
Galaxy S. [30]

Forecasting the market transforming

The company moved aggressively into smartphones, throwing away the lower-margin feature phones to
which other manufacturers (such as Nokia) held on to support their business. “Samsung could see that this
is where the market was heading”

Vertical integration
Another major part of the success of Samsung can be explained through their vertical integration.
Samsung possesses the capability to manufacture most products in-house, which enables them to react to
market changes with more speed than other manufacturers. For instance Samsung fabricates their own
LCD-screens, has its own memory-plants and semi-conductor plants and fabricates its own camera-
sensors.

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Another major part of the success of Samsung can be explained through their vertical integration.
Samsung possesses the capability to manufacture most products in-house, which enables them to react to
market changes with more speed than other manufacturers. For instance Samsung fabricates their own
LCD-screens, has its own memory-plants and semi-conductor plants and fabricates its own camera-
sensors.

4.3 Resources for Innovation

Operations of Overseas Research Centers:

Samsung is innovating all around the globe with various R&D, Research Centers and partnerships labs.
These resources allow the company to maintain is fast follower track and keep introducing new and
revolutionary products to customers in a fast and effective manner. [31]

Participation in global consortiums:

With such innovative ideas as the Car connectivity Consortium, Samsung is partnered with automotive
companies such as Daimler, GM, Honda, Hyundai, Toyota, and VW to drive "global innovation for in-
vehicle connectivity, “This alliance provides Samsung customers with in-vehicle connectivity solutions in
standards such as Terminal Mode, NFC and more. People want to use their smartphones everywhere
including in their cars. Samsung expects that the smartphone will be the dominant hub for in-vehicle
infotainment and connectivity. [31]

Mobile Technology Patents:

In the mobile market, patents are used for competitive advantage. Samsung is well known as a giant in
the mobile phones market thanks to its well established innovative reputation. This is greatly due to the
number of mobile patents the company holds in comparison the other big names in the market. Samsung
has held on to its dominance in the number of patents since 2012 and the prediction is that the company
will remain as near the top if not even the top company in mobile patents even with the rise of patents
outputs coming out of competitors from China. [32]

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 Figure 7: Samsung Leader in Mobile Technology Patents [32]

Figure 8: Overall Mobile Patents (1996-2013) [32]

The numbers indicate either ascending to a place by the number or descending to a place by a number
based on the positive or negative sign respectively.

4.4 Innovation Processes

Samsung has been behind apple in terms of profit even though Samsung is on the top position in smart
phone sales. This result comes from the fact that Samsung has been targeting on market share, not sales
margin. This basic concept allows Samsung to adopt the marketing strategy such as low pricing and
multiple devices.

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 Figure 9: Apple Outpaces Samsung in Terms of Profitability [33]

The company produces quickly, coming out with a variety of devices. It sees what the market responds to,
pushes successes, and kills failures. It is differentiated itself with larger screens, different features,
successful marketing, and delivering what consumers want. The Note is a perfect example. The company
found through market research that Asian-language speakers in particular wanted a device that they could
hand-write on, because drawing characters is easier with a pen. The result was a combination phone/tablet
("phablet") that's been an unexpected hit.

5 Samsung’s opportunity for Innovation with 5G technology

Based on the assessment of Samsung current standing when it comes to innovative capabilities, resources,
processes and strategy, it is clear that the company is fighting for competitive advantage in an already
saturated market. Granted, the fast follower strategy has done well for Samsung and from a fast glance,
this strategy has done well for Samsung as the company is the number one in sales for smartphones,
surpassing the market leader Apple. However, due to the fact that the smartphone industry is a fast
moving industry and competitive advantage can be achieved by strategically utilizing acquired patents
and first to arrive to market strategy. The SNS (Signals and Systems Telecom) Research latest report
shows Samsung as soon becoming a tier 1 LTE infrastructure vendor by 2017. Samsung already secured

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many LTE infrastructure deals in its base South Korea as well as in Japan and the US. There is an
emerging 5G ecosystem that will bring with it key market drivers, challenges, operator revenue potential,
infrastructure/device deployment commitments, future roadmap, value chain, vendor market share and
strategies. [34]

In May 2013, Samsung announced that it had produced a prototype a new wireless technology that could
transmit data far faster. This is the technology for 5G. This technology is supposed to deliver error-free
data at 256 megabits per second, reaching a rate of 512 megabits per second with negligible errors. This
compares to the theoretical maximum of about 75 megabits per second that current 4G LTE technology
can provide. It is said that Samsung technology relies on 28-gigahertz frequencies, known as “millimeter
wave”, which are roughly an order of magnitude higher than the cellular frequencies used today and thus
can carry commensurately more data. [35] Therefore, if Samsung wants to go from a strong fast follower
to the market leader, the company needs to utilize its patents to influence the next wave of standards
beyond the 4G LTE.

Here is our analysis of where the innovative capabilities, processes and resources need to be in order for
Samsung to achieve leadership with 5G technologies.

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5.1 Innovative Strategy with 5G Technology

Figure 10: Study Assessment of Innovative Strategy with 5G Technologies

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5.2 5G Technological Core Competencies

Application
Processors

Operating 5G Patents
Systems
Technologies

Alliance
with 3’rd
party

Figure 11: Samsung Innovative Strategy for Competitive Advantages with 5G Technologies

5.3 Strategy Gap Analysis with 5G Technology

With 5G, Samsung can: Develop their own operating systems, application processors as well as decrease
dependence on Google Android (OS) and Qualcomm (AP). Samsung can also forge strong alliances with
global 3’rd parties in technology standards and commercialization. Most important, Samsung can
effectively and with calculated risk, leverage its patents to secure m market leadership in 5G Technology.

Table 1: Strategy Gap Analysis with 5G Technology

Current Ideal Gap Recommendation

Fast Follower Innovator OS: 98% Develop their own

operating systems,
(OS of Samsung’s (World’s First 5G mm AP: 50% application processors
smart phones are Wave Mobile
Android, and Technology) Decreasing dependency
application processors to Google Android
(4G technology) are -Having 50% of owned (OS) and Qualcomm
applied by Qualcomm) OS on Samsung smart (AP)
phones

-Having 100% of
owned AP on Samsung
smart phones

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5.4 Capabilities Gap Analysis with 5G Technology
Table 2: Capabilities Gap Analysis with 5G Technology

Current Ideal Gap Recommendation

Competitive Supply Built and leverage a There is no 5G Securing access to

Chain strong in house established carriers. capital and redirecting
production at the same assets and
Currently does 70% in- time, forge strong reconfiguring strategy
house production of its relationships with to achieve 100%
most valuable handset external suppliers, customer satisfaction
components. Has complementors and and maintain strong
strong relationships customers. Achieve relationship with
with more than 500 100% in-house with partners, suppliers and
carriers 5G. complementors

Forecasting the Being Innovator in No existing standards Be the innovator with

market market transformation for 5G technology both the OS and Design
forecasting with 5G by taking calculated
Forecasts markets to technology risks and investing in
maintain “fast human and
follower” position. technological talents.
This will lead to market
dominance

Leadership & Top In 5G, search for new Market does not exist Create market and set
management market. Differentiate standards by being first
from competitors. arriving.
Samsung’s phones
compete with I-phone

5.5 Resources Gap Analysis with 5G Technology

As mentioned before, three main resources of innovation are considered in this research: 1) research
centers and R&D people, 2) Consortia, and 3) patents. In continue, gap analysis is applied to specify how
Samsung must transform its innovation strategy to be leader in 5G era.

However, Samsung has globally huge research resources including 40’000 researchers and 26 research
centers scattered in 11 countries [36] many governments such as UK, China, and European Commission
and competitors such as Telefonica and Fujitsu laboratories have started promotion plans and investments
in 5G technology. On the other hand, Samsung has planned to accelerate the research into 5G
technologies to be able commercialize it by 2020. Since 5G technologies is an integrated system,

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Samsung needs to build its own infrastructure and develop solutions including devices and services.
Given this ambitious goal and condensed competition, Samsung needs to inject more money to the
research centers to be equipped to the related researchers and facilities. Among current research centers,
SISA, DTL, SERI, and BST are candidates to develop the technology.

Nonetheless, Samsung’s main strategy is to be leader at 5G epoch; it is not wise to take all costs and risks
of R&D investments. Consortia have been one of most common methods that companies collaborate in
R&D activities. Currently, Samsung has commenced this way by participating in 5GIC collaborative
project with the University of Surrey and participating companies. [37] It is not only applicable for
research in hardware infrastructure, but also for developing software operating systems and other
solutions.

Patents can play a main role for emerging technologies like 5G. The sooner Samsung files the patents, the
sooner hinder competitors to enter in the market, and the sooner Samsung build the standard of the
industry. The last one makes potentially technology leader or at least one of the leaders in 5G
technologies.

The summary of resource gap analysis is illustrated in the table below.

Table 3: Resource Gap Analysis with 5G Technology

Current Ideal Gap Recommendation

Research Centers & Developing core Huge R&D resources Align R&D plans of
R&D people technologies by in- needed to SISA, DTL, SERI, and
house R&D commercialize 5G BST centers to support
Globally, Samsung has technology prototypes 5G development
just over 40,000 people
working in research Invest to hire and train
and development. Its related researchers for
huge R&D network the centers
currently comprises 26
centers across 11
countries throughout
the world.

Consortia Be the leader and create Developing stage Participate with OS

consortia to share the providers and third-
Participating in 5 risk and cost party companies to
Consortia (no one is develop applications
related to 5G
Produce APs

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technologies) independently (no
participation)

Patents Protect all main No standard for 5G File patents more

technological aspects of aggressively for 5G
Few patents are filed 5G to hinder other main Inadequate patents filed core technologies by
for 5G technology. competitors to enter to 2020
5G market

5.6 Processes Gap Analysis with 5G Technology

Table 4: Process Gap Analysis with 5G Technology

Current Ideal Gap Recommendation

Lower margin than Same profit margin 20% Expanding market area
apple with Apple such as IoT (Internet of
Things)

Keeping brand loyalty

in high end products

6 Conclusion
Our analysis concluded that the smartphone market is currently saturated with products offerings similar
technology. The market is in need of a new technology to disruptive the current situation. With 5G,
Samsung is currently in the lead among companies which can be game changer and market leaders to a
new wave of technological innovation. In order to become the market leader in the emerging 5G
technology, Samsung needs to take a more proactive view which can propel the company to be the “first
entrant” into the new market and get competitiveness. Although the “fast follower” approach still serves
well the company and might even be part of the company strategy, in innovation, every company holding
many important R&D patents can become a market leader if they apply an effective innovative strategy.
We believe that 5G can offer Samsung the opportunity to become a market leader and Samsung should
take the necessary and calculated risks if the company wants to set the industry standards instead of
following another company’s standards.

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7 Recommendation
Given gap analyses for innovation strategy, capabilities, resources, and processes, all recommendation
are accumulated in the table below. Since all recommendations are already discussed in previous
‘innovation strategy analysis’ section, it is avoided to repeat them.

Table 5: Recommendation for Samsung's 5G Technology

Aspects Recommendations

Strategy - Develop their own operating systems, application processors

- Decreasing dependency to Google android(OS) and Qualcomm (AP)

Resources - Align R&D plans of SISA, DTL, SERI, and BST centers to support 5G
development

- Invest to hire and train related researchers for the centers

- Participate with OS providers and third-party companies to develop

applications

- Produce APs independently (no participation)

- File patents more aggressively for 5G core technologies by 2020

Capabilities - Develop their own operating systems, application processors

- Decreasing dependency to Google android(OS) and Qualcomm(AP)

Processes - Expanding market area such as IoT (Internet of Things)

- Keeping brand loyalty in high end products

8 Limitations
Our study was limited only to analyzing information regarding Samsung. The findings in this paper only
focused in smart phones and smart phones technologies. Time was a constraint as this study was limited
to 7 weeks for its completion. All information in this study was obtained via the World Wide Web.
Mostly from Samsung’s website.

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9 Future Work
Future studies about this topic or similar should expand into the entire Samsung’s smart devices divisions.
We suggest a more in-depth evaluation of the innovation strategy in smart devices should be conducted to
reach a much complete conclusion. Study time should expand to months in order to get more data and
perform a more in-depth analysis.

10 References

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[3] Tomorow Work, "History of Samsung Mobile Phones: Evolution of Display," Samsung Tomorow,
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