Tuesday, October 11, 2011

Samsung, LG Take Aim at Whirlpool with Smart Appliances

Samsung Electronics and LG Electronics have an expertise in producing cell phones, televisions, and computers, and they are now planning to use this expertise to develop “computer-like household appliances.” Samsung plans making home appliances able to be controlled with new technology on these devices. These home appliances will be able to be turned on and off, connect with repair staff, display recipes, or even play music. Samsung also is in the works of making applications that could control these appliances using smart phones. This new technology can be very beneficial to customers throughout the world.

Samsungs shift towards expanding their work with appliances makes sense since their appliance sales have become one of the fastest growing brands in its market. Samsungs sales have increase steadily in the past few years, and with this new product, they will generate even more revenue in the future. This new innovation will make it a lot easier for people to manage their household appliances. They will no longer need to run to a cookbook when looking for a new recipe because they can simply download new recipes at the stove. This is just one example of how beneficial these new products can potentially be.

Differentiation is selling or offering a product that is unique from other products. The appliance market has not had applications that can do the things that Samsungs appliances plan to do. Later this month Samsung is releasing an Internet refrigerator in Korea that will allow people to purchase groceries right from their fridge. People always come home from the supermarket realizing they forgot a few items and now they won’t even need to leave their homes to purchase them. This product is the first of its kind and I think it will be a popular product. The downside to this product will most definitely be its cost.

The development of these new computer-like appliances is an above-the-line strategy. This means that the strategy is to increase revenues, which in this case will happen through gaining new customers. By Samsung shifting its focus towards household appliances it will gain numerous customers with new innovative products. The new products will increase the company’s revenue. Samsungs strategy in the future may shift to a below-the-line strategy as other companies begin developing similar products to compete. A below-the-line strategy aims toward minimizing expenses, and can be achieved when the company can perfect the production of its products.

One problem that Samsung will run into is competing with another appliance making company; LG. LG’s sales have also risen in the past couple of years with their new innovative washers. I still think that Samsung will gain the competitive advantage over LG and all the other companies In the appliance market because their technology offers a brand new addition to appliances that people have never seen before. "We have tremendous capabilities in computers, mobile phones," Jame Politeski, Vice-President of Samung says. "It's a strong advantage."



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