Smart TVs: Competitive Advantage and Security Issues

The report highlights the benefits of Smart TVs, which combine traditional television features with internet connectivity and interactive media capabilities. It also discusses the competitive advantage of Smart TV manufacturers, who are adopting cost leadership and differentiation strategies to gain market share. However, the report also raises concerns about privacy and security issues in Smart TVs, including the potential for personal data to be leaked to third-party agents through voice recognition systems. Furthermore, it notes that security flaws in some Smart TVs can allow hackers to track users' demographic information.

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Title: Smart Televisions
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Table of Contents
Part A: Introduction.........................................................................................................................3
Part B: Porter’s competitive forces and generic strategies..............................................................3
Part C: Choosing best apps for smart TVs.......................................................................................5
Part D: Discussion regarding privacy of Smart TVs.......................................................................6
Part E: Security issues in Smart TV and data sharing issue............................................................6
Part F: Summary of report...............................................................................................................7
Reference List..................................................................................................................................8

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Part A: Introduction
Smart TV is a hybrid TV that is integrated with a traditional television set with an internet
connection. This interactive multimedia set has features of Web 2.0 and it can be described as
convergence between computers and flat screen television. Smart TV has television features with
set top boxes along with additional features of interactive media, internet and OTT (Over-the-top
content) (Lee et al. 2013). Smart TV gives the features of home networking access and streaming
media. Smart gives the added benefit that it has no traditional remote as it can be connected to a
tablet or mobile app. Through mobile, TV's sound, channel, menus can be changed. Smart TV
comes with apps where users can watch videos, stream movies and social media network. Smart
TV is light in weight and it can easily be installed on the wall.
This report will highlight the competitive advantage of Smart TV as well as the security
issues regarding this.
Part B: Porter’s competitive forces and generic strategies
1. Porter’s five forces
In the Smart TV market, three major players are Lenovo, Dell and HP as these three take up
almost 50% market share.
Bargaining power of customers: In Smart TV market, the bargaining power of the customers' is
low as in grabbing the new technology; customers are willing to pay extra money. However, if
other companies offer service quality, extra features on the same price, then customers' power
can increase.

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Bargaining power of suppliers: In case the manufacturers of Smart TV do not manufacture the
materials, they need to take help of suppliers from Asia Pacific countries like China, Taiwan and
Japan (Shin et al. 2014). These suppliers do not drive up the prices of the products, hence this
force is moderate.
The threat of new entrants: Barriers of a new entry in the market is high as new electronic
companies are entering the market of home entertainment accessories. The new invention is
constantly updating the Smart TV and in case of major changes in technology, a new entry can
increase in the market.
Rivals: Market rivalry is high as the competitors can be Lenovo, Asus, HP, Dell, Samsung and
others.
Substitutes: Substitutes forces are high as other companies are doing constant research to enter
the market with new technology and products. Customers can replace Smart TV with some new
technology. In case, the customer cannot purchase Smart TV, they can purchase similar products
of laptop, PC or laptop.
2. Porter’s generic strategies
A company's profitability depends on the industry's other major players decision. Generic
strategies are important for firm's sustainable competitive advantage. There are two types of
strategies that a firm can take, such as low-cost strategy and differentiation strategy.
Cost leadership: Manufacturers of Smart TV can manufacture the products in large quantity as
this strategy will help to lower the price. The firm can take the average price, if Smart TV
already exists in order to gather more profit. In case. The maker of Smart TV wants market

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share, they can take the strategy of low-pricing (minimum profit margin). In case the market is
mature, the price of the product would decline. Cost leadership strategy has strength in accessing
the capital investment in an industry as production assets. Efficient manufacturing of Smart TV
with adding additional features can bring market share. Moreover, an organisation can give
Smart TV in an economical way that enables the firm to be profitable in long run.
Differentiation: As stated by Addo et al. (2014), the organisations try to be unique by products
features that would be valued by the customers. In Smart TV, the organisations can focus on
features, quality, designs and technologies; however, the price is not a factor in this scenario.
Loyal customers can pay a high price if the product is premium quality.
Part C: Choosing best apps for smart TVs
For buying a Smart TV, customers can focus on the picture quality of the Smart TV, big
screen and apps features. Some of the manufacturers of Smart TV give enabled smart apps and
customers can download others if they want through the internet. In order to buy a Smart TV,
simply ignore the most of the specifications eventually help the customers and bigger screen
(best picture quality) is best for Smart TV as it supports most of the apps. Now TVs are coming
with HDR quality with 4K resolution. Moreover, UHD (Ultra High Definition) Smart TVs give
more pixels that attract the customers (Sicari et al. 2015). In accessing the apps, manufacturers
must release it on Google Play or iTunes. TV developer must have this app which one finding by
customers. Users can find the apps on Google store and they can install these on TV. Some of the
best apps are iPlayer, All 4, VUDU, HBO Go, Spotify and You Tube.

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Part D: Discussion regarding privacy of Smart TVs
Most of the Smart TV developers concerns about the privacy features of Smart TV as
most of Smart TV have new technologies which are not secured. Smart TV can record the data
and transmit to the third party. The third party can generate the history and data of the users. In
this regard, Samsung Smart TV comes with new voice recognition technology that collects the
information from the users and sends to the third party. As stated by Lee et al. (2014), digital
spying is the new concept that arises with the new Smart TV technologies. Samsung's voice
commands are transmitting to the third party and it breaks the rule of the global privacy policy.
Moreover, developers are trying to update the firmware in stopping the data transfer to the third
party.
Part E: Security issues in Smart TV and data sharing issue
In today’s world, it is estimated that 13.4 billion people use the internet connection
through mobiles, tablets, broadband or other appliances. Security issues can occur in any internet
connected system and Smart TV is not out of this. Avast declared that Vizio Smart TV enabling
root access to Smart TV’s underlying Linux operating system. Through USB device, the Smart
TV’s SSID value can be exploited (Addo et al. 2014). Knowing this flaw, hackers can attack any
home appliances. This flaw is able to track the users in second-by-second basis and provide
demographic details of the users.
Part F: Summary of report
In this report, benefits of Smart TV have been described with features. Big screen Smart TV
with high resolution gives benefits to access the apps. These apps entertain the users as Smart
TVs have multimedia access with an internet connection. In the market, competition is there for

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Smart TV and major players are trying to grab the market with cost leadership and differentiation
strategy. Moreover, Smart TVs can leak personal data to the third party agents through voice
recognition system; privacy of the users may get leaked. In addition, security issues are there
also as demographic data of the users can be tracked by hackers.

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Reference List
Addo, I.D., Ahamed, S.I., Yau, S.S. and Buduru, A., 2014, June. A reference architecture for
improving security and privacy in Internet of Things applications. In Mobile Services (MS), 2014
IEEE International Conference on. 2(1), pp.108-115.
Lee, S.H., Sohn, M.K., Kim, D.J., Kim, B. and Kim, H., 2013, January. Smart TV interaction
system using face and hand gesture recognition. In Consumer Electronics (ICCE), 2013 IEEE
International Conference on. 3(1), pp.173-174
Lee, W.P., Kaoli, C. and Huang, J.Y., 2014. A smart TV system with body-gesture control, tag-
based rating and context-aware recommendation. Knowledge-Based Systems, 56, pp.167-178.
Shin, N., Kraemer, K.L. and Dedrick, J., 2014. Value capture in global production networks:
Evidence from the Taiwanese electronics industry. Journal of the Asia Pacific Economy, 19(1),
pp.74-88.
Sicari, S., Rizzardi, A., Grieco, L.A. and Coen-Porisini, A., 2015. Security, privacy and trust in
Internet of Things: The road ahead. Computer Networks, 76, pp.146-164.