Strategic Marketing Analysis and Challenges: Samsung SDI's ESS

This report provides a comprehensive strategic marketing analysis of Samsung SDI's Energy Storage System (ESS). It begins with an introduction to the growing ESS market and Samsung SDI's position as a global leader. The report delves into the company's internal analysis using the Resource-Based View (RBV) and VRIO framework, assessing its resources and capabilities. It then examines Samsung SDI's strategic choices through Porter's Generic Strategy, Ansoff Matrix, and BCG Matrix. Customer and competitor analyses are conducted to understand market dynamics. The report highlights the company's focus on differentiation and its market penetration and product development strategies. The analysis includes Samsung SDI's key customers (automobile companies, consumer electronics, etc.) and the factors influencing their purchasing decisions. The report concludes by summarizing the key aspects of Samsung SDI's strategic marketing, providing insights into its competitive advantages, and identifying future challenges within the rapidly evolving energy storage market.

Strategic Marketing Management
NAME OF STUDENT
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Running head: STRATEGIC MARKETING

STRATEGIC MARKETING
Contents
Introduction......................................................................................................................................2
Part A...............................................................................................................................................2
Introduction......................................................................................................................................2
Company Analysis...........................................................................................................................2
RBV.................................................................................................................................................3
Porters Generic Strategy..................................................................................................................6
Ansoff Matrix and BCG Matrix......................................................................................................6
Customer analysis............................................................................................................................7
Customer trend.................................................................................................................................8
Competitor analysis.........................................................................................................................9
Marketing trend...............................................................................................................................9
Part B.............................................................................................................................................10
References......................................................................................................................................14
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Introduction
The analysis of strategic marketing context and the analysis of strategic marketing challenges
which are faced by an organization are very important as it helps in the development of the
future strategies of the company. The current report also helps in identifying the strategic
challenges which are currently faced by Samsung SDI in the market as well as examines
situational analysis.
Part A
Introduction
The analysis of the strategic marketing context is very important as it helps an organization to
gain idea regarding the current position of the company relative to its competitors, the strength of
the resources and capabilities of the company in comparison to competitors resources and it also
provides an idea regarding the expectations and nature of the customers of the company as well
as understanding for the strategies which are adopted by the competitors of the company in
addressing those customer expectations. The current section focuses on analysing the strategic
context of Samsung SDI by analysing the position and status of the company through various
models such as BCG matrix, Ansoff matrix and VRIO analysis.
Company Analysis
Samsung SDI Co. Ltd. is a global producer and distributor of energy storage systems. Together
with its subsidiaries it conducts R&D, manufacturing and marketing of large varieties of
products such as small size lithium ion batteries, automotive battery, semi-conductors, energy
storage systems, organic light emitting diode and photovoltaic paste. Samsung SDI Co. Ltd.
belongs to the Samsung Electronics Group. Samsung SDI Ltd owns an energy segment which
manufactures and sells high voltage electrical energy storage which has high energy conversion
efficiency. The slogan of Samsung SDI Energy Storage System is ‘Powering Tomorrow’ and the
company looks to bestow to the future of energy sector with its high range of Energy Storage
System products. The energy Storage system is a fast growing industry and Samsung SDI is the
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market leader in the global ESS market. A large number of clients of the company based in
Korea, Europe, North America and South East Asia are using Samsung SDI’s Energy Storage
System. The company provides secured, dependable and durable performances with the energy
storage solutions. The Energy Storage System projects are established utilising Samsung SD’s
battery solutions which are effective for various products ranging from residential to utility scale
projects. Samsung SDI helps in optimizing batter system with advanced cell technology.
Samsung SDI is revolutionising the change of a new era with lithium-ion batteries. Samsung
SDI’s technology provides eco-friendly energy solutions for today and the future. Through the
constant innovation towards excellence, the company dominated with the technological
excellence of their innovative IT equipment’s and it also extended into electrical cars which have
turned into reality in the current times. Samsung SDI is also bestowing to the extension of an
eco-friendly atmosphere by the use of batteries for energy storage purposes.
RBV
The resources based view of Samsung SDI is as follows:
The question of values
 Samsung SDI has placed itself in such a way which permits them to answer the question
of value with a strong yes.
 Samsung SDI designs, produces and sells different kinds of energy storage solutions
which help in satisfying the increasing energy requirements of the customers.
 Samsung SDI has equipped itself successfully with a large number of resources and
capabilities which has facilitated them to enter and exploit various domains of energy
requirements of their clients who are individuals as well as business organizations.
 As stated by Doligalski & Tomczyk (2016) the technological capability and the
innovative characteristics which are associated with the products and solutions of
Samsung SDI have allowed the company the opportunity to expand into various
competitive markets.
 The products and solutions which are offered by Samsung SDI that are present in markets
are highly competitive in nature.
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The question of rarity
 The products, solutions and technology which are offered by Samsung SDI compete in
markets which are extremely competitive in nature.
 As opined by Karlsson & Tavassoli (2016) the competitors of Samsung SDI also have
valuable resources and capabilities and therefore the scope of rarity is very limited for
Samsung SDI is very limited.
 As a result of having similar resources and capabilities, no single company operating in
the market have rare resources which lead to competitive parity.
The question of imitability
 Samsung SDI has a vast number of patents filled which helps in creating competitive
advantage for the company
 Although Samsung produces various patents, the competitive advantage which is gained
from some of the patents of the company is temporary in nature.
 As opined by Følstad & Kvale (2018) some of the patents of the company allow the
competitors of Samsung SDI to contemplate entire functionality of the products and
solutions which finally nullifies leverage which are attained from patents.
 Insipite of the fact that few of the competitive edge of the company is lost collectively,
Samsung SDI designs and manufactures various industry products which lead in the
industry in which the company operates which helps in creating a sustainable advantage
for the company.
The question of organization
 As opined by Jiang & Lu (2018) Samsung SDI has become one of the largest firm in
electronics sector in context of revenue because of direct outcomes of value and
imitability of the products, solutions and technological applications of the company and
also due to the strategic directed provided by the top management of the company. The
revenue of the company as of 2018 is 9158.3 billion South Korean Won.
 In 2018, the net income of Samsung SDI was 745 billion South Korean Won.
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 The increasing revenue and profitability of Samsung SDI can be attributed to the
operational capability of the company which helped the company to reach to its full
potential.
The VRIO framework of Samsung SDI is as follows:
Resource/
Capability
Valuable Rare Difficult to
imitate
Exploited
by the firm
Competitive
Implications
Semi-conductor
process technology
Yes Yes Yes Yes Sustained
Competitive
Advantage
Technology and
production capability
Yes Yes Yes Yes Sustained
Competitive
Advantage
Employee retention
and selection policies
Yes Yes No Yes Temporary
Competitive
Advantage
Quality Yes Yes Yes Yes Sustained
Competitive
Advantage
Brand value Yes Yes No Yes Temporary
competitive
advantage
Customization and
product mix
Yes No - Yes Competitive
Parity
Research and
Development
infrastructure
Yes Yes Yes Yes Sustained
Competitive
Advantage
Fabrication
capability
Yes Yes No Yes Temporary
Competitive
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Advantage
Porters Generic Strategy
As stated by Paul Coster et al. (2015) the generic strategy which is followed at Samsung SDI is
differentiation focus strategy in which the company targets a niche market as a result of the
unique features and benefits offered by the products, solutions and technological applications of
the company. In order to ensure the success of the differentiation focus strategy of the company,
the company ensures that the products, solutions and technological applications of the company
are unique in nature. As opined by Guo (2019) Samsung SDI focuses on securing differentiated
technologies, cost savings and making efforts to respond to their diversified customers so as to
facilitate their success. Further to facilitate the success of differentiation focus of the company,
Samsung SDI focuses on development of core materials for high performance and low cost
batteries. In order to enhance the success of the differentiation focus strategy of the company,
Samsung SDI is pioneering a new application market through differentiation of cylindrical
batteries, expansion of automobile battery business through the differentiation of module and
pack technologies, development of differentiated materials which are applicable to semi-
conductors and displays. In order to ensure the success of the Differentiation focus strategy of
the company, Samsung SDI plans to proactively release differentiated products and focusing on
technological competitiveness.
Ansoff Matrix and BCG Matrix
The different growth strategies according to Ansoff matrix which are followed by Samsung SDI
is as follows:
Market Penetration- As stated by Global Data Ltd. (2017) by implementing the market
penetration strategy, Samsung SDI seeks growth by targeting its existing products, solutions and
technological applications in its existing marketing segment. For instance Samsung SDI signed a
memorandum of understanding regarding establishment of an ESS joint venture for penetrating
the Chinese market with Sungrow of China. The main aim of the joint venture is to gain
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advantage in the Chinese ESS market with local production which will enable the company to
dominate the Chinese ESS markets.
Product Development- As stated by Cardos & Cardos (2014) by implementing the market
development strategy, Samsung SDI seeks growth by targeting new products, solutions and
technological applications to its existing market segment. The product development strategy of
Samsung SDI can be highlighted from the fact that the company is targeting the European Union
countries with the new residential Energy Storage System module of the company.
Upon analysis of the strategic position of Samsung SDI in the market and analysis of the
products, solutions and technology applications it can be stated that ESS solutions of the
company belong the quadrant of stars which suggests high market share of the company and high
growth potential of the company. As stated by Global Data Ltd. (2017) the ESS solutions of the
company has high market share owing to the differentiated of the product and the high level of
innovation associated with the products of the company. The ESS solutions of the company have
high growth potential as a result of the increasing energy consumption among the customers and
due to the demand of high energy storage solutions.
Customer analysis
The main customer of Samsung SDI is automobile companies who require high performance
automobile battery for their vehicles. The automobile manufacturing companies require high
performance automobile batteries which will not only help in enhancing the performances of the
automobiles of the company but also will help in addressing various problems faced by the
automobile sector such as emission of carbon dioxide and fuel economy. The automobile
companies enter into collaboration and partnerships with Samsung SDI for developing energy
solutions for their automobiles which satisfies the requirements of the customers. The
automobile companies also enter into partnership with various automobile companies who
designs and manufactures electrical vehicles for developing automotive battery which will help
in enhancing the performances of the electric vehicles. As stated by Strielkowski & Lisin (2017)
the other major customer of Samsung SDI is the consumer electronic products of the company
such as smartphones, tablets, laptops, digital cameras and other consumer electronic products
which require high performance battery for powering their devices. The other customers of the
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company are the industrial electronics products of the company such as medical instruments,
industrial equipment and industrial power generating instruments. The other customers of
Samsung SDI energy storage solutions are telecommunication companies who require stable
power supply and excellent telecommunication environment for their base transceiver stations.
As opined by Taghizadeh, Jayaraman, Ismail & Rahman (2016) the other customers of the
Samsung SDI energy storage solutions are domestic customers who seek green energy and also
domestic customers who seek to reduce electricity costs and the ESS solutions of the company
help domestic consumers to store day time energy from photovoltaic cells and making it
available at any time of the day and reducing energy costs and consumptions. The other
customers of the Samsung SDI energy storage solutions include business organizations who
require ensuring the availability and reliability of the data centres of the company and therefore
they seek uninterrupted power supply from the Samsung SDI energy storage solutions. The other
customers of the Samsung SDI energy storage solutions are business organizations who seek cost
reductions through effective energy management. The other customers of the company are utility
commercial customers who seek the Samsung SDI energy storage solutions for securing grid
stability in the power supply systems which includes generation, transmission and distribution of
power.
Customer trend
The consumer trend in the energy storage system industry reflects that the customers want
innovative energy storage solutions which have the capability for meeting the ever increasing
energy consumption of the customers of the company. The consumer trend in the energy storage
system industry also states that the customers are seeking green and sustainable products from
the energy storage system providers. As opined by Rynca (2016) the customer trend in the
energy storage system industry also reflects that the customers want products, solutions and
technological applications which are high performing, sleek and uniquely designed. The
customer trends also suggest that the customer want high performing energy storage solutions
which will help in boosting the performances of electric cars so that they can compete in various
racing events. The customer trends also demonstrate that the customers want high performance
battery at lower affordable costs. The customer trends also suggests that the customers are
seeking more partnerships and collaborations between the energy storage system provider
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companies and automobile companies in order to facilitate better quality of automobile
performance.
Competitor analysis
The competitors of the Samsung SDI are LG Chem and Panasonic.
LG Chem- The main strength of the company lies in the steady revenue growth and increasing
annual revenue of the company. The other strength of the company lies in the battery business
which has an expected growth to 16 trillion Korean Won. The other strength of the company lies
in the first mover advantage for the company regarding the production of lithium ion batteries.
The other strength of the company lies in the high quality research and development capability of
the company.
Panasonic- The main strength of Panasonic lies in the variety of products offered by the
company which includes Primary batteries, secondary batteries, Battery pack design and
assembly, storage battery system, automotive battery and solar modules. Panasonic helps in
driving industrial innovations, synergies and automation with its exclusive categories of business
partners. The portfolio of the company involves electronic and electro-mechanical devices,
rechargeable batteries, displays, semi-conductors, and factory automation solutions for wide
variety of industries which includes automotive and mobility, building and infrastructure, home
and personnel, production and logistics, medical and healthcare
Marketing trend
There are various trends which are driving the market penetration of energy storage systems
which has the capability of affecting the future operations of the company. The first and foremost
trend which is the driving the market penetration of Samsung SDI energy storage solutions is
increased adoption of energy storage systems in transportations. The second trend which is
driving the market penetration of Samsung SDI energy storage system is software integration for
management of energy storage systems. As opined by Srivastav, Fankhauser & Kazaglis (2018)
the third trend which is driving the market penetration of Samsung SDI energy storage solutions
is increasing adoption of renewable energy. Another marketing trend which is driving Samsung
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SDI energy storage solutions is virtual reality which helps in engaging the target customers of
the company towards the products and solutions of the company. As stated by Srivastava, Iyer &
Rawwas (2017) as a part of their marketing trend, Samsung SDI energy storage solutions
organizes and takes part in various automobile shows which not only provides them with an
opportunity to showcase the benefits and characteristics of their products and solutions but also
provides them with an opportunity to facilitate interactions with various automobile companies
so that they can enter into a partnership with the automobile companies in the future. The other
marketing trend which has been observed in case of Samsung SDI energy storage solutions is
displaying the name and logo of the company in the body of the automobiles with which they are
in a partnership with, which participates in various racing events. The other marketing trend
which is observed in case of Samsung SDI energy storage solutions is designing of interactive
content in order to engage target customers.
Part B
In this section of report strategic marketing choices that are available for Samsung’s SDI storage
systems have been assessed along with options for their future planning. Also challenges that can
be encountered by Samsung SDI storage system in future have been discussed.
Relationship Strategies- Samsung SDI focuses on developing collaboration with global and local
automakers for solving the toughest challenges which the company faces in the market. The
company focuses on entering into projects with several automakers based in Europe, USA and
Asia. As a result of the partnership between Samsung SDI and the automobile companies, the
automobile companies will be able to introduce vehicles which will be powered by the Samsung
SDI batteries over the next few years. As stated by Global Data Ltd. (2018) looking back, the
fact that Samsung SDI was comparatively new in context of global automobile sector, it was an
opportunity for the company as it led to developing close partnerships with the global
automakers right from onset by generating new products and creating new production
capabilities which needed extensive and frequent communication, all of which would not have
been feasible under simple customer-supplier relationships. Hence, Samsung SDI had to involve
in close relationship with their customers. The company strongly believes that it succeeded in
building a culture of communication based on mutual trusts by paying uncompromised focus to
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all its projects and racing towards shared goal of the company. Samsung SDI has developed
close associations and strengthened long term strategic collaboration with BMW group while
making the way for improving the brand identity of the company in universal automobile
industry. The company is strengthening its partnership with the BMW group through the DTM
partnerships. As opined by Rawitzer & Hefti (2016) the Motorsports industry is currently
experiencing more restricted fuel-efficiency rules than ever before and more high performance
racing cars are getting electrified. In this context it can be stated that Samsung SDI has more to
bestow towards the future of automobile sector with the technical excellence they possesses and
hopes that they will be positively reflected in the minds of the customers as well in the minds of
the automobile industry as a whole.
Innovation- As opined by M2 Presswire (2014) the innovation strategy of company is founded
on their continuous effort in the field of research and development. As the company focuses on
designing and manufacturing solutions which are differentiated in nature and therefore the
company needs to largely focus on innovating their products and solutions. As stated by Global
Data Ltd (2016) the company makes huge investment in the research and development for
designing and developing products which will not only exceed the expectations of the customers
but also will help them to gain a competitive edge in market. As opined by Knott (2015) the
innovation strategy of the company is driven by the increasing expectations among the customers
of the company regarding energy storage solutions. As a part of the innovation strategy of the
company, Samsung SDI batteries are helping in transformation of the dreams of the automobile
makers into reality. The success of the company in the IT battery applications have enabled the
company to realize that the company can assist the automobile industry regarding addressing a
number of challenges in the form of powertrain performances, improvement of fuel economy and
reduction of carbon dioxide emissions by applying the latest battery technologies of the
company. As stated by Athukorala (2014) the introduction of new materials and structural
innovations in the Samsung SDI battery cells helps in improving the vehicle performances in a
significant manner and such innovations of the companies stem from the properties of the
advanced prismatic form factor. Samsung SDI has over 15 years of experience regarding the
mass production of lithium ion batteries. The company has sold over 57 billion cells for the last
15 years and is currently selling over 1 billion of lithium cells per year. The production lines
which are used in the manufacture of lithium ion batteries are 100% automated in nature. As
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