By Sanuj Shah
We applied economics to our board games each time we rolled the dice or dealt a card. The Game of Risk brings back childhood memories when we competed against our friends to gain military dominance and capture the world. There were times when we attacked our friends territory only to lose our own. We strategically stationed our troops, carefully monitored the moves of our opponents and took risks to gain dominance. Back then we attributed their win to luck, in retrospect, however, it would be amateur to stick to the same line of reasoning.
The smartphone market has become the new game of the business world. The competition is fierce and the stakes are high. There is just one rule i.e. to win. Price and product designs are the weapons of the players. One wrong move and you could lose the game. Till now there has been one company which has got everything right. Samsung Electronics.
An ethical workforce in place, the android operating system in its artillery and an established marketing strategy in hand Samsung announced itself in the smartphone market. Just like in the game of risk, you need to wait for the right time to attack, so did Samsung. At a time when Nokia had become stagnated in the Indian market and the blackberry buzz was all you could hear, Samsung played its move. It also did a commendable job in identifying the Android platform as its potential lethal weapon.The Android-run galaxy phones soon became an extension of the common man.
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Do you know? Samsung holds 41% of the total Android Smartphones market, but it receives 95% of the total android smartphones profits. In the first quarter of 2013, it pulled in $5.1 billion, leaving only $200 million for the others players.
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An essential element in the game of Risk is to know your enemy well; to carefully observe their moves and understand their strengths and weaknesses. This is exactly what Samsung has done over the last decade, by following their rivals existing products in the market, and suitably modifying them as per the users needs. Strategic and economical pricing of its low-end and high-end smartphones, a user friendly operating system, unique designs and out of the box features made Samsung the king of the smartphone kingdom. In the first quarter of 2012 Samsung finally overtook Nokia to become the worlds largest mobile phone maker by sales.
Throughout its journey up the ladder, Samsung has been seen much as a follwer. But, now, having reached the top, it does not have anyone to follow. This calls for a substantial shift of focus to more of innovation, in order to maintain its position in this volatile market, which again takes us back to the game of Risk, wherein, even after having conquered a major part of the world, it is a necessity to keep strengthening ones army to protect their territories from imminent attacks of the enemies. Having said that, Samsung seems to be completely aware of this, and hence has been seriously outspending the competition on research and development. It spent $10.6 billion in 2012, compared to Apples $3.4 billion, indicating its determination to become the pacesetter, and to stay at the top for a longer term.
Sanuj Shah is an undergraduate student at the Shri Ram College of Commerce. An avid cricket fan and health freak, he fell in love with writing at an early age. He is currently associated with the Research and Editorial wing of the Economics Society at SRCC and a volunteer at Teach India. His areas of interest include political economics, psychology and philosophy. His dream is to travel the world, try different cuisines and meet new people. A true Aries, he can spend hours arguing with people, even at times when he knows he could possibly be wrong.