Helen Edwards: How Samsung trumped Nokia

Helen Edwards: How Samsung trumped Nokia
Helen Edwards: How Samsung trumped Nokia

The marketing class of the future will learn how Samsung's grasp of technology and consumer desires propelled it to the top

One day, the story of how Samsung eclipsed Nokia as the number one mobile phone brand by handset shipments will be written up as a case, to be studied by eager students at top business schools.

Like all cases where an 'outcome' is known, the steps along the way will seem neater than they were at the time, and carry about them an inevitability that would not always have been apparent to the contemporary players and analysts. The role of luck will be downplayed; the roles of the big management beasts will be brought to the fore. Cases need narrative momentum as much as movies do.

So the class of, say, 2016 will read how Nokia seemed to sleepwalk its way to demotion, how its 14-year reign at the top descended into a mishmash of too few trials and too many errors, and how Samsung's firmer grasp of technology, sleeker internal structures and sassier design propelled it with irresistible force to pre-eminence.

Nuggets of revelation

Cases can seem a little like 'just-so' stories. Nevertheless, in all of them there are nuggets of revelation that the perceptive student, or determined professor, can prise out and cherish. So what might the class of 2016 usefully extract from this one?

First, the real convergence is human. Much has been made of Samsung's advances in 'convergence' tech-nology, but its greater achievement may be in understanding that consumers end up wanting the same good things, even though their circumstances might be vastly different. Where Nokia resisted investment in smartphones, deeming them beyond the reach of consumers in its big, developing-world markets, Samsung took the opposite view, wor-king to price its range to carve out share in markets such as India and China.

Second, beware generic positioning. Appropriation of the category's emotional benefit can ooze confidence for a while but can also leave you a hostage to fortune if the category itself goes walkabout. Nokia, as brand leader in mobile phones, had a right to claim the generic of 'Connecting people'. For many years, it served the brand well. Then devices shifted their centre of gravity to computing, with the smart stuff being less about people and more about content. Nokia looks marooned in yesterday's vernacular, whereas Samsung, with its 'change' mantra, is flexibly poised for whatever's next.

Third, HR and marketing are really one force. Samsung's ambition to be a global power-brand was realised through painful introspection of the limitations of its Confucian business culture. Under the leadership of Lee Kun-Hee, it overhauled ingrained practices to bring in foreign talent, and promote younger over older, in an ambitious determination to combine the best of East and West. Insider reports from Nokia, by contrast, evoke the image of a sulky, Finnish silo.

Business drama

In the end, though, it is for the class of 2016 to determine what the seminal factors were in this business drama. Here, they have an advantage over us, since they will know what actually happened next: whether Nokia fought back, whether Samsung achieved world domination, whether the entire category became usurped by another. All that will be a 'given' for them, just as it is a mystery for us. Looking back is easy; imagining forward is hard.

That is the ultimate lesson of every business case.

Helen Edwards has a PhD in marketing, an MBA from London Business School and is a partner at Passionbrand. Follow her on Twitter: @helenedw

30 SECONDS ON: Samsung's rise

- The world's biggest technology company rose from low-tech beginnings: when Samsung started out in 1938 it sold noodles and dried seafood. It even tried its hand at textiles and sugar before finally establishing the Samsung Electronics division in 1969.

- The workhorse of the firm's handset portfolio is the Galaxy smartphone range, first released in 2009 and now credited for a large part of the Android operating system's ubiquity. There are currently more than 20 variations, including the genre-busting Note, an intriguing smartphone-tablet hybrid.

- Critical acclaim has come hand-in-hand with commercial success for its smartphones. The Galaxy S II was declared by the TechRadar blog to set a new standard, while Engadget gushed that it was 'possibly the best smartphone, period'. The Galaxy S III launched last week.

- Samsung now generates 20% of South Korea's entire GDP and 13% of its exports. The Chinese government is rumoured to send emissaries over to study the secrets behind the firm's success.

- Samsung isn't content with just dominating the industries in which it operates; in the next decade it plans to gamble $20bn (£12.4bn) on entering surprising new territories, from bio-technology to solar panels.

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