Strategic+Innovation+1

Innovation #2

As the second of two strategic innovations, we suggest Samsung continue with the proposed strategy of providing more secure technology to attract new customers. As a second technology for this category, we propose a biometric scanning system integrated into the hardware for added personal security. The scanning could be done via iris scan or fingerprint scan. New generation smartphones have powerful enough cameras to be able to do an iris identification already, and would just need software. However, currently available software has gotten poor reviews in mobile application markets such as the Apple App Store. A fingerprint scanner is the proposed idea since it appears to be the more reliable technology, according to Fujitsu (Planck, 2011). With the combination of these two innovations, Samsung should be able to tap into the blackberry user market, consisting largely of business-oriented individuals who value security as a priority.

//__Activities __////: //  In doing an activities analysis, we can determine that while Samsung’s current strategies do contribute to low cost and differentiation in their smartphone production, there are still many options available through new game strategies to stay ahead of the competition and cater to a wider demographic. Samsung’s current activities do not include the proposed idea of biometric scanning technology. Including the proposed activities involving the technology which already exists and is already becoming popular in Japan, as part of its strategy will immediately contribute to differentiation in the western market since no other company offers it (Planck, 2011). A heightened sense of security for the users of these phones will create opportunities to expand its market to more business-oriented individuals who currently only trust their blackberries with RIM's secure network. Should the strategy go over smoothly, this should immediately create new sources of revenues, too. Over time, other new activities in the production process will be able to contribute to lower costs and better pricing, but not immediately. The strategy will temporarily improve Samsung’s position vis-à-vis competitors in the western market because it will be the first manufacturer to offer such a security technology. As for coopetittors, Samsung can stay on top of the manufacturers of the technology like AuthenTec which is today's leader by disclosing that they can switch over to other manufacturers such as NEC easily. The industry-value drivers taken advantage of here are the growing needs for secure devices and secure networks for mobile communication. By offering such important advancements, Samsung can keep its customer base and even expand it before other competitors can copy the idea. After implementation, Samsung would have to see where they can improve efficiency and/or cost-effectiveness by determining which processes it could perform on its own in the manufacturing process instead. Similarly, they could determine if they can find and afford to drop some less-important or redundant tasks in their production or partners' production processes to save time and money.

//__Value: __// The value brought to the table by adding this technology to its smartphones will be unique. No other phones in North America have such a security feature right now, and as such the idea will be considered innovative and fresh by consumers. Determining how long this will stay true will be difficult because competition is extremely heavy in this industry and competitors will be likely to follow suit almost immediately. By following this strategy, however, Samsung can make use of first-mover advantages and establish itself as a brand with heightened security awareness. It can advertise itself as ahead of its time in anticipating the need for a higher level of network and phone security that is becoming increasingly demanded. The trend towards increased security is picking up slowly. It has been predicted that biometric and similar security technologies will start becoming widely recognized and implemented over the next three to four years (Planck, 2011). With that said, the perceived level of value might differ depending on when such a feature would be released to the public. The sooner the value is created, the sooner it will be picked up by customers. In other words, the earlier Samsung can jump on this up-and-coming trend, the more it can take advantage of being the first-mover towards the trend; even if the target customers might not immediately notice how important the technology is. With the topic of biometric scanning spreading across the media in recent months (Parvaz, 2011), Samsung can prove that it's time to step up the security on our personal devices. Customer satisfaction is a very important part of Samsung's business strategy. Without them, the business would fail. The “new target” customers that Samsung is trying to win over will be an extremely valuable addition to the Samsung family. Because there are so many people in this RIM-dominated secure market, Samsung has a chance to expand its client-base significantly; a  more security-oriented infrastructure will be attractive for these new business-oriented customers, and should be intuitive enough to retain them.

//__Appropriation: __//  As of August of 2011 in the North American mobile market, Samsung has the highest share at 25.3% (Flosie, 2011). As it stands, we can say that the firm has a superior position over competitors. Because Samsung is also a veteran in its own production of components, for the components they do outsource, they still maintain a superior position because they have the facilities and resources to manufacture their own components at any moment; or if they wanted to, they could just buy out any coopetitors to gain exclusivity over their products and further their competitive advantage vis-à-vis competitors by exploiting these available options.  Because Samsung is one of many firms in an incredibly competitive market, imitation is something that has been a problem for years. With lawsuits constantly being filed by and against players in the smartphone industry, imitation is shown to be so close that it could even infringe on patents held by different firms. Depending on the strategies Samsung uses when incorporating biometric scanners in their phones (say, for example, Samsung buys out or makes a contract with the makers of the technology that prohibits them from selling the same technology to competitors), it might be difficult for other firms to imitate the technology at low costs, which would keep it on top of the competition for longer.

//__Change: __// <span style="font-family: 'Times New Roman',serif; font-size: 12pt;">Small elements of the principles of change have been mentioned in previous sections of the AVAC analysis. Including biometric scanners as a standardized feature of its phones, Samsung has already created value. To capture the value, it must strategically market the innovation as a necessity and prove that it’s a significant improvement over currently available security technology on mobile phones. Over time, Samsung can find new ways to capture more value by adjusting the production processes to lower costs. <span style="font-family: 'Times New Roman',serif; font-size: 12pt;">The extra resources involved in the new production would initially be supplied by the partner/acquired company. If these resources can be supplied by Samsung outright, it would likely be cheaper to have that happen. <span style="font-family: 'Times New Roman',serif; font-size: 12pt;">The first-mover advantages of introducing biometric scanning technology will exist for a short period before competitors catch on to its value and popularity amongst consumers. Depending on how Samsung is able to restrict other companies from adopting it, this advantage could be extended over a longer period of time.

Sources:

Planck, Seth. "Fujitsu Launches Two New NFC Phones with AuthenTec Sensor Built in."//<span style="background-color: #ffffff; font-family: 'Times New Roman',Times,serif; font-size: 16px;">Near Field Communication Rumors //. Nier Field Communication Rumors, 15 Nov. 2011. Web. 15 Nov. 2011. <http://www.nfcrumors.com/11-15-2011/fujitsu-launches-nfc-phones-authentec/>.

Parvaz, D. "Mobile Biometrics to Hit US Streets - Features - Al Jazeera English." //<span style="background-color: #ffffff; font-family: 'Times New Roman',Times,serif; font-size: 16px;">AJE - Al Jazeera English //. AJE, 02 Aug. 2011. Web. 15 Nov. 2011. <http://www.aljazeera.com/indepth/features/2011/07/20117258145965608.html>.

Flosie, Stephanie. "ComScore Reports August 2011 U.S. Mobile Subscriber Market Share - ComScore, Inc." //<span style="background-color: #ffffff; font-family: 'Times New Roman',Times,serif; font-size: 16px;">ComScore, Inc. - Measuring the Digital World //. ComScore, Inc., 05 Oct. 2011. Web. 15 Nov. 2011. <http://www.comscore.com/Press_Events/Press_Releases/2011/10/comScore_Reports_August_2011_U.S._Mobile_Subscriber_Market_Share>.