Smart Move, Smarter Strategies

Business Week just recently published an article about Samsung and their activities in the printer industry (click here to view the original article). While interesting, the author concentrated purely on the consumer side of the business, which misses other key developments.

Samsung has been positioning itself for some time to (finally) benefit from the lucrative printer/MFP industry. This article describes some of these efforts, but does not cover the entire depth of Samsung's strategy and activities. There is more to the story!

Years ago, Samsung was approaching the market exclusively from the low end, which for a newcomer is a perfect place to start, especially if you can hit attractive price points through your manufacturing base and cost structure. At the start, though, most competitors were not too concerned, as the products could not be cheap enough to be attractive due to quality issues. But obviously these concerns have largely been addressed over the years, and Samsung has emerged both as an OEM manufacturer and a vendor of own-branded products. The Apple cooperation is one example which demonstrates both their engineering and design capabilities, but they have also provided attractive and well-priced products in the (entry-level) mainstream as well. Over a year ago, Samsung already achieved a key milestone by offering a color laser printer below $100.  

In spite of their success in the OEM and consumer/SOHO markets, Samsung has developed their vision well beyond that space. They have acquired and developed more advanced technologies, recruited key R&D personnel and developed more sophisticated products. This strategy shows a clear intention to move upmarket, a wise decision which not all competitors, even those with more experience and ostensibly more insight, have followed.  As the accompanying diagram shows, there is certainly much more to the world of printing than what is visible in the consumer world. And as many other vendors have discovered (think Lexmark, Oki, Kodak and others), they have learned that the real money is made in other market segments which deliver higher output volumes, which really drive higher margins.



We have seen Samsung emerge over the past year or so with interesting new product categories, channel programs and sales approaches. They are appearing in places never expected in past years and we fully expect them to address the corporate printing space aggressively in the very near future.  Even if this is just a small part of their overall business, every OEM in the industry knows just how lucrative the market is. It is profitable enough that players with shockingly small market shares are able to stay in the game (for now) and continue to drive profitable business. Samsung appears to have recognized this fact and is now positioning their imaging business for further advances, moving well beyond the consumer space.

We at the Woodford Group (and the rest of the industry) will continue to watch with interest!