Girl in beanie taking a picture with Samsung smart phone

Samsung Shifts to Leaner Model

Early this year, the world’s largest smartphone maker admitted a problem. Samsung is hurting. Profits are down, stagnant and beginning to fall. Sure, the entire world handset market is starting to see pockets of over-saturation cutting into market share, but, where Apple has a major customer loyalty upside, Samsung customers are being pulled away by Chinese-made bargain brands, especially in China and even at home in Korea.

Streamline the Infrastructure

The solution? Samsung is going to streamline – or attempt to streamline – its infrastructure, to run more like a startup than an established international giant who employs 300,000 people.
In a statement to Reuters, the Korean tech company said: “We aim to reform our internal culture, execute as quickly as a startup company and push towards open communication and continuously innovate…”

Let’s break that down…

What Does Streamlining Mean?

Yes, quick answers, wide open communication, and innovation are part and parcel of the startup model, but will Samsung be able to turn their aircraft carrier of a company into a go-fast boat … and how long will this transformation take?

Those are big questions whose answers remain to be seen. Let’s say they can pull it off. Step one is to look at its smaller, more nimble competition and see how they’ve grabbed so much market share.

Can Samsung compete on price, and, more importantly, can they find weak and vulnerable areas of the market to exploit? Are they hungry and desperate enough to do the necessary digging and risk taking to find and take advantage of these opportunities?

Implications of Streamlining the Infrastructure

Because when you scale back all the business speak and corporate structural differences, the widest gulf between an established world power and an up and coming company is simple, desperate “need to.” This is not “want to,” which everyone in business can claim. This is “need to.”

For the startup, failure doesn’t mean your stock price drops, and you ship fewer units or lose ground in certain markets. It means you go back to working for someone else. Can you really picture the executive ownership of Samsung worried on that score? Probably not, but they could put that sort of visceral fear in the hearts of their key people … the question then becomes, will they trust these desperate people to make decisions that lead to uncomfortable change … because that’s the real strength of nimble startups. They are willing to roll the dice on everything … because they haven’t built it yet.

Roman Temkin is an NYC based mobile entrepreneur.

Leave a Reply

Your email address will not be published. Required fields are marked *