The difference between Samsung and Sony: the real reason for the defeat of Japanese home appliances

The Great East Japan Earthquake in 2011, the floods in Thailand, the subsequent appreciation of the super yen, and the European financial crisis haven't been good news for Japanese companies. Under such circumstances, large companies such as Panasonic, Sony, and Sharp also suffered losses. Moreover, nowadays, there are more and more arguments that Japan's manufacturing industry has declined and the manufacturing industry is questioned.

However, from the point of view of the electrical appliance industry to which these companies belong, not all performance is not satisfactory. The performance of major electrical companies can be described as distinct. For example, Hitachi, Ltd. ’s consolidated net profit for fiscal year 2011 set a record high for two consecutive years, and it also achieved profit in the first half of fiscal year 2012. On the other hand, Panasonic and Sharp suffered huge losses in the first half of 2012. In the field of semiconductors, Elpida went bankrupt, and Renesas is also in doubt.

There are winners and losers. Without analyzing the common reasons behind it, I am afraid it is difficult to grasp the current status of Japanese companies.

Is the downturn in the TV business of Panasonic, Sony and Sharp due to the poor development of B2C business in Japan?

The situation does not seem to be generalized. For example, in addition to the business related to B2B liquid crystal components, Fujifilm, which has performed well, is also cultivating B2C businesses such as digital cameras and cosmetics as the mainstay of revenue. However, Elpida and Renesas both make a living from the B2B business of semiconductors, but the performance is not satisfactory.

In my opinion, there is only one thing in common with these downturn businesses, that is, the previously successful business model no longer works, and the past model has not been fundamentally adjusted and modified. The mass media always wanted to capture the phenomenon from the "electrical industry" as a whole, so they misjudged the important essence.

What did Japanese appliance companies misjudge

The author once wrote in the article: "The content of the news organization will not distinguish between B2B business and B2C business. The former mainly deals in parts, materials, production equipment, etc., while the latter deals with consumers Products are different. "

The reason why such content is written is actually to guard against the idea of ​​simply summarizing according to the industry.

For example, Sharp is engaged in the B2C business of various home appliances such as LCD TVs. Of course, Sharp is also developing B2B business, supplying LCD panels and components to other companies. A large proportion of this sluggish performance comes from the LCD TV business in B2C.

As a strategy to open up the situation and revitalize operations, Sharp chose to cooperate with Taiwan Hon Hai Group. I think the significance of this is far greater than what the report says.

Because of the strategic error of the B2C business and the sluggish performance, Sharp did not continue to launch new products and new businesses in the same B2C business in order to save the situation. No one can deny that the sluggish performance is due to failure to come up with new products or new business models that can be recognized by consumers. Moreover, in Sharp's view, continuing to develop B2C does not guarantee a revitalization of the business in the future. If the previous strategy is continued, the operation will inevitably fall into the quagmire. Because of this, Sharp adopted the strategy of joining forces with B2B owls operating giant EMS companies.

This action has great significance. Because Sharp did not attack from the front to revive his B2C business, but turned his spearhead towards B2B business.

In the B2C business, the balance between market demand and manufacturers is very important. If the two do not cooperate well, they will definitely not be accepted by the market. Fujifilm noticed changes in the market and stepped away from its reliance on film cameras to achieve digitization, but Kodak, a giant in the same industry, failed to do so, and ultimately failed to escape.

In order to think more deeply about B2C business, let's go back in time. As the old saying goes, in the heyday of the analog era, technology itself is a high barrier. In the past, developed countries, which occupy half of the world, have huge markets, and the market has been pursuing products with higher functions and superior quality. Japanese companies have also developed along this line.

However, with the unification of the world market brought about by the disintegration of the former Soviet Union, the market driven by China's reform and opening up has expanded rapidly, coupled with the development of emerging market countries, the world's structure has changed. The market has shifted from developed countries to emerging market countries. At the same time, in terms of technology, with the development of digitalization, the threshold for getting involved in B2C product manufacturing is getting lower and lower.

The same products are now everywhere in the world. According to market principles, under such circumstances, that is, when a large number of products with the same function and performance emerge, price competition will occur.

Japanese companies still insist on producing high-functional goods based on the successful experience of "good goods without worrying about selling", but as the market shifts from developed countries to emerging market countries, consumer requirements have also changed. "Good but expensive" commodities start to sell slowly, and only those that can survive are "good and cheap" commodities that conform to market principles or "expensive but good" commodities that are attractive to consumers. Inadvertently by Japanese companies, market participants and rules have begun to change.

This kind of change was still very slow at the beginning, and after the Lehman crisis, the rate of change began to accelerate, but Japanese home appliance companies made a wrong judgment about this change. They stick to their own successful experience and still insist on producing high-end products. On the contrary, companies in emerging market countries have gradually grown up and expanded in line with the new trend.

Carlos Ghosn once said, "People are mobile, so the process of globalization is unstoppable." Regardless of whether we like globalization or not, the author feels that this sentence embodies a truth, that is, the movement of people brings new markets, and the differences in consumers who master the market will change market rules.

Japanese companies with rich successful experience in the world market may consider themselves to be the creators of market rules. But now, the situation has completely changed. As market participants have changed, the rules of the market have also changed dramatically.

The market principle has not changed. Consumers still buy goods that they can afford and want to buy. These goods are either "cheap" or expensive but "charismatic".

After consumers and manufacturers moved into emerging market countries, they gradually began to buy products with ordinary performance but cheap prices. At this time, Japanese companies failed to keep pace with the times. Today, in order to meet such demands, Japanese companies are shifting their business focus overseas.

But there is another very important point that Japanese companies have not grasped. Even consumers in emerging markets, as long as consumers can accept, or want to own, they will still buy "good things". For example, in emerging market countries, many young people working in hotels use iPhone. Unfortunately, they are not using Japanese mobile phones. Although the price is very expensive, they will still save a small salary to buy an iPhone.

The author feels that they are not just buying a mobile phone, but the brand of Apple. In a market full of similar products, consumers often do not know where to start. At this time, it is the "price" and the "brand" that are well-known to consumers that have a strong power.

The beginning of Apple ’s promotional email before Father ’s Day wrote:

Bring a new experience to the father's eyes.

Father's Day may wish to send a new iPad.

The staff will help your father to set it up.

As soon as the email came up, it did not promote the "new iPad" slogan, but wrote the new experience that the new product equipped with high-definition display will bring to the user. From Apple's point of view, the product is a tool for gaining a new experience. What they want to sell is the experience brought by the iPad product, not the performance and function of the product. This is estimated to be the strategy to support the Apple brand.

The author feels that Sharp's strategy this time is not to revitalize the B2C business, but to decide to provide Hon Hai with its ace technology and entrust the sales of the product to Hon Hai. Hon Hai may have discovered huge value from Sharp's brand. If Sharp has other world-famous brands, Hon Hai will certainly not let it go, but it is because of it that Sharp has fallen into the current predicament.

Samsung's focus

Sharp's strategy of working with Hon Hai is closer to B2B, while Sony intends to promote the "four-screen strategy." As in the past, this is the strategy of the B2C business. However, the author does not fully understand the significance of this strategy.

Although Sony wants to combine its “display” business, namely the TV with sluggish performance, as well as smartphones, tablets, and personal computers, these “four screens” combine to provide users with a convenient experience, but for specific methods, The author has no clue.

Maybe users can get easy-to-use functions after purchasing all four of Sony's products, but will other consumers buy products like this except for hardcore Sony fans?

Without the unique and easy-to-understand uniqueness that you immediately want to buy at first sight, the product itself cannot be sold. Moreover, if the product cannot be sold and the "four screens" cannot be collected, the benefits will not be enjoyed. This is where Sony needs to think seriously.

Samsung launched the LCD TV in the Japanese market in 2002. I have carefully compared the picture quality of Samsung products and LCD TVs produced in Japan in the mall. As a consumer, I can't see the difference. Later, when chatting with the business director of the liquid crystal department of the Japanese company, the other party made such a remark.

"Please watch for 30 minutes and try. The difference between our company's products and Samsung's products is clear."

However, it is not realistic to let consumers stare at the two products for 30 minutes in the mall. The author did not do that, so the minister ’s words have not been verified. But one thing is for sure, consumers who plan to buy LCD TVs, like the author, will never make such a comparison. If consumers feel the same appearance, function, reliability and quality, they will choose cheaper products.

Samsung, which entered the Japanese market in 2002, also once withdrew from Japan. At that time, although the appearance of Samsung products was the same as that of Japanese products, Japanese consumers did not feel the same function, reliability and quality. In other words, consumers found value in the "Made in Japan" brand.

But now, in the field of smartphones, Samsung Galaxy is also very popular in Japan and has become the target of consumer purchases. Samsung felt that the situation had changed, so it planned to return to the Japanese market in the TV field. In the company's view, the Samsung brand has been recognized by Japan.

Samsung has increased sales in the Asian market as well as the world market with the subtle difference of "expensive but good" rather than "good but expensive". What makes people think "good but expensive" is Japanese products.

Samsung is still playing rough advertisements all over the world and accumulating sales bonuses. In order to start the brand, they have made unremitting efforts in the world market.

Having said that, if Samsung is promoting the "four-screen strategy", it is more reasonable. Because first of all a product is selling well in the market, and other products are linked with it, which can form a trend of enclosing consumers. After all, even if the ultimate goal is to combine multiple products, if the first product cannot be sold, the strategy cannot be established.

The first step is to become a brand that can attract consumers. The author feels that Samsung pays great attention to this.

Prepare for new product development

Apple established the brand through the sales experience. To this end, the company even built a product system that sells applications and content through iPhones, iPads, and Macbooks. Further improving the quality and convenience of Apple's user experience is also a very beneficial mechanism for businesses that conduct business in Apple's ecosystem.

Samsung Galaxy does not have these aspects. The OS is developed by Google, and the ecosystem is also provided by Google, not owned by Samsung itself. At this point, Samsung is in a very similar situation to today's Japanese companies.

Japanese companies and Samsung own the export of the ecosystem, which is the terminal, and the interface between the user and the ecosystem, which is the hardware of the smartphone.

Therefore, if you do not improve the functions and design of the terminal and hardware to create a user experience such as a sense of ownership, the product will lose its charm. Therefore, Samsung adopts an organic EL screen and intends to form a difference through the obvious large screen. However, such decisive offensive strategies cannot be seen in Japanese companies.

Although the iPhone's screen is still not as big as the Galaxy, it does not use organic EL. However, by developing its own OS, Apple has been able to get rid of other smartphones with its refined design unmatched by others.

The two companies that are at the forefront of smartphones are in different positions in the market, so the direction of their efforts to differentiate is also different. In the world of smart phones, consumers have prominent features in their eyes. Products such as brand, performance, function, and design that can stimulate purchase desire belong to iPhone and Galaxy.

Although the author hopes that Japanese companies will also continue to launch unique products with energy, they have not seen it so far. Take Samsung's new product this time as an example. The electronic pen input technology used in the Galaxy NOTE comes from Japan Heguan. Since Japan has basic technology, why can't Japanese companies come up with such sharp application products?

It would only be a waste of effort to develop a stale business. In the United States, TVs made in Japan are increasingly becoming the staple products that attract customers with big sales. Nowadays, even if we vigorously develop TV, we cannot make any profit. Although TV also has a tendency to further develop towards high-definition, can such development achieve sufficient profit in a sufficient period?

Two years ago, the author once wrote in an article about 3D TV: "The reason why the author feels that it is difficult to maintain the price of a strategy based on the premise that the TV with the main 3D function can stimulate consumers' purchase desires is because 3D TV It is a product-oriented product conceived by Hollywood and TV companies. The author does not believe that the power of 3D TV can evoke consumer demand and purchase desires as he wishes. The author believes that the power of commodities stems from product strategy and marketing. Deliver the corresponding goods to those in need. "

"For the problems that have been found in front of you, even the logical thinking of the left brain and the rational analysis of existing methods cannot be used to create new products that can create new cultures."

"What is needed now is to use the right brain to think, use intuition to perceive what kind of potential problems exist, and then create products that can solve this problem, and develop new products that can be accepted by a wide range of people. In other words, future new Product development does not require engineering methods, but methods that favor cultural theory and sociology. "

If Apple adopts the problem-solving method of the past, that is, the analytical method that uses left-brain thinking, I am afraid that the iPhone cannot be made.

Therefore, the author feels that future product development should not only provide a certain function, but to find the function that people need. Such product development belongs to the purpose development and is closely connected with cultural development.

To achieve this, we must get rid of obsolete business and popular products and develop new products. Therefore, the author often puts "the development of new excellent products is also to reverse the stale business". Whenever I say this, I will always hear such words:

"I understand, but we have to let existing employees eat. So there is no time to do this."

If so, Japan will definitely lose to emerging market countries in the future. The author feels that it is right to move production to emerging market countries and vigorously develop the products needed by the market, but this can only barely keep up with the team.

Fortunately, Samsung is still in this situation. They really figured out Japan, and in a sense, they even cultivated themselves as Japanese enterprises more than Japan, and they noticed that they had to adapt to today's globalized world market. Today's Samsung has dedicated itself to the results of dedication and rapid development.

Because the domestic market is small, in order to achieve development, Samsung has set its sights on the world. And invest quickly to start business. The author feels that if Japanese companies want to catch up with Samsung and regain the leading position, they need to develop new products and services that have not yet been fully embarked on, not only creative, but also to develop in the fields related to cultural development Quick action. Among Japanese companies and Japanese society, such a background should still be preserved, and today the background is still there may be the last hope.

The author believes that it should be "subject to strategy" rather than "strategic obedience system". If it is a strategy formulated to protect the system, both the strategy and the system will fail in the global market. Because Japanese rules are not universal.

If Japanese home appliances want to make a comeback and return to global leadership, they must now begin to develop new uses in the context of a culture bred by new products that emerging market countries cannot produce.

Just like you do n’t want to give up once you have used a smartphone, and you ca n’t return to your past lifestyle with a washlet toilet, Japan is now in an excellent position to offer new lifestyle products. The author hopes to work with everyone, and hopes that Japan can develop new products and services.

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