One of the basic strategies of large corporations is 'Bakri Damae' (薄利多賣), which means to sell a lot while making a small profit.

It is a method of achieving 'economies of scale' through mass production to increase the overall profit by increasing sales although the per-unit profit is small.

In the early days of industrialization, it was one of the few strategies that Korean companies could take, which lacked technological prowess.



Samsung Electronics is undoubtedly the world's number one mobile phone company.

Market research firm Counterpoint Research revealed that Samsung Electronics ranked first with a market share of 18.9% last year.

Although Apple recorded the highest sales volume since its inception, it ranked second with a market share of 17.2%.

Xiaomi came in third with 13.6%, and Oppo came in fourth with 11.4%.

However, these figures are based on sales only.

'Selling a lot' Samsung, 'selling a lot' Apple

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Let's look at operating profit.

According to a study by the same company, Apple swept 75% of its operating profit in the global smartphone market in the second quarter of last year.

On the other hand, Samsung Electronics accounted for only 15%.

This is the result of the success of Apple's first 5G handset, the iPhone 12 series.



Of course, it cannot be said that Samsung's strategy, which is dominating the mid- to low-end market, is wrong.

However, there are some unavoidable differences in the capabilities of these high value-added product groups that lead to corporate performance and evaluation.

These are the ongoing controversy over '60,000 electronics' and the pessimism that 'Samsung of technology' is over.

In fact, it is the brand image that makes Samsung as difficult as technology.



Apple itself has a strong image of a premium level.

In fact, in the UK Brand Finance survey, Apple's brand value was estimated at about 427 trillion won.

Samsung also ranked sixth with 129 trillion won, following global companies such as Amazon and Google, but it is more than three times higher than Apple.

Brand value is not something that can be built in a short period of time, so for Samsung, the need for technology investment along with a high-end strategy has increased.



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'Sell less, earn more' Hyundai and Kia

Contrary to Samsung Electronics, there are also domestic companies that 'sell less and earn more'.

Hyundai and Kia.

Although there were not a lot of negative factors such as disruptions in the supply of parts such as semiconductors and rise in raw material prices due to the supply chain crisis, the 'earnings surprise' exceeded market expectations and achieved surprising results.

Based on the consolidated financial statements, Hyundai Motor recorded an operating profit of KRW 1.92 trillion in the first quarter, while Kia also recorded KRW 1.60 trillion in operating profit, up nearly 50% from the same period last year.



In fact, Hyundai Motor and Kia's sales decreased in the first quarter due to a series of adverse events such as supply chain problems including semiconductors, Russia's invasion of Ukraine, and the lockdown in Shanghai, China.

Hyundai Motors sold 92,945 units, down 9.7% from the same period last year, and Kia also dropped 0.6% to 688,739 units.

The reason we were able to make more money even though our sales volume decreased was because we focused on high value-added, that is, premium cars.



Luxury brands such as Genesis and SUVs sold more not only in Korea, but also in the US and European markets.

Also, favorable conditions for exports were created as the won/dollar exchange rate rose.

Hyundai and Kia are also looking forward to sales of electric vehicles, including Genesis and SUVs.

In fact, Hyundai Motor Company's first dedicated electric vehicle, the IONIQ 5, was selected as the 'World Car of the Year', followed by the 'Electric Vehicle of the Year' and 'Car Design of the Year'.

In addition, Kia's EV6 was also selected as the '2022 European Car of the Year'.



As I said at the beginning, focusing on premium products is not the right answer.

Market share is still an important company evaluation criterion, and 'break-through' is a valid tool for modern corporate management.

It is for this reason that Apple is working hard on low-end models such as 'iPhone SE' in addition to premium phones.

Either way, in order for our company to survive in the global market, we need to make efforts to develop our brand image along with our technological prowess.