In One Area, Samsung Out Performs Apple

Samsung's Galaxy poses a serious threat to Apple's hegemony among trend setters and taste makers in the tablet market. As Brian X. Chen reviews, the result could be the outcome of Samsung's devotion to generating market intelligence. The money generation expenditures:

Samsung outspends Apple on research and development: $10.5 billion, or 5.7 percent of revenue, compared with $3.4 billion, or 2.2 percent.

Samsung has 60,000 staff members working in 34 research centers across the globe, including, Russia, Britain, India, Japan, Israel, China and Silicon Valley. It polls consumers and buys third-party research reports, but it also embeds employees in countries to study trends or merely to find inspiration for ideas.

Designers of the Galaxy S III say they drew inspiration from trips to Cambodia and Helsinki, a Salvador Dalí art exhibit and even a balloon ride in an African forest.

"The research process is unimaginable," said Donghoon Chang, an executive vice president of Samsung who leads the company’s design efforts. "We go through all avenues to make sure we read the trends correctly." He says that when the company researches markets for any particular product, it is also looking at trends in fashion, automobiles and interior design.

Samsung's devotion to generating market intelligence is admirable. However, little attention is given to Samsung's dissemination of market intelligence. Given its global research efforts along with its designers who draw from a variety of sources in creating a product, few wonder how Samsung shares this market intelligence. Dissemination remains a key component to market orientation. A company can create as much market intelligence as it wants. If the company cannot share what it generated, though, then its ability to respond to market intelligence will be greatly dampened.

The two companies differ on responsiveness. Chen quotes Kim Hyun-suk, an executive vice president at Samsung:

"We get most of our ideas from the market. The market is a driver, so we don't intend to drive the market in a certain direction"

In contrast Apple adopt an approach consistent with a company with a product orientation. They strive to drive the market.

The market driving vs. market driven debate will not be settled by these two companies. Both companies, though, achieve superior financial performance thanks to their ability to manage resources related to market orientation. The more long-term question remains which company will continue to maintain its ability to generate, disseminate, and respond to market intelligence.

This battle lacks the drama of the Microsoft OS vs. Apple OS fights.