(Photo credit: Wikipedia)

Fellow readers, I have discussed the following with a number of you already, but wanted to open the dialog to a larger group and get your perspective. I am fascinated with what is going on with Samsung right now, and more importantly WHY I don’t see this happening at other larger companies. With ProVoke, I am involved with many companies globally and concerned that we are not actively and deliberately innovating. Why not?

Samsung Galaxy S III (Photo credit: John Biehler)

Three threads are bringing me to the Samsung discussion: Firstly, recently I am seeing tons more Samsung laptops around, so Samsung is making great inroads in an area which was not necessarily their core strength. In parallel I am seeing far less ‘slick’ looking Dell laptops. Why is Dell not doing the same? Secondly, Samsung Galaxy S III totally rocks. How did Samsung become so competitive in the same arena where Apple paralyzed Nokia, Ericsson, Blackberry and others? And thirdly, the fact that Samsung’s success is not accompanied by Apple or Microsoft-like massive media events, conferences, displays of execs walking on stage in a Steve Jobs-like manner, taunting the next product coming up! How did Samsung achieve their success in innovation and market penetration in areas with huge competitors, and do so quietly!?

So, it comes as no surprise that today Samsung announced that their 3rd quarter profit jumped 90%. The company’s telecom unit produced profit margin of 18.8% in the three months through September 2012 (WSJ October 26, 2012). These numbers are very impressive and more so given that it is competing against the likes of Apple with 2 major iPhone upgrades in the last 12 months. The question is: If Samsung can innovate and compete in this fierce market (not sure there is a market more dynamic and competitive than phones right now), why are we not seeing tons more products/ideas succeed in other companies and markets? What is stopping companies from innovating and being competitively differentiated in the marketplace? Why are we not seeing innovation much more frequently?

A few years ago, Samsung did not play in the phone arena. Galaxy S III is a bold move in exceeding customer expectation, bringing new features/technologies AND a very strong, clear and focused

global marketing effort. The market has noticed, understood and rewarded Samsung’s approach and hence the company is successful. What is stopping Dell and HP as an example and many others to do the same?

Some factors to consider include: 1) Fear of introduction of new products, 2) Inability to penetrate new markets, 3) Lack of ability to develop new products, 4) (and this I see a lot of): Fear of digressing from historic cash-cow product lines and 5) a weak competitive positioning and differentiation capability. So, what you hear more of is : ‘ Well, that is not our playing arena, so we are sticking to our core products and abilities.’ Which means, we are not going to innovate, as it is too risky and we may fail!

Newsflash: The market today has very high expectation of innovation by all vendors, AND, cash-cows eventually die out! If we don’t start way early to innovate, we will not have meaningful products in the market. We all know that Galaxy S III was not developed, marketed and sold in 2012! It means for several years Samsung invested in innovation and preparing to enter the market. In other words, Samsung heavily prepared for a transition from Innovation–>Growth–>High Growth for this product (and others products as well). This takes time and thoughtful investment, but as Samsung and others have shown, without the investment EARLY, results will not happen.

So we need to continue the discussion around innovation. We cannot innovate in a state of panic, or always acquire to become competitive. We need to develop a Culture of Disruption and an active Culture of Innovation to succeed! Never before in the history of technology has there been a more important time to have this discussion. As always welcome your thoughts and views on this…

Related articles

• Samsung Sold Twice as Many Smartphones as Apple Last Quarter (mashable.com)
• Samsung earns record $7.4 billion profit in Q3 2012 on strong Galaxy sales (mobilesyrup.com)
• Samsung’s Profits Soar, Up 91% Thanks To Smartphone Sales (businessinsider.com)