01 Nov 2016
Samsung is the latest company to fall into the strategy trap of loving a product too much
Executives are falling into strategy traps that include “loving your product too much” according to Marcus Alexander, Adjunct Professor of Strategy and Entrepreneurship at London Business School.
He set out four of the most common mistakes in his London Business School Review article ‘The quad effect: where to spot strategy traps’.
It raises pertinent questions in the wake of Samsung’s fire-catching Galaxy Note 7s. The cutting-edge technology company is the latest to add “more bells and whistles”, such as an iris scanner, to an existing product.
“Sometimes it’s just not worth it. Firms need to take a genuine look through their customers’ eyes,” said Alexander.
“Sometimes people love their own services or products so much that they create add-ons irrespective of their customers’ needs.”The Galaxy Note’s bigger screen was originally brought in to appease Samsung customers who wanted a larger display. In September 2013, the company released its third iteration a year before Apple launched its note-sized iPhone: the Galaxy Note sold 10 million units in two months.
Samsung made the strategic decision to skip the Note 6 and instead launched the Note 7 in 2016 to compete with Apple’s latest model. Such features included an iris scanner, water resistance and approximately 16% more battery life than its previous version. Critics slammed the iris scanner for making users go through more steps to unlock the phone and the TouchWiz interface for being “different for the sake of being different”, without adding to the software experience.
“Improvements must add value,” said Alexander. “Take the functionality of a typical spreadsheet; 99.9% of people use less than 1% of what it can do. If a user won’t pay more for it (because it’s irrelevant to their needs) what’s the point of adding extra features?
“There are often incremental improvements that seem just too simple to the savvy product designers – say, to put a flag at the top of the spreadsheet to show it’s the top – that would add value to the customer."
Should Samsung have focused on safely meeting consumer demand for smaller, longer lasting devices rather than adding extra features?
Alexander said: “Although the incremental consumer benefits were reasonable, they did not justify taking such a risk on the technology. When people fall in love with their products, they can become overly focused on relatively minor improvements versus relatively significant risks.”
Top of any smartphone feature list for would-be customers is a battery that does not catch fire. Samsung has said the recall could cost it upwards of US$5 billion (£4.12 billion). The company’s market value fell US$17 billion (£13.9 billion) in October 2016.