Samsung Electronics sells shares in four companies

Samsung Electronics sells

Samsung is one of the industry giants in technology, a company worth more than 200 billion dollars. Last year, statement by tech. giant Samsung Electronics Co Ltd shared something which made everyone shocked with this news. He said that his company sold out shares in four companies that include ASML (sold about half of its shares) Holding NV and Seagate (4.2 per cent stake) Technology Plc. to make the money available for its core businesses. They further claimed to dispossess from non-core operations as they would like to taper down their focus and assured to deliver more resources to its main businesses.

This statement from the big guy illustrates the fact that to keep a company alive needs resources. To achieve long term perspective you have to endure short term financial sacrifices. Financial logic dictates concentration on numbers. Along with resources, there is always need to focus on narrow target audience to master that particular niche. This is applicable on both market as well as customer accordingly. While focusing on smaller target market, it will be easy to contain costs. Advertisement and promotion of products and services must be specifically made for target audience/group.

Like Samsung, many companies in past shocked the world and took initiative on prioritizing narrow target markets as Walmart started to serve rural towns where landscape competition was weak and larger retailers like Sears and Kmart didn’t prefer to sell. Also take an example of Amazon who attracted buyer’s attention by selling out via internet access. Facebook too first made out as a service for Harvard pupil.

Company can earn lots of profit by simply getting focus by its owners both long-term and short-term. This strategy is more important rather than doing business expansion. Take an example of Xerox, who grew its technology and started to make and sell computers. Hence lost its focus and got failed in the new market. The much same thing happened to another dominant search engine Yahoo! whose expertise was being search engine but lost its reliability when it expanded into other online services. Hence Google took it over and become the leader.

To sustain and strengthen your business, try to focus on narrow target market. Then with the increase in customer share, your market will grow and probably there are more chances of you to become the next leader in your field.