Samsung was driven by Sony failings - and look at it now

In 2001, I was in a meeting at Samsung Electronics in Korea where the brand team was revealing its plan to elevate the brand from a middle tier brand perceived on a level with Sharp and Canon, up to the top tier to be on an equal footing with Sony.

I recall thinking at the time that this was an ambitious, but likely unattainable goal for Samsung.

Well, lo and behold, in Interbrand's 2009 survey of the most valued brands, Samsung rings in at 19, with Sony now eating dust at 29. And there are many theories for why this Darwinian brand flip-flop has occurred.

Bigness. Sony has had trouble managing its product quality as it grew into a mega-giant company with myriad product lines. Once a darling of innovation and a leading innovator with only the most premium-priced products, now Sony can be bought frequently on discount, and better-designed options from other brands are often available.

Unfair Practices. There is an oft-heard rumour that the Korean government has aided Samsung with research and development funding, and trading advantages behind the scenes. Even if there is truth to this, it certainly should have had no effect on Sony's string of product misses, design issues and slow movement to market.

Complacency. Sony was the king of the hill for a long time, unrivaled in areas like portable music (Walkman), flat screen TVs (Bravia), gaming (PSP), camcorders, and even personal computing (Vaio). But if power breeds corruption, then domination breeds complacency. Its many competitors, old and new, were anything but complacent.

Having worked with Samsung, I think there is another factor that drove them relentlessly to challenge Sony. Samsung had a deep inferiority complex about itself when eyeing Sony. This sense of inferiority fed a passionate determination to catch, and pass, the leader.

The big leap forward for Samsung came with the 1998 Winter Olympics, when Samsung first signed on as sponsor. This was not only a big financial commitment, but it was also a huge perceptual coup to begin associating itself with the biggest brands in the world, at the world's pre-eminent sporting competition. Interesting, too, that this Olympics was in, of all places, Japan.

Capturing and maintaining determination is a challenge for any market leader, as the recent rupture of the Toyota brand bubble proves by apt comparison. Research and development should not be limited to products, but also to organisations and people.

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This article was originally published in the 20 May 2010 issue of Media.