Reading consumer needsPower in the global automobile and cellphone markets has shifted. The race to the top is getting shorter and more unpredictable.
Toyota Motor Corporation has fallen to third in the rankings for the last two years after it was forced to recall millions of cars in 2010 and suffered production setbacks after the earthquake and tsunami in 2011. The Japanese automaker is expected to reclaim its number one status this quarter, surpassing General Motors and Volkswagen. Its sales are reliant on family compact sedans like the Corolla and hybrid vehicles like the Prius. Toyota is also helped by a weaker yen due to monetary easing policies.
On the other hand, Samsung Electronics is expected to unseat Nokia in mobile phone sales, ousting a company that has reigned over market for the last 14 years.
Samsung Electronics has been making one big stride after another with its smartphone Galaxy series backed by the manufacturer’s advanced lines in digital devices and memory chips.
Its market share in the global cellphone market jumped to 29 percent this year from 24 percent in 2011. Nokia lost 6 percentage points and is expected to settle for 24 percent. Apple, which sells smartphones only, remained more or less unchanged with a market share of 20 percent.
The cutthroat competition in the global market has shortened the life span of products and their manufacturers while increasing market volatility, making it more and more difficult for companies to maintain their market shares.
The global market is turning into an unpredictable minefield offering both dangers and opportunities.
To survive, industry players will have to concentrate resources on research and development and ways to lower noncost competitiveness. They also have to even out production bases overseas and home to leverage against currency volatility. This is how Samsung Electronics and Toyota have managed to stay ahead of the competition.
But once at the peak, the players will have to remain vigilant against the curse of the market leader. Nokia, which has reigned over the mobile phone market for more than a decade, is now struggling to fend off hostile merger and acquisition attempts because it failed to ride the smartphone wave on time. Toyota also suffered major recalls and credibility crises due to minor glitches from excessive expansion and cost-cutting efforts.
Industry leaders must strive to live up to their titles by reading consumer needs and market trends. They must be market leaders. Otherwise, they too will have to step aside.