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Management Report

Management reports, briefs issued by Samsung Economic Research Institute

The Power of Product Design

The Power of Product Design

LEE Ahn-Jae

Aug. 22, 2005

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Product design is a powerful buzzword in business management. Today, product design and brand power overwhelm product quality, even product functions as consumers demand ever higher level of aesthetic values in the products they buy.

Outstanding product design determines sales volume, boosts profitability, opens up new business opportunities, enables product developers to establish a commanding position in the mature market or can push them into new frontier markets. In 2002, Whirlpool Corporation's Duet brand of washers and dryers made a smashing hit in the market with their user-friendly and glamorous looks. The markets for white products are always mature, but Whirlpool's innovative design broke through and conquered the market.

Cutting-edge companies at home and abroad consider product design a core management strategy. Consider the case of Apple Computer, Inc. Seizing the critical importance of product design, it jumped back into the market with its i-Mac series of computers based on striking good looks and design. Likewise, large Korean companies like Samsung Electronics Corporation, LG Electronics, Hyundai Motor Company, or Kia Motors Corp. have all vied for and won leading international design awards.

For all that, however, the power of Korea's product design has a long way to go before it can catch up with that of mature industrialized countries. Overall, its design competitiveness is estimated to run between 70 to 80% of its rivals'. Korea lags behind its rivals especially in the area of establishing product identity. Different products from the same brand line rarely sustain a clear consistency in design or interfacing. Thus, Korea's needs for strengthening its corporate competitiveness with the power of better product design cannot be overemphasized.

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