Case Study
- Samsung SDS Rev 2: Apr., 2015
Prof. Euiho Suh
POSTECH Strategic Management of Information and Technology Laboratory
(POSMIT: http://posmit.postech.ac.kr)
Dept. of Industrial & Management Engineering
POSTECH
Contents
1
Introduction
2
Vision & Mission in 2005 - Overview
3
Vision in 2005
4
Mission in 2005
5
Goals in 2005
6
SWOT Analysis
7
BCG Matrix
8
GE/Mckinsey Matrix
9
International and Domestic Strategies
Introduction
Overview
Business areas
 Established in 1985
 The biggest System Integration (SI) company in Korea







Intelligent manufacturing
Intelligent logistics
Intelligent office
Intelligent surveillance
Smart education
Smart healthcare
Smart converged space
3
Vision & Mission in 2005 - Overview
Vision
Mission
To become the information service integrator
who creates the best value for customers
Lead Networking Society
 To become proactive to lead customer needs
 To foster talented people of the knowledge society
 To provide information culture in everyday life
Impression Management
Corporate
Values
Impressing
Employees
Impressing
Customers
4
Impressing
Everybody
Vision in 2005
DREAM 21
Samsung SDS, leading the network society of 21st century
Sales: 10 trillion won
Average annual growth: 38%
Operating profit: 500 billion won
Number of employee: 20,000
More than 5 world class products
Global top 10 IT service corporate
To establish
Cambridge Samsung Partnership (CSP)
with Cambridge Technology Enterprise (CTE)
5
Mission in 2005 (1/2)
Customer Market
 To become proactive to lead customer needs
 To foster talented people of the knowledge society
 To provide information culture in everyday life
Product Service
 Solution service - network, hardware, software
 Information service - Consulting, Education
 Communication service - Communication network,
Internet, PC communication
Geographic
domain
 Proactive overseas investment
 IT centers - India, Russia
 international Offices - San Jose, Tokyo, China
Technology





Global cyber education
Glocalized cooperation
Work process optimization
Video conference system
Strategic alliance
6
Mission in 2005 (2/2)
Concern for
survival
 Proactive action to lead customer needs
Philosophy
 To become the information service integrator who
creates the best value for customers
Self-concept
 Establishing Cambridge Samsung Partnership (CSP)
with Cambridge Technology Enterprise (CTE)
in order to improve international businesses
Concern for
Public Image
 To provide information culture in everyday life
7
Goals in 2005
■ Goals of Samsung SDS
Goals
Sales 1.7 billion won
S/W development
H/W sales
Sales 740 billion won
SI 44%
SM 38%
N/W 16%
Education 2%
Sales 2 trillion won
SI 58%
Consulting 6%
Education 2%
N/W 16%
Information
Distribution 18%
Year
1985
1996
2000
2005
Status
Foundation
The best IT corporate
in Korea
Top 25 global IT
service corporate
Top 10 global IT
service corporate
Sales/Average
Annual Growth
1.7 billion won
740 billion won
2 trillion won / 28%
10 trillion won / 38%
87% / 13%
70% / 30%
50% / 50%
Internal/External
Investment Ratio
Sales 10 trillion won
SI 50%
Consulting 10%
Education 5%
N/W 20%
Information
Distribution 18%
Operating Profit
-400 million won
10 billion won
60 billion won
500 billion won
Number of
Employees
63
5,700
9,000
20,000
2
More than 5
5 offices
15 IT centers
10 offices
20 IT centers
World class
products
Overseas
2 offices
1 IT center
8
SWOT Analysis (1/3)
■ Internal Assessment of the Organization
Strengths (S)
Weaknesses (W)
 Good brand image
 Excellent human resources
 The largest IT corporate and
longest history in Korean IT
industry
 Excellent education programs
 As known as SI academy
 Active support from Samsung
group
 The largest ICT education center
 Low flexibility of management
 Low ability to deal with changes
 Short history compared with
foreign competitors
 Lack of experts
 Lack of consultants
 Lack of professional skills
 Poor information infrastructure
9
SWOT Analysis (2/3)
■ External Assessment of the Environment
Opportunity (O)
Threat (T)
 Globalized market
 A lot of demands from the
financial industry
 Increasing needs for the public
sector
 The growth of the global economy
 Development of information
technology (e.g., Internet)
 Economic downturn of SI (System
Integration) industry
 Low chance to get investment
 Rivalry among existing firms
 Threat of international corporates
 The opening of the
telecommunications market
 Dumping
10
SWOT Analysis (3/3)
■ TOWS Analysis
Strengths
Weaknesses
Opportunities
S-O strategies








W-O strategies
Strategic alliances with Microsoft
To make vision focusing on “Globalization”
To improve the cyber university and online services
To strengthen education of foreign language
To enter the financial industry aggressively
Intensive investment on Intranet
To establish corporation in U.S.
To land large-scale-SOC (Social Overhead Capital)
orders aggressively
Threats
S-T strategies













Strategic alliances with foreign consulting firms
To develop HR (Human Resource)
To start AT&T WORLDNET Service
To make CAD (Computer-aided-design) department
To focus on the medical industry
To make Post-doc courses
To construct the global network
W-T strategies
Joint research with universities
To hire experts
Strategic alliances with foreign firms
To improve customer services
Partnerships with CEOs who have worked in SDS
Strategic alliances of advertisement and brand
11
 To design the flexible organization
 TQM (Total Quality Management)
 To develop and utilize system development
methodologies
 Headhunting
 Group IT infrastructure and network
 System management efficiently
 Outsourcing
BCG Matrix
Consulting
System
Integration
Market Growth Rate
High
ICT
Education
Low
Information
Distribution
System
Management
High
Low
Relative Market Share
12
GE/Mckinsey Matrix
Competitive Strength
Medium
High
High
Market Attractiveness
Medium
Low
13
Low
International and Domestic Strategies
International
Domestic
 Cost Leadership
 Concentrated Growth
 Concentrated Growth
 Vertical Integration
- Vertical integration with ICT SMEs
 Concentric Diversification
- Investment on all of the fields related with ICT
14