Samsung Electronics: Financial Crisis in Korea
SAMSUNG: FINANCIAL CRISIS
IN KOREA
Student name
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Samsung Electronics: Financial Crisis in Korea
Table of Contents
INTRODUCTION:..........................................................................................................................2
BACKGROUND.............................................................................................................................3
Analysis Of the Problem..............................................................................................................3
Samsung strategic Change:..........................................................................................................4
History Of Problem:.....................................................................................................................4
Potential Causes to Problem:.......................................................................................................5
Samsung and Korea economic growth:.......................................................................................5
Stakeholders:................................................................................................................................6
Customers:................................................................................................................................6
Shareholders:............................................................................................................................6
Employees:...............................................................................................................................6
Barriers to change:.......................................................................................................................6
PESTEL:...................................................................................................................................6
Porter Five Forces:...................................................................................................................8
References:......................................................................................................................................9
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Samsung Electronics: Financial Crisis in Korea
INTRODUCTION:
Samsung Group established in 1969 in Korea. Samsung group is the world’s giant business
conglomerate, enjoys great revenues every year. The headquarter of Samsung group established
in Seoul, South Korea. Samsung enjoys’s large revenue each year in every region, country where
Samsung serves its services and products. In 2008, Samsung enjoyed US$174 billion revenue
from its headquarters, South Korea. In Korean Samsung reflects the name “Tri-Star” or “ three
stars”. This name represents the Samsung brand in Korea. Additionally, Samsung group provides
its affiliation to different business categories. This business serves their participation under the
Samsung umbrella. The Samsung Electronics is the second most revenue generated business
affiliation under the heads of Samsung group. Besides Samsung Electronics, Samsung group
enjoys the revenues from Samsung Heavy Industries business affiliation. The Samsung heavy
industries served to consumers for several decades and enjoyed the title of world’s 2nd giant
shipbuilder. Additionally, Samsung group also leads the construction sector with the Samsung
C&T company name. [Mat17].
Although, Samsung serves its services in electronics and enjoys the most powerful brand
recognition in electronic brand from last decade. Moreover, due to high sales of Samsung
Electronics in Korea, the giant proportion of total export of South Korea depends on Samsung
Electronics. On the contrary, Samsun group also serves its services and products from every
industry almost, it serves in financial, retail industries, chemical industries and construction too.
Samsung serves various countries around the world. The top revenue generated by Samsung
from 50 countries and makes Samsung group financial stable in the market. Samsung Electronics
logo shows Samsung written in white font with a blue background. This logo depicts that
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Samsung Electronics: Financial Crisis in Korea
Samsung is reliable, stable and warmth for the consumer, and the people can trust the brand
“Samsung”. [Sam172].
As Samsung group serves in different business categories. Samsung Electronics manufactures
different electronic products. The key revenue generated products of Samsung electronics are
Samsung television, notebooks, washing machines, refrigerators, microwaves computers, CD
players, LCDs, LEDs and much more. Samsung enjoys the recognition of medium cost value
because it serves high-quality products to consumers with affordable cost. Moreover, Samsung
enjoys more revenues by making the export of its product to other countries. In 1972, Samsung
made the first venture with television market and introduced first black and white television for
customers.
With the time passes Samsung enjoys multiple highest revenue records in different time periods.
On the contrary, Samsung also faces some decline in sales in different regions of the country. The
ups and downs, profits and losses are the part of Samsung group and Samsung Electronics. To
enjoy the world recognise the brand name, Samsung group always focus on its marketing and
advertising strategies. It also provides its participation to different corporate social
responsibilities for enjoying the brand image among consumers. Samsung also performs a vital
role as Olympics Games member, so everyone knows the Samsung brand well. [Ste13].
BACKGROUND
Analysis Of the Problem
Samsung is a well-recognized brand in the market and faced many ups and downs in its growth
period. Most of the times Samsung enjoys remarkable revenues as a market leader. On the
contrary, Samsung also faced different financial crisis and revenue loss because of heavy
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Samsung Electronics: Financial Crisis in Korea
participation of competitors. In 1990, Samsung performed its business operations only in
electronic appliances. While, at that time, Samsung performs the CMOS chip assembling in all
the Samsung products. Exactly a decade later, Samsung performs enhancement in its technology
and create some innovativeness in its products. Today, different peoples around the world enjoy
more than seven product categories of Samsung. Moreover, in 1997, Samsung faced economic
downfall in Korea and suffered approx. 7.5 billion USD debt. But, this downfall never stops the
Samsung to enjoys continuing growth and strong market position. Samsung again re-built itself
and achieve the recognition of world’s best electronic product enterprise. [Sunnd].
Samsung Strategic Change:
To earn competitive advantage, it is necessary that Samsung will recall all its strategies and
revamp the business model. Samsung must introduce some innovative advancement in the
telecommunication industry. The shareholder and employee will help Samsung to stand again
and earn lost brand recognition once again. Samsung always provides its strong participation in
serving the consumer in the market. It doesn’t feel disheartened and stops its serving of product
and services to consumers. [Sam141].
History Of Problem:
When Samsung newly launched in the market, and was in the initial stage of its growth, the
peoples not used of Samsung products. They consider Samsung as cheap electronic products
maker and don’t trust the quality of Samsung products. Moreover, Samsung makes huge
investment at its R&D and change the definition of electronic products with the making of
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Samsung Electronics: Financial Crisis in Korea
technologically advanced products. With this continuous technological advancement and
innovative product category, Samsung received the title of top 25th electronic product enterprise
from the list of 100 electronic firms.
Samsung faced a financial crisis in Korea and suffered huge loss and its sales declines. Due to
the financial crisis, Samsung Electronics faced 10% sales decline in every month. It changes the
Samsung picture in Korea.
Potential Causes of Problem:

Korea faces over borrowing and approx. Thirty giant business conglomerated faced high
debts more than their equities. In those thirty conglomerates, the Samsung Electronics

was one.
In Asian countries, there was a huge outflow of capital due to changes in currency value.
Due to this, the market value of different conglomerates in Korea hits, and Samsung

Electronics faced a huge loss.
Korea, most of the time adopts cheap labour to increase the production of different

products under the brand name of different companies.
The other key factor for Korean financial crisis of Samsung Electronics is the worst
participation of government officials. The government regulators are unable to maintain

its foreign reserves as the giant conglomerates hit with huge debts.
Due to the continuous high growth of debt, Samsung faced a deficit of 30 billion.[Lee98].
Samsung and Korea economic growth:
Samsung faced a huge financial crisis in Korea due to different factors. The factors highlighted
above. The survey conduct and researchers evaluate that Samsung suffered 1.25% position at
stake and provided its strong participation to recover from its financial crisis. Due to the
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Samsung Electronics: Financial Crisis in Korea
continuous effort, Samsung succeeds to enjoy 3% revenue increases next year of financial crisis.
[Reu16].
Stakeholders:
Customers:
The customers consider as a vital stakeholder in Samsung electronic good book. Samsung also
provides it's more focus on customer satisfaction. It adopts business management practices with
highly customer interaction and always keep awareness of customer demands of the products.
Shareholders:
Shareholders are the key assets for Samsung electronics. The decision takes by Samsung always
shared and discussed with shareholders and takes the suggestion of key management issues.
Employees:
Samsung considers its employees the future asset of Samsung. Samsung always does recruitment
of talented employees that provide an addition to the Samsung products and provides creativity
for enhancing the brand image of Samsung.[Sam173].
Barriers to change:
PESTEL:
Political:
Samsung hits various time due to political foregrounds. The true evidence of Samsung political
influence is the financial crisis faced in Korea. When Samsung suffered the worst period of
financial crisis in Korea, there were various barriers which stop Samsung to increase the
productivity.
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Samsung Electronics: Financial Crisis in Korea
Economic:
Economic factors are also responsible for the decline of Samsung Electronics. However, the
declined face by Samsung belongs to any region. The recent decline faced by Samsung due to
change in consumer trend in Korea.
Social:
Since Samsung believes on continuous transformation of innovative products, so it enjoys most
of the time huge proportion of sales. Additionally, Samsung also offers the products to the
customers based on their choice, preferences and selection mode.
Technological:
Technology also the key factor of Samsung growth. Samsung always makes continuous
advancement in its products and keep up to date its Research and development department to
make changes in the product. Samsung always provides new and innovative products to its
customers.
Environmental:
Samsung always provides wide participation in corporate social responsibilities. There were
many examples where Samsung provides its role towards society welfare. Samsung makes its
strong participation in green environment practices to keep the environment green.
Legal
Samsung Electronics is a giant brand under the umbrella of Samsung group. So, there were many
legal restrictions enforces to Samsung which necessary to follow by Samsung Electronics.
[Ada16]
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Samsung Electronics: Financial Crisis in Korea
Porter Five Forces:
The threat of new entrant:
The threat of new entrant is insignificant as many giant competitors already exist in the industry.
For the new entry of any competitors, there is a huge proportion of investment needed regarding
cash investment and experience too.
Buyer’s bargaining power:
The buyer bargaining power is highly significant. There is multiple choice of brands available in
the market, which customer select to choose to switch.
Supplier’s bargaining power:
Suppliers bargaining power is low because there is few number of suppliers available in the
market. The benefit of the existence of few numbers of suppliers is that Samsung doesn’t need to
make negotiation of huge price to its buyers.
The Threat of Substitute:
Samsung enjoys great market profitability in the market. There is a various number of substitute
available in the market which customer can adopt.
Rivalry among existing competitors.
Competitors rivalry is high, as many brands already exist in the market. There is huge effort
needed to Samsung to maintain its market position and brand name for long term period.
[Joh151]
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Samsung Electronics: Financial Crisis in Korea
References:
Adam. (2016). Pestel Analysis-Samsung. Retrieved from http://freepestelanalysis.com/pestelpestle-analysis-of-samsung/
Burris, M. (2017). The History of Samsung (1938-Present). Retrieved from Lifewire:
https://www.lifewire.com/history-of-samsung-818809
Dudovskiy, J. (2015). Samsung Porter’s Five Forces Analysis. Retrieved from http://researchmethodology.net/samsung-porters-five-forces-analysis/
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Samsung Electronics: Financial Crisis in Korea
Kovach, S. (2013). How Samsung Went From A Dried Fish Exporter To One Of The Top Names
In Tech. Retrieved from Businessinsider: http://www.businessinsider.com/history-ofsamsung-2013-2
Lee, K. (1998). Financial Crisi in Korea. Retrieved from
http://www.hofstra.edu/pdf/biz_mlc_lee1.pdf
Reuter. (2016). Samsung’s Crisis Could Undermine South Korea’s Economic Growth. Retrieved
from Fortune: http://fortune.com/2016/10/13/samsung-galaxy-note-7-korea-economy/
Samsung. (2014). Strategy Changes. Retrieved from business Korea:
http://www.businesskorea.co.kr/english/news/ict/5484-strategy-changes-samsung-lgmodify-product-line-strategies-smartphones
Samsung. (2017). About Samsung. Retrieved from Samsung:
http://www.samsung.com/us/aboutsamsung/corporateprofile/history06.html
Samsung. (2017). Communication with Stakeholders. Retrieved from Samsungsecurities:
http://www.samsungsecurities.com/csr/engagement.do?cmd=list&MenuCode=M020102
Sun, J., Sun, X., & Xu, T. (n.d). Running Head: Samsung Electronics. Beijing, China.
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