SAMSUNG ELECTRONICS
Seoul, Korea
Ali Soltani
Spring 2011
Agenda
• Samsung Group – History & Structure
• Samsung Electronics
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History
Company Focus
Financial Overview
Strategy
Organizational Structure
Challenges
Samsung Group
• Founded in 1938
– exporter of dried fish, vegetables, and fruits
– flour mill and confectionery machines
• 1950’s Economic Stabilization
– Korean War - Samsung lost all assets
– aimed to help rebuild Korean economy; entered the
manufacturing industry (sugar, fabrics)
– became a leader in modern business practices (recruiting
from outside)
• 1960’s Expansion of Key Industries
– entered electronics and chemical industries
– 1969 established Samsung Electronics Co.
Samsung Electronics
• Established in January, 1969
• 1970’s: Bet the future on electronics
– laid the groundwork for electronics in Korea
– helped the domestic economy grow
– paved the way for exports
• 1980’s: A more comprehensive electronics company
– established plants in Portugal and US
– established Semiconductor and Communication corporation
– began memory chip business
• Early 90’s: Integration and Globalization
• Mid-Late 90’s: Implementing new management
strategies
• New Millenium: Digital Vision
History
1972
1992
Production of B/W TV sets began
Company ranked world’s top DRAM supplier
1969
1980
1995
Company established
Korea Telecommunications
Corp. acquired
TFT-LCD mass production began
1974
1988
1994
Wafer fabrication started
Samsung Semiconductor &
Telecommunications merged with
Samsung Electronics Co.
256Mb DRAM
developed
1996
CDMA cellular services
commercialized
History
2004
 S-LCD Corp., LCD joint venture with Sony established
 World’s 1st to develop and demonstrate Mobile WiMAX
2002
2006
Production using 300mm wafer and
90nm processing technology started
1997
2003
Worldwide Olympic
Partner contract signed
Company became leader in
flash memory
 World’s 1st Blu-ray
Player launched
 World’s 1st 50nm
1Gb DDR2 DRAM
developed
1999
2005
 World’s 1st to offer full lineup of digital TVs
 Developed watch phone,
MP3 phone and TV phone
 World’s 1st Satellite
and Terrestrial DMB
terminals launched
 World’s 1st 102”PDP
TV, 82”LCD TV,
and 71” DLP™ TV
developed
2007
World’s 1st
64Gb NAND
flash memory
developed
2009 ~ 2010
 Reorganized into stand-alone
businesses
 Acquired Samsung Digital
Imaging Co.
Global Network
66 Countries
June 2010
Manufacturing Subsidiaries
Sales Subsidiaries
33
50
Distribution Centers
Design Centers
R&D Centers
Branch Offices and Other
Total Facilities and Offices
2
7
20
81
193
Samsung Today
Leader in semiconductor,
telecommunication and digital
convergence technologies
193 offices and facilities
in 66 countries and
174,000 employees worldwide
Named one of World’s 50
Most Admired Companies
by Fortune
Magazine
Ranked 4th globally and
1st in Asia among
corporations on the Carbon
Disclosure Leadership
Index
Selected for the Dow Jones
Sustainability Index
Worldwide Olympic
Partner since 1997
Second biggest US
patent winner in 2009 (IFI)
Net Sales (2009): US$116.8 billion
Net Income (2009): US$8.3 billion
19th in
BusinessWeek/Interbrand’s
100 Best Global Brands
Business Units
Visual
Display
Mobile
Communications
Telecom
Systems
IT
Solutions
Digital
Appliances
Semiconductor
LCD
Digital
LCD
Imaging
| 9
Financial Performance
Strong revenue growth
Revenue
Net Income
(Consolidated basis)
(Consolidated basis)
(Billion US Dollars)
(Billion US Dollars)
$8.5
$116.8
$7.5
$105.0
$92.0
$8.3
$7.9
$96.5
$79.6
$4.4
2005 2006 2007
2008 2009
2005 2006 2007
2008
2009
Financial Overview
Net Sales
Dollars in Bilions
16
14
12
10
8
6
4
2
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Financial Overview
Net Income
Dollars in Bilions
16
14
12
10
8
6
4
2
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Strategy
Samsung Market Strategy
before 1997
Strategy
 Strengths
 Long-time experience in producing technical
components and low cost manufactured products for
well-known companies.
 High –quality products
 Weaknesses
 Low-price and down-market image
 Its capital eroded by the Asian financial crisis in 1997
 Distribution via discount chain at very low price
 Communication messages were not consistent due to
using so many advertising agencies with more than
20 slogans
Strategy
• Opportunities
– Development of digital technology
– New powerful advertising channel: Internet
• Threats
– The global memory chip market dramatically
decreased due to the shrinking demand and
excess supply
– Chinese cheap products
Samsung Market Strategy
After 1997
Strategy
Digital Vision: “A Company that leads the digital
convergence revolution”
SOLUTION:
1. 1.Lay off 30,000 employees
2. 2.Close down some of Samsungs factories for 2
month
3. 3.Sold about $2 billion worth businesses (pager &
coffeemaker)
 Design
 Consumer-brand awareness
 Global leader in several products
 High price products
 Fastest growing brand
 Brand value : $ 15 Billion
 Hardware
 Develop all components used in its own products
Strategy
 2000 : design-led management
 2001 : design labs : Los Angeles , London
 2002 : Usability Laboratory
 2003 : 33 awards at top design
 2006 : market value rises above $100 billion
 2007 : world's second-largest Mobile Phone maker
 2008 : take the No.1 spot as the world’s largest technology
company
 2009 : Entered the top 10 list in the world’s top 100 global brands
Product Category
Market Rank
Memory Chips
1
Computer Monitor
1
LCD Display
1
Big Screen TVs
1
DVD-VCR Combos
1
Projection TVs
2
DVD Players
2
Laser Printers
2
Mobile Phones
2
Microwave Ovens
3
Plasma TVs
4
Camcorders
4
Wow Products
•
“We have to combine computers , consumer electronics and
communications as Koreans mix their rice with vegetables and meat”
•
“We want to be the Mercedes of home electronics”
•
“They’ve got the products , a growing reputation as the innovator , and
production lines to back that up”
•
Creating chief design office
Technological Competitiveness
Innovating technologies by sustaining investment in R&D
Investment in R&D
(Billion US
Dollars)
$6.0
$6.3
$7.5
$6.2
$5.5
$5.3
2005
R&D Commitment
(as a % of parent company sales)
2006
2007
2008
2009
Culture
•
•
•
•
Entrepreneurial
Profit focused
Decisive
Different from other firms in Korea and within
chaebol
Thank you