SAMSUNG ELECTRONICS COMPANY.

1.0 HISTORY OF SAMSUNG ELECTRONICS

Samsung History Samsung's history dates to 1938 when "Samsung General Stores"
opened in North Kyung- sang Province, Korea. The company conducted its trade
business until the 1950s when it became a producer of basic commodities such as
sugar and wool. In 1958, Samsung became involved in the insurance industry by
incorporating a local fire & marine insurance company.

During the 1960s, Samsung became one of the first Korean companies to actively
expand its overseas trade. The group consolidated its manufacturing base by adding
paper and fertilizer businesses. Samsung continuedwith expansion into the life
insurance business, strengthened its retail operations and then moved into the
communications sector, successfully establishing a newspaper and a broadcasting
company. The 1970s were a crucial period in shaping present-day Samsung. Its
strengths in the semiconductor, information and telecommunications industries grew
from the significant investments made during this period. Samsung also took a
meaningful step toward heavy industries by venturing into aircraft manufacturing,
shipbuilding and construction, as well as chemical industries.

In the 1980s, Samsung expanded its efforts into exploring the larger markets overseas.
The group began contributing to foreign economies by building facilities in the US, the
UK and Portugal. Samsung also invested considerable resources into fostering Koreas
rich heritage by supporting a wide range of cultural and artistic activities. The final
decade of the 20th century saw the evolution of Samsung's new approach to
management. Chairman Kun-Hee Lee's insightful vision and the introduction of the
"New Management" in 1993 acknowledged the need to transform management
philosophy in or-der to keep up with a rapidly changing global economy. More recently
in 2000, a "Digital Management" approach was adopted to ensure that Samsung
maintains a leading position as the Information Age continues to transform global
business and culture. Since Kun-Hee Lee's appointment as Chairman in 1987, the
group's total sales increased by 7.2 times to US$98.7 billion and net income by 25 times
to US$4.5 billion in 2001. Total assets of the group grew 12.6 times to US$124.3 billion.

Today, Samsung has evolved into a group of companies unmatched by others in its
range of industries and performance. It is now coherently restructured and streamlined,
well-trained, globally-focused and responsive to the needs of each market, and more
committed than ever to true innovation. The group's three core business sectors are
electronics, finance, and trade and services.
1.1 Leaders of Global Growth:

Kun-Hee Lee, Chairman:

Son of founder Byung-Chull Lee, Kun-Hee Lee's early career at Samsung included a
decade serving as Executive Director of the Joong-Ang Daily newspaper and Tong-
Yang Broadcasting Corporation. Becoming Vice Chairman of the Samsung Group in
1978 and Chairman in 1987, Lee presented a blueprint for Samsung's global success in
the 21st century with his "New Management" declaration in 1993.

In 1998, Lee took over the helm of Samsung Electronics Co. as Chairman. Lee's "New
Management" encompasses intellectual capital, organizational creativity, technological
innovation and employee empowerment as the key strategies for Samsung's profitable
growth in an era of unbridled global competition. Lee was named among Asia's 50 most
influential people by Asiaweekly for six consecutive years and was also named one of
the world's most influential people by the French weekly Le NouvelObservateur. His
broad perspective on business stems in part from his participation in many
organizations such as the Korea-Japan Economic Committee and the Federation of
Korean Industries

Byung-Chull Lee (1910-1987), Founder: Byung-Chull Lee

He founded the Samsung Store in 1938, was the leading business visionary of his time.
With a philosophy of service to the nation through business and an emphasis on
cultivating quality human resources, Lee is remembered today as much for his
pioneering role in Korea's industrialization as for his philanthropic activities and spirit of
social duty. Samsung's, and indeed Korea's, strong presence in semiconductors,
electronics, engineering, aerospace and many other future-oriented industries can be
traced directly to the early foresight and determination of founder Lee.

Mr. Lee also devoted himself to preserving the nation's cultural heritage for future
generations. The establishment of the Ho-Am Art Museum, which houses the largest
private col- lection of art and artifacts in Asia, preserves thenations heritage, while the
Samsung Foundation of Culture encourages the cultural and artistic pursuits of future
generations. In 1997, the Ho-Am Foundation was created in memory of founder Lee's
contribution to society.

1.2 Samsung Vision and Strategy

In 1993, Chairman Kun-Hee Lee presented a blueprint for Samsung's global success in
the 21st century with his "New Management" declaration that encompasses intellectual
capital, organizational creativity, technological innovation and employee empowerment
as the key strategies for Samsung's profitable growth in an era of unbridled global
competition. "New Management" implementation began by encouraging individual
employees to first make changes within themselves, striving to care more for others and
to behave ethically.

Today, performance at Samsung is measured in qualitative rather than quantitative,

terms. Moreover, international competitiveness is an overriding objective, achieved
through multi- faceted integration of facilities as well as the development of global
information systems. Samsung's ultimate goal is to achieve quality-of-life improvements
worldwide by succeeding as a top-tier enterprise in the 21st century.

For the past half-century, Samsung employees have been guided by a corporate
philosophy that states, "We will devote our people and technology to create superior
products and services, thereby contributing to a better global society." Today, this
corporate philosophy unites all Samsung-affiliated companies. Through enhanced
global management, Samsung is now embracing the emerging business trends
worldwide, enabling it to react quickly and respond to local market changes.

The year 2000 was declared as "Samsung's initial year of digital management."
Through this declaration, Samsung set an objective to become the winner in the digital
era of the 21st century through leading initiatives based on its pioneering spirit and
management strategy of selection and concentration, as well as by advancing the
standards of next generation digital convergence technology. Innovation has long been
critical to Samsung's success, helping the group to be "first" in many new product
developments and technological breakthroughs. Its commitment to in- novation
continues to be stronger than ever.

For example, Samsung Electronics, which has been among the world's top 10 in US
patents for four consecutive years, has 13,000 re- searchers representing a US$1.7
billion investment in Research and Development. As Samsungexpands its global
presence and recognition, it has not lost touch with its roots in Korea. Samsung
continues to be a leading influence and major supporter of the Korean economy,
society, and culture. Although Samsung-affiliated companies are spread over a range of
industries and operate independently, they share the same overall management
philosophy, code of conduct and corporate identity.

Chairman Lee is responsible for determining the long-term vision and direction of
strategy for the group, while Chief Executive Officers of each affiliate have the
responsibility for autonomous decision-making on ordinary business issues. Samsung
aims to grow the businesses of the group to about US$224 billion insales by 2010, with
income before tax of around US$25 billion. Total assets are expected to reach in excess
of US$280 billion.
1.3Globalization

With more than 285 overseas operations in 67 countries, Samsung is truly global in
scope and nature. Samsung's strategy is two-pronged: to prudently expand outside its
home market and to equip overseas units with the skills and resources to be self-
sufficient. This strategy brings Samsung, andthe countrieswhere it operates, enormous
opportunities. Globalization provides access to new suppliers and customers, and
allows Samsung to learn and benefit from new cultures and new ideas. In addition,
Samsung places a priority on being a respected corporate citizen, a good employer, and
a helpful neighbour in the local community and hence contribute to the local economy.
Samsung is already a world leader in many business areas. In electronics, it is the
number one producer of memory chips, LCDs, displays and CDMA handheld phones. In
finance, Samsung Life Insurance is ranked 10th largestlife insurance company in the
world by Fortune magazine. Increasingly, Samsung has been forming cooperative
alliances with the some of the lead-ing names in the global technology arena to share
vision, knowledge and experience. Alliances include cooperation with Microsoft, AOL
Time Warner, and Sprint in the areas of technology and marketing. Samsung is also
working with Intel, Sony, and Qualcomm on technology exchange as well as
standardization. Collaborating with Dell, IBM , Com -paq, and Hewlett-Packard has
helped to reduce risks in entering new business areas and to secure stable supplies.
The partnerships are designed to provide all customers with efficiency, productivity and
stability with the aim of being a total solutions provider in the areas of home, mobile and
office through Digital Convergence and Networking. Samsung's goal in every market is
to maximize brand equity through superior design, mar- keting, and customer service,
and to constantly deliver the highest-quality products. The steadfast commitment in
each of these areas will ultimately place the "Samsung" name among the best known
and most respected in the world. Samsung's brand value increased to US$8.31 billion in
2002 from US$6.37 billion in 2001 and was recognized by Interbrand Corporation as the
fastest growing global brand.
2.0 INTRODUCTION TO SANSUNG ELECTRONICS CO.LTD

KEY FACTS

Name Samsung Electronics Co., Ltd.

Logo

Consumer electronics (digital cameras, camcorders,

TVs, blue-rays, laptops, home theaters, displays,
tablets)
Industries
Telecoms equipment (phones, smartphones)
served
Semiconductors (DRAM, V-NAND, SSD, UFC)
Home appliances (washers, refrigerators, microwaves,
dishwashers, vacuums)
 Geographic
Worldwide (80 countries)
areas served

Headquarters Suwon, Gyeonggi Province, South Korea

Current CEO Oh-Hyun Kwon

US$177.365 billion (2015) 2.7% decrease over

Revenue
US$182.273 billion (2014)

US$16.848 billion (2015) 18.5% decrease over

Profit
US$20.679 billion (2014)

Employees 319,000 (2016)

Parent Samsung Group

Apple Inc., Nokia OYJ, Intel Corporation, LG Display

Main and LG Electronics, Sony Corporation, Texas
Instruments Inc., Lenovo Group Limited, Hewlett-
 Competitors Packard Company, Sanyo Electric Co., Ltd., Toshiba
Corporation, SK Hynix Inc., Western Digital Corporation
and many other consumer electronics,
telecommunications equipment, semiconductor and
home appliance companies

Samsung Electronics Co., Ltd. (further Samsung), a part of the Samsung Group, is the
worlds second largest technology company by revenue. The company produces
consumer electronics, telecommunications equipment, semiconductors and home
appliances. Samsung operates three business divisions:

Consumer electronics - Visual Display Business, Digital Appliances Business,

Printing Solutions Business and Health & Medical Equipment Business.
IT and Mobile communications - Mobile Communications Business and
Networks Business.
Device solutions - Memory Business, System LSI Business and LED Business.

The company is the worlds largest mobile phone and smartphone vendor. It is also the
largest memory chip and TV manufacturer. Samsung operates in 80 countries, where it
sells a range of more than 100 products.

3.0SAMSUNG SWOT ANALYSIS

Strengths
3.1. Very high research and development (R&D) expenditure resulting in one of
the strongest patent portfolios among technology companies.

Innovation is crucial to succeeding in the technology sector. Usually, the more a

business invests in R&D, the more innovations it creates. Samsung has spent US$14.1
billion on R&D in 2015, which was the 2nd largest amount spent in the world. [3] R&D
spending strongly correlates with a companys revenue growth and expansion into the
new product markets.

Figure 1. R&D spending by Samsung and its largest competitors (in US$ billions
and percentages)
 Company 2014 Change As a % of 2015 Change As a % of
from revenues from revenues
2013 2014

Samsung 13.4 28% 6.4 14.1 5% 7.2

Electronics

Apple 6.0 32% 2.6 8.1 35% 3.4

Microsoft 10.4 6.1% 13.4 11.4 9% 13.1

Intel 10.6 4.6% 20.1 11.5 9% 20.6

Amazon.com - - - 9.3 41% 10.4

LG 2.3 9.1% 3.9 2.1 (1)% 3.8

Electronics

Sony 4.5 (10.2)% 6.9 3.9 0.3% 6.0

Source: Strategy+ Business [2][3] Data for Sony and LG are from their respective financial
reports[30][31]

In 2014 and 2015, Samsungs investment in R&D was the largest among technology
companies and only Intel and Microsoft came close to their expenditure. Samsungs
R&D budget was also used efficiently as the company spent only 6.4% and 7.2% of its
total revenues on R&D in 2014 and 2015, respectively.

Samsungs high R&D spending has resulted in it developing the largest patent portfolio
among its key rivals. The following table shows the number of patents granted for each
company in the U.S. from 2013-2015.

Figure 2. Utility patents granted in the U.S.

Company 2013 2014 2015 Total

Samsung Electronics 4,652 4,936 5,059 14,647

Apple 1,775 2,003 1,937 5,715

Microsoft 2,659 2,829 2,408 7,896

Intel 1,454 1,573 2,046 5,073

Figure 2. Utility patents granted in the U.S.

Company 2013 2014 2015 Total

Amazon.com 530 741 1,136 2,407

LG Electronics 1,945 2,119 2,241 6,305

Sony 3,073 3,214 2,448 8,735

Source: U.S. Patent and Trademark Office [4][5][6]

The more patents a company has, the better position it is in to defend its innovations
from being copied by rivals. Currently, Samsungs patents portfolio is one of the
strongest in the technology industry.

Both its R&D spending and patent portfolio are factors that indicate Samsungs strong
competitive position in the markets in which it operates.

3.2 Product innovation and design capabilities.

Samsung has long been viewed as an innovative company that is capable of producing
well designed and ecologically friendly products. This is proven by the many awards the
company has received over the years. The prestigious Consumer Electronics Show
(CES) awarded Samsung for its innovation and product design 12 years in a row. The
company received 80 awards in 2015, including the CES Best of Innovation award,
and has received more than 300 awards since 2004.[13]

Samsung has also received International Design Excellence Awards (IDEA) awards.
According to the company: Since 2009, Samsung has won the most (IDEA) awards
among all nominated companies.[14]

The companys commitment to producing ecologically friendly products and to decrease

its greenhouse gas emissions has also been recognized. Samsung has been named as
one of the worlds top-ten companies in the Carbon Disclosure Leadership Index
(CDLI).[15]

Few other companies have received as many awards for innovation and eco-friendly
product design as Samsung. This enhances the companys reputation, increasing brand
awareness and sales.
3.3 Samsung enjoys the widest range of product portfolio which includes Mobile
phone, Tablet, TV/Audio/Video, Camera, camcorder, Home appliance, pc, peripherals,
printer, memory cards and other accessories.

3.4 Samsung electronics maintains leadership position by the volume of

sales in the global market of smartphones. Specifically, in 2014, the company
possessed 24.7% global market share for smartphones and 22.1% global market
share for mobile phones.[4] Thanks to its leadership position in this market,
Samsung is able to generate substantial revenues to fund its R&D initiatives so
that the position of the company can be further strengthened.

The Weakness of Samsung [Internal Analysis]

-Low-Profit Margin: It always keeps low profit market. There are lots of
competitors in this industry. So, keeping the customers they must offer the
products at low price

-Damaging Image by Infringement Few of the recent incidents affected its brand
image negatively

-Too Large Product Diversity (lack of focusing on specific one).It takes a lot of
work if the product portfolio is large. It cannot be possible to give concentration to
each product with utmost importance

-Lacking of Own Operating System: Like Apple I Phone, it does not have its own
operating system.

-Less Quality than Apples: When it comes to the quality, Apple is doing better in
the handset offering.

-Heavily Dependent on Consumer Electronics: Dependence on consumer

electronics is higher than other manufacturers

-Samsungs Operating System Android has Many Lacking. Though they have
been trying hard to make the Android more quality, but still it lacks perfection.
-Large Dependence on Other Software: It cannot, solely, provide all of the
software needed to support its devices. It depends on third parties.

The Opportunities for Samsung [External Analysis]

-The Indian smart phone market is growing. People are becoming more tech
dependent, and smart phone became the most used communication tool in this
era. As a result, the demand of smart phone is increasing. Most people use
feature phones that make a switch to smart phone. The demand for
technologically advanced phones is growing. As the smart phones are becoming
the near alternative of computers, the demand of smart phones is increasing.

- Financial position for future: As the Samsung has been doing business for a
long period of time; it has been able to secure a strong financial position in the
market. As a result, it will be able to make more investment in the future.

-The growth of tablet market: The growth of table market is in negative phase for
which these users will be switching to smart phones.

-Acquisition of new companies: Samsung has been acquiring companies. It is

ensuring its future growth. Recently, Samsung bought the audio giant Harman for
$8 billion. Also, it acquired VIV, an AI platform from the makers of Siri and
completed the acquisition of NewNet Communication Technologies (Canada),
Inc. recently.

The Threat for Samsung [External Analysis].

-The large number of competitors: The mobile market is saturated. The Samsung
has a lot of competitors in the market, the number is also growing.

-Strong Competitors like Apple, HTC etc:It has strong competitors like Apple,
HTC, Lenovo, and Xiaomi Mobile. It is the biggest threat for Samsung.
-Chinese Competitors are Gaining Competitive Advantages: As the Chinese
companies can product products at low price and they can also give high quality,
people are accepting those brands spontaneously.

People are Looking for Better Quality Nowadays: So, if there is any question of
quality, people will be switching to the companies who give better qualities.

-A Large Number of Products, Failing One will Affect Another: As the Samsung
has a large portfolio, it has a high risk also. If any product do harm to the
customers, it will affect the brand image and therefore, will grow negative effect
to others.

-Threats of Chinese, Taiwanese and Indian Products in the Local Market.

SAMSUNG TOWS MATRIX

Strengths:
1.Samsung took advantage of the growing economy of Asian market by setting
up manufacturing plant in India there by reducing logistics and supply chain
costs. (S1)

2.Samsung enjoys the widest range of product portfolio which includes Mobile
phone, TV/Audio/Video, Camera, camcorder, Home appliance, pc, peripherals,
printer, memory cards and other accessories. (S2)

3.Samsung has dominated the market in South Korea in almost all its product
line.

4.Samsung has large investments on research and development. (S4)

5.Samsung operates using digital technology and product diversification strategy

differentiated the company from its competitors. (S3)
Weaknesses:
1. Allocation of marketing budget is not proportional to the needs of the regions.
(W1)

2. Poor marketing strategy resulting from different message or logo in regions

where Samsung was sold. (W2)

3. Managements wrong perception of marketing function. (W3)

4. Samsung is a hardware leader but has too much of dependence for software
from other parties. (W4)

5. Samsungs lack of strong brand identity in other countries.

Opportunities:
1.Samsung is the official Olympic partner for the 2000 Sydney Olympic Games,
2002 Winter Olympic Games, 2004 Summer Games in Athens, 2006 Winter
Games in Torino, and the 2008 Summer Games in Beijing. (O1)

2. Customers from other countries find Samsung delightful and affordable. (O2)

3. Samsung stood poised to become a leader in the era of digital convergence.

(O3)

4.In China there are prospective five million customers signing up for cellular
telephone service each month.

5.In Latin America, mobile internet usage was projected to increase to include 47
million people by 2005.
Threats:

1. Threats from Chinese products. (T1)

2. Samsung has wide variety of product lines, failure of one product line will have
impact on the other and will result in brand dilution. (T2)

3. Aggressive competitors, including Sony, Nokia, Motorola, and Panasonic. (T3)

4. Brands such as Apple and Sony focuses on both software and hardware
development. (T4)

EXTERNAL EXTERNAL THREATS

OPPORTUNITIES 1.
1. 2.
2. 3.
3. 4
4.
INTERNAL SO STRATEGIES ST STRATEGIES
STRENGHTS(S) (S3,O3) (S3,S5,T2,T3)
(S2,S5,O2,O4,05) (S2,S4,S5,T3 T1)
1.
2.
3.
INTERNAL WO STRATEGIES WT STRATEGIES
WEAKNESSES (W) (W2, O1) (W4,T3,T4)
(W1,W5,O2,O4,O5) W1,W2,W3,T1,T2)
1.
2.
3.

Maxi-Maxi

1. Diversify in the industry of telecommunication in South Korea. (S3,O3)

2. Acquire or build showcase retail outlet in big cities in USA, China, and Russia.
(S2, S5, O2, O4, 05)
Maxi-Mini
1.Improve digital technology and product differentiation to tailor their products,
marketing and other activities to needs of the specific market. (S3,S5,T2,T3)
2. Innovate or modify mobile cell phones to cater the diversified preferences of
the different nationalities. (S2,S4, S5,T3 T1)

Mini-Maxi
1.Introduce Samsungs products through sponsorship on Olympic, Winter and
Summer Games to enhance brand awareness and increase sales. (W2, O1)
2. Stop operations in such as Germany and countries in North America. (W1,W5,
O2,O4,O5)

Mini-Mini

1. Diversify the business on software industry in order to compete with close

rivals. (W4,T3,T4)
2. Set up its own advertisement company that will take charge of its global
marketing and advertisement. (W1,W2,W3,T1,T2

Alternative Courses of Action

Improve or modify its mobile cell phone products into something that will meet
the different preferences of the different nationalities. Advantages:
More customers will patronize Samsung.
Can create a solid image to Samsung, making it more identifiable.
It can aid to the domestic problem regarding customer preferences.
It will be another breakthrough for Samsung, if they could create such mobile
cell phone that can cater the needs of different nationalities.

Disadvantages:
Large capital investment.

May not be attainable.

Integrating the different preferences of each nationality into one product is a

hard task full of uncertainty.
.Diversify the business in Software Industry.

Advantages:
No need for Samsung to acquire software products from other companies.
This will close down the competition between Samsung and other competitors
who offers both hardware and software.

It can create customer loyalty.

It can enhance the marketability of hardware product of Samsung that requires

software application.

This will add up to Samsungs variety of product line and subsidiary

businesses, making Samsung a bigger Company.

Disadvantages:
Very costly to implement in terms of research and development, labour force,
marketing, and other aspects involve.
Green pastures from Software products are uncertain due to different factors like
competition.
Samsung might not meet the software needs of the industry. 3.Diversify in
telecommunication industry
in South Korea. Advantages:
Will strengthen domestic image of Samsung, making it more popular.
Making way to possible total domination of Samsung in South Korea.
Can provide employment to people of South Koreans and other Nationalities.
It will benefit the government and the economy in terms of investment and tax.
Disadvantages:
Large capital outlay will be incurred in terms of Research and development,
marketing, labor force, implementation, and other aspect involve.
Koreans may wrongly perceive this act into selfishness.
Even though Koreans admire and patronize Samsungs products, still there is a
possibility that they will not respond with the same enthusiasm to the
telecommunication service of Samsung. Recommendation A. Recommended
Strategy
One of the products of Samsung that has large market share is Mobile Cell
phones. Moreover, cell phones are almost near to becoming a necessity all
around the world. Basing on this idea, we recommend the implementation of the
first alternative.

We think that Samsung with its status as an emerging electronic company with
unstable brand identity all around the world should concentrate in making their
Mobile cell phones into something unique and more high-tech that will serve as
there weapon to make a breakthrough in the electronic industry as a more strong
and stable competitor.

Product Strategy Team:

1. The team shall conduct a market research and gather and analyzed
information on competitors and different customers preferences.
2. Make a killer new feature concepts.
3. Innovation or modification of Samsung cell phones shall still adhere to
Samsungs standardization goal.
4. Features of Samsungs cell phones should be unique in all possible
way from other competitors.
5. Quality control should be greatly stress out. Policies 6.The company
shall hire new employees that will aid the existing production team.
7 .Employees shall undergo necessary orientation and training.
8 .Awards and benefits shall be given to any employee who exhibits the
best performance in all aspect of her duty.
9. Equipment and other things necessary shall be either purchase or
lease depending on which alternative is more cheaper.
10. All mobile cell phones must carry with them the logo of Samsung.
11. Cell phones should be package in a way that can create a brand
awareness to the public.

Management policies:

1. Management should allocate more resources in research and

development for innovation of cell phones.
2. A competitive team of engineers, designers, scientist, etc. shall be form
with consideration to their capabilities and skills.
3 .The company shall a lot reasonable compensation for the said team.
4. The team shall only focus on the innovation or modification of Samsung
cell phones.
5. Rewards, benefits, and other forms of motivation should be given to the
team who will head for the said strategy. Evaluation
and Control The company shall evaluate effectiveness of strategy through
computation of Return on Investment (ROI), Earnings per Share (EPS),
and Return on Equity (ROE) basing on the incremental revenue provided
by the cell phones. Actual cost incurred in implementation shall also be
compare with the budgeted cost for further analysis. Management of
Samsung should clearly stress out its objectives and policies to ensure
control of the implementation. Moreover quality control shall be adhere by
the production team and proper guidance shall be present from the
management to support the entire operation.

THANK YOU!
UCHENDU OGECHUKWU JESSICA.
GROUP 03
MARKETING INNOVATIONS DEVELOPMENT
21-04-2017