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Case overview Introduction to Samsung Challenges faced by Samsung in korea Samsungs position in indian market Strategies Future strategy
South-korean multinational electronics company Headquarters- Suwon, South Korea. Founder- Lee Byung-Chul Initial- Dried fish, vegetables & fruits to Manchuria & Beijing. Manufacturing & sales activities by setting up flour mills & confectionary mills. Korean war 1950 Samsung electronics- 1969
HISTORY
1938 - Samsung is founded by Lee Byung-Chull as a trading company 1953: After the Korean War, Lee forms profitable Cheil Sugar, which is followed by textile, banking and insurance enterprises. 1961: Despite a political coup, charges against Lee of illegal profiteering and a 1966 family scandal of smuggling, the company grows by diversifying into paper products, department stores and publishing. 1969: Lee, with the help of Sanyo, establishes Samsung Electronics. It produces inexpensive TVs, microwave ovens and other consumer products for Western companies such as Sears and General Electric.
1970s: Under a government policy of rapid industrialization, Samsung launches a number of enterprises in ship building, petrochemicals and aircraft engines. 1980s: The company is exporting electronics under its own name. 1983: Samsung begins production of personal computers. 1987: Lee's son, Lee Kun-hee, assumes control of Samsung. 1988: Samsung Semiconductor and Telecommunications merges with Samsung Electronics. Its core business focus is home appliances, telecommunications and semiconductors. 1990: Samsung becomes a world leader in chip production.
1994: Samsung Motors is formed. 1996: Lee Kun-hee is involved in a corruption scandal and gets a suspended sentence for bribery. 1998: Samsung completes the development of flat-screen televisions and begins the first mass production of digital TVs. Samsung Motors delivers its first cars. 2005: Samsung develops the first speech-recognition phone. 2007: Samsung Group is accused of political bribery and influence-peddling throughout the South Korean government, judicial branch and the media. 2012: Samsung Electronics becomes world's largest mobile phone-maker by unit sales, overtaking Nokia, the market leader. U.S. jurors rule Samsung must pay Apple (AAPL) $1.05 billion in damages for violating six Apple patents on smart phone technology.
To devote talent & technology to create superior products & services that contribute to a better global society
VALUES
Maintain a clean organizational climate Care for the environment, health & safety Comply with laws & ethical standards Respect customers, shareholders & employees A socially responsible corporate citizen
CHALLENGES
1950 Korean war Samsung lost all its assets
CHALLENGES CONTD:
Entry of foreing players Market barriers deregulated (Sony, Philips, GE, Siemens, whirlpool)
Market share trend due to huge competition
ECONOMIC TRENDS
POLITICAL ENVIRONMENT
Multiethnic, multireligious 25 states, 7UT
Individual states competing for Foreign Investment Ongoing tension between India and Pak Terrorism and various forms of Social tensions Politically motivated attacks on Foreign projects
INVESTMENT CLIMATE
Positive attitude towards FDI
Hire foreign technicians without prior government approval Foreign investors loans from all commercial banks
CONSUMER MARKET
POSITION IN INDIA
Leading provider of high-tech Consumer electronics and home appliances company- Samsung India Electronics Ltd. In 1995. R&D- Bangalore,1996 SISO, SEIIT- may 2000 TV & video, home appliances, telecom products and IT products. Started exports to western european market-2000 Export base for CTVs to neighbouring countries.
PRODUCT PORTFOLIO The Air conditioner segment. The Microwave oven segment. The Washing machine segment. The Refrigerator segment. Telecom and information technology products.
Marketing Strategy
Product Design : according to customer needgap Brand Differentiation Product Positioning: High Technology Brand in medium & premium price segments Exchange offers Product Differentiation: Excellent Technology Distribution & After Sales Services Realized Value Consciousness
Harness Potential of Employees to full extent & have Quality Performance: Employees treated as the most important assets.
Respectable company image via Social & Cultural activities Recruitment Training & Development Recognition Rewards Working Conditions Administration Salary Structure
HR STRTEGY
R&D
Global Manufacturing Network Global R&D Network Gathering Information on New Technologies Developing Products Utilizing Best Brain & resources R&D Centre of Color T.V. at Noida(U.S.Dollar 5 Million)
Customized Models: Local Customers(Design & Features) Metallic CTVs & TV Net Appliance Color T.V. Design to meet requirement of:
India South-East Asian Countries Middle East Asian Countries
Ascnet
linking its authorized service centers(ASCs) with the head office Automation of Supply Chain Information about Stock position& order status of spares at any time
Hello Samsung
Linking dealers to Samsungs Supply Chain via Internet
Factory
HQ
Distributor
Branch
Dealer
Completed loop for communication with real time business partnership Feedback on Product Quality, Delivery & related Issues E-Business Site: Samsung e-Mart in Feb, 2000 Two Price online purchasing Strategy:
Club various regions for standardized Price
B2C :
Service Needs Online Call logging for customer complaints Follow up by regional service centre
In Feb.2000,iaunched e-business site:Samsung e-mart. B2C application for business need. Digital e-Company Initiative
Digital range of Products E-Management Processes
Strong PR with key Channel partners Provided sales training to staff, extended support on corporate mailings Value ++ Program:
free bundled products to customers
Promotion &Advertising
2nd Largest Emerging Market Aggressive Marketing campaign Advertising & Promotion Budget :increased by 15% to Rs.85Crores New Advertising Campaigns:
Print Adds (Plano CTVs & Direct Cool Refrigerator) TV Commercials (Metallica CTVs & Air Conditioners)
Brand Positioning:
Plano Brand (true life-like images) Bio Fresh Fridges ( freshness plank)
Star Endorser for Home Appliances: Tabu Ground Promotion: to target Mass Consumers Online Advertising: direct traffic to Samsung emart site Banner advertising: Portals of Women, Sports & Youth Digital Technology
Sponsorship of channels:
Samsung Adventure One National Geographic Channel Channel V & Roads Show featuring :
Sukhbir Euphoria Shaan Mehnaaz
Manufacturing Facilities
CTV
Greater Noida Investment : Rs. 90 Crores Capacity: 600, 000 units p.a. Fully geared for high speed ,high volume & high quality production New Production Line : Projection TV (screen size 43-53 inches)
Microwave Oven:
Noida (March 1999) Capacity: 100, 000 units p.a.(20-30 *1000 Litres)
Air Conditioners
Investment : Rs. 20 Crores Capacity: 100, 000 units p.a. Window & Split ACs
PRODUCTION STRATEGY
Two Auto insertion machines
Investment : Rs. 14 Crores 95% of 600 old components Save 33% of its cost over 10 years
220 workers Reduce Manufacturing Costs Reduce Tact time(9.6 seconds) for CTVs Production quadrupled in 3 years
Six Sigma
Improve Efficiency, Quality , Cost & Savings 60% reduction Operation Loss & Balancing Loss 80% reduction in the defect rate of Auto insertion machines
FUTURE STRATEGY
In order to survive in the market their future startegy is to launch new models in
Samsung wanted to shift its focus to become a leader in digital revolution. Become an export base for supplying consumer electronics and home appliance products to neighboring countries like SL, thailand,Gulf, European etc
3S:3E Campaign 3S Speed Simplicity and Self confidence and 3E - Engagement, Empowerment and Encouragement.
PERFORMANCE