...Preface This report investigates how Samsung was able to build a competitive advantage in the global memory chip industry and what steps it should take to sustain its advantage in the face of the imminent threat of Chinese competition. Analysis of Samsung’s business strategy and competitive advantage Porter’s 5 forces model in Exhibit 1 is used to analyze the global memory chip industry and Samsung’s strategy to date. Samsung had become the dominant player in the global memory chip industry and was able to increase the gap from other competitors in terms of technology and market share by following the below strategy. 1. Aggressive investments in R&D The memory chip industry is technology driven. A significant investment is required in R&D at the product design stage. As illustrated in exhibit 1 Samsung Electronics had maintained its technology leadership by outspending its rivals in R&D by over 1.5 to 20 times from 1998 to 2003 (Exhibit 3), which was possible thanks to the Samsung group’s diversified portfolio that allowed it the take calculated financial risks. Since Samsung was able to create and maintain technology leadership it was able to earn a very high premium at the initial stages of a new product to recover its initial investment and if competitors began producing the same product it could aggressively lower prices to make it difficult for followers to stay in the competition. 2. Differentiation Faced with the challenge that the DRAM industry...
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...Samsung Electronics Prepared by: M. O. Prepared for: Dr. N. C. Course: Organizational Strategy, MGM 6123, Fall 2009 [pic] Date: October 5, 2009 H. State University Samsung Group is one of the leading global conglomerates originating in South Korea, termed chaebol in native terms. Their sales in 2004 climbed to $134billion with 337 overseas operations in 58 countries and they employed 212,000 people worldwide. They have myriads of businesses in a wide variety of industry sectors including electronics, finance, trade and services (Siegel and Chang, 2005). In 1974 a semiconductor company in South Korea started ‘wafer’ production. This was purchased by Samsung Company who merged the semiconductor company with their electronics division to form a ‘global powerhouse’ (Siegel and Chang, 2005). They started with producing watch chips. In the 1980s, semiconductor was decided to be the future of Samsung Group. And the company gave most of its resources to this ‘star affiliate’ (Siegel and Chang, 2005). During 1983 to 1985, Intel exited the DRAM market. Samsung still held on despite incurring losses hoping that it would someday pay off. Their persistence paid off in later years. Samsung built its first large plant in the mid 1980s. Building a semiconductor facility is difficult and time consuming, because of high sensitivity to dust and electric shock. But the Samsung workers, from the executives, engineers, down to the field laborers, were highly dedicated. One memorable...
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...Introduction 1.1 Research Object Overview 1.2.1 Company History Samsung is a South Korean multinational conglomerate company that headquartered in Samsung Town, Seoul. It was founded by Lee Byung-chul in 1938 as a trading company. Over the next three decades, the group diversified into some division including food processing, textiles, insurance, securities and retail. In the late 1960s, Samsung entered the electronics industry and expand its business to the construction and shipbuilding industries in the mid-1970s. These expansion would drive the business growth over the next years. After the Lee's death in 1987, Samsung was separated into four business groups – Samsung Group, Shinsegae Group, CJ Group and Hansol Group. Since 1990s, Samsung has increasingly globalized its activities, and electronics, particularly mobile phones and semiconductors, have become its most important source of income. Nowadays, Samsung is acknowledged as a big company that has numerous subsidiaries and affiliated businesses. Most of them are united under the Samsung brand and it becomes the largest chaebol in South Korea. Figure 1.1.1 Logo 1.2.2 Vision and Mission a) Vision Statement b) Mission Statement Samsung Galaxy is a series of Android-powered mobile computing devices designed, manufactured and marketed by Samsung Electronics. At the latest of 2008, Samsung started to develop the idea of branded, full-touch smartphone interfaces in the Instinct and Omnia...
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...Samsung Case After reviewing Samsung’s current position in the semiconductor and memory chip industry, Swift Consulting has come up with a full analysis on the threats and opportunities facing the company. The primary threat facing the firm is the entry and growth of Chinese semiconductor companies. To respond to this threat, it is our assessment that Samsung should allocate less production to capacity to Dynamic Random Access Memory, and increase production and research to the more rapidly growing higher end Dynamic Random Access Memory, Static Random Access Memory and Flash memory markets. When Samsung entered the memory chip market, they gained market share by initially taking a loss on DRAM, because the company believed they would see future profit. The Chinese companies are following the same strategy to gain ground in the industry by their ability to produce at a high level, and sustain a loss. Samsung’s biggest threat in the semiconductor industry is the Chinese company Semiconductor Manufacturing International Corporation. By licensing agreements with German based Infineon, Japan based Eplida, subsidies from the Chinese government and private investment; SMIC has had profit increase of over $300 Million from 2002 to 2003. The secondary threat in facing Samsung is that China is expected to become the world’s second largest purchaser of semiconductors, after the United States. SMIC and the Chinese markets are deeply invested in lower end DRAM. By extensive research...
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...He later banned several foreign companies from selling consumer electronics in South Korea in order to protect Samsung from foreign competition. The Samsung Way :- It thrives in low-margin consumer electronics. It favors hardware over software. It's still a conglomerate that makes everything itself. Samsung Electronics has already taken giant steps from its early days as a copycat appliance manufacturer. Now, as a consumer electronics behemoth, it has expanded beyond South Korea and the nation’s industrial, conglomerate-run shipyards, steel mills and auto plants. In the past decade, Samsung Electronics has rocketed past Sony Corp. as the largest maker of flat-panel TVs. It has edged out Hewlett-Packard Co. in color laser printers that scan, fax and copy. It’s also the biggest in other technology-dependent areas such as liquid-crystal-display TVs and computer monitors. No. 2 in mobile phones, Samsung is pushing the Galaxy S smartphone to challenge Apple Inc.’s iPhone and narrow the gap with leader Nokia Oyj. Samsung claimed a 22 percent global mobile-phone share in the first quarter, up from 14.4 percent in 2007, when it overtook Motorola Inc., market researcher Strategy Analytics says. All of this gear has helped Samsung Electronics quadruple annual revenue to 139 trillion won ($116 billion) in the 10 years that ended in 2009. During that time, Samsung Electronics shares rose 10-fold. Samsung Electronics, which supplies 60 percent of its parent’s revenue, will probably...
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...called Samsung electronics. Samsung electronics is a multinational conglomerate company which consist of many subsidiaries under it from South Korea. This company has been around for a very long period, over 70 years since 1938 way back during World War II. Samsung electronics was founded by Lee Byun-Chull at Ingyo-dong which was at that time is called Samsung Sanghoe focusing on selling groceries with only 40 employees. Later he moved the business to Seoul in 1947, but he was forced to leave Seoul due to when the Korea war broke out where he started and founded a sugar refinery production company. Fortunately after the war ended, in 1960 Samsung entered the electronics market and investing a bulk into its research and development. After Lee Byun-Chull pass away, Samsung group was divided into four groups. Today, Samsung electronics is under the ownership of Lee Kun-Hee generating revenue of 220.2 billion USD and net income of 21.2 billion USD in 2011 consisting 344000 employees worldwide. Furthermore, Samsung electronics focuses on a wide range of products such as apparels, chemicals, electronics (smart phones, printer, air conditioner, refrigerator, televisions, cameras, laptops, vacuum cleaner, microwave, and washing machine), medical equipment and ships. On the other hand, Samsung electronics name is derived from the word three stars or tristar which the three symbolize huge, many and strong while the stars means eternity, thus forming its logo. At first, Samsung electronics...
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...I. SIEGEL JAMES JINHO CHANG Samsung Electronics Introduction Kun Hee Lee, chairman of the Samsung Group, contemplated his company’s strategy while sitting in the basement office of his home. His office had a one hundred-inch screen on the wall, and in front of the screen there was a short desk, just one foot in height. Lee spent much of his day in this room, studying the strategies of his competitors and overseeing multibillion-dollar investment decisions. Beside his desk were hundreds of DVDs and videos, many examining his competitors’ histories and strategies. Every new product made by Samsung and its competitors sat along the walls. Trained as an engineer, Lee eagerly picked apart every product, examining its design and quality of manufacturing.1 As he sat next to his low desk and sipped a cup of Korean green tea, Lee wondered whether his legion of Samsung employees was following his stern advice to always demand superiority in product design and process efficiency. He had grave concerns about complacency in his company. He remembered how he mentioned in a senior management meeting: “To an outsider, reprimanding a manager whose division racked up [billions of dollars] in profit might seem bizarre. But I don’t see it that way. Our abilities and efforts did play a role in our success, but we must realize that most of it came from the leading companies’ negligence, pure luck, and our predecessors’ sacrifice.”2 Under Lee’s leadership, Samsung had risen to become the world’s...
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...resources shared on the small group discussion board. PROJECT 3 Unit 5 Project-Individual Component Samsung is a great choice for discussing a multinational corporation. They are based in South Korea and were struggling in the 1980’s and ‘90’s. This is when they decided to make their first mobile phone. Their big break came in the late 1990’s when they acquired a large portion of a U.S. computer maker. One of the world’s leading electronics companies, Samsung started out as a small export business in Taegu, Korea. They specialize in digital appliances and media, semiconductors, memory and system integration. Today Samsung makes products that are recognized worldwide. Samsung Electronics Corporation was established in 1969, it is the largest electronics producer in Asia. The four main divisions of the company are digital media, semiconductors, information and communication, and home appliances. (www.fundinguniverse.com/company-histories/samsung-electronics-co-ltd-history/) The very first thing that the company began selling was a small black and white television. It may have taken until the 1980’s, but the company began manufacturing and shipping. PROJECT 4 References Samsung Electronics Co. Ltd. http://www.fundinguniverse.com/company-histories/samsung-electronics-co-ltd-history/ About Samsung....
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...Management Case Analysis: Samsung Electronics Memory chips were further classified into DRAM (Dynamic Random Access Memory), SRAM (Static RAM), and Flash memory. Flash memory, which was the hot-growth area, was used heavily in digital cameras and mobile phones. While DRAMs lost data when power was turned off, Flash memory could continue to store data in the absence of a power source. Considering the fact above, the flash memory market in the future will be very attractive. Along with the technology development there will be so many electronic devices using flash memory. Samsung started to create the advantage in Flash memory that it enjoyed in DRAM. Started in 1999, Samsung was seeking to move some of its production capacity from DRAMs to flash memory. Nowadays, people are always looking handy electronics device with multifunction ability and able to store huge data. Therefore, if Samsung makes investment in Flash memory technology, then it would be their advantage in the future. Foundry companies, whose sole business is manufacturing, have recently come to the fore, providing attractive outsourcing options. In addition to foundries, the ranks of increasingly specialized designers and chip testers are starting to swell. Chip companies are emerging leaner and more efficient. Four main product categories: Memory: Memory chips serve as temporary storehouses of data and pass information to and from computer devices' brains. Companies: Toshiba, Samsung and NEC Microprocessors:...
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...BY VARUN MALHOTRA SEC-H 11BSPHH010930 PROJECT ON PLACE & PROMOTION, C.S.R, SOCIAL MEDIA OF Place Strategy of Samsung The place strategy of Samsung is of three types: * It follows intensive distribution. * It follows selective distribution. * It follows exclusive distribution. The place strategy also includes * 24 state level distribution offices * Direct Dealer interface * Regional dispatch centers(RDC) Distribution System * One level channel * Two level channel * Shop-in-shop * Exclusive Showrooms * Sales and Service network all-over the India. Distribution Network Original equipment manufacturer/vendor or supplier Factory Regional Distributing Centre Direct Dealer Branch Warehouse Modern retail/ Exclusive stores & Samsung digital plazas Distributor Sub- Dealer Consumer/ Customer In India, apart from a lot of multi brand outlets, Samsung has a lot of flagship stores- which sell a wide range of Samsung products from mobile handsets, kitchen appliances to televisions. In this context it’s interesting to see Samsung explore all the more new avenues like opening a Smartphone Café. Promotion Strategy * Sales Promotion The main objective of sales promotion is to induce new customers to purchase as well as to keep attracting existing customers by providing special incentives to them. Offering discounts coupons displays and demonstration would help in increasing...
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...Technology and electronics is the way of the ever changing world for businesses and society as we evolve into time. When we think business we think the best in product, innovation, up to date technology and the branded electronic company and where it sits in the global business world. The researcher discovered that recent records show that less than a year ago in August 2013, Samsung was ranked number one in the top ten largest electronic companies in the world as oppose to its leading competitor the Apple company ranked at number four during this time period. This ranking was based on the most revenue produced, engineering and mechanical aspects. In addition, the smart television, the smart phone, the Samsung washing machine and the company is considered to be the most admired brand in Southern Africa. (Kwon, 2013) Samsung a Korean based company that was established on March 1, 1938 in a city named Taegu, located in South Korea by a gentleman named Byung-Chull Lee. This gentleman only had thirty thousand Korean won which is equivalent to twenty-eight U.S. dollars today which is not very much at all to start a company. The Samsung name means “three stars” in the Korean language and within several decades the company progressed into a prosperous global electronics company. (Samsung Corporation, 2013) The researcher gathers that the name meaning stars is catchy and seems to be an empowerment or motivator to reach for the stars. The evolution and creation of the Samsung Company’s success...
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...| | |Case Study #3: “Apple Vs. Samsung” | | | | | |Anna Cunningham | |Aaron Keith | |Katherine Seo | |Xiaotao Wu | |Luke Revitsky | |Jiayi Ge | |Monday October 10, 2012 ...
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...organizations…7Reference……………………………………………………………………………………...8 | 1.1 Compare and contrast different organizational structures and cultures. * Syngenta is a young company; but it stems from an industrial tradition going back almost 250 years. Syngenta Ventures invests globally in innovative businesses which help Bring plant potential to life. Today, Syngenta is a world-leading plant science business. Syngenta currently employs more than 24000 people in over 90 countries. * Samsung is a leader in digital, semiconductors, memory, system integration solutions and it is a versatile group. Samsung Electronics was established in 1969, is the largest electronics companies in the world. Samsung Electronics Co. is developing to a new era in product development, corporate culture and contributions to society on a global scale. * The different about organizational structure: * Samsung: This is a structure of Samsung (http://www.samsungdigitallife.com/Company/organization.html). Samsung use division structure. The company is run by CEO and CTO with the different staff responsible for production functions for each division. When use this structure...
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...Brief History Samsung Electronics Co., Ltd. is a South Korean multinational electronics company headquartered in Suwon, South Korea. It is the flagship subsidiary of the Samsung Group and has been the world's largest information technology company by revenues since 2009. Samsung Electronics has assembly plants and sales networks in 88 countries and employs around 370,000 people. Samsung has previously been known for its position as a manufacturer of components such as lithium-ion batteries, semiconductors, chips, flash memory and hard drive devices for clients such as Apple, Sony, HTC and Nokia. In recent years, Samsung Electronics has expanded upon its manufacturing roots and diversified into consumer markets leading to an ever increasing portfolio of products and revenue stream. Fig. 1.1: Samsung Logo Samsung Electronics currently stands as one of the world's largest vendors in the mobile phone and smart phone markets fueled by the popularity of its Samsung Galaxy line of devices. The company is also one of the largest vendors in the tablet computer market thanks to its Android-powered Samsung Galaxy Tab collection and is generally regarded as pioneering the phablet market through the Samsung Galaxy Note family of devices. Samsung has been the world's largest maker of LCD panels since 2002, the world's largest television manufacturer since 2006, and world's largest manufacturer of mobile phones since 2011. Samsung Electronics displaced Apple Inc...
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...certain events. Setting unrealistic goals, inadequate contract details, inflexible contracts, outsourcing products critical to their competitive position, inadequate management review and having limited knowledge and understanding of the supplier’s process. One of the most important reasons behind the failures is the outsourcing company’s inability to comprehend existing scope of work and have a clear vision of the task to be achieved which leaves them unprepared for future contingency problems. Samsung Outsourcing Model Samsung Electronics Company - headquartered in Suwon, South Korea is a South Korean multinational electronics and information technology company. Samsung Electronics has been the world’s largest IT Company by revenues since 2009. It deals with the manufacturing of Televisions, Cell Phones, Flash Memories, DRAM Chips, MP3 players, DVD Players, Refrigerators, Microwave Ovens, etc. Samsung is both in the chip market as well as in the consumer electronics market. Samsung is the number one global manufacturer of...
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