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Company Analysis [pic] SAMSUNG DIGITall everyone’s invited! Prepared by: [pic] Introduction: Samsung first got established in 1969 as Samsung-Sanyo Electric, with the future aim of “devoting its human resources and technology to create superior products and services, thereby contributing to a better global society. ” Samsung-Sanyo Electric later merged into SAMSUNG Electronics. In the year 1970, Black-and-white TV (model: P-3202) production started, which later on exported to Panama in 1971 & in the same year Construction of Suwon complex begun. In 1977 first color TV exported to Panama, from then on there is no looking back.
After setting the base for development Samsung expanded its revenues, its exports exceeded US$100 million in 1978 & 1979 is called as a fast development period in the history of Samsung. In this year Mass production of microwave ovens begun, company overcame the economic slump& by developing technology in later years, it became the Leading exporting company. in 1984 the company name changed to SAMSUNG Electronics Co. , Ltd. In the last decade of 20th century Samsung changed its directions to overseas by expanding its business & development to France, Thailand, Mexico, England, Australia, and Canada.
Research labs established in Santa Clara, California and Tokyo, Japan. Best of ’86 Prize received from Korea Management Association. All this went on hand in hand with the requirements of being a environment friendly company as Kiheung Plant officially listed as “World’s Safest Workplace” Samsung was now ready to make its advancement to enter the year 2000 which would bridge the company in to 21st century. Samsung announced its new millennium vision as, “Leading the Digital Convergence Revolution”. At this stage Samsung unveiled new brand slogan, “SAMSUNG DIGITall everyone’s invited”.
Samsung was notably first in the world to mass-produce and offer a full line up of digital TVs, developed the world’s fastest 1GHz CPU, mass-produce 256-megabit SDRAM chips,1 GB DDR SDRAM. In the same tenure Samsung was proud to announce the development of world’s first 3D TFT-LCD Monitor. Samsung entered the 21st century with the aim of becoming a world class company, for that it took initiatives & till now continuously laying the foundation to fulfill this dream. Samsung Growth, Revenues & Market Share:
Samsung Electronics is one of the top-ten electronics manufacturers in the world and an acknowledged leader in the digital convergence revolution. To attain such a higher position is not possible without having the penetrated roots of leadership within the organization. This mode brings the true leaders out in to the market from the organization to rule the world of technology & innovation. With worldwide electronic product sales of $ 36. 9 billion, over 75,000 employees in 87 facilities, and a global network in 47 countries, Samsung is recognized as a global giant and one of the world’s Top 100 Brands by Business Week magazine.
Samsung is the world’s largest conglomerate by revenue with an annual revenue of US $173. 4 billion in 2008. Samsung enjoys 30% market share worldwide. [pic] Mission & Objectives: The vision of SAMSUNG Electronics is “Leading the Digital Convergence Revolution” and its mission to carry out this vision is “Digital-? Company. There are two requirements for being “Digital-? Company”, and the first is clearly about being “Digital” producing not just digital products, but products that inspire digital integration across the entire company. The second part of being a “? is to use ? – Processes connecting R&D, production, and marketing to customers, partners, and the market-disciplined approach is the way they bring value to every part of their supply chain, including products data and customer relationship through Enterprise Resource Planning (ERP). SAMSUNG Electronics will network core components such as memory chips, system-LSI and LCDs as well as A/V, computers, telecommunication devices, home appliances and other stand-alone products into a total solution of digital convergence era. Major Products, Services & Operations:
Samsung deals seven elaborate businesses, which incorporate the following; Corporate Technology Operations. “To make Samsung a premier player, The CTO is leading the way! ” The Corporate Technology Operations is responsible for the technological future of Samsung Electronics. The Operations thus leads R&D activities at the corporate level by: (1) Defining the mid-/long-term R&D direction and strategies for overall operations with the aim of finding future growth engines, (2) Optimizing process and systems to enhance R&D efficiency company-wide, and (3) Developing shared technologies related to software and production.
About their CTO programme they comment, “We are on a mission at the CTO to secure future technology leadership by being prepared at all times and by exercising greater foresight than our competition. Our ongoing efforts are building a proactive technology management system that allows SAMSUNG to respond to any changes in the business environment. To this end, we have promulgated a company-wide R&D action plan to foster technological readiness (This plan covers strategic investments, technology initiatives and high-efficiency R&D approaches)”. Digital Media Business. pic] Samsung’s Digital Media Business has become a leader in the global market by continuously launching distinct products that serve customers’ demands. TVs, in particular, achieved the phenomenal accomplishment of becoming a bestseller in both revenue and sales volume in 2006. The Digital Media Business will further accelerate the trend to create innovative products that can generate new markets. Through this, Digital Media Business will become the high-end luxury digital brand equipped with global competitiveness in all areas including home, mobile, and office.
Telecommunication Network Business The Samsung Electronics Telecommunication Business earned an impressive operating profit of W1. 73 trillion on sales of W18. 23 trillion in 2006. Samsung mobile phones have emerged as a world-class brand, because of their superior quality, technology and designs. They are the product of choice for millions of consumers in the US, Europe, China and in other parts of the world. They say about this achievement; Despite tough market conditions, we sold 118 million mobile phones in 2009, up 18% from the year before.
This performance can be attributed to our outstanding technological capability to introduce a steady stream of premium Samsung mobile phones that are setting market trends. [pic] [pic] The robust growth in sales has solidified Samsung’s position as the world’s third largest mobile phone maker. “Our mobile phone business priorities are to be both the world’s first and the world’s best.
This dedication to excellence has earned Samsung mobile phones a premium product cachet worldwide; they’re referred to as the “Mercedes-Benz of mobile phones” in Europe and are a symbol of the wealth in China” Digital Appliance Business. The digital appliance business brings superior technology, design and environmentally friendly convenience to the contemporary household. Having revamped its organization to boost domestic and global sales, the business is concentrating on creating innovative products that link the home to the digital future.
Samsung says about it; “We are redoubling efforts to position Samsung Electronics as a leader in the future digital consumer electronics market by expanding the DVM (system air conditioner) business and home network business”. We recently completed construction of a refrigerator manufacturing facility in India, part of our strategic efforts to gain the #1 market share by 2006. [pic] [pic] Semiconductor Business Samsung’s Semiconductor Business is equipped to provide total mobile solutions and is leading the world memory market in terms of both products and technology development. [pic] |Our Memory Division is firmly established as the unrivalled global player. As of the end of | | |2006 we have remained the world’s leading memory chip maker for the past 14 years in a row. | | |We have been ranked first in the sale of DRAMs for 15 years, SRAMs for 12 years and flash | | |memory chips for 4 years.
We are also ahead of the competition in the commercialization of | | |nano-technology and the development of new memory devices as well as multichip packages and | | |fusion memory | | |LCD Business | | |.
LCDs are the ideal choice for achieving high definition. Moreover, the advent of digital | | |technology has prompted demand for displays in ever-larger screen sizes. At the same time, | | |demand for small and mid-sized LCDs continues to grow rapidly in such diverse applications as| | |mobile phones, digital cameras, PDAs and car navigation systems.
Samsung tells, | | |”We entered the LCD business in 1991 and have subsequently emerged at the display industry | | |leader and world’s largest LCD maker. ” | | |[pic] | | | |
Channels of Distribution: Broadly speaking, distribution concerns the methods, processes, infrastructure, institutions and pricing mechanisms required to bring a product from manufacturers to consumers. Product may pass from distribution partner to consumer via various “channels of trade”, where a channel of trade is defined to be an established market mechanism for distributing and selling products that follows a well-understood set of merchandising, settlement and??delivery??policies.
A number of alternate ‘channels’ of distribution Samsung utilize: ??? Selling direct, such as via mail order, Internet and telephone sales ??? Agent, who typically sells direct on behalf of the producer ??? Distributor (also called wholesaler), who sells to retailers ??? Retailer (also called??dealer??or??reseller), who sells to end customers ??? Advertisement typically used for consumption goods Competitors Strategies & Entry-Exit Barriers: There is a tough competition present in the industry, to deal with it the competitiors of Samsung adopts the following strategies; ?
Meet customers’ expectations with quality & innovation in their products. ? Give special time, effort & finance towards the changing demands of customers. ? Heavy investments in R departments. ? Make their systems eco-friendly. ? Adopt cost effective solutions. ? Provide special offers. ? Provide extra care to their customers. ? Produce products fulfilling the criteria of social norms, environment, recycling etc. Digital market, day by day, is transforming in to perfect competitive market.
There are no barriers to exit the electronics industry but it’s not easy to enter the world of electronics because all the leading companies of this industry have the huge capital & experience so for a new company to enter & to sustain is not at all simple. Similarly in this industry, consumers always prefer the reliable brands as they seek for the durability, convenience & high-tech designs. Samsung’s Strategies: R & Environment: Just as a fish cannot exist without water, a vigorous industry cannot work without competition. SAMSUNG understands the importance of quality & innovation to stand out in this highly competitive industry.
That is why Samsung provides its due importance to research & development processes. On the other hand Samsung feels its responsibility towards the betterment of the environment where we live in, for that they state; “At Samsung, we believe that the success of our contributions to society and to the mutual prosperity of people across national boundaries truly depends on how we manage our company. Our goal is to create the future with our customers”. Environmental preservation programs exist at every Samsung establishment around the world.
Samsung is actively involved in developing environmentally friendly products and related technologies, and is a strong supporter of “green” designs. Activity ??? “Adopt-A-Mountain”, “Adopt-A-River” Clean-up Campaigns ??? Developing incinerator that clean-burns 84 tons of waste a day ??? Researching commercially viable electric cars ??? Utilizing green appliances and environmentally friendly plastics ??? Children’s Painting Contests & Environmental Education Employees’ Motivation: “Our greatest asset is the solid pool of talented people who can develop value-added, market-leading products that bring new value to consumers”.
With this mindset Samsung emphasizes largely upon their employees & put immense stress on their support & motivation. Samsung also encourages its employees to participate in volunteer activities to improve their skills, moral & ethical values. The Samsung Community Service Team was founded in 1994 as a Korean corporation designed to facilitate employees’ participation in volunteer service. Samsung has set up more than 300 central offices for Samsung community relations worldwide. Samsung strongly encourages and supports employees to actively volunteer in a wide spectrum of social improvement projects from environmental clean-ups and disaster elief to providing housekeeping assistance for the elderly and mentoring orphans and young parents. More than 61% of all Samsung employees worldwide donate their time and talent for worthy causes, In awarding Samsung this honor, POLF noted Samsung ‘s achievements in establishing and maintaining effective systems to support employee volunteer activities, leveraging technological and human resources. Family volunteering is another area in which Samsung works hard for its employees, creating opportunities for quality family time and positive role models to help children and their families feel connected both to our company and our communities.
HRD Initiatives: At the core of Samsung’s management philosophy is “Priority in human resources. ” Samsung pays special attention while selecting its manpower & productive brains & provides all benefits to retain these resources. Samsung has a strong hold, clear vision and a track record of success. This could not have been achieved without the united passion of its dedicated teams across the world. If employee is a creative and striving individual with an enquiring mind and work standards that never allow him to give anything less than his best to every project he touches then he is a potential Samsung employee.
If he boldly faces the challenges then Samsung has endless potential for his success. Samsung provides fabulous salary packages with additional benefits to its valued employees. Other than this, Samsung has a particular interest in fostering quality people & improve the capabilities of human resources and at the same time practice good corporate citizenship by contributing to programs that improve the quality of education from kindergarten through high-school. This not only retain the employee’s mind free about his wards education requirements & secondly contributes to the betterment of future human resources.
SAMSUNG’s academic and educational programs include direct assistance to universities, international exchange programs, support for departments of Korean studies around the world, scholarships and donating supplies to develop schools in third world countries. Samsung also participate in the following programs to improve its employees’ skills as well as the betterment of the society; Social welfare programs, cultural and arts programs, academic and educational programs, environmental preservation programs, employee volunteer programs. Strategic Alliances:
SAMSUNG Electronics now enjoys strategic partnerships with many leading companies outside Korea. Samsung talks about its collaboration as: “We are fostering an atmosphere of openness and mutual benefit to join hands with other leaders in the world electronics industry and co-develop products that will enhance the quality of people’s lives”. Samsung contributes in partnership with almost 25 allies related to the sectors of electronics, mobile, satellite, software . The partners include majorly Nokia, Limo, Intel, Microsoft, IBM & etc
Samsung’s Future Growth: SAMSUNG Electronics aims in future to strengthen its already strong core component businesses such as memory chips and TFT-LCDs, and focus on high valued products such as system LSI, small & mid-size LCDs, and optical components. Also in the future, based on even SOC (System On a Chip) and SOP (System On a Panel) that are main parts of all machinery industries, Samsung intends to focus on three network business areas. First of all, Home Network business will be centered on digital TV and home server and home gateway businesses.
Secondly, Mobile Network business will be based on wireless handsets. Samsung will expand this business into PDAs and laptops and set up the next generation telecommunications, IMT-2000 system. Thirdly, in Office Network business, Samsung will focus on printers, IP Terminal, info mobile as well as existing display area. Samsung Electronics has 9 tier 1 products in the global electronics market. In addition to these tier 1 products, – memory chips, TFT-LCDs, CDMA handsets, display devices and more.
Samsung will include digital TVs, IMT-2000, computer peripherals, and Home Appliances as our new tier 1 products to strengthen 4 strategic business areas and setup firm foundation for future growth. Also, Samsung will focus on core components such as SOC, SOP and so on that are essential for network products based on core R&D technology and ? -Process. [pic] Substitutes, Costs & Prices: Samsung selects its suppliers very attentively to assure about the quality & prices of the raw materials. Other than this Samsung invests heavily n the costs-effective measures so that cost of the production processes could be reduced. So Samsung keeps its raw material costs in control. As far as the prices are concerned, prices of Samsung’s products are never too high. There are several reasons for the reasonable pricing of Samsung’s products. One of the major factor is the tough competition in industry, there is a wide range of substitute products are available in the market with the same function & features. It keeps the prices controlled; secondly latest technology is making the prices cut short of the digital products day by day.
Other than this when Samsung controls its costs with the above mentioned measures, it definitely effects the prices in a positive manner. Samsung Suppliers: Samsung Electronics Implements Award Program for its Suppliers Six suppliers are selected for the first SSCI Awards organized by Samsung Electronics. Cooperation between raw material makers and finished product manufacturers continues to strengthen worldwide. Competition in the semiconductor industry is accelerating, so the relationship between the chipmakers and their suppliers is more important than ever.
The new SSCI program motivates suppliers to improve quality and strengthens the bond with Samsung. Samsung Electronics plans to give the award winning suppliers various incentives, including the first chance to supply materials for newly developed chips. The SSCI program allows the manufacturer a unique opportunity to instill pride in suppliers for their technological expertise and product quality. Samsung’s suppliers are powerful as they are themselves strong companies that is the very reason they are selected as the suppliers to one of the world’s leading companies. Samsung’s Customers:
Nobody can live in this world without getting influenced by society & it becomes more important when it’s related in providing products & services to the people from different walks of life. The company needs to acknowledge its responsibility towards the people which directly or indirectly get influenced. Samsung is one of those rare giant companies who give importance to the people. As stated on the website www. samsung. com, the company’s targeted values are; People: We value our people with a strong belief in “A company is its people” philosophy & provide opportunities to perform their full potential.
Excellence: We give our best efforts to our customers with endless passion & challenge spirit to become world best in every ways. Change: We rapidly take the initiative in executing change & innovation with a sense of crisis: we cannot survive if we do not constantly strive to innovate. Samsung gives due importance to the needs of their targeted demographically changing customers. When a company operates internationally the demand, of its goods, changes culturally & regionally. Samsung Electronics provides a unique solution that fits customers’ needs.
For this, we will expand the marketing platform based on global CRM (Customer Relationship Management) that is applicable to all products. Also we will develop a digital network platform that improves compatibility between products to serve our customers with the best solution. SAMSUNG Electronics is putting and will continue to put our customers’ needs first to go forward as a market-driven and reliable company. Rules & Regulations: Samsung understands its responsibility towards following the rules & regulations.
They consider it as a company’s ethical responsibility to follow the rules & regulation applied in different nations worldwide. Samsung claims it as a part of its integrity as they state, “Integrity: We act in a right and ethical way in all manners, ensuring fairness with honor and grace. ” The company needs to follow all rules & regulations related to the production processes & quality of its products, in order to survive proudly in this world. Above all the changing demands of people & time make their job more challenging.
Samsung talks about this matter in a confident manner as they openly claim that they follow SEC global code of conduct of principles. They maintain a clean organizational culture; comply with laws & regulation standards. They claim that they respect customers, shareholders, employees, government policies. They admit that they should be socially responsible corporate citizens. The regulations do effect the competitiveness of industry as production & supply processes get influenced by the changes in the strictness of regulations. [pic] Conclusion:
During my intensive research work, I’ve seen that how gradually & steadily Samsung has maintained its pace of improvement towards its target of becoming, “Leading in Digital Convergence Revolution”. Samsung has further set the standard in the world’s consumer electronics industry with launches of several first-of-a-kind digital products. The strength of R&D department of a company provides the foundation for its promising future. Samsung is one of those greatest companies who really put in remarkable efforts to maintain this most important pillar & this makes it prominent from its competitors.
I have learned a lot while analyzing the different managerial & strategic aspects of such a remarkable organization. Samsung does not only emphasize on its progress to become a leading brand but also pays utmost attention towards the betterment of the environment & society. All these important aspects along with the ones discussed above, show that Samsung is leading its competitors & hence soon Samsung will achieve its nearest goal of becoming the leading brand of the world. All this make Samsung a valuable brand for which only skies are the limit. References:
We took the references & portions for this report mainly from the Samsung’s official website,www. samsung. com. Other sources which help in making this report are as follows; ??? www. retailscape. net/samsung. htm ??? http://www. allbusiness. com/company-activities-management/business-ethics/5369424-1. htm ??? www. icmrindia. org/casestudies/catalogue/Marketing/MKTG055. htm ??? Magazines & sites To evaluate the demand of Samsung’s products in different regions & to check the frequency of the news available about Samsung, we used the following sites www. time. com www. bbc. co. uk