This paper is focused on Samsung Electronics Co., and it has four major product lines. Digital Media line produces digital electronics for both personal and business uses. Telecommunication line produces variety of mobile phones and supply to carriers; LCD line produces flat screen monitors used on TVs, cellphones and computers. Last, semiconductors product line produces memory chips used on computers and cell phones. For each product lines, we will be talking about their history, records of success, risks and opportunities, and recommendations. Lastly, we will give recommendations regarding how the company should develop itself to be more attractive to investors. B. Introduction
Samsung was founded in 1938 and are located in Seoul, South Korea. The founder’s name is Byun-Chull Lee. “Samsung” means “three stars” in Korean. It started as a trading export company. In 1969, they became Samsung Electronics Co. And now it has become one of the largest technology companies known worldwide (Samsung Electronics, 2011). It is most known for its flagship products; the Galaxy smartphone and its LCD screens. Samsung became a publicly traded company in 2000. It has four major lines of business, Digital Media, Telecommunications, LCD, and Semiconductors.
C. Four Lines of Business
1. Digital Media
Digital media is the line of business that consists of all of Samsung’s digital consumer products, both home and personal use. These products include; personal computers, MP3 players, cameras, televisions, and home appliances. Samsung puts forward innovative designs, select world-leading products, and power efficient products. Digital media consisted of 37% of all sales in 2010 (Sustainability Report, 2012). As you can see from the graph below is was the majority of Samsung’s sales.
In the 1970’s, Samsung came out with its first black and white televisions, washing machines, refrigerators, and by the end of the decade color televisions. In the 1980’s, Samsung was marketing air conditioners, personal computers, and the world’s smallest video tape recorder. Since the 1990’s, Samsung’s innovation boomed. They came out with the world’s first digital television, the world’s first Blu-ray disc player, the world’s first HD camcorder, and the world’s thinnest television (About Samsung, 2012). Samsung also led the home entertainment business into the 3D market. Digital media’s record of success is definitely significant. Its sales numbers have increased by about 4 billion USD. Unfortunately, the profits are very low compared to its sales. This is due to Samsung’s high investment in research and development. You can see the difference between sales and profits in the graph shown below.
The biggest risk for the digital media line of business is whether the large investments in research and development will pay off against its competing products. Many electronic companies invest heavily in creating better products and imbedding innovative technology in them, so the competition is very high for this line of business. The only way for a company to be successful is getting its products in the most consumers’ hands. So that is why Samsung invests about 6.2% of total sales into research and development (Sustainability Report, 2012). This enables Samsung to ensure that its products are of the best quality, have the most innovative technology, provide convenient and advanced features, and have a stylish design.
Research and development will always be one of the biggest investments of a successful technology company. Samsung should continue its high investments to secure its place as the leader in technology and innovation in this industry. Since Samsung is a global leader in technology, it should use this advantage to lead the rest to the next level of innovation. Samsung has already lead others in the 3D home entertainment business now it has the opportunity to go further and create more advanced products that...