Samsung Analysis

Topics: Diminishing returns, Economics, Economics of production Pages: 14 (4931 words) Published: January 20, 2013
Webster University|
Samsung Analysis|
Managerial Economics|
Egzon Burri, Orhan and ….|
June 31, 2012|

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Table of Contents
Company Overview2
Samsung Core Business4
SAMSUNG Products6
Porter’s five forces11
Threat of New Entrants11
Bargaining Power of Buyers12
Bargaining Power of Suppliers12
Threat of Substitutes13
Industry Rivalry13
Law of Diminishing Marginal Returns14
Law of Diminishing Marginal Returns applied to SAMSUNG15
Economies of Scale17
Conclusions and Recommendations17

Company Overview

Founded in 1939, Samsung is one of the leading companies in the electronics market with 206 offices and facilities in 68 countries globally. The company was founded by the family of the current CEO in a small city of Korea named Taegu operating as an export company (About Samsung-History, par.1). Samsung has grown to become one of the most successful electronic companies with a main focus on digital media and appliances, memory, semiconductors, and system integration. Its profile is one that many companies would like to possess. Throughout the years, the company expanded its product lines and grew its market share and profits. The company is headquartered in Seoul and operates in over 100 countries across the world (About Samsung-History, par.3). Samsung’s profile for 2011 shows that the company closed a very successful year achieving 220 billion euro revenue, and employing 344 thousand people all over the world.

Fig.1 Samsung Profie – About Samsung
The strength and success of the company lies in its innovative and reliable products, talented staff and employees, and responsible approach to business and global citizenship which are shaping the world in completely new directions. The corporate philosophy is about making a better world and enriching people’s lives in several manners. Their values are also important factors which shape their performances and play a critical role to their business (Values&Philosophy, p.1). Their working philosophies accompanied by strong values create their business principles which are represented below.

Fig.2 About Samsung-Values&Philosophy
Samsung has its roots also in other types of businesses rather than electronics. This corporation is comprised of many companies that are setting new life standards from electronics up to petrochemicals.

Samsung Core Business
Samsung’s business is separated into Set Business and Component Business. These two portfolios create the Samsung products which had already taken our lives beyond the ordinary (Business Area, par.1). The Set Business is mainly comprised of Mobile Phones, Personal Computers, MP3 Players, and the key driver in this portfolio TV Business. The Mobile Phones section of this portfolio is one of the most successful ones especially over the last years. In this section, the company had led the standardization of mobile-phones technologies such as Mobile-WiMAX and High Speed Downlink Packet Access (HSDPA) (Business Area, par.4). The TV Business is another key driver in this portfolio. LED TV’s and LCD TV’s have maintained top positions in the market leaving now the road to further innovations such as 3D (Business Area, par.4). Other sections which seem to contribute positively in the Set Business Portfolio are Printer and Camera which are being developed even further with the most innovative technologies. Some of the products of this portfolio are the ones listed below: (LED TV-Samsung) (NOTE Pc-Samsung)...
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