Samsung - Turnaround Strategy

Samsung Electronics Company: Global Marketing Operations
1. What are the ingredients of SEC's corporate turnaround strategy?
Samsung Electronics Company originally started as a product-driven company that focused on manufacturing commodity products at lower costs than its competitors. It was established as a top OEM supplier and highly efficient manufacturer of value brands. The "new management initiative" launched by Chairman Kun Hee Lee in 1993 aimed to change SEC's direction of growth: once costs were under control and products were made, SEC changed its focus from low-end commodities to high-end premium goods. Currently, SEC has become a world class brand among the top companies preferred globally.
The following essential changes were implemented during different stages of their turnaround strategy:
Vertical Integration  Kept manufacturing as a core internal competence
 Internal manufacturing units have to compete with outside companies for supplying components for production of finished goods
 Flexible to plant locations where costs were low (i.e. China or India)
 Focus on customization of its production to keep high prices
Hardware Focus  Decided not to produce proprietary software
 Formed partnerships with content providers and allowed customers to choose
Product diversification  Focused on higher quality products across all categories
 Samsung was one of top 3 brands by market share in all its major products
 Unique, tech-advanced products: semiconductors, telecommunications, digital media, digital appliances
Product Innovation  Created world's first and award-winning pillar products because of its team of capable designers and engineers and potent investment in Research and Development.
 Because of its diverse products and innovative digital technologies, SEC was well-poised to be a leader in the emerging field of Digital Convergence. These are