Samsung electronics global marketing operation
1. Each student will read the case(s) ahead of time before attending to the class. 2. Your group will be assigned to one or several questions in class. 3. After a thorough group discussion, your group will outline/summarize your answers into a PPT file and drop it onto the Blackboard’s drop-box. 4. Your group will present and lead the discussion of the question(s) assigned to you. Although the group in charge will be the major discussants for the assigned question(s), it is highly recommended to have the rest of the class involved and participated in the discussion. Discussion questions:
1. What are the ingredients of Samsung Electronics Company (SEC)’s corporate turnaround strategy? Samsung Electronics Company has achieved a remarkable turnaround over the last two decades. Before the 1990s, Samsung was not highly regarded, and struggled with their brand identity and value. Samsung was known as a low cost Korean electronics brand that manufactured consumer VCRs and televisions. The entire company, as well as their products, did not compete well with industry leaders such as Sony for top-of-mind brand awareness.
Several key actions instigated corporate and product improvements since this time. Beginning first with personnel, the Chairman of the company (Kun Hee Lee) started the first movement within that would ultimately lead to their current lucrative position. Lee determined, in 1993, that Samsung could reposition itself as a first-class electronics brand that could distribute products world-wide.
Lee wanted to commit Samsung to long term goals and results and transform the company away from commodity based products, and instead produce luxury electronic items that would be highly innovative. At the time, electronic companies could venture into two different routes: software or hardware. The outlook for software development was very good in the 1990s, but Lee chose the route for developing hardware instead. This decision became one of the most critical ingredients to Samsung’s tremendous success of late. Manufacturing hardware components became the primary objective for the company, and one which they became highly invested into.
A second important ingredient to this turnaround strategy was how Samsung choose to structure themselves as company. Samsung wanted control of the whole process, from soup to nuts, and to be a company that could produce almost an entire electronic device in-house. This strategy was in line with a vertical integration approach and it offered Samsung an opportunity to continue serving business industries and consumers.
The combination of a vertically integrated hardware company has, over time, shown to be a very fruitful strategy that actually creates stability in an otherwise turbulent and fast-paced technology sector. Samsung hardware can be applied to many different tech markets which affords Samsung a way to hedge their investments. With the volatility of technological change, if one market is underperforming, another is likely to be performing well, and given the breadth of applications for their hardware components, Samsung will benefit in the long-term from this strategy. Another unique ingredient presented to for a hardware specific company is the free choice in software licensing agreements. Samsung has an “open architecture” which allows nearly any software to be installed onto their chips and other components. Because of this, especially in the mobile device market, Samsung’s devices can run multiple software platforms, which allows for greater market penetration.
Despite Samsung’s wise investment into vertical integration, this alone would not ensure their lofty growth aspirations. Research and development into new manufacturing locations and processes was only one component of the equation - the other side was marketing. Samsung’s desired growth could only be achieved if they followed a market-driven...
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