Samsung Group

Topics: Samsung Group, Strategic management, Samsung Electronics Pages: 6 (2429 words) Published: March 15, 2013
Samsung group is a multinational company located in South Korea. It was founded in 1938 by Lee Byung-chull and since then great changes took place). At the beginning Samsung was a small trading company with forty employees. After the Korean War in 1954 Samsung grown up and entered several industries. It will take about three decades since its creation (1938) before it enters the electronics industry. Moreover, it will take another three decades to rise into a multinational organisation (1990). It comprises numerous companies all unite under the name ‘Samsung’. The group of companies operates and serves customers in various sectors such as the electronics industries, chemicals industries, machinery and heavy industries, financial services and affiliated companies and organisations. Samsung is one of the world’s top 20 brand names ahead of Sony and Nike. According to the annual report of 2011, Samsung’s sales revenue will be 165 trillion, operating profit will be 16 trillion and the number of employees will be 369,000 people. The Samsung Group is expanded in many sectors but the most important sector is Samsung Electronics. This assignment will conduct a critical internal analysis of the company in terms of their scope, culture and management style. It will also outline how the company creates value, gain market share and what strategy they use. The external analysis will be illustrated by using SWOT analysis, PEST analysis and Porter five forces analysis. Many examples and articles are going to be used for better understanding. “There's no luck in business. There's only drive, determination, and more drive.” (Sophie Kinsella) To start with, a multinational organisation such as Samsung couldn’t leave anything in luck. Internal Samsung is a very good organised group. One critical factor of success is the CEO Mr Lee Kun-hee, who once said to the managers of Samsung “change everything but your wife and children”. Three years later, he set on fire 150 000 gadgets because same were defective. During 2010, he pushed out older managers and restructured its divisions despite the record profits they had in world of financial crisis. Obviously, great Presidents do great things and to have one like Mr Lee Kun-hee is blessing. Another key factor of success is the conditions under which their employees are working. They are continuously monitoring the work hours in order to promote work life balance. This is achieved by the flexible time program for administrative staff so they can set their own work hours to enhance quality of work life. In the global production subsidiaries the work hours are managed according to the local employment standards. In addition, Samsung strives to provide superior working conditions relative to its peers so that employees will not feel the need for a labour union. All the business of Samsung across the globe has a labour council to facilitate dialogue between labour and management for aspects such as working conditions, salary adjustments and discussions. Furthermore, they have a safety council in order to ensure the safety of their employees. Happy employees are able and willing to work for the good of the company and it is not an easy task for companies to achieve. Samsung succeed to create value, as it combines the three sources of scarcity, appropriability and demand successful. All this, are under the command of the manager. They have all the resources needed to do so. Some of these resources are land, buildings, reputation and knowledge. All of this is combined to Samsung successes come from spotting areas that are small but growing fast. Ideally the area should also be capital intensive so it is harder for rivals to keep up. They throw large amount of capitals into the technology to get familiar with it; then they produce high volume of production as fast as possible. This practise do not only gives them a price advantage over established firms, but also makes it a key customer for...
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