George B. Marasigan BSA-4
Samsung Electronics - A Case Study
I. EXECUTIVE SUMMARY
For over 70 years, Samsung has been dedicated to making a better world through diverse businesses that today span advanced technology,
semiconductors, skyscraper and plant construction, petrochemicals, fashion, medicine, finance, hotels, and more. Our flagship company, Samsung
Electronics, leads the global market in high-tech electronics manufacturing and digital media. Through innovative, reliable products and services; talented
people; a responsible approach to business and global citizenship; and collaboration with our partners and customers, Samsung is taking the world in
imaginative new directions.
Back in the first quarter of 2007, Samsung Electronics reported a 15 drop in profits. Jong Yong Yun, Samsung Electronics chief executive officer since
December 1996, has restructured Samsung by defying traditional Korean corporate culture of hierarchy and lifetime employment. Yun instilled a sense of
‘perpetual crisis’ among his employees and encouraged them to come up with innovative products that according to him, were necessary for Samsungs
survival. His emphasis was on quality products with unique designs and effective brand promotions. In 2004, Samsung surpassed Sony to earn profits of 9.4
billion over revenues of 72 billion. Still, Yun felt that to compete in the global market, Samsungs products needed to be transformed into brands like that of
Apples iPod or Sonys Walkman. Yun runs the most profitable technology company in the world. But he still has many worries. Yet Yun is not only confident
that he can meet those challenges, he is getting ready for new ones in digital convergence.
Jong Yong Yun’s strategy to focus on higher end products has clearly enhanced the firm’s brand image and lead to a sharp increase in its revenues
and profits. But accordingly, they have failed to address serious questions about Samsung’s ability to rely exclusively on its hardware to continue to generate
high margins. More so, the life cycle of most electronic products are short with prices tending to drop sharply over time.
Considering these facts and conducting the SWOT analysis, there comes up the suggested courses of action Samsung Electronics will going to take to
address the problem stated above. The courses of action includes: 1 undertaking forward and horizontal integration; 2 product proliferation; 3 cost
minimization and 4 increasing sales through market penetration and market development.
With this Samsung can surpass and survive and live with its vision Inspire the World, Create the Future” through “New Technology,” “Innovative Products,”
and “Creative Solutions.
II. STATEMENT OF THE PROBLEM
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