SAMSUNG ELECTRONICS CO.

AQUINO - ESTACIO -
FELIX - GIMENO -
VIDEO
COMPANY BACKGROUND
Public (Ticker: 005930)
Industry: Consumer Electronics, Semiconductors, Home Appliances
January 13, 1969 as Samsung Electric Industries
1981, Samsung Electric Industries had manufactured over 10 million
black-and-white televisions.
1988 as Samsung Electronics
Chairman: Kun-hee Lee ; Vice Chairman: Lee Jae-yong / Jay Lee
KEY
STATISTICS
HISTORY BEHIND
SAMSUNGS
LOGO
Founded as Samsung Sanghoe
by Byung-Chull Lee
Sam stands for 'three' and
Sung means 'stars'
Sanxing - the three gods of
fortune - Prosperity, Status and
Longevity
Agricultural roots - exporting
dried local vegetables, fruit
and fish to Manchuria and
Beijing.
First product - black and white
TV
Universe = ever-growing
STATEMENT OF THE
PROBLEM

FOCUSING ON LONG
TERM GOALS, HOW
CAN SAMSUNG
CONTINUE TO BE A
BRAND LEADER?
POINT OF VIEW
JAY Y. LEE - PRESIDENT AND
SUCCESSOR
OBJECTIVES

1. To grow the company

2. To protect their brand standing
3. To grow customer base
4. To continue to produce innovative
products
AREAS OF CONSIDERATION / MAJOR
ASSUMPTIONS
Retain and make its market share and revenue grow further
Samsung has been recognized as the best-selling brand in high-end
televisions in the United States. It has also been known as the world's largest
LCD computer monitor producer (17% global market share)
Continue to establish greater brand identity in designs. According to Jim
Wicks, Motorolas Vice-President in Cellphone design, Samsung has
improved, but I dont see an identity in their design that really speaks to
consumers.
 AREAS OF CONSIDERATION /
MAJOR ASSUMPTIONS
Take advantage of their fast follower characteristic as a brand
There are 5 new business areas identified by Samsung which it
plans to enter and build business:
- Solar panels
- LED lighting
- E-vehicle batteries
- Biotech drugs
- Medical devices
-Samsungs rivals GE, Philips and Toshiba have been preparing for years
to compete in the emerging markets and is ready to take the fight.
 STRENGTHS

Strong organizational structure-

Pipeline to the top management and
Confucian hierarchy.
Focused training and development
Back to school programs- Samsung Design Lab.
Designers exposure to different countries such as Egypt,
India, Paris, Frankfurt, New York, and Washington.
Vision to be Fast follower and receptor of all things.
 STRENGTHS

Quality designs with innovative and egalitarian

approach - Samsung has emphasis in design.
Product reputation
Samsung a trusted brand in LCD technology and high-end
televisions market.
The flash technology has been started of Samsung which
made iPhone and iPad a reality and became Apples biggest
supplier.
 STRENGTHS

Excellent human resource- solid collaboration of

designers and engineers. Experienced designers and
adaptive engineers. Growing design staff all over the
globe.
Strong financials - Increasing budget in design and
innovations. Billions of sales.
Global reach - Samsung has a foot both in industrialized and
developing country.
Continuous research and development- Samsung
studies how consumers actually use products.
 WEAKNESS

According to Jim Wicks, Samsung has

improved, but I dont see an identity in their
design that really speaks to consumers.
Lack of new skills, sales channel, and customers
in new business such as green technology and
health business.
The Samsung group has no legal identity. The
83 firms only sit under the umbrella of company
called Everland.
 WEAKNESS

Samsung has mixture of implicitly subsidized capital,

weak shareholder pressure and family control. This made
them stick too long with dodgy decisions.
The flash memory is a weakness also since Apple uses
said technology and is considered the biggest competitor
of Samsung in terms of hardware components.
 OPPORTUNITIES
(ENVIRONMENTAL FACTORS)

Green technology is vital to give society a much broader

use in technology. It is also an opportunity to drive down
the cost of zero-carbon power.
Rising importance of environmental awareness.
Demand for environmental-friendly products such as e-
vehicles batteries, solar panel and led lighting are
increasing. An opportunity for industry to invest in
innovative products.
 OPPORTUNITIES
(SOCIAL FACTORS)

Medical devices and health businesses can reach poor

countries and rural areas with medical equipment and
technologies such as telemedicine and x-rays with less
radiation. The business can also give drugs destitute
countries cannot afford.
 OPPORTUNITIES
(TECHNOLOGY)
Digital age gives start ups and strivers easy
chance to penetrate the electronic industry.
Biotechnology is now being used to develop much
needed vaccines, new drugs to combat tough
illnesses.
 OPPORTUNITIES
(ECONOMICAL)

Economic growth that increases the buying power of

consumers.
 OPPORTUNITIES
(POLITICAL/LEGAL)
Similar industries in South Korea has implicit
government policies that guarantees big business
to tap cheap financing from bank sectors.
 THREATS

Falling prices, thin margin, fast product cycle, and fickle

customer of consumer electronics industry.
The similar industries in South Korea succumbs to
endemic corruption and economic structures that border
on the feudal.
Similarity of electronic devices design, feel, and features
could be an intellectual property of others, resulting in
litigation and compensation of damages.
 THREATS

The businesses such as solar panels and led

lighting, biotech drugs, e-vehicle batteries, and
medical devices are promising but also risky. It
can entail threats such as oversupply, price
erosion, etc.
Presence of cheaper alternatives to consumer
electronics (lower class and lower quality) but
provides similar usage but not guaranteed to
stay at a longer time.
THEORETICAL FRAMEWORK
 Mobile/ Appliances Dealers
IT Retails
A. The Distributors

Marketing Product Place

Mix
Promotio
Price
n

Events/ Websites Skimming

Placements Competitive
 Resonance
B. Customer- What about you and me

Based Brand Judgement/Feelings

Equity What about you

Performance/Imagery
What are you

Salient
Who are you
THE STP PROCESS
Segment

Positioning
Target
Location Professional Affordable
s Luxury
Gender
Trendy Must-Have
Socio-
Economic Gadget- Distinct
lovers
Education
ALTERNATIVE COURSES OF ACTION
ACA 1: Focus their resources on expanding their product lines in order to
capture additional markets

Advantages Disadvantages

Stiff competition from other companies like As more competitors offer similar high
Sony who learned from what Samsung did. quality products, profit and market share
Culture where they can create products may shrink in the long run
which people may want
ALTERNATIVE COURSES OF ACTION
ACA #2 : Protect their dominance in their current markets where they are the
top brand
Advantages
Losing the top spot for certain markets
can snowball and affect its dominance
in other markets.
Samsung has to defend where it is
Disadvantages
Companies in other markets can use
this opportunity to learn from
Samsung and develop quality products
that customers want in other markets
Samsung will have to play catch
up to these companies
ALTERNATIVE COURSES OF ACTION
ACA #3 : Protect their dominance in current markets as well as expand to other
ventures where they can also develop products and services.
Advantages Disadvantages

continue being a leader in their HIgh R&D costs.

current markets since it affects the
publics perception.
Expanding to other markets = growth
Samsung has the IP and influence to
expand. They can simply share IP to
their other subsidiaries
As more technology developers match
the designs of Samsung, Samsung will
have to spend more to predict what
customers may want and design for it.
RECOMMENDATION

Criteria

1. Compliance with legal requirements (25)

2. Promotes Customer Satisfaction (25)
3. Drives Competitive Advantage (25)
4. Build organizational effectiveness (25)
 RECOMMENDATION
Alternative Courses of Action Compliance Promotes Drive Build TOTAL
with Legal Customer Competitive Organization SCORE
Requirements Satisfaction Advantage al
Effectivenes
s
ACA #1 - Focus their resources on 24 23 23 22 92
expanding their product lines in order
to capture additional markets

ACA #2 - Protect their dominance in 24 23 23 22 92

their current markets where they are
the top brand
ACA #3 - Protect their dominance in 24 24 24 23 95
current markets as well as expand to
other ventures where they can also
develop products and services.
 IMPLEMENTATION PLAN
WHAT WHO WHEN RESOURCE
REQUIREMENT
Revisit the demographic Management/ Human Months 1- Manpower and Financial
trends and buying Resource/Marketing 2 Resources
behavior Department

Increase R&D budget in R&D Department/ Finance Month 2- Manpower and Financial
coming up with unique Department 12 Resources
product
 IMPLEMENTATION PLAN
WHAT WHO WHEN RESOURCE
REQUIREMENT
Aggressive in launching Marketing Department/ Month 12- Manpower and Financial
its new smartphone Finance Department/ 18 Resources
devices

Marketing Department/ Month 18- Manpower and Financial

Attack the lower end of 36
Finance Department/ Resources
the market

Continue to be Management/ Marketing Continuou Manpower and Financial

aggressive in marketing Department s Resources
and advertising of its
products
THANK YOU