1. SAMSUNG ELECTRONICS Seoul, Korea
Ali Soltani
Spring 2011

2. Agenda Samsung Group – History & Structure Samsung Electronics History
Company Focus
Financial Overview
Strategy
Organizational Structure
Challenges

3. Samsung Group Founded in 1938 1950’s Economic Stabilization
exporter of dried fish, vegetables, and fruits
flour mill and confectionery machines
1950’s Economic Stabilization
Korean War - Samsung lost all assets
aimed to help rebuild Korean economy; entered the manufacturing industry (sugar, fabrics)
became a leader in modern business practices (recruiting from outside)
1960’s Expansion of Key Industries
entered electronics and chemical industries
1969 established Samsung Electronics Co.

4. Samsung Electronics Established in January, 1969
1970’s: Bet the future on electronics
laid the groundwork for electronics in Korea
helped the domestic economy grow
paved the way for exports
1980’s: A more comprehensive electronics company
established plants in Portugal and US
established Semiconductor and Communication corporation
began memory chip business
Early 90’s: Integration and Globalization
Mid-Late 90’s: Implementing new management strategies
New Millenium: Digital Vision

5. History
1972
Production of B/W TV sets began
1992
Company ranked world’s top DRAM supplier
1969
Company established
1980
Korea Telecommunications Corp. acquired
1995
TFT-LCD mass production began
1974
Wafer fabrication started
1988
Samsung Semiconductor & Telecommunications merged with Samsung Electronics Co.
1994
256Mb DRAM
developed
1996
CDMA cellular services
commercialized

6. History
2004
S-LCD Corp., LCD joint venture with Sony established
World’s 1st to develop and demonstrate Mobile WiMAX
2002
Production using 300mm wafer and 90nm processing technology started
2006
World’s 1st Blu-ray Player launched
World’s 1st 50nm 1Gb DDR2 DRAM developed
2007
World’s 1st 64Gb NAND flash memory developed
1997
Worldwide Olympic Partner contract signed
2003
Company became leader in flash memory
1999
World’s 1st to offer full line-up of digital TVs
Developed watch phone, MP3 phone and TV phone
2005
World’s 1st Satellite and Terrestrial DMB terminals launched
World’s 1st 102”PDP TV, 82”LCD TV, and 71” DLP™ TV developed
2009 ~ 2010
Reorganized into stand-alone businesses
Acquired Samsung Digital Imaging Co.

7. 66 Countries Global Network June 2010 Manufacturing Subsidiaries 33
Sales Subsidiaries 50
Distribution Centers 2
Design Centers 7
R&D Centers 20
Branch Offices and Other 81
Total Facilities and Offices
193

8. Samsung Today 193 offices and facilities Leader in semiconductor,
in 66 countries and
174,000 employees worldwide
Leader in semiconductor,
telecommunication and digital convergence technologies
Ranked 4th globally and 1st in Asia among corporations on the Carbon Disclosure Leadership Index
Named one of World’s 50 Most Admired Companies by Fortune
Magazine
Worldwide Olympic Partner since 1997
Selected for the Dow Jones Sustainability Index
19th in BusinessWeek/Interbrand’s
100 Best Global Brands
Second biggest US
patent winner in 2009 (IFI)
Net Sales (2009): US$116.8 billion
Net Income (2009): US$8.3 billion

9. Business Units Visual Display Mobile Communications Telecom Systems IT
Solutions
Digital
Appliances
Semiconductor
LCD
Digital
Imaging
LCD
| 9

10. Financial Performance
Strong revenue growth
Revenue
Net Income
(Consolidated basis)
(Consolidated basis)
(Billion US Dollars)
(Billion US Dollars)
$8.5
$8.3
$7.9
$7.5
$4.4

11. Financial Overview

12. Financial Overview

13. Samsung Market Strategy before 1997

14. Strategy
Strengths
Long-time experience in producing technical components and low cost manufactured products for well-known companies.
High –quality products
Weaknesses
Low-price and down-market image
Its capital eroded by the Asian financial crisis in 1997
Distribution via discount chain at very low price
Communication messages were not consistent due to using so many advertising agencies with more than 20 slogans

15. Strategy Opportunities Development of digital technology
New powerful advertising channel: Internet
Threats
The global memory chip market dramatically decreased due to the shrinking demand and excess supply
Chinese cheap products

16. Samsung Market Strategy After 1997

17. Strategy
Digital Vision: “A Company that leads the digital convergence revolution”
SOLUTION:
1.Lay off 30,000 employees
2.Close down some of Samsungs factories for 2 month
3.Sold about $2 billion worth businesses (pager & coffeemaker)

18. Design
Consumer-brand awareness
Global leader in several products
High price products
Fastest growing brand
Brand value : $ 15 Billion
Hardware
Develop all components used in its own products

19. Strategy 2000 : design-led management
2001 : design labs : Los Angeles , London
2002 : Usability Laboratory
2003 : 33 awards at top design
2006 : market value rises above $100 billion
2007 : world's second-largest Mobile Phone maker
2008 : take the No.1 spot as the world’s largest technology company
2009 : Entered the top 10 list in the world’s top 100 global brands

20. Product Category Market Rank
Memory Chips 1
Computer Monitor
LCD Display
Big Screen TVs
DVD-VCR Combos
Projection TVs 2
DVD Players
Laser Printers
Mobile Phones
Microwave Ovens 3
Plasma TVs 4
Camcorders

21. Wow Products

22. “We have to combine computers , consumer electronics and communications as Koreans mix their rice with vegetables and meat”
“We want to be the Mercedes of home electronics”
“They’ve got the products , a growing reputation as the innovator , and production lines to back that up”
Creating chief design office

25. R&D Commitment (as a % of parent company sales)
Technological Competitiveness
Innovating technologies by sustaining investment in R&D
Investment in R&D
(Billion US Dollars)
R&D Commitment (as a % of parent company sales)

26. Culture Entrepreneurial Profit focused Decisive
Different from other firms in Korea and within chaebol

27. Thank you