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Samsung electronics   master
 

Samsung electronics master

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    Samsung electronics   master Samsung electronics master Presentation Transcript

    • SAMSUNG ELECTRONICS Seoul, Korea Japan / Korea Trip 2001 Fabio Armani Julian Carey Jennifer Goodwin
    • Agenda
      • Samsung Group – History & Structure
      • Samsung Electronics
        • History
        • Company Focus
        • Financial Overview
        • Strategy
        • Organizational Structure
        • Challenges
    • Samsung Group
      • Founded in 1938
        • 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.
    • Samsung Group
      • distribution
      • hotels
      • amusement theme parks
      • trading
      • construction
      • textile
      • advertising
      • baseball team
      • security
      • cameras
      • aircraft
      • ships
      • dump trucks
      • oil trucks
      • polymerized compounds
      • plastics
      • specialty chemicals
      • life insurance
      • credit card services
      • securities trading
      • finance and trust management services
      • home appliances
      • wireless communication
      • semiconductors
    • 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
    • Focus: 4 Core Markets Home Multimedia Mobile Multimedia Personal Multimedia Core Components
    • Samsung Electronics Semiconductors 40% Digital Media 29% Telecommunications 23% Home Appliances 8% % Sales ($27B) % Operating Profit Semiconductors 79% Digital Media 6% Telecommunications 12% Home Appliances 3%
    • Financial Overview
      • Revenue growth and Operating Income suffered in 1996
      • 1997: New CEO Jong Yong Yun
        • major turnaround
          • new business focus
          • new management practices
        • very positive results in 1999, but…
      Operating Income (billion Won) Revenue (billion Won)
    • Stock Performance … Samsung is feeling the effects of the downturn in the high-tech market Common Stock Preferred Stock
    • Strategy
      • 1997 Turnaround:
      • Cut a third of workforce, cut debt
      • Sold and spun off divisions
      • Set “firewalls” to other Samsung Divisions
      • New business proposition: profits
      • Streamlined inventories
      • Diversification
    • Strategy
      • New Economy:
      • Exodus of engineers and managers to startups
      • Top 4 conglomerates: $1.2B in startups (Samsung: $520M)
        • Stakes of up to 29.9% in 80+ startups
      • Startups benefit from links to global networks and financial expertise
      • “ You simply can’t survive without adapting to the fast-changing Internet era, and one solution is linking up with startups ”
    • Strategy
      • Digital Vision: “ A Company that leads the digital convergence revolution ”
      • Brand power, logistics, IP:
        • High-margin products
        • Create value chain that integrates competencies of all areas
        • Customer and market oriented
      • Global network by function
      • Performance evaluation and compensation system
    • Strategy
      • Digital Vision:
      • Innovation, meeting challenges and creativity
      • Target debt-to-equity ratio: 50%
      • R&D: 7% of total revenues
      • Overseas partners:
        • Joint R&D projects
        • Technology transfer arrangements
        • Joint investments
    • Organization Structure
      • 4 main groups with 14 divisions
      Digital Media Semiconductors Information & Communications Home Appliances Samsung Electronics
    • Management & Employees
      • 59,000 employees
      • Development of employees strategic to success
      • “ Making rounds” encouraged as a key management practice
    • Recruiting and Training
      • Heavy investment
      • Focus on creating agents of change
      • Expertise in technology and marketing
    • Culture
      • Entrepreneurial
      • Profit focused
      • Decisive
      • Different from other firms in Korea and within chaebol
    • Current Challenges
      • Internal : “You must maintain a sense of crisis to stay competitive”
      • Profits vs. Growth
        • Financial discipline
      • Foster creativity
      • Executives jumping ship for startups
    • Current Challenges
      • External :
      • Abandon dependence on cheap commodity products
      • Emphasis on goods developed in-house
        • Rivals are outsourcing production and design
      • Guide the company into the global electronics elite
    • Current Challenges
      • Corporate Governance:
      • Cross-shareholding among affiliates
        • Shifth funds among subsidiaries
        • Manipulate debt-to-equity ratios
      • Outside directors appointed by family
      • Lack of accountability to outside shareholders