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Cheap Samsung Phones: The History

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Samsung is no different from any other businesses. Before it has grown to become top notch and one of the world's leading electronics companies, these #CheapSamsungPhones started from scratch, had its ups and downs, struggled and survived.

Published in: Devices & Hardware, Business

Cheap Samsung Phones: The History

  1. 1. SAMSUNG ELECTRONICS Seoul, Korea Ali Soltani Spring 2011
  2. 2. Agenda• Samsung Group – History & Structure• Samsung Electronics – History – Company Focus – Financial Overview – Strategy – Organizational Structure – Challenges
  3. 3. 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.
  4. 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. 5. History 1972 1992 Production of B/W TV sets began Company ranked world’s top DRAM supplier1969 1980 1995Company established Korea Telecommunications TFT-LCD mass production began Corp. acquired1974 1988 1994Wafer fabrication started Samsung Semiconductor & 256Mb DRAM Telecommunications merged with developed Samsung Electronics Co. 1996 CDMA cellular services commercialized
  6. 6. History 2004  S-LCD Corp., LCD joint venture with Sony established  World’s 1st to develop and demonstrate Mobile WiMAX 2002 2006 Production using 300mm wafer and 2007  World’s 1st Blu-ray 90nm processing technology started Player launched World’s 1st  World’s 1st 50nm 64Gb NAND1997 2003 1Gb DDR2 DRAM flash memoryWorldwide Olympic developed developed Company became leader inPartner contract signed flash memory 1999 2005  World’s 1st to offer full line-  World’s 1st Satellite up of digital TVs and Terrestrial DMB  Developed watch phone, terminals launched 2009 ~ 2010 MP3 phone and TV phone  World’s 1st 102”PDP  Reorganized into stand-alone TV, 82”LCD TV, businesses and 71” DLP™ TV  Acquired Samsung Digital developed Imaging Co.
  7. 7. Global Network 66 Countries 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. 8. Samsung Today Leader in semiconductor, 193 offices and facilities telecommunication and digital in 66 countries and convergence technologies 174,000 employees worldwide Ranked 4th globally andNamed one of World’s 50 1st in Asia amongMost Admired Companies corporations on the Carbonby Fortune Disclosure LeadershipMagazine Index Worldwide Olympic Selected for the Dow Jones Partner since 1997 Sustainability Index 19th inSecond biggest US BusinessWeek/Interbrand’spatent winner in 2009 (IFI) 100 Best Global Brands Net Sales (2009): US$116.8 billion Net Income (2009): US$8.3 billion
  9. 9. Business UnitsVisual Mobile Telecom IT Digital Digital Semiconductor LCD LCDDisplay Communications Systems Solutions Appliances Imaging | 9
  10. 10. Financial Performance Strong revenue growth Revenue Net Income (Consolidated basis) (Consolidated basis) (Billion US Dollars) (Billion US Dollars) $8.5 $8.3 $116.8 $7.9 $105.0 $7.5 $96.5 $92.0 $79.6 $4.4 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
  11. 11. Financial Overview
  12. 12. Financial Overview
  13. 13. StrategySamsung Market Strategy before 1997
  14. 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. 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. 16. Samsung Market Strategy After 1997
  17. 17. StrategyDigital Vision: “A Company that leads the digital convergence revolution”SOLUTION:3. 1.Lay off 30,000 employees4. 2.Close down some of Samsungs factories for 2 month5. 3.Sold about $2 billion worth businesses (pager & coffeemaker)
  18. 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. 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 : worlds 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. 20. Product Category Market Rank Memory Chips 1 Computer Monitor 1 LCD Display 1 Big Screen TVs 1DVD-VCR Combos 1 Projection TVs 2 DVD Players 2 Laser Printers 2 Mobile Phones 2 Microwave Ovens 3 Plasma TVs 4 Camcorders 4
  21. 21. Wow Products
  22. 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
  23. 23. Technological Competitiveness Innovating technologies by sustaining investment in R&D Investment in R&D R&D Commitment (Billion US (as a % of parent company sales) Dollars) $7.5 $6.3 $6.2 $6.0 $5.3 $5.5 2005 2006 2007 2008 2009
  24. 24. Culture• Entrepreneurial• Profit focused• Decisive• Different from other firms in Korea and within chaebol
  25. 25. Thank you

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