2. •Founded in 1938 by Byung-Chull Lee
•Electronics division began with a black-and-
white TV
•Strong semiconductor and memory sales
•Began manufacturing cell phones in the
1990s
Company Overview
3. Company Overview
26.7% US smartphone market share
- ComScore, Jan 2014
30.4% Global smartphone market share
- Samsung Strategy/Analytics, Jan 2013
Aaa~Aa (Moody’s)
AAA~AA (S&P, Fitch)
A1 (Credit rating agencies in Korea)
4. Industry Analysis
Five Forces Model of Competition Analysis
Threat of New
Entrants
○ Low Large CAPEX requirements
Bargaining Power of
Suppliers
○ Low Suppliers forced to control SG&A
Bargaining Power of
Buyers
◕ Medium
High
High quality requirements with price
sensitivity
Threat of Substitute
Products
◕ Medium
High
Relatively low switching costs and
complementary goods
Rivalry ● High Large market demand saturated by
many different suppliers
5. Industry Analysis
Strength
● Strong distribution networks
● High market share and leading industrial
position
● Advanced and innovative technology
Weakness
● Product patent infringement
● Quality issue for mobile phones
● Lack of trying for laptops
Opportunity
● Rapid development of smart tech
● Revolution driven by big data centered in
mobility, cloud and the Internet of Thing
● Operating system dominated by iOS and
Andriod
Threat
● Fierce competition with other high-tech giants
● Saturated smartphone market
6. Strength • Heavy R&D
• Strong marketing
and advertising
team
• Physical retail
footprint
• Strong market position
• Wide distribution network
• Various range of premium
products
• Leading technology standards
• Broad product and
services ranges
• Strong R&D
technology
• Focus on
environmental-
friendly and
sustainable products
Weakness • Relies on service
manufacturers
(e.g. Samsung,
Foxconn)
• Top-tier price
• Limited types of
products
• Issues of product recalls
• Decline in phone business
• Weak outlook for future
development
• High costs of
manufacturing
prices
• Lose main focus on
consumer-electronic
products
• Reduction on
financial
performance
Industry Analysis
7. Target Market
Consumers:
- 56 % Americans with smartphone
- Urban and Suburban markets
- Gender split
- Majority under the age of 54
- Over $50,000 annual income
- Some college or higher
- Largest ethnic/race: Black-non-Hispanic; Hispanic; White-non-Hispanic
9. Key Issues
• High degree of competition in virtually all markets
• Patent infringement
• Heavy R&D costs
• Trust crisis
• Weak outlook for new market and product expansion
