Samsung has grown to become a global electronics giant since its founding in 1938. It is South Korea's largest chaebol with total revenue of €185.1 billion in 2012. Samsung Electronics is its largest business unit, generating €140.5 billion in revenue. While Samsung struggled early on in the smartphone market, it became the global leader in 2012 with 21.5% market share. However, Samsung faces threats from low-cost Chinese competitors and relies on Google's Android OS. The document recommends that Samsung develop its own software platform, target cheaper smartphone segments in growing markets like China and India, and continue innovating to maintain its leadership position.

1. The Rise of Samsung
Electronics
Case study
Sjoerd van Eerdenburg
Evgenii Gvozdev
Roelof van Laar

2. Content
Company profile
SWOT analysis
Market analysis
Porters five forces analysis
Strategy recommendations

3. Samsung company profile
South Korean company, founded in 1938
Largest chaebol
Total revenue € 185.1 bn (2012)
Samsung Electronics largest SBU, revenu € 140.5 bn
(2012)
CEO is Dr. Oh-Hyun Kwon
72 Countries
206,000 employees

4. Samsung smart phones
First SE mobile phone in 1988
Apple introduces smartphone in 2007
SE smartphones unsuccesful at first
3.7% market share at the end of 2009
Google Android launched in 2010
Samsung Galaxy S in June 2010
Market leader in 2012, with 215 m units

5. SWOT
analysis
Strengths
Weaknesses
Strong brand value
Own OS and software
are unpopular
Diversified product
line
Product
cannibalization
Innovation and design
Main competitors are
largest customers
High market share
Patent infringement

6. Opportunities
Threats
Growing Indian market
Low cost Chinese
products
Strong partnerships that
can be enhanched
Rapid technological
change
Increasing demand for SE
quality application
processors
Price wars
Unrelated profile
diversification
Advertising revenue
goes to/through Google

7. Market analysis
Key Issues:
Samsung performs as flanker, not as leader
Looses market share in emerging
smartphone markets to cheaper
brands (China -6% 2011-2012)
Needs to develop further
software of its own, vulnerable
to Google’s power

8. Market Overview

9. Porters five forces analysis
Threat of new entrants
Competitive rivalry
High, mainy Chinese competitors
High, fierce competion with Apple, Sony, SK Hynix, etc.
Threat of substitutes
High, many similar products on the market
Customer power
High, low threshold for switching
Supplier power
Low, Samsung market leader
Complementors (sixth
force)
Open Handset Alliance (OHA): Android OS
Apple, market creator, large customer

10. Strategy recommendations
Samsung must position itself
as market leader and
resume its current strategy
concerning product
innovation and market
divided segments in Western
Market (including their
power in the supply of
smartphone components
and marketing to revenue
ratio), because

11. Samsung must research and develop its own software platform, because

12. Samsung must attack and enter the growing segment of cheaper smartphones and
especially conquer China and be heavily invested in India (long term growth),
because both countries will enlarge the smartphone market as a whole and have the
need for a cheaper smartphone

13. Sources
Case study: The Rise of Samsung Electronics
Samsung Electronics annual report 2012
http://www.samsung.com/us/aboutsamsung/investor_relations/financial_information/downloads/2013/SECAR2012_Eng_Fin
al.pdf
Hong, Y. S. (2012). Modes of Combinative Innovation: Case of
Samsung
Electronics. Asian Journal of Innovation and Policy,
1, 219-239.
Hsin, C. (2010). The Innovation Strategy of Core Competence and
Enterprise
Growth–The Case Study of Samsung.
Vergara, R. (2012). Samsung Electronics and Apple, Inc.: A Study
in Contrast
in Vertical Integration in the 21 st
Century.
American International
Journal of Contemporary