The document provides a comprehensive overview of Samsung Electronics, detailing its historical evolution, from its inception in 1969 to becoming a global leader in semiconductors and consumer electronics. It outlines the company's strategic choices, financial performance, and the impact of digital technology on its business model. Furthermore, it highlights the challenges faced and the strategic responses implemented by Samsung to maintain competitive advantage in the market.

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
– 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 1992
Production of B/W TV sets began Company ranked world’s top DRAM supplier
1969 1980 1995
Company established Korea Telecommunications TFT-LCD mass production began
Corp. acquired
1974 1988 1994
Wafer fabrication started Samsung Semiconductor & 256Mb DRAM
Telecommunications merged with developed
Samsung Electronics Co.
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 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 NAND
1997 2003 1Gb DDR2 DRAM flash memory
Worldwide Olympic developed developed
Company became leader in
Partner 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. 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. 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 and
Named one of World’s 50 1st in Asia among
Most Admired Companies corporations on the Carbon
by Fortune Disclosure Leadership
Magazine Index
Worldwide Olympic Selected for the Dow Jones
Partner since 1997 Sustainability Index
19th in
Second biggest US BusinessWeek/Interbrand’s
patent winner in 2009 (IFI) 100 Best Global Brands
Net Sales (2009): US$116.8 billion
Net Income (2009): US$8.3 billion

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

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. Financial Overview

12. Financial Overview

13. Strategy
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:
3. 1.Lay off 30,000 employees
4. 2.Close down some of Samsungs factories for 2
month
5. 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 1
LCD Display 1
Big Screen TVs 1
DVD-VCR Combos 1
Projection TVs 2
DVD Players 2
Laser Printers 2
Mobile Phones 2
Microwave Ovens 3
Plasma TVs 4
Camcorders 4

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. 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

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

27. Thank you