Samsung’s Digital World sample essay

During the first years after its inception, Samsung was a completely different business a compared to what we know about it today. Back in 1938, when a Korean entrepreneur Byung-Chull Lee started Samsung (“three stars” in Korean), its primary revenues came from selling fish, fruit, and vegetables. In ten years, the organization grew large enough to have its own production and operation lines. By 1970 the company began investing money in heavy industries. Soon after that, separate Samsung divisions appeared such as Samsung Shipbuilding Company, Samsung Precision Company, Samsung Heavy Industries Company, and Samsung Electronics. The company grew very quickly at that time, and it was already the major manufacturer of electronic products in Korea in 1970’s. Later the company started exporting products and growing even faster in the technological sectors. By present day, Samsung has grown into a giant corporation, rating one of the “top 10” in U.S. patents. The company has also secured 15th place in the list of world companies by revenue (fiscal 2004).

The company not would have survived and grown to such colossal size unless it had a unique and effective corporate culture, values, and goals. Samsung is devoted to its customers, as well as human resource and up-to-date technology. As the company has always been growing since its inception, the mission statement of the company has been somewhat unique because it “responds both to its own change, and to new development in the world: Economic contribution to the nation; priority to human resources; pursuit of rationalism.” This compound statement reflects exactly Samsung’s corporate values, goals, and mission. In addition, if taken separately, these three statements represent the stages of growth and development of Samsung from a local mite to a multinational giant.

Samsung’s management philosophy revolves around the desire to “contribute directly to the prosperity of people all over the world.” Although somewhat naive, this statement, represents some additional values that are beyond earthly material and commercial ideals. As any successful multinational company, Samsung pays close attention to its personnel. They value their employees, because human resource is the greatest asset the company has. Samsung believes that the way they manage the company is crucially important not only for the financial health of the company, but also because it is a determinant of “the success of our contributions to society and to the mutual prosperity of people across national boundaries.”

Thorough SWOT analysis of Samsung corporation requires much effort, time, and spending. Since the company’ production and operations are scattered around the globe, it is somewhat difficult to recognize all the strengths, weaknesses, opportunities, and threats. However, simpler SWOT analysis would include something like the following.

Strengths. One of the major strengths of the company is its financial health. The company’s financial statements only show growth of revenues. With its 175,000 employees, Samsung had $116,800,000,000 of revenue in 2004. Another more specific strengths of Samsung Engineering, for example, include efficient and impressive track of all environmental, chemical, and industrial projects. Also, their order backlogs provide good visibility of earnings. Finally, the strength of all separate Samsung entities is that they all are interconnected affiliates.

Weaknesses. The most important weakness of Samsung is that their costs are relatively high as compared to the competition. Although Samsung keeps its prices at a reasonable level to stay competitive, there is however room for improvement in their costing structure. Although, marketing and statistics people do their job, earnings at Samsung are somewhat difficult to predict. The third and probably the most prominent weakness of Samsung is the very competitive market it is currently operating in. With the swift development of technologies today, Samsung has to manage the company in a very efficient manner to be even more productive. Although Samsung is already one of the most profitable and one of the leaders in the market, still the competition is huge; Samsung must take it into consideration.

Opportunities. One of the local opportunities of Samsung is that Korean Government can increase investment in its engineering facilities. Samsung already has a half of Korean engineering market, but with more investment from the Government Samsung facilities would benefit for obvious reasons. In turn, another opportunity logically follows from this one. Samsung can improve their facilities so that macro-outlook would become attractive for investments. Another opportunity Samsung operation managers should pay close attention to is to cut costs. More thorough control over its employees is something managers might consider. Barring these, there are much more opportunities, but I am just discussing the basic ones here.

Threats. On a domestic level, the company’s publicity before shareholders may drop (which would delay investment plans) because of such unexpected phenomena as economic crisis or political instability in Korea. On an international level though, Samsung marketing people should pay close attention to cultural backgrounds that result in decreases sales, and negative public relations. Some additional threats are the spectrum of factors that may result in decrease of production, put at risk the likelihood of implementing all projects, and factors that may result in not meeting its long term and short term financial objectives.

The leadership of the Chief Executive Officer, Kun-Hee Lee, is very close to the entire corporate structure. As a manager, he supports something closer to management theory Y. Kun-Hee Lee values employees and treats them as the most valuable asset, upon which the entire company depends. Samsung CEO is committed to moving the company forward, and does not want to halt its growth and development. He believes that “only the very best companies and best products survive.” Even having gone thus far in the world market, Kun-Hee Lee realizes that Samsung must not overestimate its current status and financial health. Should the management relax and stop putting effort into the company’s growth and expansion, Mr. Lee views such circumstance as the prelude of imminent failure.

Samsung CEO stimulates teamwork within the company; he wants to derive maximum involvement by means of creating a feeling of a family, in which employees would feel that their decisions are valued, and that they are granted responsibility. He understands that Samsung is only a little part of the world’s economy, and that he and his company must build such a strategy that would make the lives of customers, employees, managers, and shareholders better, and would contribute to the beneficial coexistence with other entities on the market.

Samsung’s external marketing strategy has become aggressive recently. In addition to marketing their products to developed countries of Western Europe and North America, Samsung has recently opted for selling their products in developing countries of Eastern Europe and Asia. As these third-world countries develop, people make more money and thus have more disposable income. Gradually, these countries, such as Russia and other countries of the former Soviet bloc, are now very good markets to invest money into because of the rapid growth of economy. We could recollect what we had in the United States 20 years ago and draw a parallel. Thus, with the prewritten general scenario of development of national economies, Samsung marketing people can market their products very effectively, which is what they are doing now.

Another decent strategy employed by Samsung is the sponsorship of World Cyber Games. As cyber sport is becoming more and more popular in nearly all countries of thew world (although it has passed the growth stage of its life cycle), Samsung reacted quickly and sponsored this grand championship. This is a huge and very productive complex advertising campaign that positions the brand and targets it very effectively. By sponsoring this championship, Samsung gains a direct access to the segment they need. And since the participants of matches deal with computers much, this is a perfect audience for information technology products. Their target market for these products are adults or couples (youth in rarer cases). And so by having players (both adults and youngsters) attend matches, Samsung can position and demonstrate their latest technological achievements and innovative products. Adults are literally stimulated and pushed to purchase computers and accessories, while younger players ask their parents to buy something “cool.”

As for global competition, surely Samsung is currently marketing its products in a very competitive market, with tens if not hundreds of brands competing for a market share. Samsung, however, has secured its share in the market by implementing various strategies. These strategies not only involve marketing decisions, but production and operations as well. For example, Samsung is the world’s largest producer of liquid crystal displays (LCD’s). The new generation of LCD panels is something other companies would not want to compete.

The company’s public relations department has done a good job as well. The company’s publicity is good; people simply trust Samsung. In conjunction with effective advertising campaigns and high quality products, company’s publicity induces customers to purchase, purchase, and purchase more.

Ultimately, Samsung is a one of the leading companies on the world market. It consists of 14 affiliate groups that have 337 offices in 58 countries of the world. Since its inception in 1938, the company had shown very good marketing and management strategies, which allowed it to grow very quickly. Out from a single grocery retailer in Korean town, “the Three Stars” company had been gradually evolving and developing. The company has tried itself in many industries and sectors, but found out that the most effective, successful, and productive sectors are electronics, engineering, and heavy industries. Currently, Samsung has almost 200 thousand employees over the world, its annual sales almost $120 billion annually, and its profits are over $11 billion. With such parameters, Samsung can be easily called one of the world’s biggest and strongest corporations that specialize in technology and engineering.

Samsung has everything necessary for long term success. The only thing they have to do in simple terms is to keep the pace, and do not stop the development and growth. As Samsung’s CEO views it, failure to objectively evaluate the company’s potential and current conditions might lead to overestimation of the results. This false inference would certainly lead to rising weaknesses and drawbacks, which must be avoided in such a competitive market. This way, Samsung should keep the pace and survive the aggressive competition of today’s world.

Bibliography

1. Values & Philosophy. (2005). About Samsung. From Samsung Internaitonal at http://www.samsung.com/AboutSAMSUNG/ SAMSUNGGROUP/ValuesPhilosophy/index.htm

2. Kun-Hee Lee. (2005). CEO Message. From Samsung International at http://www.samsung.com/AboutSAMSUNG/SAMSUNGGROUP/ Chairman/CEOMessage/index.htm

3. Samsung Group Annual Report. (2004). About Samsung. From Samsung International at http://www.samsung.com/AboutSAMSUNG/ SAMSUNGGROUP/AnnualReport/AnnualReport/index.htm

4. Samsung Group Timeline & History. (1938-2005). About Samsung. From Samsung International at http://www.samsung.com/ AboutSAMSUNG/SAMSUNGGROUP/TimelineHistory/timeline01.htm

5. Rhee, P. (2004). Samsung Engineering. From JPMorgan at http://www.samsungengineering.co.kr/secl/eng/ir/2004121South_Korea.pdf

6. List of Companies by Revenue. (2005). Wikipedia the free encyclopedia. Available at http://en.wikipedia.org/wiki/ List_of_companies_by_revenueOrder custom essay now!