samsung electronics seoul, korea ali soltani spring 2011
TRANSCRIPT
SAMSUNG ELECTRONICSSeoul, Korea
Ali SoltaniSpring 2011
Agenda
• Samsung Group – History & Structure• Samsung Electronics
– History– Company Focus– Financial Overview– Strategy– Organizational Structure– Challenges
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.
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
HistoryHistory
1969Company established
1969Company established
1980Korea Telecommunications Corp. acquired
1980Korea Telecommunications Corp. acquired
1972Production of B/W TV sets began
1972Production of B/W TV sets began
1995TFT-LCD mass production began
1995TFT-LCD mass production began
1992Company ranked world’s top DRAM supplier
1992Company ranked world’s top DRAM supplier
1974Wafer fabrication started
1974Wafer fabrication started
1988Samsung Semiconductor & Telecommunications merged with Samsung Electronics Co.
1988Samsung Semiconductor & Telecommunications merged with Samsung Electronics Co.
1994256Mb DRAMdeveloped
1994256Mb DRAMdeveloped
1996CDMA cellular services commercialized
1996CDMA cellular services commercialized
HistoryHistory
2004 S-LCD Corp., LCD joint venture with Sony established World’s 1st to develop and demonstrate Mobile WiMAX
2004 S-LCD Corp., LCD joint venture with Sony established World’s 1st to develop and demonstrate Mobile WiMAX
1997Worldwide Olympic Partner contract signed
1997Worldwide Olympic Partner contract signed
2002Production using 300mm wafer and 90nm processing technology started
2002Production using 300mm wafer and 90nm processing technology started
2003Company became leader in flash memory
2003Company became leader in flash memory
1999 World’s 1st to offer full line-
up of digital TVs Developed watch phone,
MP3 phone and TV phone
1999 World’s 1st to offer full line-
up of digital TVs Developed watch phone,
MP3 phone and TV phone
2006 World’s 1st Blu-ray
Player launched World’s 1st 50nm
1Gb DDR2 DRAM developed
2006 World’s 1st Blu-ray
Player launched World’s 1st 50nm
1Gb DDR2 DRAM developed
2007World’s 1st 64Gb NAND flash memory developed
2007World’s 1st 64Gb NAND flash memory developed
2005 World’s 1st Satellite
and Terrestrial DMB terminals launched
World’s 1st 102”PDP TV, 82”LCD TV, and 71” DLP™ TV developed
2005 World’s 1st Satellite
and Terrestrial DMB terminals launched
World’s 1st 102”PDP TV, 82”LCD TV, and 71” DLP™ TV developed
2009 ~ 2010 Reorganized into stand-alone businesses Acquired Samsung Digital Imaging Co.
2009 ~ 2010 Reorganized into stand-alone businesses Acquired Samsung Digital Imaging Co.
June 2010
Manufacturing Subsidiaries 33Sales Subsidiaries 50
Distribution Centers 2Design Centers 7R&D Centers 20Branch Offices and Other 81Total Facilities and Offices 193
Global NetworkGlobal Network
66 Countries66 Countries
Worldwide Olympic Partner since 1997
Leader in semiconductor, telecommunication and digital convergence technologies
193 offices and facilities in 66 countries and 174,000 employees worldwide
Net Sales (2009): US$116.8 billionNet Income (2009): US$8.3 billion
Second biggest US patent winner in 2009 (IFI)
19th in BusinessWeek/Interbrand’s100 Best Global Brands
Samsung TodaySamsung Today
Named one of World’s 50 Most Admired Companies by FortuneMagazine
Selected for the Dow Jones Sustainability Index
Ranked 4th globally and 1st in Asia among corporations on the Carbon Disclosure Leadership Index
| 9
LCDLCD
Business UnitsBusiness Units
Visual DisplayVisual Display
SemiconductorSemiconductorTelecomSystemsTelecomSystems
Digital Appliances
Digital Appliances
IT Solutions
IT Solutions
Mobile Communications
Mobile Communications LCDLCD
DigitalImagingDigital
Imaging
2005 2006 2007 2008 2009
Strong revenue growth
Revenue
(Consolidated basis)
(Billion US Dollars)
Net Income
2005 2006 2007 2008 2009
(Billion US Dollars)
(Consolidated basis)
Financial PerformanceFinancial Performance
$79.6
$92.0
$105.0$96.5
$116.8$7.5
$7.9
$4.4
$8.3$8.5
Financial Overview
Financial Overview
Strategy
Samsung Market Strategy before 1997
Strategy Strengths
Long-time experience in producing technical components and low cost manufactured products for well-known companies.
High –quality products
WeaknessesLow-price and down-market imageIts capital eroded by the Asian financial crisis in 1997Distribution via discount chain at very low priceCommunication messages were not consistent due to
using so many advertising agencies with more than 20 slogans
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
Samsung Market Strategy After 1997
Strategy
Digital Vision: “A Company that leads the digital convergence revolution”
SOLUTION:
1.1.Lay off 30,000 employees
2.2.Close down some of Samsungs factories for 2 month
3.3.Sold about $2 billion worth businesses (pager & coffeemaker)
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
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
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
Wow Products
• “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
$7.5
$5.3
$6.2$5.5
$6.3$6.0
2005 2006 2007 2008 2009
Investment in R&D
(Billion US Dollars)
Technological CompetitivenessTechnological Competitiveness
R&D Commitment(as a % of parent company sales)
R&D Commitment(as a % of parent company sales)
Innovating technologies by sustaining investment in R&D
Culture
• Entrepreneurial • Profit focused• Decisive• Different from other firms in Korea and within
chaebol
Thank youThank you