DEPARTMENT OF BUSINESS AND INDUSTRIAL

DEVELOPMENT (DBIM)
MBA SEM-3

Subject:
Business Policy and Strategic Management

Topic:

Samsung Electronics Co., Ltd

Submitted To:

Submitted By:

Dr. Jaydeep Chaudry

Tamakuwala Shibani
Megha Saraf
Jinal Vora

Introduction to the Industry

From its inception as a small export business in Taegu, Korea, Samsung has grown to become
one of the world's leading electronics companies, specializing in digital appliances and
media, semiconductors, memory, and system integration. Today Samsung's innovative and
top quality products and processes are world recognized. This timeline captures the major
milestones in Samsung's history, showing how the company expanded its product lines and
reach, grew its revenue and market share, and has followed its mission of making life better
for consumers around the world
For over 70 years, Samsung has been dedicated to making a better world through diverse
businesses that today span advanced technology, semiconductors, skyscraper and plant
construction, petrochemicals, fashion, medicine, finance, hotels, and more. Our flagship
company, Samsung Electronics, leads the global market in high-tech electronics
manufacturing and digital media.
Through innovative, reliable products and services; talented people; a responsible approach to
business and global citizenship; and collaboration with our partners and customers, Samsung
is taking the world in imaginative new directions.

Introduction Business description :Samsung Electronics Co., Ltd. (further Samsung), a part of the Samsung Group, is the
worlds second largest technology company by revenue. The company produces consumer
electronics, telecommunications equipment, semiconductors and home appliances. Samsung
operates three business divisions:

Consumer electronics - Visual Display Business, Digital Appliances Business,

Printing Solutions Business and Health & Medical Equipment Business.

IT and Mobile communications - Mobile Communications Business and Networks

Business.

Device solutions - Memory Business, System LSI Business and LED Business.
The company is the worlds largest mobile phone and smartphone vendor. It is also the largest
memory chip and TV manufacturer. Samsung operates in 80 countries, where it sells a range
of more than 100 products.

Industry Growth in 2014

2014 Financial Highlights

AMOUNTS IN BILLIONS

WON

DOLLARS

EUROS

Net Sales*

333,891.7

305.0

229.7

Total Assets

558,777.4

529.5

383.7

Total Liabilities

314,840.1

298.3

216.2

Total Stockholder's Equity

243,937.3

231.2

167.5

24,151.7

22.1

16.6

Net Income*

[Amounts in billions]

Electronics
Our electronics companies make the small gadgets that run much more powerful gadgets
including everything from components in our PCs and mobile phones to green batteries and
behind the scenes IT solutions.

Samsung Electronics

Samsung SDI

Samsung Electro-Mechanics

Samsung SDS

Samsung Display

Samsung Corning Advanced Glass

Heavy Industries
Heavy Industries handles diverse projects that include shipbuilding, engineering and
construction.

Samsung C&T Engineering & Construction Group

Samsung Heavy Industries

Samsung Engineering

Chemical Industries
Samsungs Chemical Industries division works with high-profit fine-chemicals and life
sciences, and partners with corporations like BP to produce petrochemicals.

Samsung Fine Chemicals

Samsung BP Chemicals

Financial Services
Samsungs financial services companies, serving customers in Korea, include insurance,
investments and credit card businesses.

Samsung Life Insurance

Samsung Fire & Marine Insurance

Samsung Card

Samsung Securities

Samsung Asset Management

Samsung Venture Investment

Other Affiliated Companies

Among Samsungs other affiliates are companies that offer professional services, develop
textiles and serve industries such as hospitality and tourism.

Samsung C&T Trading & Investment Group

Cheil Industries

Hotel Shilla

Cheil Worldwide

S-1 Corporation

Samsung Medical Center

Samsung Economic Research Institute

Samsung Biologics

Samsung Bioepis

Samsung Welstory

Research and Development

R&D is at the heart of everything Samsung does. Ongoing investment in our collaborative
global research network plays a critical role in our ability to innovate products today that will
enrich peoples lives tomorrow.
People
Samsungs team of researchers and engineers include over 50,000 employees across 42
global research facilitieseach one collaborating on strategic technologies to forge new
market trends and set new standards of excellence.
Organization
Samsungs R&D organization consists of three layers:

The Samsung Advanced Institute of Technology (SAIT)

SAIT identifies growth engines for the future and oversees the securing and management of
technology.
R&D Centers
Our global R&D centers for each business area focus on technology that is expected to
deliver the most promising long-term results.

Division Product Development Teams

The division teams in each center are responsible for commercializing products scheduled to
hit the market within one or two years.
Investment
R&D is our key to responding to uncertain business environments and an increasingly
competitive market place. Each year we invest at least 9% of our sales revenue into R&D
activities with a commitment to leading technology standardization and securing intellectual
property rights.
Global R&D Network
Our R&D network spans six Samsung centers in Korea, and 18 more across the U.S., U.K.,
Russia, Israel, India, Japan and Chinanot to mention our organizations in Universities
across the globe. Our network investigates the latest technology trends and realizes
technologies that offer the greatest benefits

Samsung Porters Five Forces Analysis

Porters Five Forces analytical framework developed by Michael Porter (1979)[1] represents
five individual forces that shape the overall extent of competition in the industry. These
forces are represented below:

Threat of new entrants is not significant. Major established firms operating in the industry
such as Samsung, Apple and HTC benefit from the economies of scale to a significant extent
in terms of gaining cost advantage. However, such a benefit is not available to the new
market entrants. Moreover, entering and operating in mobile phones and consumer
electronics industry requires massive capital investments and this fact represents a significant
barrier for new entrants.
Furthermore, access to distribution channels such as wholesales warehouses, distribution
centers, and consumer technology selling outlets in the high street can prove to be a
significant barrier for new market players, thus reducing the threat of new entrants to the
competition.

Bargaining power of buyers is great. Samsung customers can easily switch to Apple, Nokia,
Motorola, Blackberry, HTC or LG with no extra cost for them and this fact increases their
bargaining power significantly. There are additional important factors such as buyers price
sensitivity and comprehensiveness of information about features and functionalities of
products that further increase bargaining power of buyers.
Bargaining power of suppliers working with Samsung depends on the specific type of
supplier. Businesses supplying general parts and components do not yield substantial
bargaining power due to the importance of Samsungs order volume and its ability to
negotiate prices. However, one particular supplier, Google exercises an immense bargaining
power as the supplier of Android platform due to the lack of alternative platforms available to
Samsung.
Samsung Electronics duly recognizes the importance of developing strategic cooperation with
suppliers and about 72.7% of total economic value was shared with suppliers in 2014.
Moreover, Samsung maintains an extensive communication with its suppliers within the
scope of various programs and initiatives such as Shared Growth Day, Supplier Dialogue
Fair, Hot Line and informal meetings with supplier.

VISION

The underlying principle that defines our vision for the future of
Samsung Electronics is "Inspire the World, Create the Future"

This vision is at the very core of our commitment to lead innovations in technology, products
and solutions that inspire communities around the world to join our aspiration for creating a
better world full of richer digital experiences. As we recognise our responsibility as a creative
leader in the global society, we also dedicate our efforts and resources to offering new values
to the industry and customers while fulfilling shared values of our employees and partners. At
Samsung Electronics, we want to create a future that is exciting and promising for all
together.
As a guide to common understanding and measurable goal, a set of specific objectives is
incorporated into our vision. By 2020, we seek to achieve annual sales of USD 400 billion
while placing Samsung Electronics overall brand value among the global top 5. Three key
strategic pillars that are now part of our culture, business operation and management describe
the governing initiatives to this end: Creativity , Partnership and Great People.
We pride ourselves on delivering the worlds best products through operational excellence
and innovation prowess. As we look forward to exploring new business areas including
healthcare and biotechnology, we are excited for new challenges and opportunities ahead.
Samsung Electronics will continue to build on top of its current achievements new capacity
and expertise to further its competitiveness and its history of innovation.

MISSION

To inspire the world with innovative technologies, products and designs that enrich peoples
lives and contribute to a socially responsible, sustainable future.

STRATEGY

Creativity, partnership and great people connectivity.

SWOT Analysis
Strength in the SWOT analysis of Samsung

Samsung enjoys the widest range of product portfolio which includes Mobile phone,
Tablet, TV/Audio/Video, Camera, camcorder, Home appliance, pc, peripherals, printer,
memory cards and other accessories

Samsung holds significant market share in most of the product categories

Samsung is NO.2 in terms of market share in mobiles, it captured Nokias market

share by superior innovation in smart phones

Samsungs is the best in terms of design features and technology. It was the first to
introduced dual screen mobiles , 65k TFT/LCD colour phone, first phone with polyphonic
ringtones, phones with rotating lens, thinnest and lightest note pad etc

Samsung enjoys the first mover advantage in terms of introducing advance features in
LCD, refrigerator, Air conditioner etc. It introduced the worlds smallest MP3 player and
Indias first 17 TFT-LCD-TV monitor.

Samsung took advantage of the growing economy of Asian market by setting up

manufacturing plant in India there by reducing logistics and supply chain costs.

Samsung brand value increased by 80% in past three years

Weakness in the SWOT analysis of Samsung

Samsung Mobile launched a series of Smart phones recently which led to

cannibalization

The demand for LCD panels is expected to decline in the future

Still Nokia is considered to be the most preferred product in India in terms of ease of
use, reliability and resale value

Chinese products focus on economies of scale and dump into Indian market for lesser
cost. This results in reduction of sales

Samsung is a hardware leader but has too much of dependence for software from
other parties.

Online stores which sell a wide range of products are giving better deals as they dont
incur cost in distribution channel

Opportunity in the SWOT analysis of Samsung

Samsung is planning to make the air-condition product category more strong with
unique technology called Triple protection proposition

Samsung is the Indias official Olympic partner for the 2012 London Olympic and
recently launched Olympic Ratna Program. This will result enhance brand awareness and
increase the sales

Samsung Mobile and Home appliance has future plans of launching Customized
products for Indian market. This will improve the market share in rural market

The Indian youth population is growing and mobile phone sales is expected to
increase due to lesser call rates

Its financial position is strong and there is a scope of entering into unrelated
diversification

Threats in the SWOT analysis of Samsung

Samsung has wide variety of product lines, failure of one product line will have
impact on the other and will result in brand dilution

The competitors like Nokia are focussed only in one segment

Since India is a potential market, entry of foreign players is likely high. Foreign
players like Haier have already started gaining market share in India in home appliances.

Threats from Chinese products

Retail Chains like Bigbazaar sell consumer electronics and home appliance in low
cost strategy which are procured in bulks from foreign market

Bibliography
http://www.samsung.com/us/aboutsamsung/samsung_electronics/business
_area/rd_page/
http://www.strategicmanagementinsight.com/products/swotanalyses/samsung-swot-analysis.html
http://www.samsung.com/in/aboutsamsung/samsungelectronics/vision202
0.html
https://www.samsungdisplay.com/eng/intro/vision.jsp
http://research-methodology.net/samsung-porters-five-forcesanalysis/#_ftnref1