Case Study on Samsung

1
Case Study on Samsung
2
About Samsung

• Samsung is a South Korean multinational company
  headquartered in Samsung Town, Seoul. It is the
  largest South Korean brand based on the chaebol
  business structure.
• Samsung was founded by Lee Byung-chul in 1938 as
  a small trading company. After that, management
  diversified its business into several areas
  including electronics, aerospace, surveillance
  and etc.
• There are several subsidiaries companies are
  controlled by Samsung group that includes Samsung
  Electronics, Samsung Heavy Industries, Samsung
  Engineering and Samsung CT,Samsung Life
  Insurance and etc.
• Strategic positioning of Samsung-For strategic
  positioning, Samsung has adopted distinct kinds
  of strategies in order to achieve mission and
  vision of company
• By using innovative technology
• By reducing production cost
• By reducing price of products
• By using innovative and social marketing tools
• By providing best after sales services

3
Key Performance Indicators

• Key performance indicator present several aspects
  and evaluates financial performance business. It
  also shows organizational capabilities. Some
  KPI's of Samsung are mentioned below
• Increment in demand of company
• Growth in market share of company
• Positive feedback from consumers
• Growth in sales and profit
• Competitive edge over other companies
• Increase satisfaction level of consumers
• Increment in brand value

4
Chaebol and Keiretsu Business Structure

• Cheabol
• This business conglomerate structure was
  developed in South Korea in the 1960s.
• In this, owners create global multinationals
  business corporation having huge international
  operations.
• The word "chaebol" means "business family" or
  "monopoly" in Korean.
• The chaebol business structure can be considered
  as a single large company or several groups of
  companies. It is managed by single family and
  founder group. For example Samsung, Hyundai and
  LG.
• Keiretsu
• A keiretsu is group of companies which is
  controlled by interlocking business relationships
  along with shareholdings. It is an informal
  business group that plays most important role in
  economy of Japan.
• The member companies of this group is having some
  portions of the shares of other firm. This set is
  centered on a core bank.
• With the help of this system, management can
  easily manage each company from stock market
  fluctuations along with takeover attempts.
• This approach is very useful in long term
  planning in development of new innovations.

5
PESTLE analysis

• Political
• In most of the markets where Samsung operates, so
  business entity has to consider government rules.
  
• Economic
• This dimension is especially critical for
  Samsung, as the opening up of many markets in the
  developing world has meant that the company can
  expand its global footprint
• Socio-Cultural
• Samsung is primarily a South Korean Chaebol or a
  family owned multinational. This means that
  despite its global footprint it still operates
  from the core as a Korean company.
• Technological Samsung can be considered as being
  among the worlds leading innovative companies.
• Environmental
• The management of Samsung all environmental and
  ethical issues in production of several kind of
  products and services.
• Legal
• Labor laws, environmental protection laws and
  service standards that influence business
  decision

6
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Comparison of Korean Samsung Cheabol with
Japanese Keietsu

• Cheabol
• Ownership of single family
• Big corporation is divided into several other
  subsidiaries firm
• Greatly influenced by stock market
• Fast decision making process
• Formal business structure
• High merger and acquisition rate

• Keietsu
• Group ownership
• A single group is developed by grouping small
  firm through relationship and shareholding
• Saves organization form fluctuations of stack
  market
• Informal business structure
• Avoid mergers and acquisition

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Competitors of Samsung

• Sony
• A very well known Japanese brand.
• Facilitating high quality electronic goods and
  other services.
• Good brand reputation in world wide for
• Gaming consoles
• HD television
• Sound and music system
• LG
• LG Corporation is the fourth-largest chaebol in
  South Korea.
• Business entity is managing business in more than
  80 nations.
• It is dealing in chemical, electronics and
  telecom products
• LG Electronics Inc is one of the leading company
  for its consumer or household products
• Refrigerator
• TV, Washing machines and etc.

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Competitor Analysis
Variables Samsung ,2013 Sony ,2013 LG,2013
Revenue, 206978.30 56773.10 1,017
Net Profit 25,893,396 (1071.62) 85
Total assets 193748.60 118593.27 3,125
Gross Margin 39.79 34.0 40.0
Net Margin 11.32 0.63 5.19
Return on Equity 19.09 2.04 6.40
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SWOT analysis of Samsung

• Strengths
• Hardware integration with many open source OS and
  software
• Innovation and design
• Focus on environment
• Low production costs
• Weaknesses
• Too low profit margin
• Lack its own OS and software
• Focus on too many products
• Opportunities
• Growth in demand for quality application
  processors
• Growth of tablets market
• Threats
• Rapid technological change
• Declining margins on hardware production
• Breached patents

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Business Strategies of Samsung

• The company has an experience of pursuing both,
  cost leadership along with differentiation
  strategies during its lifetime.
• With Eric Kim becoming chief marketing officer of
  the company, there are several changes are
  implemented in marketing and promotional
  activities and management practices of business
  entity.
• Samsung has created a unique ecosystem.
• It assists management successfully in order to
  spread its product line across both of these
  dimensions
• The future
• In order to get good position in market and
  management of competition with several
  competitor, Samsung has adopted different kinds
  of strategic and long term plans.
• In this process, business entity is aggressively
  investing in Silicon Valley with several big
  campuses to help it start to lead in software as
  it already does with hardware.
• Ability to offer customized memory chips that no
  other manufacturer could offer allowed them to
  command premium pricing on these products

12
Samsung Projects

• Samsung CT Awarded EPC Contract for Power Plant
  Projects in Algeria
• Samsung CT achieved a 630 billion KRW Private
  Gas Combined Cycle Plant order in Turkey.
• Samsung SDS is selected as the primary
  contractor for the "Digital Suwon" project that
  plays very important role in construction of
  electronic community.
• Company is working in development of new
  standards for UHD Televisions.

13
Reference

• About Samsung. 2015. Online. Available through
  lthttp//www.samsung.com/in/aboutsamsung/samsungele
  ctronics/researchdevelopment.htmlgt. Accessed on
  7th February 2015.
• Chaebol. 2015. Online. Available through
  lthttp//www.businessdictionary.com/definition/chae
  bol.htmlgt. Accessed on 7th February 2015.
• The Keiretsu of Japan. Online. Available
  through lthttp//www.sjsu.edu/faculty/watkins/keir
  etsu.htmgt. Accessed on 7th February 2015.

14
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15
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