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 diversifiedits business into several areas including electronics,aerospace, surveillanceand etc.  There are several subsidiaries companies are controlled by Samsung group that includes Samsung Electronics, Samsung Heavy Industries, Samsung Engineering and Samsung C&T,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 world’s 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

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7. Comparison of Korean Samsung Cheabol with Japanese Keietsu Cheabol Keietsu  Ownership of single family  Group ownership  Big subsidiaries firm corporation is divided into several other  A single group is developed by grouping small firm through relationship and shareholding  Greatly influenced by stock market  Saves organization form fluctuations of stack market  Fast decision making process  Informal business structure  Formal business structure  Avoid mergers and acquisition  High merger and acquisition rate

8. 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. 

9. Competitor Analysis Samsung ,2013 Sony ,2013 LG,2013 Variables 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

10. 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 

11. 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 activitiesand management practices of business entity.  Samsung has created a unique ecosystem.  It assists management successfullyin 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 C&T Awarded EPC Contract for Power Plant Projects in Algeria  Samsung C&T 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 electroniccommunity.  Company is working in development of new standards for UHD Televisions. 

13. Reference About <http://www.samsung.com/in/aboutsamsung/samsungelectronics/res earchdevelopment.html>. [Accessed on 7th February 2015]. Samsung. 2015. [Online]. Available through:  Chaebol. <http://www.businessdictionary.com/definition/chaebol.html>. [Accessed on 7th February 2015]. 2015. [Online]. Available through:  The <http://www.sjsu.edu/faculty/watkins/keiretsu.htm>. [Accessed on 7th February 2015]. Keiretsu of Japan. [Online]. Available through: 

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