Competitive Advantage Reva

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Transcript of Competitive Advantage Reva

  • 7/28/2019 Competitive Advantage Reva







  • 7/28/2019 Competitive Advantage Reva


    Company profile

    Samsung Electronics is part of one of the largest multi-billion dollar corporations inthe world. In 2007 it exceeded the $100bn mark in annual sales for the first time in its

    history. This makes it one of the world's top three companies in the electronics industrywhere only two other companies, Siemens and Hewlett-Packard, have posted largerrevenues. The name Samsung literally means three stars or tristar in Korean, reflecting

    the Samsung Groups dominance in two further sectors: Samsung Heavy Industries and

    Samsung Engineering and Construction. If you are talking innovation in Samsung walks thewalk and is now the established leader in consumer electronics, providing a range ofleading-edge premium products and, in their own words, leading the digital convergencerevolution. In so doing Samsung has made a remarkable transformation from copy -catmanufacturer to become Asia's most valuable technology company.

    Samsung today owes much of its success to its Value Innovation Programme. With 6design labs staffed by 450 people it is serious about understanding what it is consumers

    need long before considering the technologies required to deliver them. It believes (and, tobe fair, evidence suggests) that success in consumer electronics can only ever be short termand there is therefore a pressing need for continuous innovation in order to develop newtechnology platforms and create products that are first of its kind in the marketplace.Samsung spends more than $6bn on research annually. It recognises that many of itsproducts, such as semiconductors and flat-screens, are now basic commodities, and itsfocus is on producing iconic devices for the next generation as Sonys Walkman was in the80s and the iPod is today. Samsungs innovation focus is therefore set firmly on design and,

    most specifically, on the design of digital TVs. Samsung launched the R7 LCD TV in 2005which paved the way for the 2007 Bordeaux, a flat screen television with contoursreminiscent of a wine glass. This is Samsungs first LCD television to sell more than 1m

    units.Samsung has also turned its hand to designing slick mobile phones, teaming up with

    Bang & Olufsen to produce the Serene, and most recently the Serenata handset. Describedby FHM as cooler than an Eskimo in an Armani anorak it is certainly giving its peers a run

    for their money. In the third quarter of 2007 Samsungs mobile phone division overtook

    Motorola to gain second place in the market and has again seen growth in handset salesreaching 14% share. Although still far behind Nokia, with the increased demand for 3Ghandsets and its strong position in emerging markets, Samsung expects a further growth.

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    However, it is not all flash and glamour: Up until recently Samsungs memory division was

    responsible for 70% of the profit but overcapacity has led to an industry wide decline. Undaunted

    however, Samsung, which often makes big investments during downturns so that it can increase its

    market share and make bigger profits when the industry cycle picks up, is raising its capital

    investment in this division. As peers cut back this is a bold move that signals a strong confidence in

    the eventual upturn of the memory market. With a brand value now greater than Sony, it is clearthat Samsungs strategy of delivering high quality products with an emphasis on design is paying off

    and the company is confident of its future performance. Time and again Samsung has proved it is

    able to look into the future and create whats just around the corner for the rest of us.

    VisionSamsung is guided by a single vision: to lead the digital convergence movement.

    We believe that through technology innovation today, we will find the solutions we need toface the challenges of tomorrow. Technology opens opportunities for businesses to grow,for citizens in emerging markets to prosper by tapping into the digital economy stage, andfor people to find new opportunities.

    MisionEverything we do at Samsung is guided by our mission: to be "digital-Company" the

    best.Samsung grew into a global corporation by facing challenges directly. In the yearsahead, our people are dedicated will continue to face many challenges and provide creativeideas to develop products and services that lead the market. Their intelligence willcontinue to make Samsung a global company profitable and responsible.

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    History of Samsung1938 to 1970

    In 1938, Lee Byung-chull (19101987) of a large landowning family in the Uiryeongcounty came to the nearby Daegu city and founded Samsung Sanghoe , a small trading

    company with forty employees located in Su-dong (now Ingyo-dong). It dealt in groceriesproduced in and around the city and produced its own noodles. The company prosperedand Lee moved its head office to Seoul in 1947. When the Korean War broke out, however,he was forced to leave Seoul and started a sugar refinery in Busan named Cheil Jedang.After the war, in 1954, Lee founded Cheil Mojik and built the plant in Chimsan-dong, Daegu.It was the largest woollen mill ever in the country and the company took on the aspect of amajor company.Samsung diversified into many areas and Lee sought to establish Samsung as an industryleader in a wide range of enterprises, moving into businesses such as insurance, securities,and retail. Lee placed great importance on industrialization, and focused his economicdevelopment strategy on a handful of large domestic conglomerates, protecting them from

    competition and assisting them financially.In 1948, Cho Hong-jai (the Hyosung groups founder) jointly invested in a new

    company called Samsung Mulsan Gongsa , or the Samsung Trading Corporation, with theSamsung Group founder Lee Byung-chull. The trading firm grew to become the present-daySamsung C&T Corporation. But after some years Cho and Lee separated due to differencesin management between them. He wanted to get up to a 30% group share. After settlement,Samsung Group was separated into Samsung Group and Hyosung Group, Hankook Tire, andothers.

    In the late 1960s, Samsung Group entered into the electronics industry. It formedseveral electronics-related divisions, such as Samsung Electronics Devices Co., SamsungElectro-Mechanics Co., Samsung Corning Co., and Samsung Semiconductor &

    Telecommunications Co., and made the facility in Suwon. Its first product was a black-and-white television set.

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    1970 to 1990

    In 1980, Samsung acquired the Gumi-based Hanguk Jeonja Tongsin and entered the

    telecommunications hardware industry. Its early products were switchboards. The facility

    were developed into the telephone and fax manufacturing systems and became the centre

    of Samsung's mobile phone manufacturing. They have produced over 800 million mobile

    phones to date. The company grouped them together under Samsung Electronics Co., Ltd.

    in the 1980s.

    After the founder's death in 1987, Samsung Group was separated into four business

    groups - Samsung Group, Shinsegae Group, CJ Group and Hansol Group. Shinsegae

    (discount store, department store) was originally part of Samsung Group, separated in the

    1990s from the Samsung Group along with CJ Group

    (Food/Chemicals/Entertainment/logistics) and the Hansol Group (Paper/Telecom). Today

    these separated groups are independent and they are not part of or connected to the

    Samsung Group. One Hansol Group representative said, "Only people ignorant of the laws

    governing the business world could believe something so absurd," adding, "When Hansol

    separated from the Samsung Group in 1991, it severed all payment guarantees and share-

    holding ties with Samsung affiliates." One Hansol Group source asserted, "Hansol,

    Shinsegae, and CJ have been under independent management since their respective

    separations from the Samsung Group." One Shinsegae Department Store executive director

    said, "Shinsegae has no payment guarantees associated with the Samsung Group."In the 1980s, Samsung Electronics began to invest heavily in research and

    development, investments that were pivotal in pushing the company to the forefront of the

    global electronics industry. In 1982, it built a television assembly plant in Portugal; in 1984,

    a plant in New York; in 1985, a plant in Tokyo; in 1987, a facility in England; and another

    facility in Austin in 1996. As of 2012, Samsung has invested more than US$13 billion in the

    Austin facility, which operates under the name Samsung Austin Semiconductor LLC. This
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    makes the Austin location the largest foreign investment in Texas and one of the largest

    single foreign investments in the United

    1990 to 2000

    Samsung started to rise as an international corporation in the 1990s. Samsung's

    construction branch was awarded a contract to build one of the two Petronas

    Towers in Malaysia, Taipei 101 in Taiwan and the Burj Khalifa in United Arab Emirates. In

    1993, Lee Kun-hee sold off ten of Samsung Group's subsi