Samsung Electronics Company: Global Marketing Operations
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Samsung Electronics Company: Global Marketing Operations
What are the ingredients of SECs corporate turnaround strategy?
Samsung Electronics Company originally started as a product-driven company that focused on manufacturing commodity products at lower costs than its competitors. It was established as a top OEM supplier and highly efficient manufacturer of value brands. The “new management initiative” launched by Chairman Kun Hee Lee in 1993 aimed to change SEC’s direction of growth: once costs were under control and products were made, SEC changed its focus from low-end commodities to high-end premium goods. Currently, SEC has become a world class brand among the top companies preferred globally.
The following essential changes were implemented during different stages of their turnaround strategy:
Vertical Integration
Kept manufacturing as a core internal competence
Internal manufacturing units have to compete with outside companies for supplying components for production of finished goods
Flexible to plant locations where costs were low (i.e. China or India)
Focus on customization of its production to keep high prices
Hardware Focus
Decided not to produce proprietary software
Formed partnerships with content providers and allowed customers to choose
Product