Samsung Electronics Case Analysis
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Samsung Electronics Case Analysis
In 1969 Samsung Electronics was established as a maker of televisions. Over the years, Samsung moved into a few other markets including telecommunications, semiconductors, liquid crystal display (LCD) screens, and digital appliances. Samsungs products were thought of a as second rate compared to products from companies like Sony and Mitsubishi. The firm made most of its money by making parts for other electronics companies. Samsung still gets most of its profits and sales from the production of semiconductors, which had an amazing $37.64 trillion in sales leading to $10.11 trillion in sales in 2010. In 1996, Yun Jong Yong took over as CEO and got busy making massive changes to the companys business strategy. He took the company from an off brand parts producer and turned it into a leader in innovation of the electronic industry. The current CEO, Gee Sung Choi, was appointed in 2010. Choi is sitting in a pretty good seat with company reporting record net profit and on the cutting edge of new technologies, all he has to do is keep the company going in the right direction. The main issue that he faces is keeping up with competition. Technology has come so far since Samsungs start over 40 years ago, we have even seen great leaps in the last 5 fives. Choi must keep his company on top by continuing to come up with new products.
Samsung is $100 billion company and has been called the only real competition to Apple, so it should come as no surprise that they are full of strengths. One of the biggest strengths for Samsung is their research and development section. In 2010, Samsung spent $7.2 billion on research and development, almost nine percent of its revenue and more than any of its competitors. This was not done without good reason. In 2009 they had 14 products in the top 3 global rankings for each category including 6 number one products. They also employ 600 designers and engineers who are constantly working on new products. When Yun took over as CEO, he also made the brand name one of their strengths. By improving the quality of their products and removing them from such retailers as Wal-Mart and K-Mart he created one of the number one names in the electronics industry. Another strength for Samsung is decreasing liabilities in the last couple of years. Increase in sales and great but being able to cut down on liabilities can lead to real rises in profits.
As with any company Samsung is not without weakness. One that a lot of critics look at is that Samsung has yet to have “revolutionary” product such as the iPod of its own. Samsung is too worried about it and believes that with time and a huge research and development section they will eventually come up with something. Another weakness for them is their enormous spending. In 2010 they spent more than Intel, IBM, and Sony combined. As mentioned before they also have a huge budget