SAMSUNG ELECTRONICS

Samsung Electronics Case Analysis

Samsung Electronics Case Analysis

Summary

This case study analysis is on Samsung Electronics Company (SEC) and how it has climbed up the ranks in the past decade via calculated marketing strategies, extensive market research and analysis, and a risky bet on how the market will evolve. Samsung's principle outlook took time and education from within and thereafter the general market.

Samsung Electronics Company (SEC) began doing business in 1969 as a low-cost manufacturer of black and white televisions. In 1970, “Samsung acquired a semiconductor business” (Ansoff, 2005) which would be a milestone that initiated the future for SEC. Entering the semiconductor industry would also be the beginning of the turnaround phase for SEC.

In 1980, SEC showed the market its ability to mass produce. SEC became a major supplier of commodity products (televisions, microwave ovens and VCRs) in massive quantities to well known original equipment manufacturers (OEMs). For this reason, Samsung was able to easily transition into a major player in the electronic products and home appliances market (Quelch & Harrington, 2008).

SEC was mainly focused in manufacturing; therefore, it's no surprise that the executives themselves were also focused on their manufacturing plants. Profits that SEC received were soon reinvested into Research & Development, manufacturing, and supply chain activities. Unexpectedly, in 1997, a financial crisis hit the Asian market.

Even though SEC's sales were $16 billion, they still had a negative net profit. SEC executives exercised major restructuring efforts that resulted in the dismissal of 29,000 workers and the sale of billions in corporate assets. SEC was able to ride the Asian Financial Crisis and was able to reduce its debt dramatically to $4.6 billion, from $15 billion, over a 5 year period. Furthermore, SEC was able to increase its net margins from -3% to 13% (Quelch & Harrington, 2008).

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