Samsung Electronics: Company Analysis and Overview

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As I will be joining Samsung Group’s global strategy team in the fall, I have chosen its flagship subsidiary Samsung Electronics, as the company for my analysis. From its beginnings as a subcontractor to a manufacturer to a developer of electronic products, Samsung Electronics has established itself as a leading creator of innovative gadgets.

With a diversified geographic presence, Samsung has been able to reduce its exposure to risks associated with a particular market, while allowing proximity to customers that aids in developing close customer relationships and effective marketing. The company’s expansion plans into new product lines and geographic regions have been so far supported by strong brand equity anchored in its focus on hardware. In 2012, Samsung had 30.4% share of the global smartphone market; 30.6% of flat panel TV market; and, was the second largest player in the laser printer market with 16% share. Having decided not to develop proprietary software and content, Samsung has avoided the complexities involved with protecting proprietary content from piracy. The combined effect of focusing on hardware and maintaining an “open architecture” in its products has allowed Samsung to develop a core competency of delivering new technologies at a quick pace and attract more end consumers because of the freedom of accessibility to various softwares and utilities.

The picture is not completely rosy for Samsung. As the consumer electronics market trends towards intense competition for global sales of smartphones and tablets, technology companies are defending their intellectual properties and seeking to derive revenue from licensing. Samsung has been embroiled in several patent litigations, most notably the $1.05B all...

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... areas by year 2020.

In 2013, Samsung underwent organizational reform that proactively addresses the changing global IT landscape of hardware being commoditized and the urgency to develop software. Samsung Electronics is organized according to the product with all common activities (marketing, production, grouped together in a Global Standard of Excellence configuration. While there is the duplication of functions, separate product divisions allow specialization and managers can become experts in their product line, while allowing proximity to the primary customer.

Yet
SAIT merged into Electronics.
Expansion of the software related organizations was done to realize Samsung Electronics’ vision of creating new consumer experiences by combining Samsung’s existing strength in hardware design with optimized software and an emotionally appealing user interface.

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