Samsung Electronic Company : A Brand Transformation Within Seven Years Under Leadership Of Chairman Kun Hee Lee

Samsung Electronic Company : A Brand Transformation Within Seven Years Under Leadership Of Chairman Kun Hee Lee

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Samsung Electronic Company (SEC) underwent a drastic brand transformation within seven years under leadership of Chairman Kun Hee Lee. Samsung transformed itself from a low cost OEM (original equipment manufacturer) to a market leader in design, R&D and brand marketing. This reincarnation involved a moving away from its traditional practices towards embracing Western business practices. There were multiple factors that contributed towards making Samsung a prominent home leader to a global brand like,

• Investment Focus Shift from Manufacturing To Marketing and R&D:
Samsung was a well established brand name in its home markets (Korea). But for creating a global brand, it needed to undergo an image transformation from a me-too company to a premium brand. As a step towards this, Samsung shift its focus from manufacturing to marketing and R&D. Samsung already had achieved low-cost manufacturing prowess and it started then focusing on creating an innovative high end product and marketing it extensively.
This shift in focus was not a welcome change for the company and did face lot of resistance from the managers. These traditional leaders failed to realize the returns on investment of the marketing and R&D budget. Eric Kim, the marketing head of Samsung realized that the change had to come from within first. So, he focused on revamping the Samsung image internally and then spreading it globally.

• Building The Brand Globally:
Samsung was always known for its quality household product supplier. It was a major supplier for the OEMs, which then sold those products under their better known brand name. Once Samsung started producing an extensive innovative product line (ranging from basic products to premium products), it was ready to...

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... point for the Samsung products. In 2003, 130 Samsung models released were based on 78 different platforms. Such a loose integration allowed them to achieve high product diversification. Also, this strategy helps to reduce the challenges association with privacy policies. Lee believed that higher margins could still be achieved by better differentiated hardware (Samsung’s core competencies).
In addition to the factors mentioned above, Samsung pushed for adapting to the culture of the country it wants to sell its products. It hired non-Korean scientists, designers, MBAs and other expertise, provided them incentives (travel opportunities) to adapt to the market it is aiming.
Thus combining their traditional core competencies with the new product designing excellence and extensive marketing helped Samsung to transform its image as a fast imitator to skilled innovator.

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