Samsung is a South Korean multinational conglomerate company headquartered in Samsung Town, Seoul. It comprises numerous subsidiaries and affiliated businesses, most of them united under the Samsung brand, and is the largest South Korean chaebol (business conglomerate).
Samsung was founded by Lee Byung-chul in 1938 as a trading company. Over the next three decades, the group diversified into areas including food processing, textiles, insurance, securities and retail.
Internal Analysis Samsung Company
The company is focusing on five major aspects, there are :
1 . Hardware
Samsung emphasizes more on hardware production and chooses not to develop software proprietary and content such as music, movies, and video games. Although software is estimated to have a greater margin in profit and a longer cycle economically, however, Samsung has its own strategy to focus on hardware and its’ devices and will collaborate with content providers when has been considered as feasible.
2. Vertical integration
Samsung has their external supplier outsourced while taking their attention more serious on an independent manufacturing activity. Samsung thinks that by controlling the manufacture independently, they can gain much on advance products. Samsung therefore is brave enough to invest their funds on chip manufacture. Samsung has great concern to have a low-cost as possible for their operation. This revealed on their choice of location, whereas Samsung operated 12 factories in China and India on 2003 with the objective is to have high profits with low wage rates particularly on technology sector.
Samsung’s clever was act manifested in how they prevent their commodity from stuck, by customize/ combining production as many as they can. As an example, half of their memory chips produced were special order made for Dell, Microsoft, and even Nokia. As a result, Samsung’s average price is 17% above the industry level.
3. Digital Product Innovation
Samsung is very fond of innovation, one of them are by doing changes in technology from analog to digital. Focusing on the investment of digital technology products, Samsung therefore can put their products into premium class. Samsung also applies Sashimi theory, that is, selling the product with high price on the launch day while it’s still fresh, and decrease it dramatically afterwards.
4. Product Diversification
Samsung aims to raise profit and price by selling its’ high quality products, not only for those with new technology, but it also includes design as well. This of course requires an innovative strategy that can generate new interesting products. CEO Yun has decided that Samsung will only sell high-end devices, thus requiring a high value of investment in terms of research. Such innovation about design applied not only for final consumer products, but also for important inputs. Consequently, this diversification has made Samsung different from its’ competitors, making it able to penetrate to each category of electronic products. Diversification also enable Samsung to have part on chip cycle which also utilized by several other electronic producers. With a detailed product positioning strategy, Samsung will then be easier to market their products to the right segment.
5. Digital-Convergence Strategy
Samsung has focusing its company to play role on digital technology products. Not only that, Samsung also manage to become a leader on digital era. Samsung’s digital convergence refers to two trends, that is, combining several technologies into one major product and several technologies into one network. As an example, Plam OS which is combined with a cell phone and a cell phone which is combined with a camera as of SPH-i700. By focusing on digital technology, ultimately this can lure the network everywhere.
Samsung SWOT Analysis
The following are the analysis of Strenghts, Weakness, Opportunities and Threats on Samsung’s company.
Strengths
• Samsung has brand image embedded on a society
• Samsung has initiated the digital age
• Samsung offers a high quality products
• Samsung constantly perform innovations on their products improvements
• Technology developed align with changing times
• Samsung has superior design on their products
• Samsung has varied price and reachable price
• Samsung has product diversification
• Samsung is a high-end mobile headset supplier
• Samsung holds the biggest global market share for thirteen items among Samsung products, including TFT-LCD, monitor and CDMA phones
• On 2008 Samsung sat on the first position on US markets for cell phones, stood on the first chart for TV market share for nine times in a row
• With an advance view, Samsung has made an improvement in history on research and development for semiconductor, including memory flash and non-memory, a custom by-request semiconductor, DRAM and SDRAM, and also product the finest LCD on its’ class, cell phones, digital devices, and many more
• Samsung involved with leading partnership companies in the US
Weaknesses
• Korean culture which emphasize more on hierarchy may lead into retardation for any creative ideas or different opinions
• Korean corporate culture is inflexible
• Limitation on experience in managing global company
• The existence of high strain on employees to reach their goals making them ultimately try to sell classified technology of Samsung to its’ competitors
Opportunities
• Products offered by Samsung mostly part of household products needed by society
• Increase on society demand on electronic devices which already becomes a necessity
• Level of prestige from the community that always want to have the newest and most advance electronic device
• Influence on globalization that encourage marketing for electronic products without limitation
• Demand from society on market change for products related to lifestyle, best practice, simple, and fast response
Threats
• The existence of local product dependence on certain country making the market hard to penetrate
• Other brand strength that dominates the market at earlier time
• The presence of new more innovative products from other company
• The presence of products from other companies that offers lower, more valuable price with the same quality
• The economic instability that occurs on each country
• Financial crisis that causes a decline in society purchasing power
• Globalization era that might trigger European company to enter and penetrate Asian market
Conclusion
Samsung is a company that focuses on a technology. The company has conducted various improvements making it a company with well-known products. Strategies performed has a tremendous impact on its’ achievements. It focuses on brand image, product innovations, sponsorship, R n D, and design, which all of them reveal a good result. Even so, old Korean culture still firmly attached, which has impact on the management style making it not flexible.