SamSung Case Analysis1
Samsung Case Analysis
Lindsay Eddow
Luxchmi Gill
Jonathan Lee
Carol Lin
GBA 652: Marketing Seminar
Prof. Kevin Moncrief
California Polytechnic University Pomona
Abstract
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SamSung Case Analysis2
Table of Contents
Abstract
Samsung Case Analysis
I. Company Background
II. Issues / Problems
III. Company Goals, Objectives, or Drivers
IV. Constraints
Firm Specific
Industry Wide
V. SWOT Analysis
VI. Findings
GAPS
SHARED S/W
VII. Solution Options
Proposed Solution to Low Gross Profit Margin
VIII. Recommended Solution Option
References
Tables
Figures
Samsung Case Analysis
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SamSung Case Analysis3
I. Company Background
Samsung Group is a South Korean multinational conglomerate company headquartered in
Samsung Town, Seoul. For over 70 years, Samsung has been dedicated to making a better world
through diverse businesses that today span advanced technology, semiconductors, skyscraper and
plant construction, petrochemicals, fashion, medicine, finance, hotels, and more. 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.
Samsung entered the electronics industry in the late 1960s and the construction and
shipbuilding industries in the mid-1970s; these areas would drive its subsequent growth.
Since 1990s, Samsung has increasingly globalized its activities, and electronics, particularly
mobile phones and semiconductors, have become its most important source of income.
Notable Samsung industrial subsidiaries include Samsung Electronics (the world’s largest
information technology company measured by 2012 revenues, and 4th in market value),
Samsung Heavy Industries (the world’s 2nd-largest shipbuilder measured by 2010
revenues), and Samsung Engineering and Samsung C&T (respectively the world’s 13th and
36th-largest construction companies). (Company Document)
Values & Philosophy
Samsung is guided by a simple philosophy, strong values and high ethical standards that inform
our work every day. In everything they do, Samsung strives to help people live better lives.
(Company Document)
Vision
Samsung is dedicated to developing innovative technologies and efficient processes that create
new markets, enrich people’s lives and continue to make Samsung a digital leader.
Performance
To learn more about the performance of the company, download the annual reports issued by
Samsung Group and Samsung Electronics.
History
For more than 70 years, Samsung has been at the forefront of innovation. Their discoveries,
inventions and breakthrough products have helped shape the history of the digital revolution. .
The Samsung Philosophy
At Samsung, they follow a simple business philosophy: to devote their talent and technology to
creating superior products and services that contribute to a better global society. Every day, their
people bring this philosophy to life. Samsung’s leaders search for the brightest talent from
around the world and give them the resources they need to be the best at what they do. The result
is that all of their products—from memory chips that help businesses store vital knowledge to
mobile phones that connect people across continents— have the power to enrich lives. And that’s
what making a better global society is all about. (Company Document)
Samsung Electronics Co., LTD
SamSung Case Analysis4
Samsung Electronics Co., Ltd is a South Korean multinational electronics company
headquartered in Suwon, South Korea. It is the flagship subsidiary of the Samsung Group,
amounting to 70% of the group’s revenue in 2012, and has been the world’s largest information
technology company by revenues since 2009. Samsung Electronics has assembly plants and sales
networks in 80 countries and employs around 370,000 people. Since 2012, the CEO is Kwon Oh-
Hyun. Samsung has long been a major manufacturer of electronic components such as lithium-
ion batteries, semiconductors, chips, flash memory and hard drive devices for clients such as
Apple, Sony, HTC and Nokia. In recent years, the company has diversified into consumer
electronics. Samsung has been the world’s largest manufacturer of LCD panels since 2002, the
world’s largest television manufacturer since 2006, and world’s largest manufacturer of mobile
phones since 2011. (Company Document)
Operations
The company focuses on four areas: digital media, semiconductor, telecommunication network,
and LCD digital appliances. The digital-media business area covers computer devices such as
laptop computers and laser printers; digital displays such as televisions and computer monitors;
and consumer entertainment devices such as DVD players, MP3 players and digital camcorders;
and home appliances such as refrigerators, air conditioners, air purifiers, washers, microwave
ovens, and vacuum cleaners. The semiconductor-business area includes semiconductor chips
such as SDRAM, SRAM, NAND flash memory; smart cards; mobile application processors;
mobile TV receivers; RF transceivers; CMOS Image sensors, Smart Card IC, MP3 IC,
DVD/Blu-ray Disc/HD DVD Player SOC and multi-chip package (MCP); and storage devices
such as optical disc drives and formerly hard disk drives. The telecommunication-network-
business area includes multi-service DSLAMs and fax machines; cellular devices such as mobile
phones, PDA phones, and hybrid devices called mobile intelligent terminals (MITs); and satellite
receivers. The LCD business area focuses on producing TFT-LCD and organic light-emitting
diode (OLED) panels for laptops, desktop monitors, and televisions. (Company Document)
Products
Samsung Electronics Co. products consist of LCD and LED panels, mobile phones,
semiconductors, and televisions. Also, Samsung produces printers for both consumers and
business use, including mono-laser printers, color laser printers, multifunction printers, and
enterprise-use high-speed digital multifunction printer models. (Company Document)
Design
In the early 1990s, the firm began emphasizing the importance of design in its products. Located
in the company’s high-rise headquarters in Gangnam (south of Seoul) the corporate design center
includes more than 900 full-time designers. In 1971 there were only two designers in the whole
company, whose number rose to 510 in 2005.The company overhauls its design over a two-year
cycle. For the first year, it scrutinizes design trends of the world, followed by product strategies.
It then maps out new design plans during the second year. (Company Document)
Environmental Record
All Samsung mobile phones and MP3 players introduced on the market after April 2010 are free
from polyvinyl chloride (PVC) and brominated flame retardants (BFRs). The company is listed
in Greenpeace’s Guide to Greener Electronics, which rates electronics companies on policies and
practices to reduce their impact on the climate, produce greener products, and make their
operations more sustainable. The company has been taking the lead in industry efforts to reduce
greenhouse gas emissions; the company has been awarded as one of global top-ten companies in
SamSung Case Analysis5
the Carbon Disclosure Leadership Index (CDLI). The company is also accelerating its effort to
recover and recycle electronic wastes. (Company Document)
SamSung Case Analysis6
II. Issues / Problems
Promotion Issue– Above industry average (23.7 % in 2013) spending in sales and marketing is
only resulting in average revenue growth (113% in 2013). Samsung’s sales and marketing
expenditure ratio of 23.7 % in 2013, places them as the industry leader in highest spending in
sales and marketing. See Chart 1 below for industry data details. However, Samsung’s strong
efforts in Sales and Marketing are only resulting in industry average revenue growth. In 2013,
Samsung grew their revenue by 113% and the industry average was 108%. Although Samsung is
not performing poorly in regards to revenue growth, this is an area for opportunity given they
invest 7% higher than the industry average into Sales and Marketing. This is an opportunity for
Samsung to take a strategic look into whether the S&M investment is paying off for them, or if
they should consider altering their strategy.
S&M201120122013
Microsoft19.93%18.80%19.62%
RIM12.06%14.11%19.06%
Apple7.02%6.42%6.34%
Samsung16.62%22.58%23.70%
Industry Avg13.99%15.83%16.70%
CHART 1: Sales and Marketing expenditure for Industry leaders
FIGURE 1: Percentage of revenue allocated to Sales and Marketing expenditures
Revenue
Growth201120122013
Microsoft111.94%105.40%105.60%
RIM133.13%92.55%60.10%
SamSung Case Analysis7
Apple166.36%144.58%109.20%
Samsung105.37%133.20%113.72%
Industry Avg122.60%128.74%108.50%
CHART 2: Revenue Growth Industry Data
FIGURE 2: Revenue Growth
