Samsung Major Questions to Answer for Case Analysis:
1. What are the ingredients of SECs corporate turnaround strategy? What are the
implications for marketing?
2. How strong is the Samsung brand? Can Samsung pass Sony (and others) to remain a top
ten global brand?
3. As Chief Marketing Officer, what are Kims role and responsibilities? How has he built
his influence?
Please answer these questions to the best of your ability, if you have questions please email
me directly, or visit office hours. Please apply micro or macro factors that occurred during
the time period, and up until now. I grade mainly for quality, and do not have a page limit
(minimum or maximum).
1.Samsungs Background
Samsung started its business back in 1938, as an agricultural product producer. In 1969,
Samsung became a low cost black and white TV manufacturer, known as Samsung
Electronics Company (SEC). To support for its growing business, Samsung acquired a
semiconductor business, and was set for a future in electronics business. During this
period, Samsung focused on R&D, and supply chain to improve the quality of its products.
In 1997, during the Asian financial crisis, SEC had a negative net income forcing it to
dismiss 29,000 workers, and sell off $2 billion worth of assets. SEC made a turnaround
with its on-going business strategy. In 2002, it had a net profit of $5.9 billion. By 2003, the
company managed to turn into a $41 billion company- a largest Asian electronics
company. SEC took the opportunity during the financial crisis to re-define its key
fundamental strategies, and to pursue a long-term innovative goal.
2. Macro and Micro Factor Analysis
Porters Five Forces Analysis
Rivalry: Samsung was engaging in a highly competitive business environment. For
electronic product, Samsung faced known rivalry in the industry, such as Sony, LG, Sharp,
Hitachi. In semiconductor segment (computer memory), Samsung had potential rivals
from young Chinese manufacturers.
Supplier Power: Semiconductor suppliers were mainly from China, and all the hardware
manufacturers were able to access to these raw material resources so the power of supplier
was low.
Buyer Power: Semiconductor and electronic industry was mainly competing on margin.
The powerful buyers, who demanded lower prices, would hurt the companys profit. For
the semiconductor products, due to the nature of PC industry, the price could decrease
dramatically (up to 50%-75%) for every cycle (1-2 years depends on product). In
electronic segment, the life cycle of a product was also short. Hence the buyer power was
high.
Threat of Substitutes: DRAM could not be replaced in computer memory, so substitutes
