Term Paper - Samsung

Samsung Group (informally Samsung) is a South Korean multinational conglomerate company headquartered in Samsung Town, Seoul. It consists of numerous subsidiaries and affiliated businesses, most of them united under the Samsung brand. It is by far the largest South Korean business conglomerate. 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.

Through innovative, reliable products and services; talented people; a responsible approach to business and global citizenship; and collaboration with our partners and customers, Samsung is taking the world in imaginative new directions. Notable Samsung industrial subsidiaries include Samsung Electronics (the world’s largest information technology company measured by 2011 revenues), Samsung Heavy Industries (the world’s second-largest shipbuilder measured by 2010 revenues), Samsung Techwin (weapons technology and optoelectronics), and Samsung Engineering and Samsung C&T (respectively the world’s 35th- and 72nd-largest construction companies).

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Other notable subsidiaries include Samsung Life Insurance (the world’s 14th-largest insurance company), Samsung Everland (the oldest theme park in South Korea) and Cheil Worldwide (the world’s 19th-largest advertising agency measured by 2010 revenues). Samsung produces around a fifth of South Korea’s total exports. In 2006, it was world’s 35thlargest economy. The company has majorly influenced South Korea’s economic development, politics, media and culture. According to the founder of Samsung Group, the meaning of the Korean Hanja word Samsung is “Tri-Star” or “three stars”.

The word “three” represents something “big, numerous and powerful”; the “stars” mean eternity. HISTORY Samsung has an extremely vast and inspiring history which demonstrates its values of People, Excellence, Change, Integrity and Co-prosperity. Here are some excerpts: 1938: Lee Byung-chull (1910–1987) of a large landowning family in the Uiryeong county came to the nearby Daegu city and founded Samsung Sanghoe, a small trading company with forty employees located in Su-dong (now Ingyo-dong).

It dealt in groceries produced in and around the city and produced its own noodles. 1947-1950: The Company prospered and Lee moved its head office to Seoul in 1947. When the Korean War broke out, however, he was forced to leave Seoul and started a sugar refinery in Busan as a name of Cheil Jedang. 1954: After the war, in 1954, Lee founded Cheil Mojikand built the plant in Chimsan-dong, Daegu. It was the largest woolen mill ever in the country and the company took on an aspect of a major company.

In the late 1960s, Samsung Group entered into the electronics industry. It formed several electronics-related divisions, such as Samsung Electronics Devices Co. , Samsung ElectroMechanics Co. , Samsung Corning Co. , and Samsung Semiconductor & Telecommunications Co. , and made the facility in Suwon. Its first product was a black-and-white television set. 1980: Samsung acquired the Gumi-based Hanguk Jeonja Tongsin and telecommunications hardware industry. Its early products were switchboards. entered the 987: After the founder’s death in 1987, Samsung Group was separated into four business groups – Samsung Group, Shinsegae Group, CJ Group and Hansol Group. Shinsegae (discount store, department store) was originally part of Samsung Group, separated in the 1990s from the Samsung Group along with CJ Group (Food/Chemicals/Entertainment/logistics) and the Hansol Group (Paper/Telecom). Today these separated groups are independent and they are not part of or connected to the Samsung Group. 1990s: Samsung started to rise as an international corporation in the 1990s.

Samsung’s construction branch was awarded a contract to build one of the two Petronas Towers in Malaysia, Taipei 101 in Taiwan and the Burj Khalifa in United Arab Emirates. 1993: Lee Kun-hee sold off ten of Samsung Group’s subsidiaries, downsized the company, and merged other operations to concentrate on three industries: electronics, engineering, and chemicals. 1995: It created its first liquid-crystal display screen. Ten years later, Samsung grew to be the world’s largest manufacturer of liquid-crystal display panels. 006: S-LCD was established as a joint venture between Samsung and Sony in order to provide a stable supply of LCD panels for both manufacturers. S-LCD was owned by Samsung (50% plus 1 share) and Sony (50% minus 1 share) and operates its factories and facilities in Tangjung, South Korea.

As on 26 December 2011 it was announced that Samsung had acquired the stake of Sony in this joint venture. 2010: Samsung announced a 10-year growth strategy centered around five businesses. One of these businesses was to be focused n biopharmaceuticals, to which the Company has committed ?2. 1 trillion. 2012: Samsung overtook Nokia as the world’s best selling cellphone brand, shipping over 93 million units. TOTAL MARKET SIZE & MARKET TRENDS The vastness of the Market Size of Samsung as a business conglomerate can be realized by taking into account various aspects such as Sales, Assets, Liabilities, Stockholder’s Equity, Income and Employee strength as shown in the Table and Graphs below (updated till 2010):

The break-up of the Net Sales of Samsung among its various verticals is presented in the table below: VERTICAL Samsung Electronics Co. Ltd. Samsung SDI Co. Ltd. Samsung Electro-Mechanics Co. Ltd. Samsung Corning Precision Materials Co. Ltd. Samsung LED Co. Ltd. Samsung Mobile Display Co. Ltd. Samsung SDS Co. Ltd. BRIEFING One of the world’s foremost electronics companies.

Energy solution provider Leading Electronics parts maker in Korea A leading manufacturer of glass substrates for advanced panels A leading LED manufacturer Provides cutting-edge display solutions Key player in Information and Communication Technology (ICT) services A leading global shipbuilding industry Joint Venture of Samsung and Total Group, a French global energy and chemical company Partner in the Korean petrochemical industry Business in energy, electronic chemical materials (ECM) and cellulose Joint Venture of Samsung and BP Chemicals Aircraft engine and film camera business South Korea’s largest and most prominent insurer Leading Korean non-life insurance company

Full-service brokerage and investment firm One of the leading credit card companies in Korea Corporate Venture Capital arm of Samsung Group Top Asset Management company in Korea Korea’s first general trading company The first and largest Korean engineering company Korea’s top fashion and textiles company Environment & Asset, Food Culture and Resort Korea’s premier travel retailer and hospitality provider Provides security solutions Full service global marketing communications group 2010 SALES (in Billion USD) 135. 8 4. 4 6. 12 4. 86 1. 2 3. 9 3. 8

Samsung Heavy Industries Co. Ltd. Samsung Total Petrochemicals Co. Ltd. 11. 3 4. 9 Samsung Petrochemical Co. Ltd. Samsung Fine Chemicals Co. Ltd. Samsung BP Chemicals Co. Ltd. Samsung Techwin Co. Ltd. Samsung Life Insurance Co. Ltd. Samsung Fire and Marine Insurance Co. Ltd. Samsung Securities Co. Ltd. Samsung Card Co. Ltd. Samsung Venture Investment Corporation Samsung Asset Management Co. Ltd. Samsung C&T Corporation Samsung Engineering Co. Ltd. Cheil Industries Inc. Samsung Everland Inc. Hotel Shilla Co. Ltd. S1 Corporation Cheil Worldwide 2. 0 1. 0 0. 27 2. 7 22. 8 11. 7 0. 905 2. 8 0. 0154 0. 1007 19. 5 4. 6 4. 3 1. 92 1. 26 0. 730 0. 320

Other verticals of Samsung include Samsung Medical Center, Samsung Economic Research Institute, Samsung Lions, Samsung Foundation of Culture, The Ho-Am Foundation, Samsung Welfare Foundation and Samsung Life Public Welfare Foundation. MARKET SHARE & MARKET GROWTH RATE ? In VISUAL DISPLAY BUSINESS, Samsung Electronics has earned the No. 1 global market share across all TV product lines every year since 2006, including flat panel TVs, LCD TVs, smart TVs and 3D TVs. In 2011, the sales were 47. 69 million TV units, a 5. 7% increase over 2010. It acquired a global market share of 26. 8% and is currently topping the chart. In DIGITAL APPLIANCE BUSINESS, the 2011 global market share and the global side-by-side market share figures for Refrigerators are 13. 49% and 33. 1% respectively, with the company leading the figures in the latter case.

In MOBILE COMMUNICATIONS BUSINESS, the worldwide demand for mobile phones was a staggering 1. 5 billion units, out of which 330 million units, i. e. , 21. 2% of the total demand, were accounted for by Samsung Electronics. Its Global Smartphone Sales and Market Share was 19. 9% (97. 4 million units) in 2011. In IT SOLUTIONS BUSINESS, Samsung achieved sales increase of 28% in 2011 compared to 2010. In the printer sector, the A4 Laser Printer Sales increased from 6. 71 million units in 2010 to 6. 99 million units in 2011. In TELECOMMUNICATION SYSTEMS BUSINESS, Samsung’s 2011 Ratio of contributions to standards for OFDMA was 8. 4%, was ranked No. 1 and contributed 1, 256 reports. In DIGITAL IMAGING BUSINESS, Samsung Electronics aunched a number of highdefinition Cameras and Camcorders. However, its global market share remained more or less unchanged as 12. 7% and 10. 0% for Camera and Camcorder respectively.

In MEMORY BUSINESS, Samsung has held the No. 1 market share for nearly two decades from 1993 to 2011. Its latest Global Memory Chip Market Share is 35. 7% (No. 1), Global DRAM Market Share increased from 37. 5% in 2010 to 42. 2% and Global NAND Flash Market Share increased from 39. 2% to 39. 4% in 2011. In SYSTEM LSI BUSINESS, Samsung’s Global Mobile AP Market Share increased from 70. 3% to 72. 8% (No. 1) and Global CIB for Mobile Phone Market Share was 28. 0% in 2011.

In LED BUSINESS, Samsung wants to bolster its leadership in the light source industry and deepen customer trust with its competitive and highly satisfying products in the rapidly-growing LED market. ? ? ? ? ? ? ? ? COMPETITORS & PRICING COMPARISON ? VISUAL DISPLAY BUSINESS: The major competitors in the Color Television Market are LG (26. 40%), ONIDA (11%), Videocon (7. 9%), Philips (7. 40%) and Sony (9. 40%), with Samsung’s market share being 15. 10%. ? ? DIGITAL APPLIANCE BUSINESS: Samsung leads the digital appliance market in terms of market share, facing competition from the following companies in various domains: DRAM: Samsung (34. 3%), Hynix (21. 6%), Micron Technology (14. 6%), Elpida Memory (14. 2%), Qimonda (4. 8%)

NAND FLASH: Samsung (40. 4%), Toshiba (28. 1%), Hynix (15. %), дMicron Technology (7. 9%), Intel (9. 3%) LITHIUM ION BATTERY: Samsung (18%), Panasonic & Sanyo (30%), Sony, BYD Company, LG LCD MONITOR: Samsung (16. 1%), Dell (14. 6%), HP (11. 9%), LG (9. 9%), Acer (9. 5%) HARD DISK DRIVE: Samsung (9. 5%), Seagate Technology (34. 9%), Western Digital (22. 5%), Hitachi GST (17. 8%), Fujitsu (7. 2%) MOBILE COMMUNICATIONS BUSINESS: In the Global Mobile Market, Samsung has attained the top market share (20. 7 %), closely followed by and Nokia (19. 8%, sales of 83. 2 million) and Apple (7. 9%). The scene is a bit different in the Indian Market: Nokia (36. 2%), Samsung (19. 1%), LG (9. 9%), Motorola (6. 2%), Sony Ericsson (5. %) owing to lack of variety in low-end phones from Samsung. MARKET PROFITABILITY The numbers for Samsung’s first quarter of 2012 are up sharply over the same period from 2011. Samsung has managed to notch an operating profit of 5. 85 trillion won ($5. 16 billion US) for the quarter, a 98 percent gain over a year ago. Phones accounted for 73 percent of the profit, contributing 4. 27 trillion won to the bottom line. DISTRIBUTION CHANNELS The Distribution Channel for Consumer Durables of Samsung in Indian Market is shown below: Company’s Manufacturing Units C&F Agents Distributor Big Retailers Retail Chains Franchised Outlets Small Dealers/Retailers Digital Plazas Digital Homes Digital Worlds

KEY SUCCESS FACTORS Samsung owes its tremendous success to a simple business philosophy: “To devote our talent and technology to creating superior products and services that contribute to a better global society. ” SAMSUNG VALUES: People: Quite simply, a company is its people. At Samsung, we’re dedicated to giving our people a wealth of opportunities to reach their full potential. Excellence: Everything we do at Samsung is driven by an unyielding passion for excellence—and an unfaltering commitment to develop the best products and services on the market. Change: In today’s fast-paced global economy, change is constant and innovation is critical to a company’s survival.

As we have done for 70 years, we set our sights on the future, anticipating market needs and demands so we can steer our company toward long-term success. Integrity: Operating in an ethical way is the foundation of our business. Everything we do is guided by a moral compass that ensures fairness, respect for all stakeholders and complete transparency. Co-prosperity: A business cannot be successful unless it creates prosperity and opportunity for others. Samsung is dedicated to being a socially and environmentally responsible corporate citizen in every community where we operate around the globe. The other success factors can be Diverse Product Line and Reliability. Owing to such factors, the roadmap for Samsung looks quite optimistic and structured.

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