Marketing Management Case Study

Samsung Electronics in 2005

OR

Abstract:
In 2004, Samsung Electronics (Samsung), the flagship company of Samsung Group, was the world’s largest memory chip maker and Asia’s biggest electronics manufacturer. Samsung’s revenues accounted for 6.6% of Korea’s GDP. It had strategic alliances with various global companies such as Sony, IBM, Microsoft, Hewlett Packard and Dell. In 1997, the company was facing problems due to Asian Financial Crisis, and at the same time, demand and prices of memory chips were falling. Yun, the CEO, took steps and transformed the image of the company from manufacturer of me-too products to stylish, premium, latest technology products and helped company to gain market share in each product segments. In 2005, the management of the company was worried as dollar was depreciating; growth of cell phone markets were shrinking and oil prices were rising which hurt exports. An outdated family-controlled corporate structure was also a concern for Samsung. Would Samsung be able to sustain its growth when it was facing competition from local as well as global players?

The case discusses how a market follower company restructured and turned itself into a leading global electronics manufacturer in the span of 10 years. The case highlights how the investment in Research and Development, even in times of financial crisis, helped the company achieve growth and become market technology leader. The case details out Yun’s style of leadership and the strategies he implemented to transform the company. The company’s emphasis on Research and Development, marketing, brand equity, human resource, and inventory management helped company to gain market share. As the company’s main source of income was through exports, managing the fluctuation in the Won-Dollar exchange rates also became a matter of concern.

Pedagogical Objective:

• To discuss the growth strategies followed by Samsung
• To discuss the leadership at Samsung and its impact on the corporate strategy
• To debate the sustenance of its growth in future.

Keywords : Samsung Electronics; Electronics Industry; Consumer Electronics; South Korea; Chaebol (Conglomerate); Dynamic Random Access Memory(DRAM); Static Random Access Memory (SRAM); flash memory chips; flat panel LCD displays; cell-phones; LCD monitors; NAND flash memory; nano; Technology; Yun Jong Yong (Yun); Organisation Restructuring, Transformation, Leadership, Research and Development; Product Innovation; Growth Strategies Case Study; Inventory management; Core Competence; Business Strategy; Human Resource Management; Marketing; Branding; Corporate Governance; Niche market; Strategic Alliance; Globalisation