Brief introduction
Company Name: Samsung Electronics Co., Ltd
Website: https://www.Samsung.com/
Samsung is an electronics company from South Korea and has become the largest technology company in the world by revenue since 2009 Samsung specializes in the production of a wide variety of consumer and industry electronics, including appliances, digital media devices, semiconductors, memory chips, and integrated systems It has become one of the most-recognizable names in technology and produces about a fifth of South Korea’s total exports
Samsung currently operates many representative offices, product assembly factories and sales networks spread across 120 countries with a number of official employees reaching hundreds of thousands of people
Pic 1.1: Lee Byung-chul (Founder and first-generation chairman of Samsung)
In the information technology and electronics industry, Samsung is the manufacturer with a market share of 23.45%, second only to Apple with 41.99%
In 2019, Samsung had the largest brand value in Asia, ranked 5th in the world
2020 is considered a successful year for Samsung when it topped the ranking of the 1,000 most loved brands in Asia, surpassing Toyota to become the most valuable brand in Asia; 5th globally (behind Google, Microsoft,
Amazon and Apple.) Not only that, Samsung surpassed Apple to lead the smartphone market in the US in November
In 2021, Samsung brand value is valued at approximately 102.6 billion USD and Samsung still holds 5th place globally
In Vietnam, Samsung has up to 4 production factories and revenue accounts for 1/5 of Vietnam's total export turnover in 2022, accounting for
Samsung currently operates many representative offices, product assembly factories and sales networks spread across 120 countries with a number of official employees reaching hundreds of thousands of people a Misson and approach
Samsung follows a simple business philosophy: dedicate its talent and technology to create outstanding products and services that contribute to a better global society To achieve this, Samsung places great importance on its people and technology b Mission and value
Our commitment is to operate responsibly as a leading company worldwide
History of formation of Samsung
The period 1938-1969: Samsung was founded in 1938 by Lee Byung chul, a businessman and industrialist Coming from a chain of small stores and through many mergers Samsung changed its focus to electronic technology in the late 60s in 1969, Samsung Electric Industries was founded in Taegu, Korea The first product was BLACK AND WHITE TV
The period 1970-1988: The company faced many difficulties such as in 1987, Lee Byung Chul passed away so Samsung split into 4 corporations with separate fields: Samsung, Shinsegae, CJ and Hansol During this period Samsung has made efforts to implement many international strategies, thereby achieving certain achievements:
− In 1981, the company produced more than 10 million black-and-white televisions
− In 1983, Samsung began to focus on DRAM production and became the third company in the world to develop 64Kb DRAM
− In 1974, the company expanded its business by acquiring Korea Semiconductor, a chip manufacturing company
− In 1980, Samsung acquired the Korean Telecom electronic switching system
The period 1988-2000, Samsung changes in strategy, outlining a long-term plan
− In 1988 Samsung released the first mobile phone in the Korean market and had difficulty in market share of the domestic mobile phone business due to competition with other competitors (Motorolla), product quality is still poor,
− In 2000, Samsung started changing the strategy by postponing non - selling products, instead pursuing design, producing components and shifting into the consumer market and sponsoring big sports events As a way PR
− In addition, a 10 -year plan to eliminate the image of "budget brand" and challenge with Sony a largest consumer electronic manufacturing company in the world
The period 2000-Present, being success in mobile business and chip production
− In 2007, Samsung Electronics became the second largest mobile manufacturer in the world, surpassing Motorola for the first time
− Samsung has emphasized the innovation strategy in the early 2000 management In 2009 when Samsung achieved US $ 117.4 billion revenue, becoming the largest technology company in the world according to sales
− Samsung officially competes with technology firms in the production of electronic chips, semiconductors Also, during this period, Samsung focused on developing all fields including satellites and space and space exploration
− With many breakthrough technology inventions, Samsung has become an expensive brand The largest global brand in Asia and third in the world (only after Google and Apple), …
Pic 1.4: Samsung factory in the 2000s b Viet Nam
In April 2009: Samsung Electronics Vietnam Project (SEV) is granted investment certificates and put into operation, located in Bac Ninh Industrial Park
In 2014: Samsung Vietnam Electronics Project (SEVT) received an investment license to operate in Yen Binh Industrial Park, Thai Nguyen
In 2016: Samsung CE Complex (Samsung Ce Complex) project of Samsung Vietnam is located in Saigon High -tech Park officially put into operation
In 2017: Opening Executive Briefing Center - EBC and Samsung Ho Chi Minh Research & Development Center - Shrd
ORGANIZATIONAL STRUCTURE OF SAMSUNG
DIGITAL MEDIA AND COMMUNICATION
Digital communication is as its name implies: communication is carried out by and by digital technology Multimedia developers and managers use digital media methods to create a variety of entertainment, graphic design, and art products
Providing breakthrough products and exceptional value to people around the world As the No 1 Consumer Electronics company, Samsung Electronics is a global leader in mobile, semiconductor, and display technologies
Has been a specialist provider of wide-area digital radio dispatch solutions and antenna sites Lead the industry in providing seamless, flat-rate airtime on our independently owned Trunked Networks and the most up-to-date technologies in a rapidly changing market
Is “Mobile Communications Solution & Service Provider” which enables communications and collaboration at any time at any place Important businesses include telecommunications service-based businesses (telephony, UC application solutions), solution/service-based businesses (mobile office, mySingle), and software development support business (mobile contents, ESDM).
DEVICE SOLUTIONS
Samsung's Device Solutions Business leads the world's memory and LCD markets in product and technology development It consists of four major divisions: the Memory and System Large Scale Integration (LSI) Divisions, comprising Samsung's semiconductor operations and Storage Systems Divisions
• Samsung's Memory Division designs and manufactures integrated circuits for storing digital information It is the market leader in dynamic random-access memory (DRAM), static random-access memory (SRAM), NAND flash memory and Solid-State Drives (SSDs)
• The System LSI Division designs and manufactures logic and analog integrated circuit devices It is comprised of 3 major areas of business concentration - mobile solutions, home & media solutions, and ASIC & foundry services
Pic 2.3: System LSI Strategy for Moving Forward in the 4th Industrial Revolution
• Samsung's LCD Division produces panels for TVs, digital information displays (DIDs), notebook PCs and desktop monitors
• The Storage Systems Division is a leading producer of high-capacity, high-performance hard disk drives for notebook and desktop PCs, as well as digital camcorders, MP4 players and a wide range of other consumer electronics and mobile devices.
MARKET PENESTATION STRATEGY
Transnational strategy
This is a competitive strategy to increase profits through cutting costs globally, while increasing value by adapting products to each market A transnational strategy makes sense when businesses face high pressures to reduce costs and high pressures for local responsiveness Some ways Samsung has applied this strategy:
• Production optimization: Samsung optimizes its production scale across countries such as Korea, China, Vietnam, India and Brazil to produce large quantities of mobile phones and other components
➔ This helps them reduce production costs and take advantage of mass production
Some factories that Samsung has built include:
Pic 3.1: Samsung's factory in Huizhou (China)
Pic 3.2: Samsung factory in Thai Nguyen (Vietnam)
Pic 3.3: Samsung factory in Noida (India)
Pic 3.4: Samsung chip factory in Austin, USA
• Build global research centers: Samsung has built and developed research and development (R&D) centers in countries around the world, including the United States, Vietnam, India, England
➔ Building global research centers not only helps Samsung maintain innovation and competitiveness, but also creates an environment of global collaboration and maximizes talent and knowledge from diverse sources
Some R&D centers that Samsung has built include:
Pic 3.5: “ Samsung Research America (SRA)” Center in Mountain View, California (USA)
• Producing customized product lines for each market: Samsung customizes some features on its phones to meet the special requirements of each market
For example: Samsung Galaxy M Series for the Indian market
Pic 3.7: R&D center “ Samsung R&D Institute UK (SRUK)” in
Samsung Galaxy M Series is a customized product line specifically for the Indian market This product line is designed and optimized to meet the needs of Indian consumers such as:
Samsung Galaxy M Series is equipped with a battery with a capacity of up to 6000 mAh, with such a large battery capacity it will create a long usage time without interrupting the user experience
The Galaxy M product user interface is optimized to support multiple languages and text formats popular in India Additionally, they support local apps and features, including "Dual SIM Manager" to easily manage two different mobile numbers
Galaxy M product lines will have prices ranging from 140 USD to 280 USD
SUMMARY: Samsung's goal of using transnational strategy is to meet the unique needs of each market but still be able to compete in price compared to competitors in the same industry when the group is skillful Choosing markets with preferential policies on infrastructure, low labor costs, and tax incentives on imported components for technology projects to build production complexes for their products.
Global standardization strategy
The strategy of increasing profits through cost reduction on a global scale, rather than focusing on creating a local identity, emphasizes business operations that are standardized and unified at the international level while still ensuring low competitive costs It is logical that there is strong pressure to reduce costs and the need for local response is minimal This is some ways Samsung has applied this strategy:
• Production of standardized products: Samsung standardizes many of its products to meet the needs of a wide range of consumers Below are some of Samsung's standardized product lines:
− Galaxy S series: Samsung's high-end phone line, with strong image quality and performance, standardized to meet the high-end customer segment
− Galaxy A series: Mid-range phones designed to provide a good experience at a reasonable price, between quality and price
− QLED and OLED series: Samsung standardizes its high-end TV line with leading image technology, ensuring the best image quality for high-end users
− Crystal UHD and LED series: Standardized TV series for general users, with good picture and sound quality, between price and performance
• Unified user interface: Samsung develops and uses user interfaces such as One UI for both mobile phones, tablets and other devices This makes it easy for all of your global customers to switch between devices smoothly and without confusion
• Unified advertising campaign: Samsung deploys consistent advertising and marketing campaigns across many countries Brand image and advertising message are aligned to create a strong brand image
• Uniform warranty policies: Samsung's warranty policies are applied consistently across international markets, helping users feel secure when purchasing products anywhere in the world
SUMMARY: Samsung's goal when applying the Global Standardization strategy is to maximize production efficiency, increase consistency and take advantage of opportunities from the global market to maintain and expand its presence in the market international.
ENTRY MODES
EXPORTING
Exporting is often the first method firms use to enter foreign market
The late 1960s and early 1970s marked the beginning of Samsung's significant involvement in international trade and export, including black-and- white televisions, computers, and refrigerators These exports play an important role in making Samsung a global brand in consumer electronics
Over the decades, Samsung continued to expand its product portfolio and export operations across a variety of industries, including semiconductors, consumer electronics, home appliances, and mobile devices Samsung's global reach and export volume grew significantly, making it one of the world's largest and most recognizable technology companies
Samsung, as a global technology conglomerate, exports its products to numerous countries around the world It exported to 128 countries and territories, including the US, Europe, Russia and Southeast Asia
Pic 4.1: Samsung Electronic's global business structure
− In late May 1970, exporting speakers to Hong Kong
− In January 1971, exporting TV to Panama
In the early 1980s, Samsung Electronics began specializing in the export of semiconductors, particularly memory chips One notable milestone was:
− In 1983, exporting 64Kb DRAM (Dynamic Random Access Memory) chips to the United States
Pic 4.3: A group of Samsung workers putting together black-and-white TVs
− In the late 2000s and early 2010s, Samsung Electronics specialized in the export of smartphones - Samsung's Galaxy series They exported these smartphones to numerous countries around the world, with a significant focus on markets like the United States, Europe, Asia, and Africa
Exporting can indeed be a relatively low-cost way for companies like Samsung to expand their reach into international markets compared to other modes of foreign market entry, such as joint ventures or wholly owned subsidiaries Here are some advantages and disadvantages:
Pic 4.4: Samsung ’s chip - Samsung LPDDR5X
− Low Initial Investment: Samsung can leverage existing manufacturing facilities, distribution channels, and supply chain networks so Samsung can start exporting its existing products
− Reduced Tax and Legal Complexity
− Testing Market Viability: Exporting allows Samsung to test new markets
If the market reaction is positive, Samsung may consider increasing or decreasing the scale of operations as market conditions change
− Lower-cost manufacturing locations exist
− Transport costs can be high
− Tariffs and Trade Barriers: Different countries may impose tariffs, duties, or other trade barriers on imported products, which can increase the cost of Samsung's products and make them less competitive in those markets
− Foreign agents fail to act in the exporter’s best interest: For instance, a distributor might prioritize selling a competing product or give preference to products with higher profit margins.
JOINT VENTURES
SE participates in the market through joint ventures and partnerships because
SE does not waste time developing software Partners often already have technology that SE doesn't have, or it may take too long and cost too much to develop
• Samsung SDI - started to produce Color Cathode Ray Tube (CRT) monitors
Samsung SDI is Samsung-NEC Co., Ltd, which was founded on January 20,
1970 with the equity participation of 40% by the NEC (Japan), and 10% by Sumitomo General Trading Company Samsung SDI started to produce Color Cathode Ray Tube (CRT) monitors and more focused on manufacturing display panels, batteries, and other electronic components
• Samsung Electro Mechanics (SEM) - produce parts for televisions, including tuners, deflection yokes, transformers and condensers
On August 8, 1973 Samsung-Sanyo Parts was set up Its shareholders were Sanyo Japan (30%) and Sanyo Electric Trading (12.85%)
Pic 4.6: Color Cathode Ray Tube (CRT) monitors
Pic 4.7 Samsung Healthcare's worldwide map
• Tianjin Samsung Display Electronics (TSED) - display/monitor industry
In March 1996, the company established a joint venture called Tianjin Samsung Display Electronics Co., Ltd (TSED) with registered capital of 1.2 million USD, of which the Chinese side holds 20% of the equity
In 1998, TSED produced main products which were 15 - 19inch CRT monitors and 15 - 17inch TFT-LCD monitors
Producing both CRT and TFT-LCD screens allowed TSED to serve a diverse customer base as these were popular display technologies at the time, thanks to affordable CRT and TFT-LCD technology LCD This market penetration will lead to increased market share and position TSED for future growth and competitiveness
• Samsung Corning (SC) - Braun tube glass, ITO glass, ceramics and fiber optics Braun tube glass is divided into panels and funnels for either TVs or monitors
SC was the third largest manufacturer in this market in 2001, with a 20% market share Samsung SDI and LG Philips Displays are major domestic customers
SC also began its internationalization in the early 1990s SC has established
Pic 4.8: Samsung R&D Institute China-Tianjin (SRC-T)
Europe (East Germany), North America (Mexico) in May 1997, and China in September 1992
This partnership plays an important role in producing glass substrates for OLED displays and creating high-quality displays Since then, Samsung has consolidated its leading position in screen technology
− Samsung can benefit from a local partner's knowledge of the host country's competitive conditions, culture, language, political systems, and business systems
− The costs and risks of opening a foreign market are shared with the partner
− Samsung avoid the risk of nationalization or other adverse government interference
− Lack of control over technology: Samsung risks giving control of its technology to its partner
− The company may not have strict control over its subsidiaries
− Conflict of Interest: Shared ownership can lead to conflict and struggles for control if goals and objectives differ or change over time
WHOLLY OWNED SUBSIDIARIES
The Korean company wants to be independent as soon as it can be Starting from the 90s, SE newly focused on wholly owned subsidiaries
• Samsung Electronics America (SEA) - digital technologies
The US is one of the countries where Samsung applies the 100% owned subsidiary strategy
− In 1977, SEA was established in the US SEA primarily focuses on supporting Samsung to innovate and converge digital technologies to deliver superior product quality, feature diversification, performance and value to customers
− In 1988, Samsung Research America was a wholly-owned subsidiary that operated in the United States It serves as a research and development center for Samsung, focusing on cutting-edge technologies, including artificial intelligence, machine learning, and software development
• Samsung Information Systems American (SISA) - HDD, SSD, printer and so on
Samsung Information Systems American (SISA) is a wholly-owned subsidiary of Samsung Electronics in San Jose, CA in 1988
− In 1998, SISA was established in the San Jose, CA
− Samsung is using SISA to research emerging technology in the world in order for R & D to develop cutting edge technology that can enhance competitiveness of Samsung’s products such as HDD, SSD, printer and so on
Pic 4.9: Samsung Electronics America (SEA)
• Samsung India Electronics (SIEL) - produce smartphones, consumer electronics and other products
It was established in India in 1995
SIEL is responsible for manufacturing and selling Samsung products Samsung's manufacturing plants in India produce smartphones, consumer electronics and other products for both local and export markets Samsung Display Vietnam (SDV) - OLED and LCD screens
Pic 4.10: Samsung Information Systems American (SISA) in the San Jose, CA
Pic 4.11: Samsung India Electronics (SIEL) in India
As of February 2019, Samsung's presence in Vietnam includes 6 factories and 1 Research and Development (R&D) center Among them, SEHC (Ho Chi Minh City) is the largest consumer electronics factory in Southeast Asia and SVMC (Ha Noi) is Samsung's largest R&D Center in Southeast Asia
Pic 4.12: Samsung Vietnam plans to expand its investment in Vietnam
Pic 4.13: Inauguration ceremony of Samsung R&D
− They reduce the risk of losing control over core competencies: Samsung can protect its proprietary technologies, processes, and intellectual property more effectively, exert complete control over the operations, strategies, and policies
− They allow for the tight control over operations in different countries that is necessary for engaging in global strategic coordination
− They may be required if a firm is trying to realize location and experience curve economies
− Firms bear the full costs and risks of setting up overseas operations