Samsung

South Korean company that is one of the world’s largest producers of

electronic devices. 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 was founded as a grocery trading store on March 1, 1938, by Lee
Byung-Chull. He started his business in Taegu, Korea, trading noodles and
other goods produced in and around the city and exporting them to China and
its provinces. After the Korean War, Lee expanded his business into textiles
and opened the largest woolen mill in Korea. He focused heavily
on industralization with the goal of helping his country redevelop itself after the
war. During that period his business benefited from the new
protectionist policies adopted by the Korean government, whose aim was to
help large domestic conglomerates (chaebol) by shielding them from
competition and providing them easy financing.
During the 1970s the company expanded its textile-manufacturing processes
to cover the full line of production—from raw materials all the way to the end
product—to better compete in the textile industry. New subsidiaries such as
Samsung Heavy Industries, Samsung Shipbuilding, and Samsung Precision
Company (Samsung Techwin) were established. Also, during the same
period, the company started to invest in the heavy, chemical,
and petrochemical industries, providing the company a promising growth path.
Samsung first entered the electronics industry in 1969 with several
electronics-focused divisions—their first products were black-and-white
televisions. During the 1970s the company began to export home electronics
products overseas. At that time Samsung was already a major manufacturer
in Korea, and it had acquired a 50 percent stake in Korea Semiconductor.
The late 1970s and early ’80s witnessed the rapid expansion of Samsung’s
technology businesses. Separate semiconductor and electronics branches
were established, and in 1978 an aerospace division was created. Samsung
Data Systems (now Samsung SDS) was established in 1985 to serve
businesses’ growing need for systems development. That helped Samsung
quickly become a leader in information technology services. Samsung also
created two research and development institutes that broadened the
company’s technology line into electronics, semiconductors, high-polymer
chemicals, genetic engineering tools telecommunications, aerospace, and
nanotechnology.
 In the 1990s Samsung continued its expansion into the global electronics
markets. Despite its success those years also brought about corporate
scandals that afflicted the company, including multiple cases and patent-
infringement suits. Nevertheless, the company continued to make
advancements on the technology and product-quality fronts, with a number of
its technology products—ranging from semiconductors to computer-monitor
and LCD screens—climbing into top-five positions in global market share.
The 2000s witnessed the birth of Samsung’s Galaxy smartphone series,
which quickly not only became the company’s most-praised product but also
frequently topped annual lists of the best-selling smartphones in the world.
Since 2006, the company has been the top-selling global manufacturer of
televisions. Beginning in 2010, the Galaxy series expanded to tablet
computers with the introduction of the Galaxy Tab

Vision 2020
Samsung’s corporate vision statement is “Inspire the world with our innovative
technologies, products and design that enrich people’s lives and contribute to
social prosperity by creating a new future.” The company follows this vision
statement to maintain profitable technology business operations that contribute to the
improvement of people’s lives. Samsung frequently refers to a shortened version of this
corporate vision: “Vision 2020: Inspire the World, Create the Future.” The company
extensively implements this statement throughout its subsidiaries’ operations in the
consumer electronics, computing technology, and semiconductors industries. The
following components are contained in Samsung’s vision statement:

1. Global inspiration
2. Innovation
3. Improvement of lives and future social prosperity

Based on its vision statement, Samsung’s strategic objectives include the development
of products that inspire. This inspirational aspect requires the company to consider local
and regional market conditions to ensure that its technological products actually inspire
people despite differences in their societal situations. Samsung’s corporate vision also
pushes for a high degree of innovation. Technological innovation is especially notable in
the company’s products, such as smartphones and laptops. Moreover, the vision
statement indicates strategic efforts that include Samsung’s corporate social
responsibility strategy for improving people’s lives and contributing to social prosperity.
This corporate vision means that the company sees itself as a mover and major
contributor to the world’s improvement through consumer electronics, semiconductors,
and other products that add value to people’s lives and society. In a way related to the
mission statement, Samsung’s corporate vision includes a global scope of application
and the aim of contributing to societal improvement.
 Mission
Samsung’s mission statement is “We will devote our human resources and
technology to create superior products and services, thereby contributing to a
better global society.” This corporate mission was published in the 1990s, when the
company was undergoing rapid global expansion in various semiconductors,
electronics, and related technology markets. Based on its business operations and
current international industry positioning, Samsung focuses on the following
components in its corporate mission

1. Human resources and technological resources

2. Superiority of products and services
3. Improvement of the global society

In its mission statement, Samsung identifies human resources and technology as the
two main assets that it uses to pursue its purpose and strategic objectives in its global
industries. This component of the corporate mission requires that the company maintain
highly competitive compensation packages and related human resource administration
and development programs to attract sufficient talent while competing against
technology giants like Apple Inc. and Google LLC. Considering the significance of
human resources, Samsung’s corporate culture is a determining factor in fulfilling its
corporate mission. On the other hand, superiority of products and services is at the core
of fulfilling the consumer electronics company’s corporate mission. Such superiority
emphasizes the importance of strategic management that directs decisions at
Samsung’s headquarters toward operational effectiveness for high quality
organizational outputs in various technology markets. In a way, this component of the
mission statement pushes the corporation to ensure an effective value chain and
achieve its value proposition, such as effective and high quality consumer electronics.
Furthermore, the corporate mission targets positive contributions to improve the global
society, leading to Samsung’s generic strategy, intensive growth strategies, and
strategic objectives that include the provision of high quality products, such as
smartphones, laptops, and home appliances. In relation, to achieve a positive global
impact, the company has embarked on various multinational acquisitions, such as the
purchase of Harman International Industries, which now operates as a subsidiary of
Samsung Electronics. Global scope and societal improvement are factors that link the
mission statement with the technology corporation’s vision statement.
 Samsung’s Organizational
Structure Type and
Characteristics
Samsung has a product-type divisional organizational structure. This structure type
uses product categorization as the basis for determining which resources and business
operations belong to certain divisions, such as the company’s Device Solutions division.
The entire corporate structure is unified via Samsung’s headquarters, which are located
in Seoul. Strategic management directions from the corporation’s headquarters are
implemented through strategic objectives specific to the structural divisions’ contexts,
such as the context of the U.S. market for consumer electronics. Samsung’s corporate
structure has the following main characteristics:

1. Product-type divisions
2. Centralized corporate hierarchy
3. Geographical groupings

Product-Type Divisions. Samsung’s organizational structure’s main characteristic is its

product-type divisions. Each division is a group of resources and operations that
represent a product category, such as resources and operations for the production,
distribution, and sale of consumer electronics. The corporate structure’s emphasis on
technological innovation and product development in these divisions helps in
achieving Samsung’s corporate vision and mission statements. The technology
conglomerate may add, merge, or disband divisions, depending on current business
needs and the development of the organization, considering that further business
diversification is possible. The following are the product-type divisions in Samsung
organizational structure:

1. Consumer Electronics
2. Device Solutions
3. IT & Mobile Communications

Centralized Corporate Hierarchy. Samsung’s corporate structure involves a

hierarchical model, despite its product-type divisions. The corporate headquarters are
the most notable manifestation of this hierarchy, which is part of an organizational
design for ensuring that the conglomerate’s operations are unified and effectively
directed towards growth and operational effectiveness. This characteristic of the
organizational structure involves centralization of overall strategic planning, as well as
vertical lines of command and authority that relay strategic directions from the
headquarters to the daily operations in the Consumer Electronics, Device Solutions, and
IT & Mobile Communications divisions.
Geographical Groupings. Samsung uses geographical groupings or divisions as a
minor characteristic of its corporate structure. In the company’s organizational chart,
these geographical divisions are generally under the product-type divisions. For
example, Samsung Electronics North America is a geographical division within
Samsung Electronics, which is a product-type division. Through this characteristic of the
organizational structure, the company implements region-specific strategies, such as
strategies intended for the North American market for Device Solutions.

Samsung’s Corporate
Structure’s Advantages &
Disadvantages
Advantages. Samsung’s corporate structure has the advantage of extensive support
for product development, especially in terms of technology and innovation. This support
comes through the structural framework of the conglomerate’s product-type divisions.
Another advantage of this organizational structure is the company’s ability to fine-tune
its strategies and operations based on market characteristics. This is possible through
the geographical groupings or divisions within the product-type divisions, such as IT &
Mobile Communications. These structural advantages couple with the strengths shown
in the SWOT analysis of Samsung to buttress the business against fierce competition.
In this way, the organizational structure supports the company’s competitive advantage,
especially against major competitors like Apple Inc.

Disadvantages. Samsung’s organizational structure has the disadvantage of limited

autonomy of the product-based divisions. For example, because of the centralized
hierarchy, the product-based divisions need to follow strategic directives from the
company’s headquarters in Seoul. Nonetheless, this structural hierarchy is necessary to
keep Samsung’s entire organization unified toward its mission and vision involving
superior technology and technological products. In relation, the corporate structure
presents challenges in expanding the business in regional markets, considering the low
priority given to the geographical groupings. Nonetheless, Samsung’s corporate
culture helps in minimizing the negative effects of these structural disadvantages. Also,
its current global success means that the technology company effectively uses the
advantages of its corporate structure in spite of the disadvantages.
 Samsung SWOT Analysis &
Recommendations
A SWOT analysis of the corporation indicates the most relevant strengths, weaknesses,
opportunities, and threats in the technology business and its operating environment. In the
SWOT analysis framework, the external analysis of the corporation refers to opportunities and

threats that relate to strategic factors identifiable in a PESTEL/PESTLE analysis of Samsung.

Samsung’s Strengths (Internal

Strategic Factors)
Business strengths are internal strategic factors that, in this SWOT analysis, refer to
competencies, resources, and capabilities that support the company’s value chain, as
well as growth and profitability of the semiconductors, consumer electronics, and
technology solutions businesses. The organization capitalizes on these strengths to
bring Samsung’s mission statement and vision statement into fruition. These internal
factors relate to market demand and related supply chains, especially those linked to
consumer electronics, which is the main source of the company’s revenues. Samsung’s
strengths are as follows:

1. Strong global brand tied to consumer electronics

2. Semiconductors and electronics manufacturing expertise
3. Synergistic support among divisions or subsidiaries

The Samsung brand is one of the most competitive in the global market, especially for
consumer electronics. The brand rivals some of the biggest names in the industry, such
as Apple, Google, and Sony. This strength is an internal factor that supports Samsung’s
ability to grow and expand against competitors. This SWOT analysis also identifies the
company’s design and manufacturing expertise for the semiconductors and electronics
markets. This strength is notable, considering that major technology companies use
Samsung electronic components in their respective finished products. Another strength
in this case is the synergistic support involving the technology company’s divisions and
subsidiaries. For example, Samsung Electronics benefits from the conglomerate’s
semiconductors business. This synergistic support is based on the divisions and
subsidiaries in Samsung’s organizational structure. The internal factors in this aspect of
the SWOT analysis are used in the enterprise’s strategies for growth and to compete in
the saturated global market for consumer electronics.
 Samsung’s Weaknesses (Internal
Strategic Factors)
Samsung’s weaknesses are internal factors that reduce business capabilities in
capturing the opportunities shown in this SWOT analysis. These weaknesses impose
limits on the long-term success of the company’s semiconductors and consumer
electronics business. The following are the weaknesses of Samsung:

1. Dependence on Android OS
2. Lack of a competitive comprehensive platform for hardware, software, and services

Samsung’s dependence on Android OS is a weakness that limits business capabilities.

For example, the company’s smartphone’s operating-system functions and related
licenses are restricted because of Google’s licensing of Android. Also, Google’s
influence on Android development weakens Samsung’s competitive position, as both of
these companies directly compete in the market for smartphones and other mobile
computing devices. In relation, this SWOT analysis points to the lack of a competitive
platform to rival Apple’s ecosystem of hardware, software, and services. This internal
strategic factor makes Samsung relatively weak in increasing the switching cost of its
customers when deciding to purchase consumer electronics from the competition. The
weaknesses shown in this aspect of the SWOT analysis are internal strategic factors
that prevent the company from offering an expansive product range and further
strengthening customer loyalty relative to Apple and Google.

Opportunities for Samsung (External

Strategic Factors)
Opportunities are external factors that allow further business growth, as presented in
this aspect of the SWOT analysis of Samsung. These opportunities are linked to
technological development, market development, and alliances with various business
organizations. Samsung’s strategic opportunities in the international market are as
follows:

1. Strategic partnerships with software developers

2. Strategic partnerships with online service firms
3. Business growth through product development
4. Business growth through diversification

This SWOT analysis considers strategic partnerships with software developers as an

opportunity to grow Samsung’s revenues, considering the company’s design,
development, and manufacturing capabilities. For example, exclusive partnerships with
software developers can provide additional functionality to make the company’s
 consumer electronics more competitive. Similarly, strategic partnerships with online
service firms are an opportunity for stronger competitive advantage. This external
strategic factor refers to possible exclusive agreements between Samsung and other
firms. Spotify already has a non-exclusive agreement with the mobile device maker to
make the music streaming service an integrated part of Samsung mobile devices.
Another opportunity significant in this SWOT analysis is to grow the business through
product development, such as in the form of new or improved variants of
semiconductors and electronics products. This external factor is an opportunity to boost
the technology conglomerate’s competitive advantage through its products’
features. Samsung’s organizational culture and related human resource management
capabilities can support strategies for exploiting product development opportunities in
global markets. In addition, diversification is an opportunity to grow the business in
terms of entering new industries or businesses, although exploiting this opportunity
present risks that could harm the company’s semiconductors and consumer electronics
businesses. The external factors in this aspect of the SWOT analysis indicate the
favorable business environments where Samsung can grow its revenues, increase its
market share, and improve overall competitive advantages.

Threats Facing Samsung (External

Strategic Factors)
Threats are external factors that, in this SWOT analysis of Samsung, reduce or
destabilize business performance, growth, and development in the global market for
semiconductors, consumer electronics, and related technologies. Even though the
company has a large and diversified multinational footprint, some factors in its industries
present threats. The following are the main threats that affect Samsung:

1. Competition, especially in the consumer electronics industry

2. Imitation of consumer electronics products
3. Legal restrictions and lawsuits

Competition is the most significant threat relevant in this SWOT analysis of Samsung.
This external strategic factor refers to competitive pressures from firms like Apple,
Google, Sony, Lenovo, and LG. These competitors are capable of reducing Samsung’s
market share and corresponding sales revenues. In relation, imitation is an external
factor that threatens the company, especially in market segments that are price-
sensitive. For example, cheaper phones that partially imitate the company’s smartphone
designs are attractive among price-sensitive customers. Considering this SWOT
analysis, the combined threats of competition and imitation are further understood
through a Five Forces analysis of Samsung and its competition environment. Legal
restrictions and lawsuits are also external factors that threaten the company in terms of
possible limitation of business performance, especially in major mobile technology
markets like the United States and the European Union, where Apple and other
competitors are actively pursuing legal avenues. The threats identified in this SWOT
analysis persist against Samsung and, thus, require strategies to mitigate their effects
on the business and to maintain the company’s competitive advantage.

Summary & Recommendations –

SWOT Analysis of Samsung
The strengths, weaknesses, opportunities, and threats in Samsung’s businesses and
industry environment present a competitive situation that requires innovative strategies
to continue business growth despite competition. As this SWOT analysis indicates, the
company possesses core competencies for capturing a bigger market share, increasing
sales revenues, and growing the technology business operations. However, Samsung’s
weaknesses are barriers and challenges that require strategic solutions. For example, it
is recommended that the company exploit the identified opportunities, such as strategic
partnerships, to strengthen its competitive position in the international market for
consumer electronics. This SWOT analysis also emphasizes Samsung’s weakness of
the lack of a competitive comprehensive platform similar to Apple’s. It is recommended
that Samsung use the previously mentioned partnerships or develop its own platform to
target certain services that could open new opportunities for growing its business. In
addressing the issues identified in this SWOT analysis, the corporation can expect a
continuously strong industry position, and possible mitigation of the effects of
competition, imitation, and other strategic issues.