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Samsung History and Background - Essay Example

7 pages
1671 words
Vanderbilt University
Type of paper: 
Business plan
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Samsung company is a household name across the globe. When one hears of the name Samsung, electronic devices and appliances come to mind especially phones, television sets, refrigerators, and laptops. How did Samsung company rise to become a famous global brand? The story begins in 1938 when Lee Byung-chull founded a small trading company in Su-dong city, Korea (Stickler, 2013). The company expanded its operations to Seoul by 1947 but its operations were greatly affected by the subsequent Korean war (Stickler, 2013). Lee, however, resumed operations after the war ended. He ventured into sugar, securities, banking, textile, insurance and retail enterprises. Despite political challenges, the company trudged on by expanding interests into publishing, paper products, and electronics from 1961 to 1969 (Stickler, 2013).

The company formed four electronic divisions after venturing into electronics: Samsung semiconductors and telecommunications, Samsung Electro-Mechanics, Samsung Corning, and Samsung Electronic Devices (Burris, 2017). This move made the company be highly profitable due to specialization that encouraged innovations. Some of the results include Samsung dominating global production of chips in 1990 (Burris, 2017). They developed the first phone with speech-recognition in 2005 (Burris, 2017). They were also not left behind in technological advancements when for instance they began production of digital televisions in 1998 (Burris, 2017). The company split into four groups after the death of its founder, Lee. Samsung group is the most notable of the four. Today, Samsung is heavily competing with other global companies especially in the electronics field. It is indeed one of the best companies in the industry as evidenced in 2012 when it eclipsed Nokia to become the largest mobile-phone producer in the world (Burris, 2017).

Samsungs Four Ps (Product, Price, Place, Promotion)

As seen in the companys history, Samsung company has a wide array of interests. We will look at a subsidiary of Samsung Group, Samsung Electronics which was created in 1969 (Samsung, 2017). This subsidiary handles four divisions that deal with appliances, digital media, semiconductors, and telecommunications (Samsung, 2017). Samsung Electronics product line includes cell phones, televisions, home appliances, camera equipment, computers, solar powered cells, closed-circuit television cameras and associated accessories (Samsung, 2017). Samsung Company has its headquarters in Seoul, South Korea but the subsidiary, Samsung Electronics, is based in Suwon in the same country (Samsung, 2017). It, however, has assembly stations in about 80 countries across the globe. Since its inception, Samsung Electronics is keen on producing products for the high-income, middle-income and low-income markets. In fact, the company has been among the pioneers of cheaper smartphones in the market.

Mission Statement and its Impact

Samsung mission statement is Inspire the world with our innovative technologies, products, and design that enrich peoples lives and contribute to social prosperity by creating a new future (Samsung, 2017). This mission is in line with their vision of inspiring the globe and creation of the future (Samsung, 2017). This mission hinges on innovativeness to stay ahead of their competitors and shape the world. The company, therefore, has to invest heavily in research projects that have potential to bring better products to the market. The hiring policy should also be one that focuses on acquiring creative employees. Their top management should also be occupied by visionary leaders who have the capacity to chart a path that ensures a successful future for the company. In addition to that, the company must adopt good work ethics among its employees such as discipline, punctuality, honesty, and integrity.

Samsungs Current Situation

Samsung Electronics has made its name in the cell phone industry. It currently has a larger market share than its closest competitor, Apple. Other companies such as Huawei, Tecno, and Xiaomi are also giving Samsung a run in the smartphone industry. Samsung has been able to weather the competition and still remain ahead of its competitors due to its strong manufacturing capacity. This enables the company to be able to produce cheaper, high-quality smartphones than its rivals in the market. The evidence of Samsung Electronics dominance is seen in its financial statements. For instance, they posted net profits of KRW 11.19 trillion from a revenue of KRW 62.05 trillion by the third quarter of the 2017 financial year (Korea, 2017). Pioneer mobile devices and chips contributed heavily to the record figures (Korea, 2017).

It has not been rosy for Samsung in the market anyway. The company faced a Public Relations nightmare in 2016 when their flagship Galaxy Note 7 smartphones were reporting exploding incidences (Spence, 2016). This led to massive recalls and a significant dent in the companys image (Spence, 2016). They missed out on the chance to rival Apples flagship phone and were also forced to discontinue production of the devices. Their operating profits were significantly hurt. The company is also being sued by Apple for copyright infringement. This could see the company lose $399 million in damage penalties (Spence, 2016). It is not a smooth sailing for Samsung.

SWOT Analysis


Samsung deals with a wide range of products such as televisions, phones, washing machines, refrigerators, chips, hard drives et al (Rasheed, Nawaz, & Abbas, 2014). this is a major reason why Samsung has a large market share in the globe. This diversity also increases sales of some products without having to advertise them. This is because the popular products which are of superior quality will entice customers to purchase other products of the same brand. For instance, if you have a good Samsung smartphone, you are likely to have a positive opinion of a Samsung television set too.

Samsung also serves different classes of the society because they specialize in high-end to low-end products (Rasheed, Nawaz, & Abbas, 2014). The Galaxy S smartphone series is a good example of this because this range of products includes lowly priced and highly priced smartphones. This strategy has mainly contributed to the identification and acceptance of the Samsung brand among diverse classes worldwide. It is the main reason why Samsung still edges out Apple in the market share. Apple mainly specializes in high-end products.

Samsung company is also big in advertising and marketing. They have wisely embraced technological advancements by aggressively adopting social media marketing on platforms such as Twitter (Rasheed, Nawaz, & Abbas, 2014). Samsung has also partnered with numerous mainstream media channels. The companys strong financial muscle enables it to hire highly competent marketing agencies to run their ads. Samsung is also among the best in the world in product design and innovation. They were the first company to introduce speech-recognition in phones (Burris, 2017). They also employ cutting edge technology and design in the production of their smart televisions. This enables Samsung products to possess unique qualities thus attract more customers.


One major weakness of Samsung is lack of its own software and Operating Systems (Rasheed, Nawaz, & Abbas, 2014). As a result, they become dependent on purchasing third-party software to run on their devices. A good example is the Android Operating System that runs on most Samsung mobile devices. This eventually discourages customer loyalty and hurts their market share. Lack of a unique software that defines Samsung can create a market assumption that their products are similar to those of other companies using the same software.

Diversification is a strength but it can also be a weakness for the company. It affects specialization and can have negative effects on the brand. For instance, customers who have a frustrating experience with low-end Samsung products may assume that the high-end ones are no different (Rasheed, Nawaz, & Abbas, 2014). This is not the case of course, but we can see that the low-end products have potential to damage the appeal of the high-end ones.


Samsung has not capitalized on the potential of their low-end products especially in the rural areas (Jung, 2014). They should focus on launching an awareness campaign in the rural areas to display their products. This is an effective way to reach a market that is not yet aware of the Samsung products that suit their pockets and needs. They should also use intellectual knowledge at their disposal to design gadgets for specific subsets of the population such as the elderly and physically challenged people (Jung, 2014). The company should also explore the possibility of partnering with other organizations that can aid them in customizing their accessories. This will improve the uniqueness of their products, hence the brand will stand out from its competitors.


Class action lawsuits against Samsung have the ability to significantly dent their market base and reputation (Jung, 2014). This mainly arises from faulty devices such as the exploding phones debacle. Another threat to Samsungs smartphone market share is the vast array of competitors in the market such as Infinix, Apple, Nokia, Huawei, and HTC. The competitors are doing their best to provide smart devices at affordable prices. Samsung should, therefore, remain active in its innovation efforts in order to stay ahead of the game.

Tabulated summary of SWOT analysis

Strengths Weaknesses

Wide product portfolio

Diverse price range

Advertising and marketing

Design and innovations Lack of own software and OS

Negative effects of diversification

Opportunities Threats

Market low-end products

Unique designs for elderly and disabled

Partnerships Class action lawsuits

Competitors in the smartphone market

Essential Areas of the Strategic Plan

Innovation and design

This area is important for the future strategic plan. First of all, when Samsung uses cutting-edge technological innovations and designs, it will reduce the likelihood of faulty products entering the market. Class action lawsuits will decrease significantly as a result. Innovation will also enable the company to come up with appropriate devices for special groups of the population such as the disabled and the elderly. This area will also help the company to come up with its own software and operating systems to run on their devices. This will improve the perception of the uniqueness of the brand.


Samsung should use this aspect to aggressively reach areas where they are not yet well known. This is true especially in African and Asian countries which contribute to Samsungs big market share. These regions have many rural areas which should be reached to create a larger market for Samsungs low-priced products.


Samsung can resort to strategic partnerships to improve production rate and also create unique accessories for their product lines. This strategy helps to increase production efficienc...

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