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Arceo, Riegele Cuarto, Alyssa EU 133, Mr. Tristan Osteria December 22, 2010 1.) Why did the group select this particular agent? To what particular niche/sector does the chosen agent belong to? What is its area of operations? Samsung Group is a multinational corporation whose centre of operations is in Seoul, South Korea. It has 124 offices and facilities across 56 countries in the Asia Pacific, Australasia, Eastern Europe, Latin America, Middle East and Africa, North America, and Western Europe. As of 31 December 2009, Samsung Group employs about 275,000 people (Samsung Group Company Profile). The Group¶s subsidiaries include 33 listed companies and foundations operating in various sectors (Samsung): Samsung Electronics; Samsung SDI; Samsung Electro-Mechanics; Samsung Corning Precision Materials; Samsung SDS; Samsung LED; Samsung Mobile Display; Samsung Heavy Industries; Samsung Total Petrochemicals; Samsung Petrochemical; Samsung Fine Chemicals; Samsung BP Chemicals; Samsung Techwin; Samsung Life Insurance; Samsung Fire & Marine Insurance; Samsung Card; Samsung Asset Management; Samsung Securities; Samsung Venture Investment Corporation; Samsung C&T; Samsung Engineering; Cheil Industries; Samsung Everland; Hotel Shilla; Cheil Worldwide; S1 Corporation; Samsung Medical Center; Samsung Economic Research Institute; Samsung Lions; Samsung Foundation of
such as synthetic polymer resins (polyethylene and polypropylene). and has captured part of the market shares traditionally belonging to market
.3 billion. a 30% increase from the previous period. picture tubes. nextgeneration small and medium displays. stock securities. Ho-Am Foundation. Samsung Techwin provides products and services to fine machinery industry. and electronic security services. The Group¶s electronic business produces memory chips. the value of the brand was estimated at about $8. Its chemical business division produces and provides chemical products for everyday life. Operations of the financial services division include life and general insurance. among other things. Samsung is also involved in real estate development. and investment trust services. Of these. Samsung Electronics is considered as Samsung Group¶s flagship company. credit cards. Samsung has been recognized as the fastest-growing global brand. construction. computer and
telecommunications equipment. catering and food services. printed circuit boards (PCBs). textile industry. Samsung Welfare Foundation. instalment financing. Then in 2005. For the 2001-2002 period. base chemicals (styrene monomer and paraxylene) and other petrochemicals and petroleum-based products. glass bulbs. digital tuners. glass substrates for TFT-LCDs.Arceo & Cuarto 2
Culture. semiconductor material parts. and optical devices. Samsung is the second leading producer of cell phone handsets. It also manufactures macromolecule and engineering plastics and special chemical products. including engine manufacturing and special businesses related to national defence.96 Billion. digital cameras. and Samsung Life Public Welfare Foundation. behind only Nokia (Cartwright 78). Today. televisions. the Samsung brand value was already worth $14.
As a chaebol.) What is the role of the agent in contributing to the political. and with great skill in brand management and research and development. DVD players and recorders. and of this. (Kim and Jaffe 129-130) In the creation of its products. In 2004. with $172. and DVD players. plants in Korea dealt with 522 foreign firms in addition to 1131 domestic
. it seems that the Samsung Group has become so financially powerful and secure that any real need of government assistance seems laughable.Arceo & Cuarto 3
leader and rival Sony ± markets for camcorders. 2. The top 30 chaebol alone accounts for more than 40% of South Korea¶s GDP. cell phones. and $13. It has gone from being a much-maligned brand considered to be a cheap option for consumer electronic products like PDAs.5 billion in revenues in 2009. However. a Korean term for a family-owned business. Samsung acquires significant amounts of parts from abroad.5 Billion in total assets. and business environment of that particular locality and country? How about in the region and other regions? What are the patterns of interaction by that particular agent? In its home country.8 Billion in net income. economic. and digital TVs. Samsung Group posted $172. it enjoys government assistance. Samsung accounts for 15 percentage points. considered the world¶s largest by a conglomerate. For the 2009 financial year. (Samsung) The authors selected Samsung Group as the subject of this paper because of its notable accomplishments throughout its history. flat-panel computer monitors. the Samsung Group of companies is at the forefront of all South Korean conglomerates. $294. particularly in terms of the assurance of the availability of bank financing.5 Billion in net sales. transformed into a highly regarded brand that placed a high premium on quality and innovation.
a shipyard. For instance. Weihai. and Shenzhen. Kim 231). On the whole. local firms in China supply these plants with the generic parts. Samsung maintains 29 manufacturing facilities (Young and Aitken 167) in 14 countries. During the manufacturing process. Jiangsu. Suzhou. Samsung¶s interaction with other regions is promoted by its initiative to localize its production. particularly in the electronics industry. are either sold locally or exported worldwide by the five regional distribution centres in China (H. whose workforce is composed of both the country¶s top talents and Korean expatriates. or acquiring local enterprises. It also serves to
. It does this through investing in the establishment of local facilities. three of Samsung¶s production complexes are found in Tianjin. Most of Samsung¶s billion-dollar investments go into establishing and maintaining production facilities locally. Samsung Japan. and Taiwan. functions more as a general trading corporation which sells Samsung products sourced from the global production and trading network. In addition to nine plants in its home nation. Mongolia. oversees all Samsung operations in the People¶s Republic of China. including Huizhou. Twelve manufacturing sites are located along coastal areas. Shanghai. the total revenue of all Samsung companies in China reaches up to the tens of billions.Arceo & Cuarto 4
suppliers. entering into joint ventures. and R&D activities. Other Samsung operations include a camera plant. on the other hand. therefore speeding up the process of extending its global reach. whose headquarters is in Beijing. and Guangzhou. on the other hand. and fabrics manufacturing. marketing. The regional division in China. Final products. Samsung has been and continues to be a key investor in the Chinese business and economic landscape. Each year. while more sophisticated ones are brought in from the Hong Kong global sourcing centre. Y.
Lee 114-121) Samsung operations in the United States. Mexico. the most ambitious of these is the Seremban Integrated Manufacturing Complex.500 local and only a handful of Korean expatriates in its workforce in the entire country. worth $840 million. New Jersey. of which the bulk of responsibilities concerns Southeast Asia and Australia. (Samsung Corp . Because Asia is Samsung¶s biggest and most dynamic market. Mexico. and more than 80% of production materials are locally sourced. the regional headquarters. Europe. such as Korea. Hewlett-Packard and IBM. Manaus. Texas and a $213 million integrated manufacturing complex in Tijuana. and South Asia. Brazil recognizes Samsung as its first entrepreneurial investor. Samsung has invested heavily in this region. such as those in the animation industry.3b billion semiconductor fabrication plant in Austin. The company has also invested in research and development in this region by building an R&D centre in Yokohama in 1997 and the Semiconductor Design Centre. and Brazil are handled by Samsung Americas. is based in Singapore. and the Philippines. the leading audio-maker in Japan. whose headquarters is in Ridgefield Park. the company has also strived to invest in promising local ventures.Consumer Appliances . US. Samsung has also bought Lux Corporation. The Austin plant supplies DRAM memories to global PC makers such as Apple. (D. Investments in this region include the $1. About 90% of the products manufactured by the Malaysian complex are sold in other countries and regions. Moreover. The Group operates factories in India.World) As indications of its efforts to contribute to Malaysia¶s growing economy and trust of Malaysian-made products. (Roll 154) The Samsung
. Samsung counts more than 7. Indonesia. In the recent past. Lee 121-122) In Asia.Arceo & Cuarto 5
link Samsung with local partners in the Japanese market and to provide valuable information on new business development in Japan. However. Canada. (D. Dell. particularly in terms of localization of its production processes.
It partnered with its Japanese rival Sony to manufacture
. Apart from its localization strategies. The Group¶s operations throughout Europe are supervised by Samsung Europe. (D. Other investments in the European region include two manufacturing sites in Hungary and Slovakia. Samsung¶s position as a market leader and a leading exporter in these areas has helped in furthering the economies of Eastern and Central Europe. Samsung also enters into a number of strategic alliances with other global companies. Lee 111) Similar to the production facilities in China. whose centre of operations is in Brentford. Investments in this region were particularly significant in the second half of the 1990s: $700 million were put in to establish the European Research and Development Centre in London.Consumer Appliances . Samsung Wynyard Park tries to get as many materials as possible from local suppliers in the UK market. the production complex in Wynyard features a state-of-the-art training centre which provides special skills training and lifelong education to Samsung employees and the local community. was established here. UK.World). In 2010. England. Currently. UK and the integrated electronics production complex in Wynyard. an integrated electronics production facility. United Kingdom. with investments amounting up to around $50 million. Samsung Europe is in the initial phase of negotiation to build a $100 million appliance factory in Ukraine (Samsung Corp . It remains to be Samsung¶s grip on opportunities for future expansion in South America.Arceo & Cuarto 6
Electronica de Amazonia or SEDA. which would supply Russia. Teeside. which can supply both Eastern and Western Europe. Samsung has struck a deal to buy two major appliance plants in Poland. Moreover. Samsung also offers technological assistance to these suppliers to ensure increased overall product quality.
Standard Chartered. Because of the strength of the conglomerate as a whole. With IBM. Infineon. the company enters into many strategic alliances which allow it to reduce spending in research and development. As discussed previously. A 2007 collaboration with IBM. especially for new businesses. Every year. and Arialink. Samsung has also entered into agreements to develop telecommunication products with companies such as Sprint. Samsung¶s growth as a global brand is due in large part to its dedication to research and development. Samsung aims to develop the 65/45 nanometer logic processing technology. The diversified operations of the Group also enable it to cater to a wider customer base and to diminish its risks.World).Consumer Appliances .Arceo & Cuarto 7
TFT LCD panels for LCD TVs.) What are the strengths and weaknesses of the agent? What are the factors which and further and hinder the agent¶s ability to operate effectively and efficiently in the local/national/global environment? Strengths As the largest corporation in South Korea. Linking up with other companies from other localities also enables Samsung to speed up its marketing. and with Microsoft. each of its subsidiaries have increased competitive advantages. the Samsung Group chaebol accounts for 20% of all national exports (Samsung Corp . It employs about 42. Lastly. (Samsung Group . and Freescale Semiconductor aims for joint developing and manufacturing semiconductor processes. the Group allots at least 9% of its revenues in R&D activities.000 people in the entirety of its global R&D network. Nextel. particularly in terms of innovation and technology development. it agreed to be the HDTV worldwide marketing partner for the Xbox and co-developer for new gaming technology. which
. Bouygues Telecom.Company Profile) 3.
000 units of these phones resulted from the finding of the US Consumer Product Safety Commission that they were unable to connect to Emergency 911 in
.World) Declining profit margins of the company can have implications on its profit-making capacity and can adversely affect consumer confidence. In May 2009.Arceo & Cuarto 8
comprises 6 centres in Korea and 18 in other countries. the company has witnessed declining trends in profit margins. which allows the company to continuously develop new products to match ever-changing consumer preferences. a subsidiary of the Group. generating from recent events such these may harm Samsung Group¶s reputation which could hinder it from pursuing efforts to break into new markets. In the last three years. Samsung has suffered from bad publicity due to a drawn-out bribery and tax evasion case concerning Lee Kun Hee. Bad publicity.2% to 4. indicating the company¶s inability to manage its cost structure efficiently. The voluntary recall of 160. Weaknesses Recently. going down 9. particularly Jitterbug cell phones with model numbers SPH-a110 and SPH-a120. The net profit margin reflects this decline as well. Since the 2006 financial year.0% in 2008.Company Profile) Samsung Group¶s focus on R&D facilitates innovation.Consumer Appliances . It has also been accused of exporting appliances at below domestic market prices. recalled some of its products in North America. the operating margin and net margin have been waning. From 10. the chairman of the Group (Kung).6% within the same period. Samsung Electronics. a practice commonly referred to as ³appliance dumping´.6% in 2006. (Samsung Corp . to Australasian and Western European market (Australia Says Samsung. Daewoo "Dumping" Washing Machines). (Samsung Group . the operating margin fell down to 5.
as well as their now ubiquitous mobile phone products. This has resulted in a coherent brand identity. Sony. with its ³designer´ appliances and electronics line. such as with the sponsorship of the Olympic Games. Many factors helped Samsung skyrocket into popularity²first. Samsung has also focused its marketing and advertising ventures on promoting Samsung as a holistic brand instead of focusing on individual product lines. It began to market flat-screen televisions and ultra-thin DVD players. Samsung also began investing heavily in its global profile. By branching into another market for electronics. the brand¶s decision to cater to a more upscale market. fast catching up to its rival. which discouraged Korean exporters. Samsung was ranked as one of the top 25 brands in the world. because of the lagging price of semiconductors. Opportunities In 2004. they were able to increase their profit margins. Samsung experienced trouble in 2002-05. (Haig) Secondly.Company Profile) Product recalls as significant as this can likewise result to adverse effects in consumer confidence in the group¶s products. (Samsung Group . one based on product divisions.Arceo & Cuarto 9
a no-service area. It became a market leader instead of a market follower. The company also adopted a new organizational structure. which made consensus difficult to reach. Threats Historically. thanks to a massive advertising campaign²³Digit All Experience´² Samsung was able to rise above most of its competitors as a one of the leading providers of digital appliances. and the Korean won strengthened against the US dollar.
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Following a record low of 4% growth in 2006. The ³global identity´. to double its 2004 sales revenue by 2010. Google. efficient execution. As one of the top-ranking electronics companies in the market. Samsung also experienced difficulties in trying to reconcile its ³Korean identity´ as a leading brand with its ³global identity´. Samsung began a massive company restructuring the following year. or scaling down the company in order to recoup losses. and Facebook seem to be more relaxed and geared towards fostering creativity and uniqueness among their employees. cheap production Samsung has previously been known for. 4. and now stand on the delicate balance of restructuring. which is held by top companies such as Apple. concentrating on innovation rather than the swift. and
. Samsung has decided to go the route of re-imaging its whole brand.) How is the agent able to realize its objectives and vision in light of these patterns of interaction? In the multidimensional and multifaceted scope of relations. including their Digital Television products and printers. Samsung has also fallen victim to the financial crisis plaguing the globe. to have 20 number one market share products in 2010. also began experiencing revival mode. experiencing higher percentages of growth and profit margins in 2007. In light of this. to identify eight growth engines for the company¶s business. examine the significance of the role of the agent in the environment. Samsung¶s competitors. In 2005. What is known as the ³Korean mentality´ was defined by the characteristics of single-mindedness. and the unquestioning loyalty and therefore obedience of its employees. which caused low productivity among its employees. Samsung outlined a five-year plan that included major goals such as being one of the top three brands in the world in quantity and quality by 2010. such as Nokia and Sony.
it inevitably exerts some influence. and Samsung Electronics KHAN (Online gaming).Arceo & Cuarto 11
to pursue innovation in all six main areas of the company¶s business operations. These are the Suwon Samsung Bluewings (Soccer). Samsung has five core values: people. However. Finally. ³Integrity´ refers to their dedication to exhibit respect and transparency to consumers and stakeholders. they are now anticipating to sell a million more before the year is out. The Samsung Galaxy Tab hit the 1. given the number Samsung employs. which includes Digital Media. Samsung has established several athletic clubs devoted to a variety of sporting disciplines. Samsung does not have any particular affiliation and does not support any particular political candidate. excellence. Samsung¶s goals for 2010 also included hitting the 1 million sales mark for its relatively lowbudget contender to the Apple iPad. which the company was not expecting. ³Co-prosperity´ refers to Samsung¶s commitment to being a socially and environmentally responsible corporate citizen in every community that houses its operations.
. Politically. ³Change´ addresses Samsung¶s dedication to innovation. With regards to corporate social responsibility. Telecommunication Network. Samsung Electronics Field and Track. Samsung Lions (Korean Basketball League).5 million sales mark in November. ³Excellence´ refers to their commitment to develop the best products and services they can offer to consumers. integrity and co-prosperity. With regards to the increase in figures. Samsung¶s core value of ³people´ means that they are committed to giving their employees the opportunities they need and deserve in order to meet their full potential. change. Samsung Electronics Equestrian Team. and the loyalty of its Korean consumers. and LCD Digital Appliances. Semiconductor. Seoul Samsung Thunders (Basketball).
In China. was established. in order to further the education of the residents in the field of Information Technology. which is an essay contest on the topic of the impact of digital technology in schools. which is committed to constructing Information Technology centers for juveniles in countries that include Thailand. As of 2010. which is composed of four hospitals: Samsung Seoul Hospital. Orissa. In the United States. and Indonesia. Philippines. In India. which supplies underprivileged patients with funding for the operation to remove cataracts. Kangbook Samsung Hospital. Samsung also sponsors the Samsung Light of Love. Malaysia.Arceo & Cuarto 12
In 1994. basketball. and Samsung annually donates $100 million to the Center. Samsung sponsors Samsung Hope. Samsung is committed to contributing to the building of 100 new schools in China. It is the third largest teaching hospital in Korea.
. it has contributed to the construction of the Elementary School of Hope in a poverty area. which supports the charities sponsored by famous American stars of the sports golf baseball. It also sponsors the essay contest Hope for Education. Vietnam. it sponsors the project Four Season of Hope. In Southeast Asia. the Samsung Medical Center. and football. Samsung has committed itself to the construction of seven community centers in the Indian slum of Bhubaneswar. and Samsung Life Sciences Research Center. Samsung Changwon Hospital. Samsung also has social projects going on all over the world. (Kennemer) Outside Korea. as part of the ³Project Hope´ program. as well as providing computer education centers for blind youth in underdeveloped areas.
com) Environmentally. Samsung also ranked first as a Global Eco-Label company. In Africa. Samsung conducts Information Technology training programs for elementary and middle school teachers in Ethiopia. Samsung is listed as 13th out of 18 leading electronics makers in Greenpeace¶s Guide to Greener Electronics. for 2134 of its models meeting the Global EcoLabel standards. investing in eco-friendly Research and Development and manufacturing facilities. Samsung has entered into a joint sponsorship of youth education programs with the International Youth Foundation. which includes supporting Information Technology education. and building eco-management partnerships with customers and suppliers. (Samsung. and hosted the Saint Petersburg Running Festival at Night. Egypt. all of Samsung¶s phones and media players are free from polyvinyl chloride and brominated flame retardants. Republic of South Africa and Nigeria plan and develop their future. Scientific. As of April 2010. In partnership with United Nations Educational. instituted Tolstoy Literature Awards. they are also committed to expanding their offering of ecofriendly products. In Eastern Europe. and funding consultation services for employment to help the youth in Kenya. In Latin America. Samsung has sponsored the Bolshoi Theatre. and Cultural Organization (UNESCO). Samsung has contributed to a Youth Anti-Obesity program in partnership with the European Olympic committees.Arceo & Cuarto 13
In the United Kingdom. as well as provide computers for the community center. sponsored the Hermitage Museum. Environmentally. (CSRWire)
. they support and maintain cancer wards and local orphanages.
Regarding its management. It aims to train
. be it in products. It also hopes to increase the value of its core networks ± Industry. Create the Future´. Samsung has mapped out two main goals: to secure $400 billion in revenues and to become one of the world¶s top five brands in 2020. global management.Arceo & Cuarto 14
5. cost. and Employees. it has developed three key approaches. (Michell) In order to secure its collective competitiveness. Samsung is also looking into upgrading its manufacturing. By leveraging its three key strengths² ³New Technology´. fostering its human resources. ³Innovative Products´. the company hopes to contribute to a brighter future for its consumers. Samsung puts a lot of effort into promoting innovation. as well as strengthen its research and development. including health.com) The company is also looking forward into branching out to different enterprises. and acquiring new technology. ³Partnership´. and ³Talent´. Samsung is also looking to increase the value of consumer response and knowledge. or organizational culture. namely: ³Creativity´. To ensure that this vision is met. technology. market. (Samsung. in order to create and design better products for its consumers. Along with these thrusts. medicine and biotechnology. Partners.) What are the future prospects for the agent? What are the steps that the agent actively undertakes to ensure that it achieves its short term/medium/term/long term objectives? Samsung¶s vision in the coming decade is ³Inspire the World. and ³Creative Solutions´. fields Samsung has been previously involved in thanks to its contribution to the Samsung Medical Center.
Aside from branching into medical diagnostic implements and biopharmaceuticals. (Y. Samsung¶s corporate goals from five or so years ago sets its 2010 revenues at a $140 million. Lee) Only time will tell whether or now they will achieve their corresponding goals for 2020.Arceo & Cuarto 15
functional specialists and future leaders for the company.
. According to analysts. and build an infrastructure for Information Technology. and Facebook. Samsung¶s sales will be able to reach that amount before the end of the year. Google. as well as develop new processes and improve the local development of parts and equipment. as previously mentioned. Samsung recently remodeled its offices to better foster creativity and efficiency in its workers. Having observed the relaxed attitude and office etiquette of top companies such as Apple. As mentioned earlier. Samsung is also looking to branch into manufacturing light-emitting diodes and batteries for hybrid cars.
Quentyn.com/news. Ltd. New York: AMACOM. 12 December 2010 <http://www. Lee. ApplianceMagazine. 12 December 2010 <http://www. Singapore: John Wiley & Sons (Asia) Pte.com>." Lee." 03 December 2010. Asian Brand Strategy: How Asia Builds Strong Brands. Dongyoup.the Asian global brand. Myung Oak and Sam Jaffe. "Samsung Hits 1 Million Galaxy Tabs Goal. "Samsung Chief Charged for Tax Evasion. 104-137. phandroid: android phone fans.euromonitor. Glos: Edward Elgar. "Location Choices of Korean MNEs in East Asia: escaping the nutcracker. 13 December 2010 <http://www. 2010. "Case 3: Samsung Electronics.html>. 11 December 2010 <2010>. Lee." Roll.php?article=4962&zone=0&first=1>. Cleared of Bribery. Tony." Cartwright. "Chapter 6: Globalization. Philadelphia: Kogan Page Limited." 22 September 2003. Daewoo "Dumping" Washing Machines. Ups Ante to 1. Brand Royalty: How the World's Top 100 Brands Thrive & Survive. 203-247." 17 April 2008. Huffington Post.Arceo & Cuarto 16
"Australia Says Samsung. London: YSM Inc." Samsung. Ho Yeon. "Company Profile. "Samsung Eternal: From Rice Trading to $174 Billion in Sales. Yoolim. Strategies for Hypergrowth. 2010. Samsung Electronics: The Global Inc.Consumer Appliances .5 Million." Economic Integration in East Asia: Perspectives from Spatial and Neoclassical Economics. Kennemer.com/2010/12/03/samsunghits-1-million-galaxy-tabs-goal-ups-ante-to-1-5-million/>.. 76-82. Dongyoup. Michell. 151-160. The Corporate Social Responsibility Newswire. "Samsung Intensifies Focus on Eco-Management. 118-131. Roger.appliancemagazine. Michelle. CSRWire. Kim.. 2008. "Case 4: Samsung .samsung.com/2008/04/17/samsung-chief-chargedfor_n_97159.huffingtonpost. Satoru Kumagai and Koji Nishikimi.com>. Oxford: Capstone. 2006. 13 December 2010 <http://phandroid. "Samsung Gets Creative. 2002. Matt.
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165-169.com>. "Case study: Samsung ." 2009. 11 December 2010 <http://www. 13 December 2010 <http://www. 2007.About Samsung.com. Antony and Lucy Aitken.samsung.pdf>.Corporate Profile." Young. Profitable Marketing Communications: A Guide To Marketing Return on Investment.datamonitor.com/us/aboutsamsung/corporateprofile/vision." 2009 November 2009. Vision . London: Kogan Page.Making every dollar count.Company Profile. Datamonitor.
.Arceo & Cuarto 17 "Samsung Group .samsung. Sustainability .com/us/aboutsamsung/sustainability/socialcontribution/download/social_contri bution. "Social Contribution. 11 December 2010 <http://www.html>. . Samsung.