Do What You Can't
Samsung
Tagline
Net Worth
$260,000,000
Started in (City)
Daegu
Started in (Country)
South Korea
Incorporation Date
01st December, 1938
Bankruptcy Date
-
Founders
- Lee Byung-chul
About
Samsung is a multinational South Korean Company founded in 1938, by Lee Byung Chul. The story of Samsung is synonymous with the phrase, “From humble beginnings come great things”. The story of Samsung’s humble birth, growth, and dominance of multiple industries is like a creation myth. It comprises numerous affiliated businesses; most of them united under the Samsung brand and is the largest South Korean chaebol (business conglomerate). Samsung has a powerful influence on South Korea's economic development, politics, media, and culture and has been a major driving force behind the "Miracle on the Han River". Its affiliate companies produce around a fifth of South Korea's total exports. Samsung's revenue was equal to 17% of South Korea's $1,082 billion GDP
Beginning
Samsung started off as a grocery trading store in Daegu, South Korea. The store traded fruits, vegetables, dried fish, noodles, and other produce in the city and exported goods to China and its provinces. After the Korean War, Lee expanded his business in textiles and opened the largest woolen mill in Korea, in 1950. He focused heavily on industrialization with the aim of helping his country re-establish itself after the war. During this tumultuous time, his business was able to benefit from the new protectionist policies that were adopted by the government, whose aim was to aid large domestic conglomerates (chaebol) by shielding them from the competition and providing them with funding. This secured a string of loans and other business support. Soon he ventured into other sectors including, insurance, retail, and securities. Lee wanted Samsung to become a leader in all possible sectors. The company expanded its textile manufacturing process to cover the full line of production from raw materials to the end product. New subsidiaries, such as Samsung Shipbuilding, Samsung Precision Company, and Samsung Heavy Industries were also established. The company also started to invest in heavy, chemical, and petrochemical industries; this paved the way for the company’s growth and subsequent entrance into the electronics sector.
It wasn’t until 1969, that Samsung entered the electronics sector. One of its first electronic products was the black and white television. By 1970, the company was exporting electronics overseas and was already a major manufacturer in Korea.
Road to Success
During the mid-1970s, Samsung began to manufacture washing machines and fridges, before creating and producing colored TVs. It started to export home appliances abroad and by 1978, it had produced 4 million black and white TVs. The very same year, Samsung opened its first office in America.
There was a rapid expansion of Samsung’s technologies, with more than 6 product divisions, including, semiconductor, telecommunications, hardware, etc. The company acquired telecommunications giant, Hanguk Jeonja Tongsin. They started producing fax machines, switchboards, and telephones. This laid the company’s foundation, for their largescale productions in the years to come. It was around 1984 that the company changed its name to Samsung Electronics Co Ltd and the sales exceeded 1 trillion. Samsung Data Systems was established a year later, this was done to serve the growing demand and need for systems development. This ploy saw Samsung become a leader in Information Technology services. The company also created two research and development institutes that broadened the company’s technology line into electronics, semiconductors, high polymer chemicals, aerospace, and nanotechnology.
Tragedy struck, when Byung Chull, died of lung cancer. His son, Kun Hee took over and transformed the company into the global power it is today.
Challenges
Many firms are now using smartphones and other related electronic gadgets to address various activities. Multinational corporations rely heavily on these devices to monitor the operations at various branches across the world. Firms such as Blackberry and Apple have remained very successful in marketing to the organizational buyers. However, many firms have rejected Samsung devices citing a number of reasons. The major reason why Samsung smartphones and other communication gadgets are less popular among organizational buyers is because of the issue of security. Samsung’s Smartphone runs on Google’s open-source Android OS. This operating system is more vulnerable to viruses and can easily be hacked as opposed to that which is used by Apple Inc and Blackberry. According to Butow and Watson (29), the chief executive officer of Samsung admitted that the operating system used by the firm’s Smartphone has a number of security problems. This confession came after complaints from some of the organizational buyers who had used the Samsung communication gadgets. These customers complained that their data was easily breached because of the poor security systems. They also complained that they were slowed in their work because of the constant malware interference every time they went online.
The complaints have earned Samsung a negative image in the market. Organizational buyers no longer trust their communication gadgets. As Doole and Lowe (78) say, firms highly value the security of their data. In order to have a competitive edge over market rivals, it is necessary to have superior marketing and production strategies. Such strategies should not be accessible to rival firms. To do this, these organizations need communication gadgets that can protect their internal database even when it goes online. However, it has been proven that Samsung gadgets cannot offer this security.
Failures
In 1987, the company’s reputation was tainted with allegations of controversy and corruption. Nevertheless, the company pushed forward. In 1990, Samsung launched its first mobile. During this time Nokia dominated the market, but Samsung continued to make innovations to handsets. Shortly after this, the company made headlines once again, this time for its defective mobile phones and overall depreciation in product quality. In 1993, Kun Hee took a stand and told his employees to change everything. The company began to focus on electronics, engineering, and chemicals. The quality of the products coming out of the factories was still not up to the mark and continued to receive backlash. It was around this time that Samsung became synonymous with shoddy and cheap, no more the bar setter.
The mobile phones stacked up high in the Gumi factory yard. Phones, TVs, fax machines, and other devices hit the concrete and Kun Hee and his board members cracked the screens and cases with hammers. They then lit a bonfire and threw everything in. The CEO was disgusted by the quality of product coming out of his factory and in a fit of rage, set it all ablaze. All in all, $50 million worth of hardware was burned.
Achievements
- TRA Most Attractive Brand - 2018
- The Most Trusted Brand - 2018
- AdGully DIGIXX awards - 2017
Subsidies
- Samsung Electronics
- Samsung Engineering
- Samsung C&T Corporation
- Samsung Heavy Industries
- Samsung SDS
- Samsung Life Insurance
- Samsung Fire & Marine
- Insurance
- Cheil Worldwide
- Samsung Biologics
CEOs
- Kim Hyun Suk
- Kim Ki Nam
- Koh Dong-Jin