Inquiry into Samsung - Essay Example

Inquiry into Samsung Executive summary The Samsung Company is a Korean multinational company and a technological giant that has risen to prominence in multiple fields over many years. The company is one of the most diverse companies in the world. Samsung has an unimaginable size and scope. This company has gained popularity through it technological division. Therefore, Samsung is the largest company in Korea and second largest company in the world. The company has other sections like retail, finance, straight up entertainment and chemicals. Most of these subsections of the company are uniquely successful. Samsung group grown through acquisitions and mergers like the move to buy DongHwa department store in 1963 and two years later the acquisition of Saena paper industry followed. Samsung electronics were established by Samsung group in the year 1969. However, it was in the 1970s when Samsung made a decision to enter into industries petrochemical, heavy and chemical industries. This was followed by the establishment of a new Samsung shipping company. The Samsung heavy industry was established in 1973. The Samsung group procured Daesung heavy industry to develop the Samsung shipbuilding company. Samsung precision, which was later renamed to Techwin, was established in the same year. Samsung was rising at an extremely high speed and expanding its influence to expanding its industrial influence and empire. This positioned the company to the present day growth culture. Samsung group is known to be one of the companies that are leading in innovation. The company has been introducing the latest Smartphone and has increased its market share through introducing superior products like Smartphone and tablets. The growth of this multinational has been gradual but steadfast. Samsung was founded in the year 1938 by Byung-Chull. The company used to export fruits, vegetables and dried fish produced in Korea. The exports were destined for Beijing and Manchuria in China. The company then started small scale manufacturing by establishing confectionary machines and flour mills. The company was incorporated in the year 1951. Samsung Corporation started to substitute imported goods with locally manufactured products through the establishment of the industry called Ceil Sugar in the year 1953. This was later followed closely by the establishment of Cheil industries. Samsung group then went ahead to acquire Feb Ankuk Marine and fire insurance in the year 1958. The company was later renamed as Samsung fire and marine insurance. This was followed closely by the acquisition of Jul Dong Bang Life insurance in the year 1963. The company was later renamed to Samsung life insurance in the year 1989 (Michell 2011). However, in 1983, Samsung group begun to develop interest in the field of semiconductors. Up to 1983, the company was known to develop semiconductors for the local market. The development of the 64k DRAM (dynamic random access memory) by Samsung Company marked a fresh beginning with regard to international influence (Michell 2011). This marked the beginning of production of many semiconductor chips for the international market from Samsung Company (Chang 2011). In 1985, Samsung data systems were established. The company was rebranded to Samsung SDS in 1986. The aim was to pave the way for Samsung economic research institute. In the following year, Samsung advanced institute of technology was developed as the company’s main research center. Samsung group acquired KOCA. This was a credit company which was renamed into Samsung credit card in the year 1995 (Books 2011). Through this, Samsung Company was increasing asserting itself in the world of technology and financial security systems. Samsung began acquiring many international companies with an aim of asserting itself in the international market and increasing its market share. Samsung group faces incredible competition from other South Korean industries. Some of the companies that give Samsung fierce competition include LG and SK companies. Besides, the Samsung group is known to face strong competition from international companies in all frontiers of its business (Michell 2011). Some of the companies include Sony and Matsushita Companies. Samsung is also known to face many problems from legal frameworks that have been placed in South Korea. The government of South Korea has consistently discouraged some divisions of the company from going public citing some legal reasons. This affected the life insurance division of Samsung Company (Chang 2011). The increase in technology in the world has led to production of new product designs in the market. This has caused the company to be attracted to long and protracted court battles. The aim is to try to safeguard its intellectual property rights and maintain its competitive advantage. This has seen Samsung and Apple fighting in every expensive court battles at the expense of both companies. With the falling prices of memory chips, the revenues of Samsung electronics is set to fall unless something urgent is done. The company is invested $1.99 billion into microchip business in order to develop semiconductor chips (Michell 2011). The Sumsang group has attributed its financial success over the last few years to telecommunications business in the year 2002 (Books 2011). With the sale of over 45 million semiconductor units, the revenues of Samsung Company were profoundly impacted. It has been argued that telecommunications business is the only department that has prevented the decline of Sumsang revenues (Munhwa 2000). Therefore, a decline in demand would pose a substantial challenge to Sumsang group (Chang 2011). This could be prompted but increase in competition, innovations or even a chance in fashion. Financial stability and market share of Samsung products remain one of the main areas that required the company to strive and maintain its progress. Samsung securities have continued to face contingent liabilities. They have also suffered from a reduction in brokerage commissions. This has resulted in poor profitability in the recent years (Munhwa 2000). For Samsung group not to be affected, this trend needs to be halted. Samsung is known for diversification of its business. This has continued to be one of the major reasons for its transformations and competitiveness (Chang 2011). Through competitive pricing, the company has managed to broaden its portfolio in terms of products and met its demands. Samsung has been transforming its business continuously in order to remain relevant (Michell 2011). This has given Samsung group a competitive edge over its competitors when it comes to expansion of market share. In the year 2002, the Samsung Company advanced cell phones, which have voice dialing and cameras. Besides, these phones have color screens and this uniqueness boosted product sales tremendously (Books 2011). The handset business generated 48 per cent increase in its sales. Samsung has risen to become the third largest mobile company in the world. The company employs some of the South Korea's best employees. Many of the Samsung group employees have PHD level of education. The company’s total asset is approximately $300 billion (Chang 2011). The company is said to have some of the most loyal employees. Many of them work throughout, that is, during holidays and weekends without being coerced. Samsung could have been larger than it is now (Munhwa 2000). However, the government has been concerned by the growing influence and power of the multinational company (Michell 2011). This caused the government to order the company to drop some of its affiliates. The large size of the Samsung group has been cited as the main reason why other companies remain small or go bankrupt. Samsung group is accused of taking the lion’s share of the market share and controlling the market. Sumsang group can inflate prices at will or control the market value due to its commercial muscle and power (Books 2011). The government of South Korea has been forced to step in and lessen the conglomerate’s scope and power. However, Sumsang group is responsible for a fifth of South Korea’s exports (Munhwa 2000). The amount of money they supply to the government keeps them in a position of power. The employment opportunities created by the company is essential in South Korea’s economy (Chang 2011). In 2010, Samsung electronics merged with Samsung digital imaging which was followed by the introduction of Galaxy A in the Korean market. This led to many sales and an increased turnover as people tried out the new product. In the same year, the company launched the Galaxy Smartphone in China (Chang 2011). This was done in partnership with three other companies that deal with mobile phones. This caused Samsung to be perceived as a giant in the production of Smartphone which were going head to head with Apple Inc. Smartphone in terms of features and scope (Michell 2011). This has also altered Samsung’s image into a global giant with is competing with the finest and the largest company in the world. Samsung Smartphone has led to increased turnover in the Samsung group (Chang 2011). Ever since, Samsung has started production of smart televisions, which has led to expansion of scope, and increase in its market share and its brand loyalty spreads around the world. According to research, Samsung is keen of being seen as an innovator. However, the CEO of Samsung group plans that Samsung primary strategy should be quick delivery of superior and competitive products. Samsung uses Android operating system in a wide range of its devices (Books 2011). This includes its Smartphone and tablets. Samsung is using android powered galaxy to challenge its main Smartphone competitor, the Apple Inc. Samsung group is known to be targeting $44 billion in sales by the year 2020. This shall entail establishing new growth businesses and the use of renewable energy. According to Gee-Sung, the vice chairman of Samsung group, the company aims at being among the top ten companies in the world by the year 2020 with $400.0 billion in terms of revenue. This shall be facilitated by the doubling of sales of Smartphone according to the Samsung action place this year (Munhwa 2000). Samsung hopes that over 50 million handsets shall be sold as it popularized its galaxy lineup (Books 2011). According to research, Samsung is changing its leadership with an aim of coping with a rapidly changing market. This is different from the mentality of the South Korean corporate culture where seniority is admired and revered. Samsung is young for a young generation leadership which is said to understand the modern market dynamism. In conclusion, Samsung group has been in operation for many decades in South Korea. Debate about the strength of the multinational and the controversy of its power exists. However, there is not doubt on the amount of benefits the company has brought to the Korean economy. Samsung is perceived to be a powerhouse with many products around the world, and its influence continues to grow. The company has been facing stiff competition from companies like LG and Apple Inc. among many others. However, the innovation and ingenuity of the Samsung team has maintained it on course to be a global technology giant whose influence is on the rise. With the introduction of the highly advanced and the world most intelligent Smartphone, the galaxy series, Samsung is set to assert its position as a leading player in both innovation and manufacturing. The future of Samsung group looks promising, and it is estimated that the company shall set the pace for the next incoming wireless technologies. The market share of Samsung products might increase at the company ventures into new international markets in the coming years. References Books, H. 2011. Articles on Samsung Group, Including Suwon Samsung Bluewings, Samsung Lions, Samsung Cup, Seoul Samsung Thunders, Samsung Life Insurance, Samsung Heavy Industries, Samsung Town, Samsung Hub 1st ed. Hephaestus Books. Chang, S. J. 2011. Sony vs Samsung: The Inside Story of the Electronics Giants' Battle For Global Supremacy 1st ed. John Wiley & Sons. Michell, A. 2011. Samsung Electronics and the Struggle for Leadership of the Electronics Industry 1st ed. John Wiley & Sons. Munhwa, S. M. 2000. Samsung Foundation of Culture: A Dialogue with the Past, Present, and Future 1st ed. Samsung Foundation of Culture. Read More