Samsung Electronics And Its Managerial - Essay Example

Samsung Electronics has experienced a meteoric rise in its field sine the Asian financial crisis, when its debts were pushing it too the brink of bankruptcy. In the ensuing years Samsung changed both its managerial, operations and product concept and has become an outstanding technology innovator, which has enabled it to evolve to the position of one of the top five companies in Asia, and holding a solid number three position among global electronic companies. "Samsung employs approximately 113,600 people in over 90 offices in 48 countries. The company consists of five primary businesses units; The Digital Appliance Business, Digital Media Business, LCD Business, and Telecommunications Network Business" (Digital) It has captured this sterling position through an aggressively focused Research and Development component which focuses its attention on producing a quality product for a specific demographic. Additionally the company is involved in an aggressive distribution and marketing concept; the company promotes the principle of high-end brand quality which carries a specific price tag, which is not to be discounted or negotiated downward at the retail level. The Chinese economy is a thriving and viable entity. However, in the area of electronic manufacturing, innovation and manufacturing it lags very far behind the Korean prototype, being exhibited by Samsung. 2 Section 1 The study will investigate the electronics industry in general and it will focus on Samsung Electronics and its managerial, operations and product distribution style as a model which can be duplicated by Chinese Companies. Samsung rose from the bottom of a mass producing, low price, export dumping electronic company to be situated as the number three electronic company in the global market. Whereas, there are no Chinese Companies which hold this distinction of being a leader in any industry. The study will point out why and how the Korean Company has become an industry leader. The study will pursue this topic because Samsung's management and operations style is extremely successful, and its importance as a business model can serve as an example to other companies on how an aggressively focused Research and Development department, and a well thought out marketing concept can make the difference in a company's bottom line. The beneficiaries will at a minimum be two fold; for students who are interested in how a successful company plans its short and long term objectives for project development. How important it is to identify your primary market during the conception and development of a product and how critical it is to produce high-end quality products and not waver on corporate pricing structures. Moreover, it will exhibit to the business person how critical it is to establish policy and make it stick. The information presented by the study will provide the inner details of a strategy which exhibits sound long range business planning and reflects positive results, based on a system which is successful. 3 Section 2 The objectives of the study will be to show that the system which Samsung functions under is replicable and can be applied to any business which is committed to remain focused. Section 3 "Samsung Electronics, the consumer electronics giant in Korea, posted its financial performance for the first quarter, 2006 at 13.96 trillion won, which represents a one percent growth compared to the first quarter of 2005" (Survival) "Samsung electronics revealed this year's TFT - LCD monitor sales through November. The company has maintained its world market leadership by selling 5 million TFT - LCDs through the first eleven months of this year, a figure that is twice the 2.5 million units sold in all of last year. Five million units represent more than 20% of the world market, a highly significant statistic considering the soaring growth of this new product segment" (Digital). Samsung has developed a global marketing strategy, and to augment the concept they recognize that it is incumbent upon them to contribute to the economies which they extract sales from. While the company is about the business of producing electronics, they are also about the business of building viable networks. These networks provide employment to host country nationals and contribute significantly to the various local economies. Moreover whenever a company the size of Samsung decides to make a capital investment, it also generates interest on behalf of other manufacturers to make similar capital investments. 4 "The board of Samsung Electronics Co. Ltd., the partner of Samsung Austin semiconductor, recently gave approval to go forward with a $3.5 billion chip plant which will be built next to their existing factory. Also, nearby at the Southwest corner of Palmer and McCallen Pass near I-35, Gainesville Fla-based Quentin Corp. is moving ahead with a 350,000 - square - foot office development. Quentin cites similar reasons as Trammel Crow; better market conditions, roadway improvements and proximity to Samsung". (Mixed Use) Again Samsung has a keen ear and eye on what its consumers are prone to want in their electronic equipment; Samsung Electronics LCD monitor Product Manager Jai Hoon Kim explains; "Our technological expertise, diverse product lineup for accommodating various consumer needs and aggressive marketing activities in major markets are all factors that have allowed us to maintain our top ranking in the world LCD monitor market". (Kim) Additionally Chris Kim, vice-president of PDP's, expects plasma demand to reach 7.2 - 7.3 million this year, versus 3.5 million a year ago. Kim also added, that Samsung SDI was considering building a fourth plasma factory to boost capacity". (Chris) "Samsung has disclosed to media at its China Region outsourcing strategic conference that in 2006 it will outsource about $18.5 billion to China in an attempt to help lower its production costs". (Tech) "As more of the electronics industry moves to Chinato cut costs and boost efficiency, international original equipment manufacturing services companies are augmenting their supply chains with indigenous Chinese electronic suppliers. The benefits are considerable; cost savings ranging from 5 per cent to 50 per cent as well as 5 shorter lead times for parts needed to supply factories in China. But as Mike Hegedus points out; "there is a cost that is not visible on your bill of materialsindigenous Chinese companies typically need guidance and management support from the buyer. Companies can find high-quality suppliers, but those suppliers need help in improving consistency, he adds that every Chinese company that his company has dealt with has needed to upgrade its inventory management and delivery capabilities. There are definite cost savings when dealing with Chinese suppliers, but you have to do a lot more home work and invest in some level of supplier development". (Gap) Section 4: The Research methods shall be secondary and primary. The secondary research will consist of information on Chinese companies which are presently servicing electronic manufacturers as suppliers and those who are or have exhibited an interest in becoming manufacturers themselves. I would venture to say that the latter endeavor is quite away down the road, but the study will systematically explore the prospects. This will entail looking at those companies who have the financial capability and the desire to venture into what will be for them, very virgin territory, albeit not alien. The study will explore this research through the examination of peer journals which address the issue of private business development in China. In that peer journals will be used in this aspect of the research, it can be expected to be very reliable. It is a given within the electronic community among those who use Chinese companies as suppliers that they are not as sophisticated as most in the areas of management. So, the secondary research will have to 6 explore the feasibility of long term training for prospective Chinese electronic manufacturers. Also, the secondary research will attempt to ascertain how much of the product will be absorbed in the domestic market if such an undertaking were feasible. This aspect of the secondary research will validate the premise that Chinese companies can compete in the global electronics market, if the resources are made available to them. The primary research will be conducted with the use of questionnaires. In that the groups which the questionnaires will use as respondents will consist of business persons and end users, one can be reasonable certain that the validity will be sound and the reliability can easily be confirmed. These individuals will all have a vested interest due to their respective positions. The sample size will only be total of 25 respondents, selected from controlled groups: a total of 5 businesspersons who are either retailers, distributor or sales personnel, and 20 students who have made a purchase in the last twelve months. Section 5: The study will use questionnaires and conduct single respondent interviews for the primary research and the secondary research will be done on the internet, books and peer journals. The study will collect information on business planning, policy, financial and implementation, from the business respondents, and from the students (consumers) the study will concern itself with satisfaction levels; engineering, mechanics, durability, price, service, reliability of product and possibility of 7 repeat business. Impressions on Chinese electronic companies. And consumer satisfaction level at point of sale The information gathering for the primary research method will be obtained using a pre-written (paper) questionnaire. The venue for business respondents will be between 9am to 5 pm at their respective business locations. The students (consumers) can either be approached at the point of sale, prearranged meeting, perhaps in the library, student center or the dorm. Business persons (distributors, retailers or sales persons) Consumers (Students) The study data will be plotted in a matrix. Works Cited Austin Business Journal, Mixed Use Project Set Near Samsung, Retrieved on line on May 3, 2006 from, www.bizjournals.com Bridging the Chinese Supply Gap, February 1, 2006, retrieved on line on April 3, 2006, from www.reed-electronics.com Kim, Chris, Samsung Digital World Management, Retrieved on line on May 3, 2006, from www.samdung.com Kim, Jai, Hoon, Samsung Electronics breaks 5 million mark in LCD's, Retrieved on line on May 3, 2006, from www.samsung.com Namakura, Dominique, Survival Game for Consumer Electronics, Newsletter from Japan, April 21, 2006, Retrieved on line on May 3, 2006, from www.emsnow.com SDI America, Retrieved on line on Read More