Industry System and Environment in Samsung Group - Case Study Example

Name : Tutor : Title : Institution : @2015. Samsung Group is the greatest Chaebol or group in South Korea. It is an international company with its headquarters in Samsung Town. It was started in 1938 by Lee Byung-Chul as a trading company. In the following three decades, it diversified into other areas including insurance, food processing, retail, textiles and securities. In late 1960s, Samsung entered the electronics market. In mid-1970s, it started construction and shipping industries. These latest areas are the ones that have made the company to grow most. After Lee’s death in 1987, Samsung divided into four business groups; Shinsegae Group, Hansol Group, CJ Group and Samsung Group. Samsung has grown enormously conducting its activities globally and selling electronics like semiconductors and mobile phones. (Samsung 2010). The major industrial subsidiaries of Samsung are; Samsung Electronics, which is the greatest information technology company as per 2012 revenues. Samsung Heavy Industries, which is the world’s second most major shipbuilder as per 2010 earnings, Samsung Engineering and Samsung C&T, which are among the world’s largest construction companies. Samsung Life Insurance, one of the world’s greatest insurance companies, Samsung Everland, which operates the Everland Resort and Cheil Worldwide, which is a great advertising agency are among other prominent subsidiaries of Samsung. (Samsung 2011). Samsung Electronics is greatest subsidiary, according to the 2011 report. It has 144 consolidated subsidiaries. It has three major divisions; the Device Solutions which is a Business to Business (B2B) division deals with Liquid Crystal Display (LCD), semiconductors, chips and other components, Digital Media & Communications (DM&C) which is a Business to Computer (B2C) Company dealing with computers, mobile phones, televisions and other appliances and Samsung Advanced Institute of Technology (SAIT) which is the research power and which deals with new businesses. The structure of Samsung Electronics. The Samsung Value Chain. Samsung and its affiliates, being a hi-tech company, are doing their best to keep the leadership in all the fields related to media and mobile technologies. It is intellectually spearheaded by Samsung Advanced Institute of Technology (SAIT). The Institute together with its related bodies starts preparation for developing a new product by away of the first of the three layers of developing the product. The following ones are at the middle of the Digital Media and Communications division and every product category. (Samsung 2010). The components’ procurement is mainly based on Samsung Electronics Device Solution division together with its affiliates. The products that are not in that division are acquired by a transparent process. They are the assembled in the required factories of that group all over the world. The Device Solutions and Digital Media part gets divided into B2B and B2C. The B2B deals with marketing and logistics that major on Korean and Incheon airport. The B2C deals with global Enterprise Research Planning (ERP) system and sophisticated logistics which are managed by Samsung Digital System (SDS) and Samsung Electronics Logitech. The sales and marketing occur under another management structure, depending on geographical area and not a product. It works with outsourced vendors and logistics in every market. Samsung was positioned 7th out of 25 in the world leading companies due to its integration in the field in the year 2007. (Samsung 2010). Future Technology – Connected Vehicles and Mobile Media. In both Mobile Media and Connected Vehicles, the technology used, and the one that will get used in future depend on the same concept called the ‘smart’ idea. Thus, development in the mobile media will also result in the development of the connected vehicles. Mobile media which is currently involving phones, tablets together with other devices is very advanced considering the usage by consumers and the quick technological development as compared to connected vehicles. In related cars, only some aspects have been created for general usage like navigation by use of Global Positioning System (GPS) and other specific telecommunication functions. Currently, all the vehicles are developed fitted with computers. The future designs also show that the cars that will get made in future will also have computers. It will make it very easy to achieve the desired goal of connected vehicles. (Samsung 2011). From the current available devices and systems, it is very easy to conclude that future devices will be more advanced and extremely sophisticated. The technology is rapidly increasing at a high rate. The tools made like computers, and mobile phones continue getting smaller and more powerful. The devices that will get made in future will be more intelligent and human-like. They will be able to perform many of the activities that people do. They will also be able to sense more like people since the available ones are already more intelligent. With the advancements in technology, communication will be very easy, and people will be able to share information very easily. The Oracle value chain has been used to base Samsung value chain for its hi-tech businesses and increasing logistics that are crucial to the size of the Samsung Electronics Company. The framework of Samsung value chain is explained to show the unique difference between the connected vehicle value chain and the mobile media value. Activities like product development, basic research and design are classified as essential primary activities and not support activities like in others. (Samsung 2010). Technology development and to some extend the product development from the first part of the value chain, even before inbound logistics and procurement. It adds more value to the at this stage for the connected vehicles more than the mobile media because the business model for connected vehicles does not get yet established while that for mobile media is already leading globally. Samsung has succeeded in coming up with a complex organization that helps to create new products as well as furnishing the initial ones. (Samsung 2011). Beginning late 1990s, Samsung has continuously participated in competitive leadership starting with memory chip design, followed by LED technologies and currently mobile telephony. Samsung R&D consists of three layers;  The Samsung Advanced Institute of Technology (SAIT) which makes sure that Samsung technology is competitive in the primary business areas. It determines the development engines for the future and supervises the acquisition and management of technology involving patents.  The R&D centers for every business major on technology that is required to produce the best and long-term results. Every part of the SEC has a research department though all of them ca outsource projects to a third party or SAIT.  The divisional product development teams which work together with the design centers, and which handle marketing products planned to enter the market within one or two years. The major centers outside Korea. Cleaner Production. Cleaner Production is a company specific initiative for environmental protection. Its primary aim is to reduce waste and emissions and increase the product output. Recycling is the first step in environmental preservation. Samsung has been in the forefront to help in realizing sustainable environment through recycling products at the end of their life. (Samsung 2012). Collection and recycling electronic waste in Korea. Recycling scheme: Samsung Electronics was the initial electronics in the whole of Korea to start a system for collecting and recycling electronic waste that was no longer needed by the consumers.Through adaptation of the initiative, it has immensely contributed to protecting the environment and efficiently utilizing resources. (Samsung 2010). Collection system: Samsung Electronics started a collection system that involves around 228 logistic centers and 1560 retail stores worldwide to help in collecting electronic goods that have reached the end of their life for upgraded customer services. (Samsung 2011). Recycling System: The set recycling system processes the electronic waste collected. It consists of a network of centers including Asan Recycling Center which is in Asan, the entirely Samsung funded Chungcheongnam-do, the Metropolitan Recycling Center which was also started by Samsung and other six plants which have been contracted for recycling. The goods recycled include washing machines, air conditioners, refrigerators, microwaves, televisions among others. (Samsung 2010). When Samsung started sustainability management in 2003, it had the aim of environmental sustainability as eco-value creation. It states that externally, a company contributes to the community by developing eco-values and the internal environment as one of the major features in business management makes critical values. Currently, Samsung has five strategies that get used in all the activities of corporate processes. The five strategies involve combined environmental management system for progressive improvement of systems and organizations, cleaner production for less resource utilization and reduction of pollution, environmental supply chain management to create great partnership with the suppliers, eco-design to make environmental standards for consumers, and interactive communication. Samsung worked out accordingly for plans to carry out each strategy and has executed them continuously. Eco-network. To come up with real eco-values, all the life-cycle that is associated with the management company should be considered, and a good partnership should exist between the customers, the environment, suppliers and partners and the society that is surrounded by the Samsung SDI. You have to emit and take less from the environment so as to conserve it. The partners and suppliers, the society and customers, you exchange and cooperate more. It is the direction taken by the Samsung SDI. Samsung has always made protecting the global environment one of their greatest priorities. It got achieved by creating energy-saving solutions, developing greener activities and reducing the problem of carbon emissions. The company through the initiative is making its business more efficient and also it is assisting in environmental preservation for future generations. Samsung has created a green culture for its entire business. Green management: Samsung is aware that environmental awareness is the pivot of sustainable commercial development. It has advanced health, safety and environmental system created to enhance production of greener processes, workplaces, and products and to promote the local communities positively. The company works only with the suppliers who have passed the Eco-Partner Programme to allow them supply their raw materials and parts. The company works together with the others to minimize the levels of hazardous substances that gets found in the raw materials and also help them to create the management systems of the environment. (Samsung 2012). Green products: Samsung has done many activities that involve the whole product life-cycle to better the environmental performance of the product. It is a leader in increasing new eco-friendly design aspects and making processes to the products. Samsung takes responsibility in recycling techniques and developing user-friendly devices. (Samsung 2012). Green processes: Samsung is creating cleaner technologies by refurbishing activities and facilities while turning to substitute resources in efforts to be sensitive to the environment. It is also trying to reduce the pollutants released while manufacturing products and minimize the energy used in the company. Green Workplace: Samsung gets fully determined to pollution-free, safe and environmentally aware workplaces for their employees. It involves safety training, pollution monitoring and prevention and fire prevention in the workplaces. It does everything to ensure that customers and workers enjoy hazard free and greener environment. (Samsung 2012). Bibliography Samsung Electronics, http://www.samsung.com/us/aboutsamsung/ir/financialinformation/annualreport/downloads/2010/SECAR2010_Eng_Final.pdf 20 May 2015. Samsung Electronics, Business Report page 20-33, the data has been preceded by the consultants http://www.samsung.com/us/aboutsamsung/ir/financialinformation/businessreport/download/2011_business_quarter02.pdf 20 May 2015. Samsung Electronics http://www.samsung.com/us/aboutsamsung/sustainability/sustainabilityreports/download/2011/2011%20About%20Samsung%20Electronics.pdf 20 May 2015. Samsung Electronics’ Business Report, page 20-33, the data has been proceeded by the consultants http://www.samsung.com/us/aboutsamsung/ir/financialinformation/businessreport/download/2011_business_quarter02.pdf 20 May 2015. Samsung Electronics Financial Highlights http://www.samsung.com/us/aboutsamsung/ir/newsMain.do 20 May 2015. Samsung Electronics Consolidated Statements of Financial Position, Income Statement, data interpreted by the Consultant http://www.samsung.com/us/aboutsamsung/ir/financialinformation/auditedfinancialstatements/downloads/consolidated/2011_Consolidated_all.pdf 20 May 2015. Read More