Samsung – History, Brand Value, and Brand Strategies

Samsung is a South-Korean multinational company. Its headquarters is situated in Seoul. Samsung comprises numerous affiliated businesses, all of which are united under this brand.

Samsung started as a small trading company by Lee Byung-Chul, with forty employees in 1938 in Su-dong (now Ingyo-dong). It started its business by selling local groceries. Over the next three decades, the company diversified into the area of food processing, textiles, insurance, securities, and retail.

Samsung History

The company entered the electronics industry in the late 1960s and the construction and shipbuilding industries in the mid-1970s. Following Lee’s death in 1987, Samsung was separated into four business groups- Samsung Group, Shinsegae Group, CJ Group, and Hansol Group.

Since the 1990s, Samsung has increasingly globalized its activities, especially its mobile phones and semiconductors have become its most important source of income. Notably, Samsung’s affiliates include Samsung Electronics, Samsung Heavy Industry, Samsung Engineering, and Samsung C&T.

The company has a powerful influence on South-Korea’s economic development, media, and politics. Its affiliate companies produce around a fifth of South Korea’s total exports, and they contribute to a large percentage of South Korea’s GDP.

Samsung Brand Value

Samsung diversified into many different areas. Lee sought to establish Samsung as a leader in a wide range of industries. Samsung moved into lines of business such as insurance, securities, and retail.

In 1947, Cho Hong-Jai, the Hyosung group’s founder, jointly invested in a new company called Samsung Mulsan Gongsa, or the Samsung Trading Corporation, with Samsung’s founder Lee Byung-Chul. The trading firm grew to become the present-day Samsung C&T Corporation.

Later, Samsung Group was separated into Samsung Group and Hyosung Group.

In the late 1960s, Samsung Group entered the electronics industry. It formed several electronics-related divisions, such as Samsung Electronics Devices, Samsung Electro-Mechanics, Samsung Corning, and Samsung Semiconductor & Telecommunications.

In the 1980s, Samsung Electronics began to invest heavily in research and development; these investments act as the pivotal force pushing the company to the global electronics industry. In 1982, it built a television assembly plant in Portugal; in 1984, a plant in New York; in 1985, a plant in Tokyo; in 1987, a facility in England and another in Austin, Texas in 1996, which was one of the largest single foreign investments.

Samsung started rising as an international corporation in the 1990s. Their construction branch was awarded for constructing Petronas Towers in Malaysia, Taipei101 in Taiwan, and Burg Khalifa in the United Arab Emirates. By 1992, Samsung became the world’s largest producer of memory chips and 2nd largest chip maker after Intel. In 1995, it created its first Liquid-Crystal-Display, and it grew as the world’s largest manufacturer of LCD panels. 

Compared to other major Korean companies, Samsung survived the 1997 Asian financial crisis relatively unharmed. However, Samsung Motor was sold to Renault at a significant loss. As of 2010, Renault’s Samsung is 80.1 percent owned by Renault and 19.9 percent owned by Samsung. Additionally, Samsung manufactured a range of aircraft from the 1980s to the 1990s.

In 2012, Samsung Electronics became the world’s largest mobile phones makers. But they suffered a great penalty of $1.05 billion to Apple for violating six of its patents on smartphone technology. In 2015, Samsung was granted 7679 utility patents which are more patents than any other company.

Samsung Electronics is currently in 7th position on the world’s most valuable brands list Forbes with a brand value of $53.1 billion and brand revenue of $221.6 billion, their headquarters is in Suwon, South Korea. The company was listed 3rd in the Top 100 digital companies list 2019.

Samsung Brand Strategies

Broad Differentiation

Samsung is highly flexible with its business strategies; they have changed its strategies dramatically based on external business factors from initially starting as a grocery store in 1938 and other food consumption businesses to later engaging itself as an insurance and securities business.

And then moving towards the electronic market, building semiconductors and chips, then expanding into mobile technologies. But among these frequent changes in business and adapting to new markets, we can find some important features followed by them to this day. Samsung maintains a competitive advantage by targeting a wide market and providing unique products to their target audiences, from LCD television to smartphones and laptops.

Understanding the market

Samsung closely observes the market, and they are fast in replicating new products and/or introducing new features to existing products that other companies initially introduced.

Especially in smartphone technologies, Samsung has proved effective in replicating the design and important features of its main competitors in the market, like Apple. Samsung then developed a series of new devices as a combination of phone and tablet, which proved to be an unexpected hit.

Samsung entering a new market will cause an increase in market growth and its market shares. By adopting this strategy, they enter a new market by targeting new customers in other areas. A new market for Samsung could be a new country or a new city within the same country it is operating in before. 

Utilizing market opportunities

Samsung constantly searches for the gap in the market and exploits opportunities with positive implications for the bottom line.

An example of this can be the need for a device that could help draw characters; this need was particularly in Asian-language speakers; the company introduced an electronic pen sold with the phablets, and the product helped in a valuable gain for the company. 

Research work and patents

Samsung electronics started investing hugely in research work, and they have benefited most from it. Their extensive product range includes hundreds of product types and is arranged along with three product divisions: IT & Mobile Communications, Consumer Electronics, and Device Solutions.

The company has around 36 Research and Development centers worldwide to secure future core technology. In 2015, Samsung was granted 7679 utility patents, more patents than any other company. Samsung targets the same old customers with a new production company. 

Diversification

Samsung Group’s diversified business operations maintain multiple revenue channels and spread risk across industries and markets.

This intensive growth strategy’s implementation is infrequent in the technology conglomerate, considering regulatory hurdles and other barriers. With the strategic objective of establishing new profitable businesses, the diversification strategy grows Samsung typically through acquisitions of smaller firms, such as Harman International Industries.

The minor role designation of this intensive growth strategy limits the risks of establishing new business operations. In implementing diversification, the differentiation generic competitive strategy is also applied for competitiveness and strategic alignment among Samsung subsidiaries’ business operations.

Competitive Pricing

Samsung is an authentic brand, and whichever global market it enters, they uphold the brand value among its customers. Samsung produces various products. Even though it holds an edge in technologies like smartphones etc., they do not hold an edge in all the technologies. To withstand the competition with market leaders, Samsung uses its vital competitive pricing strategies.

Conclusion

Samsung’s generic and intensive growth strategies direct the organization’s growth and development. Differentiation plays a major role in building the company’s competitive advantage. However, other generic competitive strategies, such as cost leadership and focus strategies, also support the technology enterprise and its competitiveness.

Samsung’s operations management strategies and administration must align with the differentiation generic and intensive growth strategies to support business growth while competing against Apple, Google, Sony, and other aggressive multinational companies.

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