Case Study Of Samsung
Case Study of Samsung’s Mobile Phone Business
I. Introduction
For Samsung Electronics, 2003 was a watershed year. It successfully positioned itself as one of the world’s best mobile phone manufacturers and its products were featured all over the media. Many were calling its mobile phones as “the best gift for Christmas”1 or “the Mercedes of mobile phones.”2
Samsung’s achievements were particularly remarkable considering that its primary focus had previously been in semiconductors and home appliances. Indeed, when it first made the decision to enter the mobile phone business, industry observers viewed the move as foolhardy and reckless. But, much to their surprise, Samsung’s foray into the market turned out to be a great success, contributing significantly to the company’s profit growth and brand reputation.
In 2003, Samsung posted net profits of 6 trillion won ($5 billion) on annual sales of 43.6 trillion won ($37.9 billion). As of April 2004, its market capitalization stood at around 100 trillion won ($87.4 billion). It had also surpassed Sony, which had been a benchmark for Samsung, in terms of revenues and market capitalization. (Exhibit 1)
Samsung’s exports currently account for two-thirds (79%) of total sales. In addition, Samsung has built its brand around the world; in 2003, the ‘Samsung’ brand was ranked 25th in the annual BusinessWeek/Interbrand study of the world’s most valuable brands, having grown from $8.31 billion in 2002 to $10.85 billion in 2003. (Exhibit 2)
Few would deny the claim that Samsung has achieved remarkable success in the global market. As such, it could be worthwhile to take a closer look to find out which factors have contributed most to its success. In particular, we should focus our attention on the company’s emerging mobile phone business, which has achieved some of the most outstanding gains of any of Samsung’s business lines.
The objective of this study is to gain helpful insights into how a late-comer to an industry can
I. Introduction
For Samsung Electronics, 2003 was a watershed year. It successfully positioned itself as one of the world’s best mobile phone manufacturers and its products were featured all over the media. Many were calling its mobile phones as “the best gift for Christmas”1 or “the Mercedes of mobile phones.”2
Samsung’s achievements were particularly remarkable considering that its primary focus had previously been in semiconductors and home appliances. Indeed, when it first made the decision to enter the mobile phone business, industry observers viewed the move as foolhardy and reckless. But, much to their surprise, Samsung’s foray into the market turned out to be a great success, contributing significantly to the company’s profit growth and brand reputation.
In 2003, Samsung posted net profits of 6 trillion won ($5 billion) on annual sales of 43.6 trillion won ($37.9 billion). As of April 2004, its market capitalization stood at around 100 trillion won ($87.4 billion). It had also surpassed Sony, which had been a benchmark for Samsung, in terms of revenues and market capitalization. (Exhibit 1)
Samsung’s exports currently account for two-thirds (79%) of total sales. In addition, Samsung has built its brand around the world; in 2003, the ‘Samsung’ brand was ranked 25th in the annual BusinessWeek/Interbrand study of the world’s most valuable brands, having grown from $8.31 billion in 2002 to $10.85 billion in 2003. (Exhibit 2)
Few would deny the claim that Samsung has achieved remarkable success in the global market. As such, it could be worthwhile to take a closer look to find out which factors have contributed most to its success. In particular, we should focus our attention on the company’s emerging mobile phone business, which has achieved some of the most outstanding gains of any of Samsung’s business lines.
The objective of this study is to gain helpful insights into how a late-comer to an industry can
References: Chung, J., “The Secrets of the Anycall Myth,” Hit Product Research Vol. 286, 1999 Hyun, S., Han, M., and Yeh, J., “Anycall: Building a Powerful Brand,” Korea Marketing Journal Vol Joo, T., “Samsung Electronics Co., LTD.: Digital Convergence in the U.S. Mobile Phone Market (A), Darden Graduate School of Business Case, UVA-S-0106, 2003 Kim, J Kim, JH., “Success Strategy of Advertisement: Samsung Anycall,” Advertisement Information, Vol. 250, 2002 Kim, JW Kim, M. and Kwon, J., “Strategies and Insights of Major Mobile Phone Manufacturers,” KISDI IT FOCUS, Vol. 15(14), 2003 Kim, S Lee, B. et al., “Samsung Rising,” The Korea Economic Daily Press, 2002 Na, J., “Three Paradox in the Digital Convergence Era,” LGERI Economy Weekly Vol.690, 2002 Na, J., “Camera Phones, a New Growth Engine in the Mobile Phone Industry,” LGERI Economy Weekly Vol.733, 2003 Na, J., “Critical Assessment of Growing Mobile Phone Industry,” LGERI Economy Weekly Vol.767, 2004 Nam, D., “Securing Competitive Advantage in the Mobile Convergence Era,” LGERI Economy Weekly Vol.756, 2003 “The 30-Year History of Samsung Electronics,” Samsung Electronics Publication, 1999 “Samsung Electronics: Mr. Yun’s Efforts for Upscale Image,” ICFAI Business School Case 303-179-1, 2003 “David Beat Goliath: The Myth of Samsung Mobile,” KBS, December 12, 2003 (Broadcasting material)