Samsung Case Study: The World's Number 1 Smart Phone Maker

Assignment 1  

Fall 2015

Quick trivia question: Name a global superpower technology company, that is the world's biggest seller of smartphones headed by a charismatic CEO surrounded by a cult of personality. I'm guessing most of will just said Apple, right? You would be wrong. The answer is Samsung (Sullivan, 2013). This strong introduction was given during a live radio interview on National Public Radio (NPR) which was hosted by Laura Sullivan.

Bloomberg journalist Sam Grobart gained access at Samsung Electronics in South Korea and shared his experiences on air in during this live radio show. The gist of the interview was how Samsung catapulted to be the one of the world’s smartphone maker.

According to the assigned case study , the man behind this huge success is no other than chairman Lee Kun Hee.  Since Lee took control of Samsung in 1987, sales have surged to over $175 billion, from the modest start in making household appliances and all among other things in South Korea, through Chairman Lee’s vision, Samsung became the world’s largest electronics maker and now considered the number one smartphone maker.

The company’s goal was global market recognition. Although Samsung earned billions in revenue on electronics and appliances, through chairman Lee’s keen desire in success and competition; he saw the potential in the smartphone industry. By manufacturing its components to other companies like Apple Inc., Samsung gains insight into how the smartphone industry works. From this experiences, Lee saw the opportunity in joint ventures, thus Samsung started selling the components all over the world.

Eventually, the company decided to compete with the companies it has been supplying smartphone parts.  Samsung made massive investments in facilities and technologies in order to surpassed its competitors, thereby leveraging its foothold into a position that other companies have little chance of matching.  Samsung successfully executed this strategy with LCD panels for televisions and flash memory for iPods, iPhones, iPads and all other smartphones.  It is now the market leader for all of these products.  In 2012 it surpassed Nokia to become the world’s largest mobile phone manufacturer.

The following case study questions depicts Samsung success in being the world’s number one smartphone maker:

1. What is Samsung’s approach toward managing the global environment ?

Samsung enters potentially lucrative global markets by initially establishing itself as an outsourcing organization capable of providing mass manufacturing expertise and lots of upfront capital. After gaining sufficient understanding of how the industry works, it begins competing with the companies it formerly supplied, using its manufacturing expertise and large amounts of capital as a competitive barrier.