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					           Samsung Electronics Co.
   Case: a firm’s capability building and its
   contribution to Korea’s economic growth



Processed By G-3
Kyungu Ilunga Maloba;
Mahdi Abdullah Mohammed;
Ulan Jylkybaev Osmonkulovich
                     Content
1.   Background
2.   Main factors of success
3.   Samsung electronics capability building
4.   Interaction of the Korean government
5.   Leadership in global
6.   Samsung contribution to Korea’s economic growth
7.   Conclusion
8.   References
                      1. Background
   Samsung founded in 1938 by Byung-Chull Lee.
       Lee started a small trading company with a $2,000 nest egg and forty
        employees.
       exporter of dried fish, vegetables, and fruits
       flour mill and confectionery machines
       He called it Samsung, which means "three stars" in Korean.
   1950’s Economic Stabilization
       Korean War - Samsung lost all assets
       aimed to help rebuild Korean economy; entered the manufacturing
        industry (sugar, fabrics)
       became a leader in modern business practices (recruiting from
        outside)
   1960’s Expansion of Key Industries
       entered electronics and chemical industries
       1969 established Samsung Electronics Co. as a division of the
        Samsung Group.
                      1. Background
   In 1970s, Samsung's entry into the semiconductors business was
    pivotal for the company, to that end, creation of Samsung's
    semiconductors and telecommunication Co. in 1978.
      laid the groundwork for electronics in Korea
      helped the domestic economy grow
      paved the way for exports
   1980’s: Samsung was manufacturing, shipping, and selling a wide
    range of appliances and electronic products throughout the world.
        A more comprehensive electronics company
        established Semiconductor and Communication corporation
        began memory chip business
   Early 90’s: Integration and Globalization
        Sales at Samsung Group grew more than 2.5 times between 1987 and
         1992.
        Mid-Late 90’s: Implementing new management strategies
         2.Main factors of success

        2.1 - Human resources
         One of Samsung's
    strongest assets is their team of
    talented researchers and
    engineers. More than a quarter
    of all Samsung employees -
    42,000 people - work everyday
    in research and development,
    and this number is in increase
    every year.




                                        Source: http://www.mke.go.kr
         2.Main factors of success

  2.2 R&D network of Samsung
Samsung's R&D organization has three layers :
    1.   The Samsung Advanced Institute of Technology
         (SAIT) Creation;
           1 step: 1987-1993 Laying the Groundwork for Samsung's Central
                R&D Organization.
           2 step: 1994-1998 Building Up Technological Competencies.
           3 step: 1999-2003 Innovating research methods.
           4 step: 2004-Taking Research Competencies to the Top
        2.Main factors of success
   The R&D centers
 This research and development
 network spans six Samsung
 centers in Korea and 18 more in
 nine other countries.
 . Each year Samsung invest at
 least 9% of its sales revenue in
 R&D activities


Division product development
       The division product
development teams are
responsible for commercializing     Source: www.samsung.com
products scheduled to hit the
market within one or two years.
      2.Main factors of success

   2.3 Management
    The hallmarks of leadership at Samsung are
    Creativity, collaboration and excellence. By
    attracting the world's most talented managers
    and continuously evolving their company's
    culture to support them, they foster innovative
    ideas that advance technology, create new
    products and markets, and improve the
    everyday lives of their customers.
        3. Samsung electronics capability
                   building

 Samsung Electronics Co. Ltd. is a case of
  Korea’s National Innovation System and the
  three stages of Samsung development can
  be summarize as following
 Imitation: 1st stage (1970s)
       Reverse engineering
       As a learning process
       Selling imitation product
      3. Samsung electronics capability
                 building
   The 2nd stage: Technology acquisition, assimilation,
    development & transfer (1980s)
      Absorptive capability was important

      Process innovations

      Fast catching-up

   The 3rd stage: Making innovations, competition in
    the leading group (1990~)
      Expansion of Samsung in-house R&D

      Samsung competing in the leading group.

      Creative capability is important

      Product innovations

      Licensed technologies
 4. Interaction of the Korean government

 The government worked with the companies,
  providing protection from competition and
  financial assistance as part of a series of five-
  year national economic growth plans.
 The Korean government introduced the
  Electronics Industry Promotion Law, marking the
  beginning of official support for the industry. It is
  also introduced in 1983 the semiconductors
  promotion policy.
           5. Leadership in global
Samsung Electronics is Asia’s top
electronics company with more
than 134 offices in 62 countries
and over 150,000 employees.

Samsung Electronics Co., Ltd. is
a global leader in semiconductor,
telecommunication, digital media,
components for the computer,
mobile and entertainment markets
and digital convergence
technologies with 2008
consolidated sales of US$96
billion.


                 Source: www.samsung.com
 6. Samsung contribution to Korea’s
         economic growth
Korea's economy, including its electronics
industry, is dominated by the relatively small
number of industrial conglomerates that often
enjoy vertical monopolies
The story of the remarkable growth of Korea's
economy is the story of the growth of electronic
industrial.
According to the Korean Semiconductor Industry
Association (KSIA), domestic chip makers in
1994 relied on foreign manufacturers for 84% of
equipment and 52% of materials
               7. Conclusion
 The Korean government played a major role by
  initiating Korea’s National Innovation System
  (NIS) for development in early 1970s.
 Korea's willingness to invest heavily and long-
  term in R&D, plants, and manpower is
  impressive
 Korea's electronics capabilities in the past 25
  years have undergone remarkably consistent
  and rapid expansion in terms of (1) size and
  capacity of facilities, (2) technological expertise
  and sophistication, and (3) income earned and
  impact on the world market.
  8.Some of Samsung products

Home Multimedia       Mobile Multimedia




Personal Multimedia   Core Components
                                 References
       www.samsung.com
       www.samsungcorp.com
       http://wikipedia.org
       http://www.secc.co.kr
       http://www.wtec.org
       http://www.investkorea.org/
       http://www.mke.go.kr
       http://www.bookrags.com
       Jordan I. Siegel, James Jinho Chang, Samsung electronics Harvard Business school 2006;
       S. Ran Kim, The Korean system of innovation and the semiconductor industry: a governance
        perspective, 1996
       Youngsoo Kim, Technological Capabilities and Samsung Electronics' International Production
        Network in Asia, BRIE, 1997
       International Directory of Company Histories, Vol. 14. St. James Press, 1996.
       http://www.wtec.org/loyola/kei/welcome.htm WTEC report on the Korean electronics
        industry;
       Richard R. Nelson, National innovation systems: a comparative analysis, Oxford University
        Press US, 1993:
            Linsu Kim, National system of industrial Innovation: Dynamics of Capabilities Building in
             Korea;
       Y.Gil, S.Bong, J.Lee, Integration model of technology internalization modes and learning
        strategy: globally late starter Samsung's successful practices in South Korea, Seoul 130-012,
        South Korea, 2001;
            Thank you for your attention!!!


Group 3:
 Kyungu Ilunga Maloba;
 Mahdi Abdullah Mohammed;
 Ulan Jylkybaev Osmonkulovich

				
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