The Secret of Samsung's Success - Essay Example

The Secret of Samsung’s Success Introduction Samsung was founded by Byung-Chull Lee in 1938 in Korea. The company was initially a food exporter in Korea and it exported dried fish and flour to China. From its branch in Tokyo, it ventured into textile and in the 1960s, the company shifted into electronics and in 1970s it engaged in shipbuilding. Samsung built huge companies based on sugar and seasonings and textiles; and LG on chemicals for household and industrial consumption (Michell, 13). It also expanded the business by acquiring Han kook Semiconductor. Later on it also introduced first 10 – million seller cell phones, became world’s best TV manufacturer. Samsung claims to have the largest share in the global smart phone market, which is because of the Galaxy smart phones by Samsung. In 2012 it was awarded as a world’s ninth best brand (Tek, n.p). Samsung now stands among the top tier global corporations, possesses good ranking in the superior management, and provides innovation in design along with improving its sales and earnings (Lee, 9). In 2012, the company’s sales were about $ 42 billion and it made a 50% profit in the same year making Samsung the best electronic company amongst its potential competitors Apple and Sony. This paper puts across the secrets of the success of Samsung Company over the years. Samsung’s goal is to establish every inch of customers starting from their homes, new phones, tablets, televisions, washing machines, cameras, dryers, refrigerators, computers among others unlike Apple that focuses on laser electronics. Samsung does a variety and it does it very well. In 2011, Samsung was the world’s top television maker with a market share of 22%. It also had grown in washing machines from 7% to 9% in 2009 and 2011 respectively. The company introduces a variety of products that best serve the customers. Samsung Corporation has successfully blended speediness, imagination and affordability in their offerings to capture the consumers’ attention. It has invested huge sums on extensive research and development to gain and maintain competitive market, Samsung spent around US$ 2.3 billion on research and development (Roll, 154) while its competitors Apple used only 2.4 percent of its revenues on innovation (Roll 154). Focusing on research and development of a variety of products such as refrigerators, tablets, televisions, cameras, new phones, washing machines with features that best suit public demand is the secret behind the success of Samsung. The secret of Samsung’s success is attributed to quality investment and manufacturing. Samsung introduced Samsung galaxy, Smart TV, Smart Phones each with a new feature. The Smart Phones had quality Cameras, enabled the user to access information faster and used a variety of font sizes as preferred by the user. The problem of their competitor Apple has been lack of constant innovation. It has been around 3 years since Apple released the iPod, the company’s last breakthrough product. Its latest products have been iterations of existing gadgets. The iPad Mini is just a smaller iPad and not something new. Samsung’s success is therefore because of its constant innovations of new products such as galaxy S II. Samsung poses great motivation to its employees that make them work even harder for the achievement of the company’s success. It manages the working hours of its employees to ensure no worker is overworked. Their system tallies overtime hours daily by individuals and communicates to the human resource managers. Samsung SDI recommends employees to take leaves available for them. The leave- use record is controlled at the individual level by the system and the employees are only allowed to take their leaves as indicated in the system. To domestic employees, the company provides pension scheme, health insurance, industrial accident insurance, employment insurance, mortgaging support, medical expense support, personal scheme assistance, fitness facilities and recreation facilities to satisfy their employees and create better environment for their workers. In 2012, Samsung SDI carried out a Mental Health Diagnosis on its employees. The company’s counseling center is concerned with the mental wellbeing of its employees and to increase their concentration at work. It creates a forum where employees talk about their problems and find solutions to stress management and psychological problems. Chairman of Samsung Lee Kun leads the organization with zeal for success. He does in depth scanning of the working environment of his employees, he delegates duties strongly and lays great emphasis to employees training hence making Samsung successful in the global business (Adjibolosoo 354), Samsung not only pay their workers well according to the industrial standards but also trains their employees to acquire the highest skills available (Adjibolosoo 359). This has accounted for a higher success of the company compared to Apple and Sony which have less committed workers. Samsung’s success is also attributed to the fair prices its products sell such as smart phones while their rivals Apple heightened the price of their products to unreasonable levels. This made the consumers prefer Samsung to the Apple’s products. Sony became Apple’s competitor by introducing iPhone with the same design and feel as Apple’s iPhone. Samsung on the other hand succeeded to capture and establish a strong market base for their products by keeping their prices lower and affordable to the customers, unlike their rivals (Baaghil, 134). When the fans of Apple were waiting for iPhone 4S, just at that time Samsung introduced galaxy S II at $300 less than the price of Apple’s iPhone 4S. Samsung also introduced galaxy star which is a smart phone with similar features as other smart phones but sold for only $100 hence affordable to the people who could not afford expensive smart phones. By price moderation and making their products affordable, Samsung was able to record great profits. In 2005, Samsung earned seven times the Sony’s net profit of just over 1 billion on revenues of $56 billion that were lower than Sony’s $66 billion (Agtmael, 60). In 2006, Samsung had a market capitalization of $106 billion. This was highly accounted for by the quality products Samsung sells at affordable prices. Samsung’s great success in global business is also attributed to aggressive advertising of its products. Its electronic advertisements are aimed at empowerment of corporate brand identity and product as well as abide by the laws, regulations and moral concerns of the targeted market. Samsung advertise their products on televisions, magazines, billboards, radio station and internet, they also use famous people to advertise their products on television, films, news, music videos among other places. Samsung also advertises its products by sponsoring world Wide recognized events such as the Olympics and other events such as the winter games. By aggressive advertisements Samsung has been able to create a great public knowledge of its products and hence promoted the sell and demand of its products unlike its competitors Apple and Sony. In conclusion, Samsung’s success is attributed to more than one factor. The company’s management strategy and creation of a better environment for their workers as well as focusing on employees’ development gives motivation the workers to work harder every day for the success of the company. Samsung’s innovativeness, aggressive advertisement, fair pricing of its products mark the top secrets to its success in the global electronic business. Its approach to selling is also a secret to the company’s success. While apple and Sony narrow their focus on their advantage, Samsung’s approach is that of selling each and every one of their products so as to make the ultimate profit in the global electronic business. Work Cited Adjibolosoo, Senyo B.-S. K. Portraits of Human Behavior and Performance: The Human Factor in Action. Lanham [Md.: University Press of America, 2001. Print. Baaghil, S Said Aghil. The Power of Belonging: A Marketing Strategy for Branding, 2nd ed, iUniverse. Bloomington: 2013. Print Lee, D Dongyoup. Samsung Electronics: The Global Inc, Dongyoup Lee, YSM, Inc. Korea. 2006. Print Michell, Tony. Samsung Electronics: And the Struggle For Leadership of the Electronics Industry, Jhon Willey and Sons. Singapore. 2010. Print Read More