Case Study

Samsung Electronics: Global strategies

17 pages
November 2013
Reference: IMD-3-2444

This case study describes how Samsung Electronics transformed into a world-class company and the strategic challenges it faces as it looks to sustain its success in both developed and emerging markets. It has been 20 years since Lee Kun-Hee announced the New Management initiative that played a crucial role in transforming Samsung from a second-tier Korean firm producing low-quality products to a first-rate global electronics firm. In less than two decades, Samsung has become a leading global brand known for innovative products. In 2012, Samsung achieved $188 billion in sales, had the leading global market share in the mobile phone and TV businesses, and was the 9th most valuable brand in the world according to Interbrand. A key factor in Samsung’s growth was its push into emerging markets: while other multinational firms were reluctant to enter emerging markets due to risky business environments, Samsung created strong positions in many emerging markets, including the priority markets of China and India. The case provides a platform for exploring how Samsung was able to achieve success in both developed and emerging markets at the same time – a feat that its main competitors such as Nokia and Apple did not achieve. A closer look at the strategic approaches in the key emerging markets of India and China illustrates how Samsung’s performance varied across products and regions. The case also provides an opportunity to discuss the topic of innovation and how multinational companies (MNCs) such as Samsung can come up with solutions to the unique challenges faced by price-sensitive emerging market consumers having to deal with institutional voids. Even though the context is consumer electronics, the lessons that this case provides should appeal to other companies and industries as they seek to strategically position themselves for future challenges and opportunities in both developed and emerging markets.

Learning Objective

Our objective in this case is to stimulate discussion and reflection on the following key issues: 1) Organizational transformation: Lee and his top management team led Samsung to prosperity through the New Management initiative that created a more focused, efficient and international organization. 2) Strategic innovation: Samsung achieved success in emerging markets by importing innovations from developed markets and focusing on local innovations and adaptations. 3) Competing in emerging markets: Samsung’s advantages in speed have contributed to its success in developed markets. Can its strengths in speed be helpful in both emerging markets and developed markets at the same time? 4) Sustaining success: Samsung is a leader in key product categories in both developed and emerging markets – can it remain on top in the fast-moving consumer electronics industry in the face of strong global and local competition?

Keywords
Consumer Electronics, Emerging Market, Organizational Transformation, Strategic Innovation
Settings
South Korea
Samsung Electronics, Manufacturing, Electric and Electronic Equipment
1993 to present
Type
Field Research
Copyright
© 2013
Available Languages
English
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