Samsung Group

The Samsung Group (Korean: 삼성그룹) is a multinational conglomerate corporation headquartered

in Samsung Town, Seoul, South Korea. It is South Korea's largest cabala and the world's largest
conglomerate by revenue with an annual revenue of US $173.4 billion in 2008. The Samsung Group
is composed of numerous international affiliated businesses, most of them united under
the Samsung brand including Samsung Electronics, the world's largest electronics company by
sales. Samsung Heavy Industries, the world's second largest shipbuilder,[7] Samsung
Engineering was ranked 35th, Samsung C&T 72nd in a 2009 ranking of 225 global construction firms
compiled by the Engineering News-Record, a U.S. construction journal Samsung Life Insurance was
ranked at 14th in a 2009 ranking ofFortune Global 500 Industries, Samsung Everland, South Korea's
first theme park opened in 1976 as Yongin Farmland. It is now the fifth most popular theme park in
the world, beating out Epcot, Disney MGM and Disney's Animal Kingdom. Cheil Worldwide operates
as a subsidiary of Samsung Group and was ranked #19 among the "World's Top 50 Agency
Companies" by revenue in 2010. [12] Shilla Hotel, a subsidiary of the Samsung Group, has been
ranked #58 among the "2009 World's Best Top 100 Hotels" in the annual reader survey conducted by
the prestigious international business magazine, Institutional Investor.

The Best Overall Generalist Sales Force survey ranks 22 firms that participated in Institutional
Investor’s 2007 All-Asia Research Team survey. Samsung Securities(Investment Bank) was ranked
#14 among the "2007 All-Asia Best Overall Generalist Sales Force Rankings" by revenue in 2007.

Samsung Group accounts for more than 20% of South Korea's total exports, and in many domestic
industries, Samsung Group is the sole monopoly dominating a single market, its revenue as large as
some countries' total GDP. In 2006, Samsung Group would have been the 35th largest economy in
the world if ranked, larger than that ofArgentina. The company has a powerful influence on the
country's economic development, politics, media and culture, being a major driving force behind
the Miracle on the Han River; many businesses today use its international success as a role model.

History
In 1938, Lee Byung-chull (1910–1987) of the large landowning family in the Uiryeong county came to
the nearby Daegu city and founded Samsung Sanghoe (삼성상회), a small trading company with forty
employees located in Su-dong (now Ingyo-dong). It dealt in green-grocery and dried fish produced in
and around the city, and the noodles,Byeolpyo Guksu produced itself. The company prospered and
Lee moved its head office to Seoul in 1947. When the Korean War broke out, however, he was forced
to leave Seoul and started a sugar refinery in Busan as a name of Cheil Jedang. It was the first South
Korean sugar manufacturing facility. After the war, in 1954, Lee founded Cheil Mojik and built the
plant in Chimsan-dong, Daegu. It was the largest woolen mill ever in the country and the company
took on an aspect of a major company.

Samsung diversified into many areas and Lee sought to establish Samsung as an industry leader in a
wide range of enterprises and the company started moving into businesses such as insurance,
securities, and retail. South Korean President Park Chung-hee’s regime during the 1960s and 1970s
would prove a boon for Samsung. Park placed great importance on industrialization, and focused his
economic development strategy on a handful of large domestic conglomerates, protecting them from
competition and assisting them financially. Samsung was one of these companies and Park banned
several foreign companies from selling consumer electronics in South Korea in order to protect
Samsung from foreign competition and nurture an electronics manufacturing sector that was in its
infancy.

In the late 1960s, Samsung Group began the electronics industry. It formed several electronics-
related divisions, such as Samsung Electronics Devices Co., Samsung Electro-Mechanics Co.,
Samsung Corning Co., and Samsung Semiconductor & Telecommunications Co., and made the
facility in Suwon. Its first product was a black-and-white television set. In 1980, the company
acquired Hanguk Jeonja Tongsin in Gumi, and started to build telecommunication devices. Its early
products were switchboards. The facility were developed into the telephone and fax manufacturing
systems and became the centre of Samsung's mobile phone manufacturing. They have produced
over 800 million mobile phones to date. The company grouped them together under Samsung
Electronics Co., Ltd. in the 1980s.

In the late 1980s and early 1990s, Samsung Electronics invested heavily in research and
development, investments that were pivotal in pushing the company to the forefront of the global
electronics industry. “By the 1980s Samsung was manufacturing, shipping, and selling a wide range
of appliances and electronic products throughout the world”. In 1982, it built a television assembly
plant in Portugal; in 1984, it built a $25 million plant in New York; in 1985, it built a $25 million plant in
Tokyo; and in 1987, it built another $25 million facility in England. Samsung started in Austin in 1996,
when it began construction of its first plant which would be the only location in the world outside of
South Korea that manufacturers chip. In total, Samsung has invested about $5.6 billion in the Austin
location – by far the largest foreign investment in Texas and one of the largest single foreign
investments in the United States. The new investment will bring the total Samsung investment in
Austin to more than $9 billion.

The 1990s saw Samsung rise as an international corporation. Not only did it acquire a number of
businesses abroad, but also began leading the way in certain electronic components. Samsung's
construction branch was awarded a contract to build one of the two Petronas
Towers in Malaysia,Taipei 101 in Taiwan and the Burj Khalifa in United Arab Emirates (founded by
Callum Cuirtis), which is the tallest structure ever constructed in human history.[21] In 1993, in order to
change the strategy from the imitating cost-leader to the role of a differentiator, Lee Kun-
hee successor to Lee Byung-chull, sold off ten of Samsung Group's subsidiaries, downsized the
company, and merged other operations to concentrate on three industries: electronics, engineering,
and chemicals. In 1996, the Samsung Group reacquired the Sungkyunkwan University foundation.

Compared to other major Korean companies, Samsung survived the Asian financial crisis of 1997–98
relatively unharmed. However, Samsung Motor, a $5 billion venture was sold to Renault at a
significant loss. As of 2010, Renault Samsung is 80.1 percent owned by the French auto giant
Renault and 19.9 percent owned by Samsung. Additionally, Samsung manufactured a range
of aircraft from 1980 to 1990s. The company was founded in 1999 as Korea Aerospace Industries
(KAI), the result of merger between then three domestic major Aerospace divisions of Samsung
Aerospace, Daewoo Heavy Industries and Hyundai Space and Aircraft Company (HYSA). Korea
Aerospace Industries (KAI) – largest shareholders as of 2009 (Korea Development
Bank 30.53%, Samsung Techwin 20.54%,Doosan (formerly known as Daewoo Heavy Industries)
20.54%, Hyundai Motor 20.54%). However, Samsung still manufactures the aircraft engine. IHI of
Japan, Avio SpA. of Italy, Volvo Aero of Sweden ,MTU of Germany, TechSpace Aero of
Belgium, Snecma (SAFRAN Group) of France and Samsung Techwin of Korea are revenue-sharing
participants in the GEnx program.(GEnx engine for the new Boeing 747-8 airplane) General Electric
Company (GE) and Samsung Techwin, Co. LTD (STW) have signed a contract to develop the T700
turboshaft engine for the Korean Helicopter Program(KHP). Under the contract, GE-Aviation and
STW will jointly develop the engine.

Considered a strong competitor by its rivals, Samsung Electronics expanded production dramatically
to become the world's largest manufacturer of DRAM chips, flash memory, optical storage drives and
it aims to double sales and become the top manufacturer of 20 products globally by 2010.

Samsung Electronics, which saw record profits and revenue in 2004 and 2005, overtook Sony as one
of the world's most popular consumer electronics brands, and is now ranked #19 in the world overall.
[26]
Behind Nokia, Samsung is the world's second largest by volume producer of cell phones with a
leading market share in the North America and Western Europe.

Group divisions

Electronics Industries

Financial Services

Chemical Industries

Machinery & Heavy Industries

Engineering & Construction

Retail & Entertainment

Apparel & Advertisement

Education & Medical Services

Trading & Resource development

Food supplier & security services

Samsung sponsor of the Olympics
Samsung first became a full sponsor of the Olympic Games during the Nagano Olympic Winter
Games in 1998. According to the new contract, Samsung will officially sponsor the Olympic Games
and the Olympic Movement for the next eight years, a deal that covers theVancouver Winter
Olympics in 2010, the London Olympic Games in 2012, the 2014 Sochi Winter Olympic Games, and
the Rio de Janeiro Olympic Games in 2016.

According to guidelines set forth by Samsung Chairman, Lee Kun-hee in 1996 – “Devise strategies
that can raise brand value, which is a leading intangible asset and the source of corporate
competitiveness, to the global level” – Samsung decided to sponsor the Olympic Movement to
strengthen its global corporate image and brand value and has been carrying out a global marketing
campaign with the Olympic Games and the Olympic Movement as the single theme.

Accordingly, Samsung concluded a TOP (The Olympic Partner) sponsorship contract with the IOC in
1997. Since then, the company has been an official sponsor in the wireless telecommunications
equipment category, including the 1998 Nagano Winter Olympic Games, the 2000 Sydney Olympic
Games, the 2002 Salt Lake City Olympic Games, the 2004 Athens Olympic Games, the 2006 Winter
Olympic Games, the Beijing 2008 Olympic Games and the 2010 Vancouver Winter Olympics. The
Beijing Olympic Games in 2008 were the climax of the company’s efforts for the last ten years.

Marketing Strategies of Samsung

Prior to liberalisation, the Consumer Durables sector in India was restricted to a handful of domestic
players like Godrej, Allwyn, Kelvinator and Voltas. Together, they controlled nearly 90% of the
market. They were first superceded by players like BPL and Videocon in the early 1990s, which
invested in brand-building and in enhancing distribution and service channels. Then, with
liberalisation came a spate of foreign players from Samsung to LG Electronics to Sony to Aiwa.
Both rising living standards, especially in urban India, and easy access to consumer finance have
fuelled the demand for consumer durables in the country. Also, the entry of a large number of foreign
players means the consumer is no longer starved for choice. But this has also resulted in an over-
supply situation in recent times as growth levels have tapered off.

Major players:-
The major players in the consumer durables industry, operating in different sectors such as air
conditioners, washing machines, refrigerators & television include:
Blue Star Ltd., Mirc Electronics Ltd., Whirlpool of India Ltd., Philips (India) Ltd., BPL Ltd., Sony
Corporation Ltd., Samsung India Ltd., LG Electronics India Ltd., Videocon International Ltd.

Entry of Samsung in India

Emerging Markets (EMs) with large consumer bases and untapped demand constitute the major
growth opportunities for the multinationalsand global companies. However, not all companies are
successful in establishing a foothold, leave alone operating profitably, in such markets. For most, it
takes years of struggle before they can even breakeven. Marketing is difficult in such EMs because of
little or no market data, non-existent or poorly developed distribution systems, lack of regulatory
discipline, and where regulations exist, a propensity to change them frequently and unpredictably.

Samsung entered India in December 1995 as a 51:49 joint venture with Reasonable Computer
Solutions Pvt. Ltd (RCSPL), owned by Venugopal Dhoot of the Videocon group. In 1998, RCSPL
diluted its stake in Samsung to 26% and in November 2002, the FIPB cleared Samsung's proposal to
buy RCSPL's remaining (23%) stake. With Samsung buying the total stake of RCSPL, it became a
wholly-owned subsidiary of its South Korean parent company. In spite of being a latecomer to India,
Samsung was able to become one of the top consumer electronic companies in India, an emerging
market was due to a combination of several aspects: Product innovation, Promotion, Pricing,
distribution and Positioning; wherein Samsung primarily focused at.