International Advance Technology Education Center I. A. T. E. C. Computer College, Inc. Sta. Rita, Pinamalayan, Oriental Mindoro Samsung Electronics Co. , Ltd. A Case Study Presented to the Faculty of Engineering As Partial Fulfillment in Engineering Management Submitted by: Geminiano M. Cordero Jr. Nico S. Sajul Charlie M. Fanoga Jakeson S. Javier Jonh Phillip N. Fransisco Submitted to: Engr. Robert Belarmino Ramos 1 I. Samsung Electronics Co. , Ltd. According to the founder of Samsung Group, the meaning of the Korean hanja word Samsung (?? is “tristar” or “three stars”. The word “three” represents something “big, numerous and powerful”; the “stars” mean eternity. A. History 1. 1969 to 2000 Samsung Electric Industries was established as a subsidiary of Samsung Group in 1969 in Suwon, South Korea. Its early products were electronic and electrical appliances including televisions, calculators, refrigerators, air conditioners and washing machines. In 1970, Samsung Group established another subsidiary, Samsung-NEC, jointly with Japan’s NEC Corporation to manufacture home appliances and audiovisual devices.
In 1974, the group expanded into the semiconductor business by acquiring Korea Semiconductor, one of the first chip-making facilities in the country at the time. The acquisition of Korea Telecommunications, an electronic switching system producer, was completed at the start of the next decade in 1980. By 1981, Samsung Electric Industries had manufactured over 10 million black-and-white televisions. In February 1983, Samsung’s founder, Lee Byung-chull, made an announcement later dubbed the “Tokyo declaration,” in which he declared that Samsung intended to become a DRAM (dynamic random access memory) vendor.
One year later, Samsung became the third company in the world to develop a 64kb DRAM. ] In 1988, Samsung Electric Industries merged with Samsung Semiconductor & Communications to form Samsung Electronics. Samsung Electronics launched its first mobile phone in 1988, in the South Korean market. Sales were initially poor and by the early 1990s Motorola held a market share of over 60 per cent in the country’s mobile phone market compared to just 10 per cent for Samsung. Samsung’s mobile 2 hone division also struggled with poor quality and inferior products until the mid-1990s and exit from the sector was a frequent topic of discussion within the company. Samsung Electronics acquired a 40 percent stake in AST Research, a United States-based personal computer maker, for US$378 million in February 1995. In 1996, the company devised a plan to sponsor major sporting events, resulting in it becoming an official sponsor for the 1998 Winter Olympics held in Nagano, Japan. In December 1998 Samsung Electronics agreed to sell its power-device division to Fairchild Semiconductor Corporation for US$455 million. . 2000 to 2010 For four consecutive years, from 2000 to 2003, Samsung posted net earnings higher than fivepercent; this was at a time when 16 out of the 30 top South Korean companies ceased operating in the wake of the unprecedented crisis. In 2005, Samsung Electronics surpassed Japanese rival, Sony, for the first time to become the world’s twentieth-largest and most popular consumer brand, as measured by Interbrand. In 2006, BusinessWeek rated Samsung in twentieth place on its list of global brands and second in the electronics industry. The publication also ranked Samsung as twentieth in terms of innovation.
In 2007, Samsung Electronics became the world’s second-largest mobile-phone maker, overtaking Motorola for the first time. In 2009, Samsung achieved total revnues of US$117. 4 billion, overtaking Hewlett-Packard to become the world’s largest technology company measured by sales. Furthermore, the company’s semiconductor division is the world’s largest producer of memory chips and the second largest for semiconductor manufacturing. In 2009 and 2010, the US and EU fined the company, together with eight other memory chip makers, for its part in a price-fixing scheme that occurred between 1999 and 2002.
Other companies fined included Infineon Technologies, Elpida Memory and Micron Technology. In December 2010, the EU granted immunity to Samsung Electronics for acting as an informant 3 during the investigation (LG Display, AU Optronics, Chimei InnoLux, Chunghwa Picture Tubes and HannStar Display were implicated as result of the company’s intelligence). 3. 2010 to present Despite consistent growth, Samsung, along with its chairman Lee Kun -hee, has developed a reputation for insecurity regarding its financial stability and the potential for future crises to arise.
After returning from a temporary retirement period in March 2010, Kun-hee stated that “Samsung Electronics’ future is not guaranteed because most of our flagship products will be obsolete in 10 years from now. ” Samsung has emphasized innovation in its management strategy since the early 2000s and it again highlighted innovation as part of core strategies when it announced the Vision 2020 in which the company set an ambitious goal of reaching $400 billion in annual revenues within ten years.
In order to cement its leadership in the areas of memory chip and television production, the company has invested aggressively in research and development. The company has 24 research-and-developement centers around the world. In April 2011, Samsung Electronics sold its HDD commercial operations to Seagate Technology for approximately US$1. 4 billion. The payment was composed of 45. 2 million Seagate shares (9. 6 percent of shares), worth US$687. 5 million, and a cash sum for the remainder. In the first quarter of 2012, the company became the highest-selling mobile phone company when it overtook Nokia, selling 93. million units compared to Nokia’s 82. 7 million units. Samsung also became the largest smartphone vendor as a result of strong sales of its Galaxy SII and Galaxy Note devices. 4 B. Trademark Fig. 1. 1: Samsung’s Trademark The current Samsung logo design is intended to emphasize flexibility and simplicity while conveying a dynamic and innovative image through the ellipse, the symbol of the universe and the world stage. The openings on both ends of the ellipse where the letters “S” and “G” are located are intended to illustrate the company’s open-mindedness and the desire to communicate with the world.
The English rendering is a visual expression of its core corporate vision, excellence in customer service through technology. 5 The basic color in the logo is blue, the color that the company has had used in its logos for years. The blue color symbolizes stability and reliability, which are precisely what the company wishes to accomplish with its customers. It also stands for social responsibility as a corporate citizen, a company official explained. 6 C. Products and Services 1. LCD and LED panels Fig. 1. : The Samsung Galaxy S II, which incorporates a Super AMOLED Plus screen By 2004 Samsung was the world’s-largest manufacturer of OLEDs, with a 40 percent market share worldwide, and as of 2010 has a 98% share of the global AMOLED market. The company is leading the world OLED industry, generating $100. 2 million out of the total $475 million revenues in the global OLED market in 2006. As of 2006, it held more than 600 American patents and more than 2,800 international patents, making it the largest owner of AMOLED technology patents.
Samsung’s latest AMOLED smartphones use its Super AMOLED trademark, with the Samsung Wave S8500 and Samsung i9000 Galaxy S being launched in June 2010. In January 2011, it announced its Super AMOLED Plus displays – which offer several advances over the older Super AMOLED displays – real stripe matrix (50 percent more sub pixels), thinner form factor, brighter image and an 18 percent reduction in energy consumption. In October 2007, Samsung introducing a ten-millimeter thick, 40-inch LCD television panel, followed in October 2008 by the world’s first 7. 9-mm panel.
Samsung is leading the industry by developing panels for 24-inch LCD monitors (3. 5 mm) and 12. 1-inch laptops (1. 64 mm). In 7 2009, Samsung succeeded in developing a panel for forty-inch LED televisions, with a thickness of 3. 9 millimeters (0. 15 inch). Dubbed the “Needle Slim”, the panel is as thick (or thin) as two coins put together. This is about a twelfth of the conventional LCD panel whose thickness is approximately 50 millimeters (1. 97 inches). While reducing the thickness substantially, the company could maintain the performance as before, including full HD resolution, 120 Hz refresh rate, and 5000:1 contrast ratio. . Mobile phones Samsung’s flagship mobile handset line is the Samsung Galaxy S, which many consider a direct competitor of the Apple iPhone. It was initially launched in Singapore, Malaysia and South Korea in June 2010, followed by the United States in July. It sold more than one million units within the first 45 days on sale in the United States. The company’s I9000 Galaxy S and S8500 Wav e smartphones were the winners of the 2010 European EISA Awards in the smartphone and social media phone categories.
The I9000 Galaxy S was recognized for its superior-quality screen and excellent connectivity while the S8500 Wave for its Bada operating system with unparalleled social networking and location-based services. While many other handset makers tend to focus on supporting one (or at most two) operatin g system, Samsung has kept supporting a wide range of operating systems in the market. Although the Galaxy S adopts Google Android as the primary operating system, it also supports other competing operating systems such as Symbian, Microsoft Windows Phone, Linux-based LiMo, and Samsung’s proprietary Bada.
Samsung sold 235 million mobile handsets in the year 2009. At the end of the third quarter of 2010, the company had surpassed the 70 million unit mark in shipped phones, giving it a global marketshare of 22 percent, trailing Nokia by 12 percent. Overall, the company sold 280 million mobile phones in 2010, corresponding to a market share of 20. 2 percent. Partially owing to strong sales of the Samsung Galaxy range of smartphones, the company overtook Apple in worldwide smartphone sales during the third quarter 2011, with a total arket share of 23. 8 8 percent, compared to Apple’s 14. 6-percent share. Samsung became the world’s largest cellphone maker in 2012, with the sales of 45 million smart phones in the first quarter. 3. Semiconductors Fig. 1. 3: A Samsung DDR-SDRAM Samsung Electronics has been the world’s-largest memory chip maker since 1993. In 2009 it started mass-producing 30 nm-class NAND flash memories.  It succeeded in 2010 in massproducing 30 nm-class DRAMs and 20 nm-class NAND flashes, both of which were the first time in the world.
According to market-research firm Gartner, during the second quarter of 2010 Samsung Electronics took the top position in the DRAM segment due to brisk sales of the item on the world market. Gartner analysts said in their report, “Samsung cemented its leading position by taking a 35-percent market share. All the other suppliers had minimal change in their shares. ” The company took the top slot in the ranking, followed by Hynix, Elpida, and Mic ron, said Gartner. Another hitherto not-well-publicized area where the company had significant business in for years is the foundry segment.
It had begun investment in the foundry business since 2006 and now positioned it as one of the strategic pillars for semiconductor growth. 9 Market researcher IC Insights has predicted that Samsung will become the world’s-biggest semiconductor chip supplier by 2014 when it surpasses Intel. For the ten-year period from 1999 to 2009, Samsung compound annual growth rate (or CAGR) has been 13. 5 percent, compared with that for Intel paltry 3. 4 percent. 4. Televisions In 2009, Samsung sold around 31 million flat-panel televisions, enabling to it to maintain the world’s largest market share for a fourth consecutive year.
Samsung launched its first full HD 3D LED television March 2010. Samsung had showcased the product at the 2010 International Consumer Electronics Show (CES 2010) held in Las Vegas. Samsung sold more than one million 3D televisions within six months of its launch. This is the figure close to what many market researchers forecast for the year’s worldwide 3D television sales (1. 23 million units). It also debuted the 3D Home Theater (HT-C6950W) that allows the user to enjoy 3D image and surround sound at the same time.
With the launch of 3D Home Theater, Samsung became the first company in the industry to have the full line of 3D offerings, including 3D television, 3D Blu-ray player, 3D content, and 3D glasses. In 2007, Samsung introduced the Internet TV, enabling the viewer to receive information from the Internet while at the same time watching conventional television programming. Samsung later developed “Smart LED TV”, (now renamed to “Samsung Smart TV”) which additionally supports downloaded apps. In 2008, the company launched the Power Infolink service, followed in 2009 by a whole new [email protected]
In 2010, it started marketing the 3D television while unveiling the upgraded [email protected] 2010, which offers free (or for-fee) download of applications from its Samsung Apps store, in addition to existing services such as news, weather, stock market, YouTube videos, and movies. Samsung Apps offers for-fee premium services in a few countries including Korea and the United States. The services will be custom-tailored for each region. Samsung plans to offer family-oriented applications such as health care programs and digital picture frames as well as games. 10 5. Others Fig. 1. 4: The Samsung GX-10 digital SLR camera
Samsung produces a wide range of printers for both consumers and business use, including mono-laser printers, color laser printers, multifunction printers, and enterprise-use high-speed digital multifunction printer models. In 2010, the company introduced a number of energy efficient products, including the premium laptop R580, netbook N210, the world’s-smallest mono-laser printer ML-1660, and color laser multifunction printer CLX-3185. Samsung has introduced several models of digital cameras and camcorders including the WB550 (premium camera), ST550 (the dual-LCD-mounted camera), and the HMX-H106 (64GB SSDmounted full HD camcorder).
In 2009, the company took the third place in the compact camera segment. Since then, the company has focused more on high -priced items. In 2010, the company launched the NX10, the next-generation interchangeable lens camera, thereby commencing the race toward the new category of camera market. In the area of storage media, in 2009 Samsung achieved a ten percent world market share, driven by the introduction of a new hard disk drive capable of storing 250Gb per 2. 5-inch disk. In 2010, the company started marketing the 320Gb-per-disk HDD, the largest in the industry.
In addition, it was focusing more on selling external hard disk drives. Following financial losses, the hard disk division was sold to Seagate in 2011. 11 In the MP3 player segment, Samsung has launched products including the M1, the premium MP3 player model, and the world’s-smallest DivX MP3 player R1. 12 II. Owners Biography A. Oh-Hyun Kwon (Vice Chairman and CEO) Fig. 1. 5: Oh-Hyun Kwon Dr. Oh-Hyun Kwon was officially appointed Chief Executive Officer of Samsung Electronics Co. by the company’s Board of Directors on June 8, 2012.
As well as overseeing the company in his role of CEO, the Vice Chairman continues to lead the Device Solutions Division of Samsung Electronics, which consists of the three component businesses: Memory, System LSI and LED. Since Dr. Kwon joined Samsung Electronics’ Semiconductor Business in 1985, he has played a pivotal role in Samsung Electronics’ rapid advance in the semiconductor industry. He successfully led the development of the industry’s first 64Mb DRAM in 1992, and was promoted to Vice President of Samsung’s Memory Device Technology unit three years later. In 1998, Dr.
Kwon was appointed Senior Vice President and head of System LSI Division’s ASIC business. In 2000, he became Executive Vice President and head of LSI Technology. In J anuary of 2004, Dr. Kwon was appointed President and General Manager of the System LSI Division. During his 10 years at the System LSI Division, Dr. Kwon gained special recognition for achieving top market shares of display driver ICs, application processors and CMOS image sensors. In May of 2008, Dr. Kwon was appointed President of Semiconductor Business (now Device Solutions). In December of 2011, he was promoted to Vice Chairman of Samsung Electronics. 3 Dr. Kwon has published numerous papers at conferences and symposiums including ISSCC, VLSI Symposium, and IEDM. He has also contributed his expertise to a number of technical journals on semiconductor related topics. Dr. Kwon has a B. S. in Electrical Engineering from Seoul National University, a M. S. in Electrical Engineering from KAIST (Korea Advanced Institute of Science and Technology), and a Ph. D. in Electrical Engineering from Stanford University. 14 III. Organizational Structure DMC Digital Media and Communications C O E DC Device Solution Others Fig. 1. : Samsung Organizational Chart Business Segments 1. Digital Media and Communications The Digital Media and Communications division (DMC) is composed of Digital Media and Telecommunications reporting segments, and mainly manufactures and sells handsets, networking systems and other consumer electronics (TVs, monitors, printers, computers and home appliances). This business line includes digital flat-panel TVs and monitors, audio and video equipment, cameras and camcorders, computers and peripherals, printers and multifunction devices, and home appliances. Samsung’s TV and monitor usiness segments make up the largest portion of Samsung’s net sales. Samsung utilized patented technologies to increase TV sales, such as the digital natural image engine technology (DNIe) in 2004. This technology was applied to regular Samsung TV and a digital product that allows consumers have optimal on-screen image quality. ? Telecommunication Networks: The telecommunication networks division includes mobile phones and telecommunications equipment. The product portfolio also consists of MP3 players and turnkey telecommunications network solutions, as well as 4G 15 technologies such as Mobile WIMAX and LTE.
In 2008, Samsung delivered Mobile WIMAX network equipment to major operators in the US, Japan, Russia, and other markets. The company also delivered nearly 200 million phones during the year. Samsung has focused specifically on consumer marketing for their mobile phones. Samsung’s Anycall line has been highly successful since 1994, and the TouchWiz UI reflects the adaptability of Samsung’s mobile phones to any operating system. 2. Device Solution The DS division is composed of Semiconductor and LCD reporting segments, and manufactures and sells memory, system LSI, TFT LCD and HDD. Semiconductor: Samsung’s semiconductor business ranks number two as a worldwide supplier in terms of revenues, growth, and market share. It is a top supplier of flash memory, SRAM, displayer driver ICs, and MP3 player system-on-chip devices. Samsung is involved in the development of emerging high-tech market segments such as solid-state drive (SSD) storage and “fusion” hybrid semiconductor solutions. Samsung and Microsoft (MSFT) were the first companies to develop the hybrid hard drive in 2005. ?
LCD: The LCD division includes LCD panels for the TV, monitor, notebook, and digital information display markets. 3. Others Others primarily represent corporate headquarters and institute of technology. 16 IV. Core Department of Company A. Department Heads Name Department Oh-Hyun Kwon Head, Device Solutions Gee-Sung Choi Head, Corporate Strategy Office Head, Digital Media & Communications Head, Telecommunications Networks Head, Mobile Communications Division Head, Corporate Design Center Ju-Hwa Yoon Head, Management Support Team Head, Corporate Executive Staff
Head, Global ERP Task Force Head, Corporate Executive Staff Table. 1. 1: Samsung Electronics Division Heads 17 B. Head Plant/Central/Factory 1. Samsung Electronics Co. , Ltd. Headquarters: Samsung Electronics Building, 1320-10, Seocho 2-dong, Seocho-gu, Seoul 137, 857 Phone: +82-2-2255-0114 Fax: +82-2-2255-0117 Web Address: http://www. samsungelectronics. com Overview: Samsung Electronics is an electronics Samson. One of the world’s largest semiconductor manufacturers, Samsung Electronics is also South Korea’s top electronics company.
It makes many kinds of consumer devices, including DVD players, digital TVs, and digital still cameras; computers, color monitors, LCD panels, and printers; semiconductors such as DRAMs, static RAMs, flash memory, and display drivers; and communications devices ranging from wireless handsets and smartphones to networking gear. The company, which is the flagship member of Samsung Group, also makes microwave ovens, refrigerators, air conditioners, and washing machines. Nearly half of sales come from the Asia/Pacific region. 2. Samsung Electronics Philippines Manufacturing Corp. Address: Blk. 6 CPIP Batino Calamba City Laguna
Phone: 049-545-8454 Fax: 049-545-0353 Website: http://www. samsungelectronics. com 18 Industry: Manufacturing / Production Overview: Our company, Samsung Electronics Phils. Mfg Corp (SEPHIL), is a manufacturer of optical disk drives based in Calamba Premier International Park, Calamba City. A 2003-2005 Most Outstanding Exporter Awardee. SEPHIL is an OSHAS 18001, ISO 9001:2000 and ISO 14001 certified company. With a clear vision of being The Leader in the digital ODD World, we devote our resources (people and technology) to create superior products and services that will create a better global society. 19 V.
Financial Statements Currency in Millions of US Dollars 2008 2009 2010 2011 1st Quarter 2012 2nd Quarter 2012 Assets 94,265. 1 100,423. 3 120,215. 3 139,321. 1 161,774. 2 167,979. 6 Liabilities 37,935. 6 35,033. 3 40,230. 0 48,149. 2 55,201. 9 56,601. 9 Capital 56,329. 5 65,390. 1 79,985. 3 91,171. 9 106,572. 3 111,377. 8 Revenue 108,704. 0 122,173. 3 138,579. 7 147,874. 6 45,727. 7 48,077. 7 Net Loss – – – – – – Net Income 4,948. 4 8,571. 4 14,148. 0 11,963. 2 4,910. 0 5,100. 0 Table. 1. 2: Financial Statement 20 160,000. 00 140,000. 00 120,000. 00 100,000. 00 80,000. 00 60,000. 00 40,000. 00 20,000. 00 . 00 2008 2009 Assets Liabilities 2010 Capital Net Income 2011 Revenue Chart. 1. 2: Financial Statement 21 VI. Management A. Explain the effect/s of the management based on the financial statements. According to the financial statement, the net income on the company is unstable. As the years go by the net income does not exceeds the introductory net income. Hence, there is a proper management on the company. B. If in the financial statement, the company is not gaining. Explain management as a cause. If the company is not gaining in the financial statement; maybe it may be due to their major competitors.
Apple being their top competitor is one of the main reasons for the company to loss gain in their financial statements. 22 VII. Conclusion A lot of factors have influenced the ever-increasing pressures that resulted to intense competition in the global manufacturing industry. New trends in the business operations strategies, more interactive business relations among different market players as well as the customers’ increased involvement in maintaining the quality of products and services continue to demand efficient and productive measures among service providers particularly in the electronics industry.
Manufacturing companies were able to answer and meet the specifications of their customer base by utilising the current technological advancements in the past decades. Innovations in computer features, networking strategies, and telecommunication products facilitated business organisations to invest on market researches, company development, and effective reengineering measures to create quality products and provide efficient services.
As a result, outsourcing strategies have been widely accepted in the electronics industry particularly by Original Equipment Manufacturers (OEM) in order to reduce expenses, improve productivity, operations management, and delivery, and concentrate on upgrading the company’s technological expertise. In this regard, initiatives to develop an electronic component which is only a part of the products being manufactured and offered to the customers are completely omitted from the responsibilities of the company.
With regards to the performance of Samsung for the last past 10 yea rs (i. e. from 1993-2003), there are dramatic changes within the organisations that leads successful development. Basically, the success in Samsung Electronics that operates for marketing and profit acquisition lies on the ability of the management in positioning and establishing the products/services being offered. Furthermore, the ability of Samsung Electronics and its management to compete and maintain a 23 competitive edge among its competitor is another basis to say that it is successful.
The constant development and innovation on the product line and the growing number of clientele also define the corporate standing of Samsung Electronics. As part of management style of Samsung Electronics, the development of DRAM products creates impact to their progress. The teachings of Micron to make DRAM products positively affect the sales of Samsung. However, despite of the success of the company, their Chairman are quite afraid regarding the Chinese competitors. The company needs to innovate strategies since these new Chinese entrants are attacking the DRAM market.
Basically, the DRAM market of Samsung show great revenue performance for the last 10 years. Compared to other competitors, Samsung extensively improved their R&D to maintain product development and cost effective production processes. Their ability to make innovation through DRAMs is one the cost advantage of the company since they will not be needing any outside help to make DRAMs as they did previously in Micron. The quality of the products and original electronic materials created by Samsung is one of the sources of their premium prices. Hence SAMSUNG will be able to win a major between the competitors. 24