SAMSUNG APPLIED By: Jayla Dunlap

SAMSUNG BackgroundSAMSUNG...

Is headquartered in Samsung Town, Seoul

Is a multinational conglomerate that unites numerous affiliated businesses

Was founded almost eighty years ago, on March 1st, 1938 by Lee Byung-chul

Has a revenue of over $300 billion (2016)

Has employees in over 80 countries

Has a construction company that built the Burj Khalifa, the tallest building in the world

First electronic product was a black and white TV in 1970

SAMSUNG: How it all beganLEE BYUNG-CHUL (Feb. 12th, 1910- Nov. 19th, 1987)Mr.Lee was known for being one of Korea’s most successful businessmen and the owner of the Samsung Group organization. It started as a small export business in Taegu, Korea, with 40 employees, primarily selling dried Korean fish. In 1947, Lee built an office in Seoul, where he started a successful sugar refinery. After venturing into retail, security, and insurance sectors, Lee entered Samsun into the electronics industry with confidence, In 1970, Samsung had released its first black and white television.

Samsung’s history/timeline can be found here:

http://www.samsung.com/us/aboutsamsung/our_company/history/timeline/

ARTICLE ONE: “Managing Cross-Cultural Environment in Samsing Company: Strategy in Global Business” This study was conducted in order to learn how Samsung…

overcomes issues in communication with internal and external structure in order to overcome potential threats,

how culture in global business works, managing cross-cultural issues,

employers and employees’ specific roles in the company,

how Samsung has dealt with the “Globalization era”, making its business blow up and ultimately expand over international borders

ARTICLE 2: Globalization and Divergent Paths of Industrial Development: Mobile Phone Manufacturing in China, Japan, South Korea and Taiwan This study found…

“...globalisation does not lead to the convergence of development paths, but promotes cross-national divergence depending on countries’ positions in the value chain and market niches”,

the concurrent development of multiple trajectories in China’s mobile phone industry with some overlap in value chain niches with its neighbouring countries,

China, Japan, North Korea and Taiwan hold the same level of importance in global markets, but are different parts in the GVC (global value chain: “the full range of activities that firms and workers perform to bring a specific product from its conception to its end use and beyond”.),

a diverging pattern of development paths in the East Asian region, as well as the internal complexity of the Chinese trajectory

CONCEPT: Globalization In Katherine Miller’s Organizational Communication: Approaches and Processes, the first chapter describes that we live in a global economy with a global market, and as telecommunications and transportation improves, so does our connections amongst other in the world (on personal and organizational terms). Globalization arose not too long after key political changes, and has led to practices such as outsourcing (moving the company somewhere where labor is cheaper) and businesses are spread across nations throughout the developing world to create international presence.

GLOBALIZATION: defined by globalization101.org:

“Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world.

How Globalization has applied to SamsungSamsung is a Korean MNC (multinational company) which has used globalization to its advantage in the best ways possible. The mobile phone industry has changed significantly due to globalization over the past 20+ years, and although it has challenged how industrial development takes place, the company has embraced new ways to market and distribute its products to consumers in various ways. It has used the opportunities given to them to expand internationally into industrialized and developing worlds.

Basic InformationMobile phone manufacturing is part of East

Asia’s electronics sector and has played a major role in exports, jobs, and innovation for each of the countries involved

Offshoring and outsourcing rise has facilitated production tasks to be conducted in different countries as intermediate goods travel across borders (laborers in poor countries> cheap work > increased profits)

As a result of this, more mobile phones are produced by 3rd party contract manufacturers (OEM suppliers and providers) that specialize in making parts and components

Division of LaborIPHONES:

Designed by Apple (US)

Taiwanese contract manufacturer

Hundreds of components are imported from Germany, Korea and other advanced economies

Set up 5 Lifestyle Research labs in Deli, London, San Jose, Beijing, and Singapore

Samsung can capture more gains by conducting higher value-added tasks

Series of geographically dispersed value-adding tasks is integrated and governed by multinational enterprises through various governance mechanisms to regulate buyer-supplier relations

This form of international division of labor is common in manufacturing of consumer electronic devices (example on left)

Why globalization works for SamsungPerformance of mobile phone producers increasingly relies on their competitiveness in global markets

Companies must conduct extensive marketing efforts and a source product (cost to entering global market)

Rapid growth of Samsung is mainly attributed to their active engagement in global markets through exports

Without a globalized market, Samsung wouldn’t be able to use low cost strategy to mass produce various phones and products

Location advantages

Samsung selects locations for manufacturing plants called “clusters” (US, England, China, Brazil, etc)

Why globalization works for Samsung cont...Having different international locations allows Samsung to gain knowledge, and create an

innovative spirit

Samsung searches these clusters for the best educated employees as candidates to import to HQ in Seoul

This allows innovative ideas to come into play

Innovative thinking

Samsung analyzes the global market through demand factors

Enters a market where the company is already established in

Uses transfer of knowledge between its activities and adapts its products - for example, Samsung created the Galaxy S3 with more attributes at a cheaper cost. When research showed that people thought the handset was too big, Samsung created the Galaxy S3 Mini 4-6 months later)

Vertical Integration - has all parts to manufacture their phones (chips, screen, etc.)

Slow political risks because Samsung is geographically diverse

Government and Business working together - Samsung center in Silicon Valley, Cali, was granted a tax discount

Staying Globalized

In their 5 Lifestyle Research Labs, it is critical for employees to define products’ behavior to predict consumers’ future needs, based on location.

Samsung has used its innovative employees’ thinking that has

helped them sell millions of their products worldwide.With a worldwide customer base,

Samsung doesn’t subscribe to a “size fits all” philosophy.

Staying Globalized Examples

Employees find inspiration from observing people’s lives and giving them options that meet their cultural and regional needs. Samsung has even created an app to fit the needs of customers through technology, and promises that they will make products based on local needs.

The following slides will show some of Samsung’s most successful products that have been made to accommodate specific regions:

UNITED STATES

French Door Refrigerator: Sparkling water dispenser; by observing the increasing demand for sparkling water in the United States, Samsung introduced a refrigerator that dispenses carbonated water at the touch of a button.

Examples BULGARIA

Smart Oven MC32F: Since yogurt is such an important part of the Bulgarian local diet and culture, this oven was made able to produce homemade yogurt with the push of a button.

AFRICA

Safe Surge TV: In certain regions of the African continent, power outages are common. This series of televisions was made with increased pressure resistant capacity, so that they can still stay on during outages.

Examples AFRICA CONT…

Free Satellite TV: Satellite tuners have been installed so customers will have access to free TV services in isolated regions without cable access

Duracool Refrigerator: Insulated fridges keep food fresh after power outages/cuts for up to 8 hours

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ExamplesTURKEY

Top-Mounted Fridge RT55: To fit in Turkish homes and their local taste for fresh food, Samsung made this model’s freezer 21% narrower.

MIDDLE EAST

DVM Desert:

Made to handle the Middle East region’s 40 degree Celsius temperatures, with a built in AC with specialty developed compress

ExamplesINDIA

Twin Top Washing Machine: Wheels were built in so the machines can be transferred and connected to a different power source during power outages, and filled with a special basin to meet the custom for hand washing certain clothes before the cycle

CHINA

Fu Yun Monitor/Ji Xiang Fa TV F4280/ Ru Yi Hong TV: In China, the color red and the number 8 are considered lucky so on these models the monitors have red-black covers and 8 shaped stands.

ExamplesKOREA

Kimchi Fridge M9000: Kimchi, a fermented veggie delicacy, is eaten with almost every meal in Korea; this is a bespoke fridge that keeps air flow and temperatures just right for kimchi to stay fresh

CHINA AND KOREA

Q9000 AC: A desire for a minimalistic sleek, ultra-slim standing AC was made for design conscious customers

Questions/Observations

1. In what new, innovative ways can Samsung prove that it can adapt to any country/region’s needs through their products?

2. In ten years, how will Samsung figure out ways to create products that will satisfy regions/areas that not many live in?

3. IF, for some reason, globalization stopped being an important factor for Samsung’s sales and manufacturing, what steps would the company take in order to establish a base for their work?

Works citedLee, Joonkoo, Jong-Cheo Kim, and Jinho Lim. "Journal of Contemporary Asia." Globalization and Divergent Paths of Industrial Development: Mobile Phone Manufacturing in China, Japan, South Korea and Taiwan: Journal of Contemporary Asia: Vol 46, No 2. Routledge Taylor and Francis Group, 12 Nov. 2015. Web. 13 Feb. 2017.

Rani, Hazrin Shahar, Faiezi Zubuer, Muhammad Saifulbarki Yusoof, Muhammad Nadhir Zamziba, and Saazmi Ahmad Toriryhrma. "Managing Cross-Cultural Environment in Samsung Company: Strategy in Global Business." Hrmars.com. Shah University, 2016. Web. 5 Feb. 2017.