Samsung Electronics Case

I. Background

Samsung Electronics has been received a whirlwind of attention in the last few years, most recently with their battle with Apple Inc. over design patents. While Samsung's feud with their greatest competitor has bought the company some negative attention on the subject of integrity of innovation, the company has done an excellent job in transforming itself from a company that was greatly known as a reasonable priced alternative to Sony to becoming one of the most recognized leaders in most powerful brand of electronics in existence (specifically the #12 most powerful brands on Forbes list). Samsung today is the world's largest mobile phone manufacturer unit sales and second largest semi-conductor chips. For over 7 years the company held the title of the largest producer of televisions and LCD panels and is currently the next runner up in the tablet market (behind Apple) with the release of the Samsung Galaxy Tab. But how has Samsung managed to grow their global market share to from 17% to 23% (in 2 years) among the vast among of competitors in the electronic industry? Samsung has spent a huge amount of their company's resources of tailoring their operations to revolve around what they predicted would be their factor of differentiation: Design.

II. Analysis

The company decided to shy away from it traditional "Confucian" hierarchy and highly structured method of operations and re-invent itself as a new forward focused company that promotion freedom of thought and creativity within its employees. In order to give their products an edge they set several standards for product development such as: design led innovation, investment in expansion of designer's education, and increased focus on how consumers actually use products. In my opinion it is actually the smartest thing a company can do once their brand reaches a point in their life cycle in which they are declining in value. Samsung was regarded for years as provider of commodity electronics. It was not until 1993, when Samsung researchers took a trip to Los Angeles and discovered exactly why their products were being passed up by its competitors. The design and look of their products was not edgy or appealing enough to consumers. It was then that researchers realized that people will pay more in price for the value of receiving the best looking product.

The monumental decision to focus on the development of innovative product design and to establish a new brand identity came with a lot of changes. In order for the company to revitalize the Samsung brand required restructuring at all levels. Samsung expanded its design centers to Los Angeles, Tokyo, San Francisco, London, and Shanghai. They dramatically increased their design staff from 120 to over 500 designers in less than 6 years. Designers were assigned to work at fashion, furniture, and industrial design houses so they can stay up to date on the newest trends. The priority in manufacturing changed to the preference of the designers. Now engineers had to learn how to build components