Samsung’s Success story

Samsung Success story

ORGANIZATION Samsung | The success story of one of the top companies in the world  Published 6 months ago on March 24, 2022 By Abhinandhinee  Samsung is a South Korean multinational corporation founded by Lee Byung-chul in 1938. Initially, it was founded as a trading company. In the next three decades, the group diversified into several areas such as food, electronics, retail, textiles, etc. Today, Samsung is one of the top conglomerates in the world with the 8th highest global brand value. In the late 1960s, the company entered the electronics industry, and currently, Samsung Electronics is the largest information technology company. Here’s its success story. The early days In 1938, Lee Byung-chul founded Samsung as a trading company. It dealt in dried fish, groceries, and noodles. Due to the Korean War, he had to forcefully leave Seoul. Later, he moved to Busan and started a sugar refinery. Later, he also founded the largest woolen mill in the country. Samsung soon diversified into other areas of business such as insurance, security, and retail. In the 1960s, they entered the electronics industry. Its first product was a black-and-white television set. In 1980, they started manufacturing switchboards and later moved into the telephone and fax manufacturing industry. During that time, they had already became a major manufacturer in Korea and owned almost 50% in the semiconductors industry. After Lee Byung-chul‘s death, the Group split into five business groups. Today, all the groups are independent and not connected. Later, the Group started to perform research and development which helped the company become the top in the electronics industry. They quickly broadened into semiconductors, electronics, telecommunications, aerospace, and more. In the next few years, they opened up plants in cities such as Portugal, New York, Tokyo, and more. Since the 1990s, mobiles, and semiconductors have become the top source of income for Samsung Electronics. In the 2000s, the Samsung Galaxy mobile was birthed. The phones quickly became the best-selling smartphones in the world. Since 2006, the company is the best-selling manufacturer of television. In 2012, they became the world’s largest mobile phone manufacturer. Present-day Samsung Today, Samsung is one of the top companies in the world. The company has a powerful influence on South Korea’s politics, media, economic development, and more. Their success story is very inspiring. In 2012, Samsung Electronics became the top cellphone manufacturer. Every second person in the world has a Samsung device in their hand. In addition, its construction company constructed the Burj Khalifa. Samsung also employs more than 370,000 employees all around the world. 17% of Samsung’s Gross Domestic Product is owned by Samsung.  From a grocery store to becoming one of the top companies in the world, the company’s success story of truly inspiring. In 2018, the company madSamsung subsidiaries

Not wanting to be left behind in other burgeoning industries, the 1970s also saw Samsung open subsidiaries including Samsung Shipbuilding, Samsung Heavy Industries and Samsung Precision Company. Samsung also started to invest in the chemical and petrochemical industries.

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Leading the way with memory chips

In 1974 Samsung Electronics acquired Hankook Semiconductor, a move which saw the company become the market leader in memory chips in the early 1990s and retain its position as the world’s leading manufacturer of semiconductors. Today, even most Apple iPhones, the arch-rival of Samsung’s Galaxy phones, use Samsung memory chips.

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Exporting electronics abroad

The 1970s was a pivotal decade for Samsung. It started to export home electronic products abroad, and by 1978 it had produced four million black and white TVs – the most in the world at the time. That same year, Samsung opened its first overseas office in the US, and exported its first VCRs to America in 1984. Around that time the company changed its name to Samsung Electronics Co Ltd and sales exceeded 1 trillion won, the equivalent of 3.4 trillion won today (US$3bn/£2.3bn).

Synonymous with shoddy goods

Despite emerging as a major manufacturer in South Korea, Samsung had a reputation for allegedly making cheap, shoddy electronic household items which broke quickly. As Korean business professor Chang Sae-Jin later wrote in his 2008 book Sony vs. Samsung, Samsung’s electric fan "was so poorly designed and manufactured that even lifting it up with one hand broke its neck".

In 1987 Byung-Chull, one of South Korea’s most successful businessmen, died of lung cancer. Byung-Chull’s son, Lee Kun-Hee, filled his father’s post. In the ensuing years, Kun-Hee transformed Samsung into the global power it is today, but not without the company (and himself) being tainted with well-documented controversy and corruption...

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"Change everything except your wife and children"

Fed up with the reputation of making poor quality goods, in 1993 Kun-Hee famously told his employees to "change everything except your wife and children". Subsequently the company underwent a major transformation, rebranding and reinventing itself as a major player in the manufacturing of quality tech. But two years later, he made the headlines again...The legendary phone funeral furnace

Just like its earlier electrical goods, Samsung’s first mobile phone models were riddled with defects. A pivotal moment in the company’s history came when Kun-Hee visited the phone manufacturing plant and demanded staff set the 100,000–150,000 phones in production alight on the factory floor. Unsurprisingly, a major part of that highly successful rebranding strategy saw Samsung actually make better mobile phones. In 1999, it launched the world's first MP3 mobile phone. While Nokia dominated the mobile phone market during the 1990s, Samsung continued to make innovations to handsets. By 2002, Samsung's SGH T100, the first mobile phone to use a thin-film transistor active matrix LCD display, was one of the best-selling phones, selling 12 million handsets worldwide. Samsung’s rapid expansion in the 1990s was not without its controversies though, as multiple bribery cases and patent infringement suits afflicted the company, although they seemed to do little to stifle Samsung’s growth.

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A "heightened sense of crisis"

In 1997 Kun-Hee famously wrote that a "heightened sense of crisis" was required for any company to succeed, warning about the risks of complacency. That same year a journalist published recordings of Samsung’s vice-chairman Lee Hak-Soo (pictured centre) talking about funnelling approximately $3 million (£2.3m) to South Korean presidential candidates and linking Samsung with the bribery of senior prosecutors.Meanwhile, on the goods front, the 2000s saw Samsung develop new technologies for the TV industry, designed to improve viewing experiences for customers. In 2007 Samsung enjoyed global sales surpassing $100 billion (£78.3bn) and by the end of 2008 it was the world’s number one TV producer, which was a far cry from its former reputation for making slapdash black and white TVs.However, Samsung’s dominance as a global electronics powerhouse continued. In 2009 Samsung released its first Android-powered device – a smartphone known as the Samsung Galaxy i7500 (pictured). The phone was not without its faults, with original Galaxy users criticising Samsung for the phone’s lack of firmware updates.Despite the allegations reported in the book, most of South Korea’s mainstream media refused to run the scandal, seeing an attack on Samsung as an attack on South Korea itself.

Despite the damning copyright infringement ruling, in 2013 Samsung was named as the world’s largest tech company by the annual Fortune 500 list, which ranks the world’s largest corporations by revenue. Samsung was placed five notches above rival Apple, reporting revenues of $178.6 billion (£140bn) and profits of $20.6 billion (£16bn).Despite being laden with controversy, scandal and setbacks along the years, Samsung is now the 15th largest company in the world, taking $225 billion (£176bn) in sales, $41 billion (£32bn) in profit, $293 billion (£230bn) in assets and a market cap of $326 billion (£255bn) in 2018 – not bad for a one-man dried fish-selling start-up.

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