HISTORY OF SAMSUNG:-

2000-Present Pioneering the Digital Age

The digital age has brought revolutionary change – and opportunity – to global business, and Samsung has responded
with advanced technologies, competitive products, and constant innovation. Brand Reinforcement

At Samsung, we see every challenge as an opportunity and believe we are perfectly positioned as one of the world's
recognized leaders in the digital technology industry.
Our commitment to being the world's best has won us the No.1 global market share for 13 of our products,
including semiconductors, TFT-LCDs, monitors and CDMA mobile phones . Share of Market Looking
forward, we're making historic advances in research and development of our overall semiconductor line, including flash
memory and non-memory, custom semiconductors, DRAM and SRAM, as well as producing best-in-class LCDs, mobile
phones, digital appliances, and more.

Displayed the world’s thinnest TV (6.5mm) at CES Innovation leader

2009 Launched major restructuring of its businesses
Cooperates in creating a foundry with Xilinx of the US
Developed the world’s first 40 nanometer DRAM Point of difference
Announced its “Blue Earth” solar-powered phone
Released its V-line Crystal Rose LCD TV
Samsung is found No. 1 in customer loyalty for 8 years consecutively by Brand Keys of the
USA Market Leader
Samsung Digital Imaging developed an innovative hybrid digital camera
Built the world’s largest mobile phone as recorded in the Guinness Book of World Records
Received a “Quality Management Award” in Malaysia
SADI, Samsung's design school, received the most iF Concept Design Awards for its entrants
Opened “samsungmobile.com” for its domestic customers
Received an Excellence Award from ENERGY STAR of the US
Released the world’s thinnest Blu-ray player
Introduced Mobile WiMax into Malaysia
Released the world’s first full HD camcorder with a 64GB SSD
Sold more than 20 million full touch phones in shortest time ever
Samsung took up a record high market share in LCD monitors
Released the world’s first solar -powered mobile phone in India Innovation
Released the “JET,” its new concept full touch screen phone
Released its 120Hz 3D monitor
Samsung took the No. 1 spot in the global digital sign market for the first time
Sold 500,000 units of its LED TVs in 100 days since its release
Opened the “visual mobile” era with its third generation full touch Haptic AMOLED
Released the world’s first infrared video phone
Became the first in the industry to acquire TCO 3.0 certification for its notebook computers
Announced its “Green Management” strategy
Began mass production of the world’s first 40 nanometer DDR3 DRAM
Released the world’s thinnest watch phone
Developed the world’s lowest power 1GHz mobile CPU core
Opened Samsung Application Store Seller Site
Attained its most awards ever at IDEA 2009
Released its strategic smart phone, the OmniaⅡ
Samsung's Yuna Haptic sold 500,000 units in record time
 Became the first in the industry to sell more than 10 million LCD TVs in the first half of the year
Samsung won the chairmanship of the 3GPP international standardization association
Sold more than 5 million of its STAR full touch phones in 4 months
Samsung’s Application Store officially opened
Released the “Corby” full touch phone targeted at younger users
Provided the WorldSkills Calgary 2009 Competition support
Installed the world’s largest video wall in the US
Released the first large capacity 16kg automatic washing machine in the domestic market
Samsung's “Mondi” WiMax terminal receives “Best Product” at the 4G Awards
Entered the top 10 list in the world’s top 100 global brands
Samsung was selected as one of the top 10 global businesses in responding to climate change
Samsung TVs took 50% of the Iranian market
Introduced its R&D master system
Released the “Giorgio Armani” smart phone
Sold more than 5 million LCD panels for notebooks per month for the first in the industry
Developed a 240Hz 3D LCD panel
Received the 2009 LCD TV Market Leadership Award
Deploys its brand memory card business
Reached the world’s first LTE terminal supply agreement
Developed the world’s thinnest 3mm LED TV panel
Samsung successfully tested WiMax global roaming
Samsung’s LED TV won “TV of the Year” in Britain
Declared its “Creative Company” strategy for the next 100 years
Passed 4 trillion won in operating profits for its 40th year of foundation
Introduced a “Creative New Employee” hiring system
Developed the world’s first 0.6mm 8 chip package
Sold 10 million STAR phones in six months of its release
Announced its open mobile platform, “bada”
Became the first in the industry to sell more than 4 million LCD panels for TVs per month
Supported the hosting of the WCG final
Launched a VIP membership program
Sold 50 million full touch screen phones in 2 years
Samsung's printing solutions won product of the year in the US
Announced “bada” its own smart phone platform
Samsung successfully commercialized its 4th generation LTE terminal
Restructured its organization and appointed Gee-Sung Choi as its new CEO
Sales of Samsung “Yuna Haptic” phones broke the threshold of 1 million
Became No. 1 in the US digital TV market for the 4th consecutive year

Named Yoon-Woo Lee as a Vice Chairman & CEO of Samsung Electronics

Launched OMNIA phone 
Completed establishing TV manufactory in Russia Kaluga
Became the official sponsor of 2010 Guangzhou Asian Game
2008 Developed the world's first 2Gb 50 NANO
Samsung takes No. 1 spot in U.S. cellphone market
Opened Global Brand PR Centre ‘Samsung D'light'
No.1 worldwide market share position for TVs achieved for the 9th quarter in a row

2007 No.1 worldwide market share position for TVs achieved for the seventh quarter in a row
Developed the world's first 30nm-class 64Gb NAND Flash™ memory
BlackJack bestowed the Best Smart Phone award at CTIA in the U.S.
 Attained No.1 worldwide market share position for LCD for the sixth year in a row

Developed the world's first real double-sided LCD

Developed the worlds' first 50nm 1G DRAM
Unveiled 10M pixel camera phone
2006 Launched "Stealth Vacuum," a vacuum cleaner with the world's lowest level of noises
Launched the worlds' first Blu-Ray Disc Player
Developed 1.72"Super-Reflective LCD Screen

Developed the largest Flexible LCD Panel

Ranked 27th in "the World's Most Admired Company" of Fortune
Became the official sponsor of Chelsea, the renowned English soccer club
Released the world's first 7 mega pixel camera phone
2005
Developed the world's first OLED for 40" TV
Became the official sponsor of Chelsea, the renowned English soccer club
Developed the first-ever speech recognition phone

Produced the first wrinkle-free steam washer

Sold more than 20 million cellular phones in the U.S
Developed the world's first 60-nano 8GB NAND Flash memory chip
Ranked top in mobile phone sales in Russia
2004 Released new PDP TV featuring the highest contrast ratio in the world
Developed a 3rd Generation Optical Blu-Ray Disc Recorder
Developed cellular phone chip for satellite DMB system
Released 46" LCD TV for the first time in the world

Samsung brand value ranked 25th in the world by Interbrand

Ranked 5th on the "Most Admired Electronics Company" list released by the Fortune Magazine
2003
Released the first HD DVD combo

Development of the 54"TFT-LCD, the largest digital TV monitor in the world

Launches PDP-TV, the slimmest in the world
2002 Launch of colour mobile phones in which the new concept UFB-LCD is introduced
Launched new high-definition TFT-LCD colour cellular phone

Ranked No. 1 of world's Top 100 IT Companies by BusinessWeek

Unveils 16 Chord Progression Melody Phone
Begins Mass Production of 512Mb Flash Memory Device
2001
Unveils Industry's First Ultra-Slim Handset
Develops World's first 40 inch TFT-LCD

2000 Unveils TFT-LCD with Record-breaking Definition

Launches PDA phone
Samsung Olympic Games Phone selected as the official mobile phone of the Sydney 2000 Olympic Games
TV Phone and Watch Phone Make Guinness Book of World Records
Unveils the Worlds Fastest Graphics Memory Chip
Samsung Electronics and Yahoo! Form Strategic Alliance
Develops Unique All-in-one DVD Player
 Developed world's first 512Mb DRAM
Developed world's first 512Mb DRAM

CORPORATE PROFILE OF SAMSUNG:-

Vision 2020

As stated in its new motto, Samsung Electronics' vision for the new decade is, "Inspire the World, Create the Future."

This new vision reflects Samsung Electronics’ commitment to inspiring its communities by leveraging Samsung's three key
strengths: “New Technology,” “Innovative Products,” and “Creative Solutions.” -- and to promoting new value for Samsung's
core networks -- Industry, Partners, and Employees. Through these efforts, Samsung hopes to contribute to a better world
and a richer experience for all.

As part of this vision, Samsung has mapped out a specific plan of reaching $400 billion in revenue and becoming one of the
world’s top five brands by 2020. To this end, Samsung has also established three strategic approaches in its management:
“Creativity,” “Partnership,” and “Talent.”

Samsung is excited about the future. As we build on our previous accomplishments, we look forward to exploring new
territories, including health, medicine, and biotechnology Market Expansion Samsung is committed to
being a creative leader in new markets and becoming a truly No. 1 business going forward.
The Samsung Philosophy

At Samsung, we follow a simple business philosophy: to devote our talent and technology to creating
superior products and services that contribute to a better global society. Creative leaders

Every day, our people bring this philosophy to life. Our leaders search for the brightest talent from around the world, and
give them the resources they need to be the best at what they do. The result is that all of our products—from memory chips
that help businesses store vital knowledge to mobile phones that connect people across continents— have the power to
enrich lives. And that’s what making a better global society is all about.

Our Values

We believe that living by strong values is the key to good business. At Samsung, a rigorous code of conduct and these
core values are at the heart of every decision we make.

People

Quite simply, a company is its people. At Samsung, we’re dedicated to giving our people a wealth of opportunities to reach
their full potential.

Excellence

Everything we do at Samsung is driven by an unyielding passion for excellence—and an unfaltering commitment to develop
the best products and services on the market.
Change

In today’s fast-paced global economy, change is constant and innovation is critical to a company’s survival. As we have
done for 70 years, we set our sights on the future, anticipating market needs and demands so we can steer our company
toward long-term success.

Integrity

Operating in an ethical way is the foundation of our business. Everything we do is guided by a moral
compass that ensures fairness, respect for all stakeholders and complete transparency Ethics driven

Co-prosperity

A business cannot be successful unless it creates prosperity and opportunity for others. Samsung is dedicated to being a
socially and environmentally responsible corporate citizen in every community where we operate around the globe.
Samsung Profile 2008

Wherever you are... in the hustle of the streets or the comfort of the home...Samsung is part of the fabric of your life. As a
global leader we are at the forefront of change, anticipating today what our customers around the world will want tomorrow.

2007 Financial Overview (WON/DOLLARS/EUROS)

AMOUNTS IN BILLIONS WON DOLLARS EUROS

Net Sales* 161,847.4 174.2 127.2

AMOUNTS IN BILLIONS WON DOLLARS EUROS

Total Assets 284,165.5 302.9 205.7

Total Liabilities 180,833.2 192.7 130.9

Total Stockholder's Equity 103,332.3 110.1 74.8

Net Income* 12,873.7 13.9 10.1

[Amounts in billions]

We are committed to delivering superior corporate and shareholder

value through creativity and transparency in management. Brand
equity

At Samsung Electronics, our modern, board-centered corporate

governance system ensures transparency
and accountability in management. The board actively supports top
management in effectively
managing the company to maximize corporate value. It also plays a key
role in increasing shareholder
value as well as safeguarding shareholder rights and interests. The
board’s scope of
responsibility encompasses all matters required by statute, specified in
the articles of incorporation, or
delegated by resolution at the general shareholders’ meeting. These
matters include the setting of basic
management policies, guidance on strategic business decisions, and the
oversight of senior management
performance.
As of May 2009, our board is composed of nine directors, five of whom
are outside directors. In 2008,
the board convened five times to discuss and decide 23 agenda items. As
provided for by law, the
board has set up and delegated authority to a number of committees
staffed by directors with relevant
experience and professional knowledge to aid in timely, efficient
decision-making. The board presently
operates four committees: the Management Committee, Audit
Committee, Outside Director Recommendation
Committee, and the Internal Transaction Committee.
Sustai nability
Making sustainability top priority
At Samsung Electronics, the greening of management, products,
processes, workplaces, and communities has been our top priority Green marketing
since we launched our sustainability strategy in 1996. Over
the years, we have implemented ISO 14001- and OHSAS
18001-certified integrated environment, safety, and health (ESH)
management systems at each of our eight Korean manufacturing
facilities. As of the end of 2008, 94% of our global manufacturing
network had an internationally certified ESH system in place, and
we expect the entire network to be certified by the end of 2009. In
early 2009, we established the Environment Strategy Team within
our Customer Satisfaction Environment Center to support and
enhance our sustainability strategy and execution capabilities.
Cooperating to mitigate climate change
We are actively involved in a number of initiatives to mitigate
climate change. Launched in 2002 as part of our efforts to voluntarily
reduce greenhouse gas (GHG) emissions, our Catch
CO2 project has enabled us to progressively lower the carbon
footprint of each manufacturing process. We have also
worked to shrink GHG emissions by signing a voluntary agreement
with the Korea Energy Management Corporation to cut
energy consumption at our manufacturing facilities. Today, we
are focusing on developing highly energy-efficient products
and components that will enable us to achieve a standby energy
consumption of under 1 watt for our entire product portfolio. CSR
We’re helping usher in an era
of sustainable, low-carbon growth.

Greening the product life-cycle

We are adopting cleaner, more energy-efficient manufacturing
processes and technologies as we work to maximize resource
and energy efficiency and minimize waste. We are also striving to
reduce GHG emissions over the entire product life-cycle—from
design to manufacturing, usage, and disposal—by developing
and implementing an eco-design strategy across our operations.
This strategy includes eco-certification of our supply chain, ecodesign
assessment, and eco-label certification. Beyond our ongoing
efforts to make our supply chain more environmentally
friendly, we have created an international take-back program to
facilitate efficient reuse of resources as well as reduce waste and
pollution for a cleaner environment. We also comply with increasingly
stringent international rules and regulations on the usage,
handling, and disposal of hazardous materials.

Earning the right to be called “green”

In addition to operating our own eco-labeling program to effectively
communicate the eco-friendly features of our products to
consumers, we certify our products under six major international
eco-labels, including the EU Ecolabel and US EPEAT systems.
In 2008, we led the global electronics industry’s green revolution
by acquiring eco-label certification for over 1,900 products. We
also continued to win awards and great reviews from consumers
and NGOs for green products such as our LCD TVs with
liquid-crystal styling, front-load washers with “bubble wash”
technology, and mobile phones made with corn-based bioplastics.
At the CES 2009 show in the US, we won two Innovations
Eco-Design Awards, sharing the limelight for the most awards
earned in the category.
Samsung's businesses harness the power of the digital revolution to create ground-breaking products and services that take
consumers and businesses beyond imagination.
 GLOBALISATION
Headquartered in New Delhi, Samsung India has widespread network of sales offices all over the country.

Innovation is at the heart of Samsung. Our R&D activities not only span the globe, they also pave the way for what's next in
cutting-edge digital electronics.

Choose the right TV for you

Samsung TVs offer world-class picture quality, design and energy
efficiency . Find the TV that is perfect for you.

 LED TVRedefine the way we watch television.

 LCD TVAll the purity of liquid crystal. CASH COWS
 Plasma TVEnjoy the Superior cinematic experience.
 Ultra SlimFit TV40% slimmer and 20% lighter.

 Flat TVTechnology and style combine for captivating entertainment.

Led TV:-

UA55B8000
MRP Rs. 350,000/-*
UA40C7000WR UA55C7000WR UA46C7000WR UA40B7000
MRP Rs. 140,000/-*

UA46B7000 UA55B7000
MRP Rs. 180,000/-* MRP Rs. 275,000/-*

UA40C6200UR
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UA46C6200UR
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UA46C6900VR
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 UA40C6900VR
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UA32C6900VR
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UA55C6900VR
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UA32B6000VR
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UA46B6000VR
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 UA40B6000VR
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UA40C5000
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UA32C5000QM
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UA37C5000QM
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 UA26C4000PM
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UA32C4000PM
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UA22C4000PM

PLASMA TV:-
 PS63C7000YR
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PS50C6500
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PS58C6500
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PS63B680
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 PS50C550
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PS42B450
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PS50B450
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PS42C450
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 PS50C450

FLAT TV:-

CS21A330
MRP Rs. 9,350/-*
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CS29A330
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CS15K30MJ
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CS29M40
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 CS29M50
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CS21K40
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CS21K45
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CZ21K44
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CS29K44
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 CS21M40
MRP Rs. 8,500/-*
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CZ21K50
MRP Rs. 8,900/-*
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CS15K30ML
MRP Rs. 7,100/-*
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CS21S8
MRP Rs. 10,500/-*

LCD TV:-
 LA46C750R2R
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LA40B750U1R
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LA46B750U1R
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LA32C630K1R
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 LA32B650T1R
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LA22B650T6
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LA40C650
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LA40B650T1R
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LA46B650T1R
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 LA32C650
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 LA46C530F1R
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 LA32C550J1R
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LA52B550K1R
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 LA32B530P7R
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 LA22C450E1M
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 LA22B450C4
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 LA70F91B
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ULTRA SLIM FIT TV:-

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CS29A730
MRP Rs. 19,000/-*
 Samsung is comprised of companies that are setting new standards in a wide range of businesses, from consumer
electronics to petrochemicals, from advertising to life insurance. They share a commitment to creating innovative, high
quality products that are relied on every day by millions of people and businesses around the world.

 Samsung Electro-Mechanics
 Samsung SDI
 Samsung Corning Precision Glass
 Samsung SDS
 Samsung Networks
 Samsung Techwin
 Samsung Mobile Display
 Samsung Digital Imaging

 Samsung Heavy Industries

 Samsung Total Petrochemicals

 Samsung Petrochemicals
 Samsung Fine Chemicals
 Samsung BP Chemicals

 Samsung Life Insurance

 Samsung Fire & Marine Insurance
 Samsung Card
 Samsung Securities
 Samsung Investment Trust Management
 Samsung Venture Investment

 Samsung C&T Corporation

 Samsung Engineering
 Cheil Industries
 Samsung Everland
 The Shilla Hotels & Resorts
 Cheil Worldwide
 S1 Corporation
 Samsung Medical Centre
 Samsung Human Resources Development Centre
 Samsung Economics Research Institute
 Samsung Lions
 The Ho-Am Foundation
 Samsung Foundation of Culture
 Samsung Welfare Foundation
 Samsung Life Public Welfare Foundation

Samsung - The TOP Brand in the World

According to the global brand scoreboard of 2004 from Interbrand,

Samsung, the Korean based electronics brand, has boosted its profile
and being listed as 21st valuable brands in the world. Its brand value
surged by 16% to 12.5 billion US dollars compared to the figure in
2003 which is 10.8 billion US dollar. (Simon, 2004) It becomes the
world’s leading brand in electronics and digital industry. This
achievement is closely related to its sponsorship strategies. Samsung
associate its name to the “TOP” plan, which is “The Olympic Partner”
plan. It is a plan which leads Samsung to be the top brand in the
world. However, there are many other programs to support Samsung’s
sponsorship strategy. Without these strategies the “TOP” plan will not
have such effectiveness and efficiency.

Samsung’s philosophy is “devote our human resources and technology to

create superior products and services, thereby contributing to a
better global society”. (www.samsung.com) Under this philosophy
Samsung has adopted a sport-based strategy in building its brand. The Building brand equity
multinational consumer electronics firm acknowledges the fundamental
role played by sport and by the Olympic Games as a promoter of its
brand. Vice president of corporate communication at Samsung, Il-Hyung
Chang, rationalizes the important role of sport sponsorship by stating
"sports sponsorship is a strategy that fits well within our operations
at Samsung….it’s an integral part of our company’s philosophy". Philip
and David, 2003 Entering into the “TOP” plan propels Samsung’s
sponsorship to a new era. It has an opportunity to act on the same
stage with the world top brand such as Coca Cola, IBM, and Visa, which
greatly enhanced its brand image. The company’s active and established
role in the heart of the Olympic Movement has contributed to its brand
value surge in recent years.

Samsung’s involvement with the Olympic movement began as a local

sponsor for the Seoul 1988 Olympic Games. Then it became the TOP
sponsor in the wireless telecommunications equipment category for the
Nagano 1998 Olympic Winter Games, Sydney 2000 Olympic Games, Salt Lake
2002 Olympic Winter Games and Athens 2004 Olympic Games. This status
as a global partner in the wireless telecommunications equipment
category will be continuing in the Torino 2006 Olympic Winter Games
and Beijing 2008 Olympic Games. Samsung have agreed to pay the huge
amount for corporate sponsorship because they recognize the vital
importance of sports marketing on their bottom line. The TOP plan
helped Samsung increase its brand awareness and enhance market
position considerably. Compared to the results of the survey held
before the Sydney Olympic Games, the amount of consumers that became
aware that Samsung Electronics was one of the 9 sponsors of the Games
approximately tripled. Unaided awareness of Samsung’s “Olympic
sponsorship” was 6.0%, it placed 2nd after Coca Cola.
(www.samsung.com)

Samsung want to accomplish two goals with all its sponsorship efforts.
The first goal is to build brand awareness especially create higher
level of awareness than its rival Sony. The effectiveness of Samsung’s
Sponsorship was shown at the ATHENS 2004 Olympic Games which had a
positive impact on brand awareness, with an increase from 57% to 62%.
(Samsung steps up Olympics marketing campaign, 2004) The second goal
is to enhance the worldwide imagery and attitudes towards its brand.
Samsung considered its commitment to the Olympic Movement is a key
element in positioning and strategy. It contributes to the success of
the Olympic Games and at the same time enhances Samsung brand image
and its market position.

Samsung built its brand through sponsor Olympic Games in the following
ways.

Samsung mobilized the organization for brand building. Both the

process and the result of a brand-building effort often have a key
payoff internally to employees, as well as externally to consumers.
Samsung sponsored ATHENS 2004 Olympic Torch Relay, which was the first
truly journey of Olympic flame. 1,900 torchbearers were selected from
over 40 countries including SamsungÂ’s employees. (www.sumsung.com)
They received emotional benefits from pride in being associated with
the sponsorship and have a direct link to the Olympic activities.

Samsung provided an experience to the consumers. For example as a part

of Samsung’s brand presence program it set up Olympic Rendezvous @
Samsung, a 1,064 square meter entertainment complex, located within
the Athens Olympic Sports Complex, which was a central gathering place
for athletes, their families, and the spectators coming to the Games.
The OR@S provided a wide range of activities. For instance consumers
were provided with the opportunity to try out Samsung’s revolutionary
products for themselves. Fans are able to meet their national heroes,
enjoy musical performances and special laser shows. During the Games
Samsung has hosted a series of "National Days", which celebrate the
many cultures of Olympic nations. In addition, OR@S provided free
telephone and on-line services. Over 6,000 athletes from a huge number
of the 202 competing countries have based themselves here and taken
time out from the pressure of the Games to make contact with home.
(Over 6,000 Olympic competitors make use of special facilities to
contact loved ones, 2004). At the same time they are experiencing the
convenience Samsung brought to them.

Samsung used Olympic Games as a platform to demonstrate new products

and technology. The most powerful way to introduce a new product and
technology is by publicity. It is not only cost-effective but also
more credible. Samsung provided its latest wireless communications
technology during the Sydney 2000 Olympic Game. Focusing on the future
of wireless communications, Samsung launched futuristic products such
as the mobile phone watch, the PDA-phone, the digital camera cum
mobile phone, the MP3 mobile phone and the its latest model of 3G
mobile phone. In addition, visitors are able to experience the future
by experimenting with the various digital knick-knacks developed and
on display by Samsung Electronics.

Samsung boost its brand awareness at Olympic Games. Samsung’s

dedication in Olympic Games brings great success in elevating its
brand awareness. Samsung's sponsorship of the Sydney Olympic Game in
2000 raised awareness of the brand by 5% to 16.2 %. The awareness rise
leaded to the sales surge. The first year after the Sydney 2000
Olympic Games, sales of the telecommunications products have increased
by 44%. Four years later in Athens, its brand awareness was raised to
62%. (Coca-cola and Samsung present the first international Athens
2004 Olympic Torch Relay, 2003)

Develop brand association. The Olympic Games as the world’s biggest

sports event requires enormous and sophisticated communication system.
Samsung, an official sponsor in wireless communication equipment
presented the Wireless Olympic Works (WOW), a communications system to
support and guarantee the smooth and efficient running of the event.
It also provided wireless communication devices to athletes,
officials, media, staff and volunteers. Samsung’s expertise in digital
wireless communications equipment played a vital role in contributing
to the successful operation of the Games. Besides the functional
association, it enhanced its market leader image and revealed its
status of a global organization through the prestigious Olympic Games.

There is no doubt that Olympic sponsorship played an important role in

Samsung’s brand building. However Samsung can not merely depend on
sponsoring Olympic Games to enhance its brand equity. It adopted many
associated programs to support TOP plan.
Reposition of its products. In early 1990th Samsung was still
perceived as a conservative manufacturer and always associated its
brand with bargains. Samsung realized that low price is just a major
means to compete in the lower-market whereas in upscale market
technology and brand are competitive means. Samsung decided to
penetrate the upscale market and gave up lower-market in order to
exalt its brand image. It repositioned all series of its products such
as mobile phone, consumer electronics and memory flash to upscale
market. Correspond to Samsung’s new position in the market it has
relatively higher price in it category. To Samsung higher price would
bring more profit and at the same time it is the better imply of good
quality. The strategy of reposition helps Samsung starting to build
its noblest image. 

Technology innovation. Samsung recognized that digital is the future

developing aspect of consumer electronics. They regard the digital age
as having both incalculable potential and risks. It's a time of
intense competition-fortunes can be made or lost in the blink of an
eye. (Samsung group timeline and history, 2005) Samsung took this
challenge as an opportunity. They switched their core competitive
power from mass manufacture to its own brand which based on digital
technology. It is well positioned as one of the world's recognized
leaders in digital technology and eventually become the worldÂ’ top
innovative company in technology. It starts to provide consumers with
innovative and cutting edge products and rapidly become a huge player
in electronics field competing toe to toe with another magnate Sony.
Samsung launched an industry design revolution in order to get rid of
its image of imitator. It employed world top designers to expand their
thought and keep track on the world highest level. It achieved most of
the Award of American Industry Design which is the most important
award in industry design area on the global basis. Its brand was
recognized by the consumers and specialists. The technology
breakthroughs enhanced Samsung’s brand image of young, fashionable and
strong function.

Demonstration of US market. Us market has a strong demonstration

effect on the global market due to its leading status. To some extent,
the brands should succeed in US market in order to become the top
brand worldwide. Therefore Samsung regarded US market as it’s most
important market and put great efforts on marketing in US market.
SAMSUNG took part in the Salt Lake 2002 Olympic Winter Games in USA as
the worldwide partner in the wireless telecommunications equipment
category. Samsung carried out various advance public relation
activities and programs centered on the PR pavilion to promote its
image of a fist-class corporation. During the game consumers were
provided with the opportunity to try out SamsungÂ’s revolutionary
products for themselves. Samsung spent considerable funds to sponsor
this winter game in USA. After few yearsÂ’ management, Samsung’s brand
disengaged bargains and was regarded as high-class products by the
American consumers. Samsung’s success in US market plays an important
role in its success in other markets.

To summarize, the key to a successful sponsorship depends not only on

the creative and crucial sponsorship itself but also rely on the
supporting strategies. Samsung successfully integrated its product
strategy, technology strategy and branding strategy into the TOP plan.
The TOP plan provides Samsung a road to be the top brands in the
world. Without the supporting strategies the TOP plan can not endow
Samsung’s brand with internal and rich meaning. The plan comprises
huge risk because if the consumers attracted by the TOP plan perceive
it as an ordinary product Samsung’s brand would be damaged. Samsung
has successfully and fully utilize the benefits of the Sponsorship and
was rewarded for its commitment to Olympic Games and other sports
activities.

The web’s role in building brand

With the prevalence and development of internet, the Web reveals its
important role in marketing communication. According to a global
web-based survey by Interbrand, the Google brand had the most impact
on people's lives in 2002. It beat established brands such as Coke and
Apple. (Gerry McGovern, 2003) This reveals how Web builds you brands
differently. In the coming digital age, the strong brands in this era
will be those that utilize web as a building tool.

Web became a new communication channel between brands and consumers.

It has unique characteristics compared to the most traditional media
advertising.

The web is interactive and involving. It provides an innovative way to

build brand awareness. For example, when Visa organization plan to set
up their long term branding tactic of focusing on young people, they
chose MSN Site which is the world's most popular destination on the
Web with enormous young users, as the hub of its promotional contest.
It chose MSN to build and host the online hub for the promotional
competition designed to build brand awareness of Ideas Happen among
young consumers. The Ideas Happen campaign allows consumers ages 18 to
29 to submit ideas for businesses and other ventures and vote on the
best submissions via a custom-designed site created by MSN. Over three
months, more than 5 million unique users visited the site MSN created
for the contest. The Ideas Happen campaign is an incredible example of
how immediate and interactive of the online medium to make big results
happen online. (MSN Again to Make Ideas Happen With Young Consumers,
2004) The campaign boosts Visa's image with target market. In addition
to the increase in Visa's brand awareness among the 5 million unique
users who visited the contest site, the heavy traffic helped build
Visa's image among young adults who are still forging lifelong
allegiances to consumer brands. According to polling conducted by
market research agency Millward Brown, perceptions of Visa improved
markedly after the Ideas Happen campaign. The number who deem Visa the
best credit card overall increased by 13 percent, while those who
agreed that Visa offers unique and different features jumped by 9
percent. In addition, 8 percent more of those polled said they
consider Visa the most innovative and forward-thinking credit card
company. (MSN Again to Make Ideas Happen With Young Consumers, 2004)
Ideas Happen is more effective in reaching our target audience due to
MSN. Teaming up with MSN has allowed us to realize the potential of
online marketing and allowed MSN to stretch its own limits in terms of
interactivity and engaging young consumers

The web offers current, rich information. On Visa’s website customers

can manage their Visa card account online. The links on its page can
take customers directly to their Visa card issuer, which maintains
their personal, secure account information. By providing the current
information of account, websites can let consumers to track their
transactions on the spot. In addition, Visa introduces its various
cards in detail on the website.

Personalization. When customers enter Visa’s website they can select

relevant content by choosing from the menu. There are three categories
on Visa website which is personal, small business and merchants,
corporate and government. People coming to it website with different
purposes can simply choose corresponding category and go directly into
that area to get the information their need. There is a calculator
program in the website to help customers to plan their personal budget
on Visa’s website. Moreover customers can order different information
of discounts and financial tips through email on the personal basis.

With these distinctive characteristics website can be a key part of a

brand building program. It serves as a fantastic vehicle for
distributing information, providing experiences, leveraging other
brand building programs. It affects brand building from the following
three aspects.

Web can stretch the continuity and depth of the single sale channel,
consequently expanding existing customers and increasing potential
customers. Furthermore it can be taken as a market attempt, helping
marketers to leverage marketing promotion programs in other medium. If
use properly, website could effectively impel its offline products.
For example there was a successful cooperation between Pepsi and
Yahoo. Consumers could collect the number on the caps of Pepsi and
Mountain Dew and change to credits on the websites of the two drinks.
The credit can be used to exchange prizes or as cash for purchase and
auction on Yahoo website. This campaign attracted 350 million people
to anticipate. Pepsi increased it sale by 5% while the industry has
little growth. (Lili, 2003) Pepsi did one similar attempt before
without the help of web but failed eventually. Moreover, Pepsi can
interpret the consumer behaviors through analysis of the data
collected in the campaign and work out the relevant strategy.

Website can improve the shopping experiences accordingly enhance the

brand equity. On the website of Co-op bookstore, consumers can search
the books they want, preview the abstracts and check whether they are
available. Other information is provided to the consumers like
breakdown of every shop throughout Australia. In the Co-op shop or at
home consumers can order or reserve a book through the on-line
bookstore. The interaction between online and offline greatly enrich
the shopping experiences.

Web helps to differentiate brand. Product differentiation was regarded

as a magic weapon of powerful brand. Without the differentiation brand
will be reduced to product, consumers can only choose products from
the prices. New brand with high differentiation are usually popular
although they do not have high brand prestige. On the contrast high
prestige brand with little differentiation will be forgotten gradually
by consumers. When product or services enter into the maturity stage,
they will reveal commonness and hard to be differentiated. The typical
way to be differentiated at that stage is adding new products or
services. For example, the customers of FedEx can accurately locate
their parcels via its website. This service was even extended to the
PDA users. The additional and distinctive service help FedEx enhanced
the service quality and relationship between brand and customers.

Web provides a platform for the communication of programs in the

company’s overall brand-building strategy. Web could improve companyÂ’s
brand marketing and sales efforts from internal as well as external.
Internally, web offer a special site that every brand-building efforts
emerge there. It will help the management to leverage each
brand-building project to fit the overall strategy and redress the
deviation in time. Externally, a well-designed website could connect
every distinct part of business. The website will integrate them to be
a continued and correlative means of brand description.

There are several factors will contribute to the success of the web
brand-building.

A clear brand concept and position in the market. A clear brand

concept and position will impel company’s brand-building process.
Companies should make sure to bring their brand identity or core brand
elements onto the Web. The integral part of their offline brand
identities need to be delivered to the online brand.

Integration of web in whole brand-building strategy. The growing

importance of web in building brand attracts more and more attention
of company’s management. To use web more effectively company should
integrate web into its whole strategy and make sure it is in
conformity with other brand-building strategies. CompaniesÂ’ which
leverage their resources between brand-building strategies will
achieve greater success.

Strategic alliance with other website or brand. Sometimes web allies

can give your brand extraordinary success. Especially the alliance
between powerful brands will make the cooperation more effective and
cost-efficient. In the previous example Pepsi achieve great growth of
sales in its cooperation with Yahoo. Yahoo brought Pepsi’s brand in
front of large numbers of people which Pepsi can not access and the
hit rate of Yahoo also surged during that period. Visa card attracted
its target market of young people by allying MSN to offer MSN Titanium
Visa Card. More and more brands become eager to develop alliances
through which they benefit mutually and beat their competitors.

Loyalty .On the Web, brand loyalty is rooted in providing customers

with an outstanding experience. (Gerry McGovern, 2003) To encourage
customers visiting website regularly, websites are trying to build
their loyalty through different ways. For example, commerce sites can
offer a great selection, good prices, and a simple purchasing process
while information sites can offer rich, relevant information in a
format that is easy to read. With the help of outstanding experience
provided by the websites companies draw their customers back again and
again. In additional, companies can use email to offer their customers
with opportunities or information which is tailored to their needs.
For example a membership registration is provided on most websites.
Then you can get more customized services by becoming a member of
websites. Websites are building long-term relationship between
customers and themselves. This relationship is essentially the
loyalty. Websites will benefit from the loyalty their customers have,
at the same time customers get their distinct needs and interests more
satisfied by showing their loyalty.

The important role of web in building brands suggests that companies

that had successfully built their brand offline should make sure to
leverage their resources to build their brands on Web. Retail stores
should think of building their web-based shopping to provide a
convenient alternative to consumers. Magazines should start to device
their online editions in order to attract more readers. Web is
providing huge exposure for brands. The brands which use them wisely
will achieve tremendous advantage.

Brand architecture art of L'Oreal

With the growing globalization of markets and competition, the brand

architecture became a key component in international firms’ brand
building strategy. It provides a framework to leverage strong brands
into other markets, assimilate acquired brands, and rationalize the
firm's international branding strategy. The key element contributes to
a successful brand-building strategy is a harmonious and consistent
brand architecture across countries and product lines. (Susan, Samuel
and Edwin, 1999) 

L'Oreal, the world's leading cosmetics companies is an apotheosis in

brand architecture. It managed very well of its wide range of products
and many of them are the world's biggest beauty products. L'Oreal was
the only company in its industry continually achieves a double-digit
profit for 18 years. Moreover, it is a genuine international company
which has operations in more than 130 countries in the world and over
80% of group sales are generated outside France. www.adbrands.net. The
L’Oreal is known for its diverse brand house which includes brands
like L'Or©al Paris, Maybelline, Garnier, Soft Sheen Carson, Matrix,
Redken, L'Or©al Professional, Vichy, Lanc´me, Helena Rubinstein,
Biotherm, Shu Uemura, Armani, Cacharel, Ralph Lauren and so on.
L’Oreal’s brand architecture is like a brand pyramid which is used to
target different group or level of people.

The luxury products division offers consumers top range of products

like Lanc´me, Helena Rubinstein, Biotherm, Shu Uemura and Kiehl’s.
These are premium products known for their innovation, performance and
quality. Some of the world’s top perfume brand like Giorgio Armani,
Ralph Lauren was also included in this division. The distribution
channel of these brands mainly through department stores, perfumeries,
travel retail outlets, and the brands own boutiques. Customers will
receive personalized advice at the point of sale, enabling them to
choose the products best suited to their needs. (www.loreal.com)

The professional products division is designed to serve hairdressers

worldwide. They provide products to meet the requirements of salon
professionals salon customers with a wide range of innovative,
high-performance products. The professional products division of
L’Oreal is made up of four different brands: L'Oreal Professionnel,
Krastase, Redken 5th Avenue NYC and Matrix.

The consumer products division is dedicated to offering consumers its

high technology products at competitive prices. The brands in this
division covered haircare, skincare, make-up and perfume products. The
five major international brands are L'Oreal Paris, Garnier, Maybelline
New York, Softsheen.Carson and Le Club des Créateurs de Beauté. They
are distributed through mass-market retailing channels.

In addition, L’Oreal has the active cosmetics department offering skin

care, sun care, hair care and make-up products. The departmentÂ’s
includes three brands Vichy, La Roche Posay and innov. They are sold
in pharmacies and specialist retailers. These products offer consumers
proven safety and effectiveness supported by advice from pharmacists
and dermatologists.
L'Oreal used different product division to help it segment the market
and form its band house. Brand architecture is the vehicle by which
the brand team functions as a unit to create synergy, clarity and
leverage. (Aaker and Joachimsthaler, 2002) We can start to learn the
important role of brand architecture in companiesÂ’ brand building from
the following aspects in L'Oreal’s example.

Implement differentia of product and strengthen brand

recognition. The consequence of differentia strategy of L'Oreal is
that consumers from different income level or education background can
find the product which is suitable to their own culture and taste.
L'Oreal also focuses on continually strengthening the meanings of its
brands and fully utilizes the advantages which are rooted from brand
recognition. L'Oreal established very clear identity for each of its
products. Each brand has its own image. For example, customers
associated Lanc´me with the image of stylish combination of elegance,
charm and daring. Helena Rubinstein was perceived as a pioneer in
cosmetic industry which provides cutting-edge science to the art of
femininity and glamour. (www.loreal.com) It associates with
high-performance and luxury as well. Its underlying brand Garnier
represents natural beauty. Each brand has its unique symbol which
creates a close relationship to its target market.

Distribution based on brand differentia. L'Oreal uses different

distribution channels according to the brand position in the market.
The mass brand Maybelline promote its brand mainly through TV
advertising and product prolocutor. La Roche-Posay, a brand positioned
at solving skincare problem, is distributed by dermatologists,
specialists of skincare and professional beauty salon. L'Oreal Paris
relies on the public praise among professional cosmetic consultant. 

L'Oreal embodied culture flexibility. Many star brands in L'Oreal’s

brand house are from different culture, but their original culture did
not vanish because of being managed by a French company. When a lot of
companies are trying to integrate different cultures, on the contrary
L'Oreal tends to develop multi-culture in its underlying brands. This
strategy proved to be very successful in reality and even played a key
role in L'Oreal’s success. The most representative example is
Maybelline New York. L'Oreal developed Maybelline’s brand culture
instead of upsetting it after its acquisition of Maybelline. The sales
figure dramatically rose after the acquisition and Maybelline product
enter into more than 90 countries. Maybelline became a stylish global
brand for all women all around the world from a merely regional brand.

L'Oreal provides a platform for the brands under its brand

architecture. Every brands target at a specific market and keep the
specialty of its own brand. At the same time fit into the overall
brand pyramid.
L'Oreal’s innovations always start from its luxury brands then
penetrate to the brands in different price level and different markets
eventually implemented in its consumer brands. The innovations based
on the same technology platform will reduce the cost. The knack for
L'Oreal to create the advantages is to spread around strategic
investment by sharing the production of innovation between different
product divisions. L'Oreal not only focuses on the single brand but
also pays attention to the technology relevancy in the series of
brands. For example, L'Oreal first introduced a breakthrough
anti-aging composite by using Lanc´me brand. Subsequently, it was
implemented in Vichy brand and brought into the consumer product
division eventually. The broad distribution channel of consumer
products was used to promote this technology at last. In term of same
products in the different market, L'Oreal also exerts the technology
platform to meet the specific needs of consumers. From L'Oreal’s
experiences, the core technology platform is a key component to the
success of an international company with complicated brand house.
Without leveraging the resources between brands, it will cause
increase of operational cost and waste of resources and will be very
hard to manage the L'Oreal’s sophisticated brand architecture.

Other than building the brand structure according to the product

identity, L'Oreal relied on distribution channel to carry out its
strategy of brand structure. There are four product departments in
L'Oreal’s structure. Every department has several brands and each
brand has many names. They are conspicuously different in packages and
with distinct image and advertising. The different brands share the
resources of distribution channel and have high integration effect on
management. The luxury brands of L’Oreal are sold in strictly selected
distribution channel like department store, perfumeries and tax free
shop. Professional products are provided to the hairdressers. Active
cosmetic products are sold in pharmacists. The most important sector
consumer products are distributed through mass consumption channel
like department store and supermarket.

L'Oreal has formed a brand matrix with great power of integration. Any
new brand merged into the relevant channel will fully utilize the
resources in existing channel as well as expand L'Oreal’s whole
distribution channel by integrating its original channel.

The dissemination of brand will improve company’s overall influential

power. L'Oreal recognized the leverage effect of it brand and focus
its propagandas on brand rather than propagandas on particular
product. It is dedicated in building the relationship between its
brand and the market. It aims to enhance brand power by maintaining
the good image in publicities. L'Oreal’s efforts were also embodied on
its marketing strategy. It always concentrates on supporting those
brands which can mostly represent its advantages and leverage
resources to those premium products.
Firms that aim to expand internationally or strengthen market position
tend to acquire new brand into the brand architecture. Acquiring
influential and well positioned brand is an important strategy of
L'Oreal in developing its brand architecture. It achieves rapid growth
by acquiring brand in same or related business and is continually
seeking these opportunities in the worldwide scope. L'Oreal expanded
its brand architecture by acquiring Maybelline brand in 1996, which
was a very successful transaction. The Maybelline’s image was enhanced
by branded L'Oreal while L'Oreal got complementary in its brand
architecture. Recent years in Asia, it acquired the third skincare
brand Mininurse in China and Japanese top luxury brand Shu Uemura.
These acquisitions represent L'Oreal’s ambition to Asian market. They
have the same product business with L'Oreal. In China the acquisition
will enhance L'OrealÂ’s market position in skincare and acquire
distribution channels Mininurse had. It is also a preparation for the
future expansion in the most fast-growing market China. By acquiring
Shu Uemura, L'Oreal want to use this Japanese brand to compete with
SK-…¡which was a competitor in the same level, in order to meet the
trend of prevalence of Japanese cosmetic brand in Asia. This is
considered to be an effective and cost-efficient strategy which is
consistent with L'Oreal’s overall brand architecture.

In summary, companies will be more successful by constructing a

well-designed brand architecture.

Market Strategy:-

The Samsung Way 

It thrives in low-margin consumer electronics. It favors hardware over software. It's still a
conglomerate that makes everything itself. Can Samsung keep defying conventional
wisdom? 

A black-suited Agent Smith sprints down a city street. As he is felled by an acrobatic kung fu kick from Trinity, the
camera pulls back to show the action taking place inside a giant, floating Samsung TV. The screen rotates, revealing
that the set is just three inches thick. "You cannot escape the Samsung 40-inch LCD flat-panel TV," intones the
baritone voice of actor Laurence Fishburne. "Welcome to the new dimension."

The ad, now appearing in many U.S. theaters showingThe Matrix: Reloaded, has an element of truth: Whether you're
a consumer in America, Europe, or Asia, it's getting pretty darn hard to escape anything made by Samsung
Electronics Co. Take the U.S. alone. Stroll the aisles of Best Buy (BBY ) Co. electronics stores, and stylish Samsung
high-definition TVs, phones, plasma displays, and digital music and video players are everywhere. Log on to the
home pages of USA Today (GCI ) CNN (AOL ) and other heavily trafficked sites, and Samsung's ads are first to pop
out. You see its blue elliptical logo emblazoned on Olympic scoreboards. And expect more Matrix tie-ins: Samsung is
selling a wireless phone just like the one Keanu Reeves uses to transport himself in the movie. Samsung will be even
more visible in this fall's sequel, The Matrix: Revolutions.

Samsung's Matrix moment is the latest step in its reincarnation as one of the world's coolest brands. Its success in a
blizzard of digital gadgets and in chips has wowed consumers and scared rivals around the world. The achievement
is all the more remarkable considering that just six years ago, Samsung was financially crippled, its brand associated
with cheap, me-too TVs and microwaves.

Now the company seems to be entering a new dimension. Its feature-jammed gadgets are racking up design awards,
and the company is rapidly muscling its way to the top of consumer-brand awareness surveys. Samsung thinks the
moment is fast arriving when it can unseat Sony Corp. as the most valuable electronics brand and the most important
shaper of digital trends. "We believe we can be No. 1," says Samsung America Chief Executive Oh Dong Jin. Its
rivals are taking the challenge seriously. "I ask for a report on what Samsung is doing every week," says Sony
President Kunitake Ando.

A few measures of Samsung's progress: It has become the biggest maker of digital mobile phones using code
division multiple access (CDMA) technology -- and while it still lags No. 2 Motorola (MOT ) Inc. in handsets sold, it
has just passed it in overall global revenues. A year ago, you'd have been hard pressed to find a Samsung high-
definition TV in the U.S. Now, Samsung is the best-selling brand in TVs priced at $3,000 and above -- a mantle long
held by Sony and Mitsubishi Corp. In the new market for digital music players, Samsung's three-year-old Yepp is
behind only the Rio of Japan's D&M Holdings Inc. and Apple Computer (AAPL ) Inc.'s iPod. Samsung has blown past
Micron Technology (MU ), Infineon Technologies (IFX ), and Hynix Semiconductor in dynamic random-access
memory (DRAM) chips -- used in all PCs -- and is gaining on Intel (INTC ) in the market for flash memory, used in
digital cameras, music players, and handsets. In 2002, with most of techdom reeling, Samsung earned $5.9 billion on
sales of $33.8 billion.

Can the good times last? That's a serious question, since Samsung is challenging basic New Economy dogma. In
high tech, the assumption is that developing proprietary software and content gives you higher margins and a long
lead time over rivals. Yet Samsung defiantly refuses to enter the software business. It's wedded to hardware and
betting it can thrive in a period of relentless deflation for the industry. Rather than outsource manufacturing, the
company sinks billions into huge new factories. Instead of bearing down on a few "core competencies," Samsung
remains diversified and vertically integrated -- Samsung chips and displays go into its own digital products. "If we get
out of manufacturing," says CEO and Vice Chairman Yun Jong Yong, "we will lose."

Yet the industrial history of the past two decades suggests that this model does not work in the long run. The hazard
-- as many Japanese, U.S., and European companies learned in the 1980s and '90s -- is that Samsung must keep
investing heavily in R&D and new factories across numerous product lines. Samsung has sunk $19 billion over five
years into new chip facilities. Rivals can buy similar technologies from other vendors without tying up capital or
making long-term commitments. What's more, the life cycle of much hardware is brutally short and subject to
relentless commoditization. The average price of a TV set has dropped 30% in five years; a DVD player goes for less
than a quarter. The Chinese keep driving prices ever lower, leveraging supercheap wages and engineering talent.
Meanwhile, the Japanese are building their own Chinese factories to lower costs. No wonder Samsung exited the
low-margin market for TV sets 27 inches and under.

Faced with these perils, Samsung needs a constant stream of well-timed hits to stay on top. Even Sony has stumbled
in this race: It now depends on PlayStation to support a consumer-electronics business whose glory days seem
behind it. Other legendary hardware makers -- Apple, Motorola, Ericsson (ERICY ) -- have learned the perils of the
hardware way.

Investors got a sharp reminder of the risks Samsung is running when the company announced first-quarter results. In
a tough environment, Samsung racked up the biggest market-share gain of any company in handsets, from 9.3% to
10.5%. Yet it had to lower prices to get there, and memory-chip prices also hit the bottom line. The result was a drop
in first-quarter profits of 41%, to $942 million, on sales of $8 billion. Second-quarter profits could drop further, analysts
say, hurt by lower sales in Korea's slumping economy -- and in China and other Asian countries struck by the SARS
epidemic. Controversy also flared in May when Samsung Electronics agreed to invest a further $93 million in a
troubled credit-card affiliate. Many critics believe Samsung should divest the unit but that it is propping it up under
orders of its parent, Samsung Group. Concern over corporate governance is the big reason Samsung continues to
trade at a discount to its global peers. Even though it's regarded as one of the most transparent emerging-market
companies anywhere, Korea's history of corporate scandals means many foreigners will always suspect its numbers.

If the earnings continue to soften, plenty of investors around the world will stand to lose. Samsung is the most widely
held emerging-market stock, with $41 billion in market capitalization, and foreigners hold more than half its shares.
Over the past five years, the shares have risen more than tenfold, to a recent $273. But concerns over 2003's
earnings have driven the shares off their recent high this year.

The challenges are huge, but so are Samsung's strengths. It is used to big swings: Nearly half its profits come from
memory chips, a notoriously cyclical business. Even in the weak first quarter, Samsung earned more than any U.S.
tech company other than Microsoft, IBM, and Cisco. Meanwhile, Sony lost $940 million in this year's first three
months and chip rivals Micron, Infineon, and Hynix lost a combined $1.88 billion. In cell phones, Samsung has kept
its average selling price at $191, compared with $154 for Nokia (NOK ) and $147 for Motorola, according to
Technology Business Research. What's more, since 1997 its debt has shrunk from an unsustainable $10.8 billion to
$1.4 billion, leaving Samsung in a healthy net cash position. And its net margins have risen from 0.4% to 12%.

Driving this success is CEO Yun, a career company man who took over in the dark days of 1997. Yun and his boss,
Samsung Group Chairman Lee Kun Hee, grasped that the electronics industry's shift from analog to digital, making
many technologies accessible, would leave industry leadership up for grabs. "In the analog era, it was difficult for a
latecomer to catch up," Yun says. But in the digital era, "if you are two months late, you're dead. So speed and
intelligence are what matter, and the winners haven't yet been determined."

Samsung's strategy to win is pretty basic, but it's executing it with ferocious drive over a remarkably broad
conglomerate. To streamline, Yun cut 24,000 workers and sold $2 billion in noncore businesses when he took over.

Samsung managers who have worked for big competitors say they go through far fewer layers of bureaucracy to win
approval for new products, budgets, and marketing plans, speeding up their ability to seize opportunities. In a recent
speech, Sony Chairman Nobuyuki Idei noted Samsung's "aggressive restructuring" and said: "To survive as a global
player, we too have to change."

Second, Samsung often forces its own units to compete with outsiders to get the best solution. In the liquid-crystal-
display business, Samsung buys half of its color filters from Sumitomo Chemical Co. of Japan and sources the other
half internally, pitting the two teams against each other. "They really press these departments to compete," says
Sumitomo President Hiromasa Yonekura.

The next step is to customize as much as possible. Even in memory chips, the ultimate commodity, Samsung
commands prices that are 17% above the industry average. A key reason is that 60% of its memory devices are
custom-made for products like Dell servers, Microsoft Xbox game consoles, and even Nokia's cell phones. "Samsung
is one of a handful of companies you can count on to bridge the technical and consumer experiences and bring them
successfully to market," says Will Poole, Senior Vice President at Microsoft's Windows Client Business, which works
with the Koreans.

The final ingredient is speed. Samsung says it takes an average of five months to go from new product concept to
rollout, compared to 14 months six years ago. After Samsung persuaded T-Mobile, the German-U.S. cell-phone
carrier, to market a new camera-phone last April, for example, it quickly assembled 80 designers and engineers from
its chip, telecom, display, computing, and manufacturing operations. In four months, they had a prototype for the
V205, which has an innovative lens that swivels 270 degrees and transmits photos wirelessly. Then Samsung flew 30
engineers to Seattle to field-test the phone on T-Mobile's servers and networks. By November, the phones were
rolling out of the Korean plant. Since then, Samsung has sold 300,000 V205s a month at $350 each. Park Sang Jin,
executive vice-president for mobile communications, estimates the turnaround time is half what Japanese rivals
would require. "Samsung has managed to get all its best companies globally to pull in the same direction, something
Toshiba, Motorola, and Sony have faced big challenges in doing," says Allen Delattre, director of Accenture (ACN )
Ltd. high-tech practice.

Samsung can also use South Korea as a test market. Some 70% of the country's homes are wired for broadband.
Twenty percent of the population buys a new cell phone every seven months. Samsung already sells a phone in
Korea that allows users to download and view up to 30 minutes of video and watch live TV for a fixed monthly fee.
Samsung is selling 100,000 video-on-demand phones a month in Korea at $583 each. Verizon plans to introduce
them in three U.S. cities this fall.

This year alone, Samsung will launch 95 new products in the U.S., including 42 new TVs. Motorola plans to introduce
a dozen new cell-phone models, says Technology Business Research Inc. analyst Chris Foster. Samsung will launch
20. Nokia also is a whiz at snapping out new models. But most are based on two or three platforms, or basic designs.
The 130 models Samsung will introduce globally this year are based on 78 platforms. Whereas Motorola completely
changes its product line every 12 to 18 months, Foster says, Samsung refreshes its lineup every nine months.
Samsung has already introduced the first voice-activated phones, handsets with MP3 players, and digital camera
phones that send photos over global system for mobile (GSM) communications networks.

Samsung has been just as fast in digital TVs. It became the first to market projection TVs using new chips from Texas
Instruments (TXN ) Inc. that employed digital-light processing (DLP). DLP chips contain 1.3 million micromirrors that
flip at high speeds to create a sharper picture. TI had given Japanese companies the technology early in 1999, but
they never figured out how to make the sets economically. Samsung entered the scene in late 2001, and already has
seven DLP projection sets starting at $3,400 that have become the hottest-selling sets in their price range. "They'll
get a product to market a lot faster than their counterparts," says George Danko, Best Buy's senior vice-president for
consumer electronics.

Samsung hopes all this is just a warm-up for its bid to dominate the digital home. For years, Philips, Sony, and Apple
have been developing home appliances, from handheld computers to intelligent refrigerators, that talk to each other
and adapt to consumers' personal needs. Infrastructure bottlenecks and a lack of uniform standards got in the way.

Now, many analysts predict that digital appliances will take off within five years. By then, as many as 40% of U.S.
households should be wired for high-speed Internet access, and digital TVs, home appliances, and networking
devices will be much more affordable. Samsung is showing a version of its networked home in Seoul's Tower Palace
apartment complex, where 2,400 families can operate appliances from washing machines to air conditioners by
tapping on a wireless "Web pad" device, which doubles as a portable flat-screen TV.

It's a grandiose dream. But if the digital home becomes reality, Samsung has a chance. "They've got the products, a
growing reputation as the innovator, and production lines to back that up," says In-Stat/MDR consumer-electronics
analyst Cindy Wolf. With nearly $7 billion in cash, Samsung has plenty to spend on R&D, factories, and marketing.

Samsung Electronics' ascent is an unlikely tale. The company was left with huge debt following the 1997 Korean
financial crisis, a crash in memory-chip prices, and a $700 million write-off after an ill-advised takeover of AST
Technologies, a U.S. maker of PCs. Its subsidiaries paid little heed to profits and focused on breaking production and
sales records -- even if much of the output ended up unsold in warehouses.

A jovial toastmaster at company dinners but a tough-as-nails boss when he wants results, Yun shuttered Samsung's
TV factories for two months until old inventory cleared. Yun also decreed Samsung would sell only high-end goods.
Many cellular operators resisted. "Carriers didn't buy our story," says telecom exec Park. "They wanted lower prices
all the time. At some point, we had to say no to them."

A top priority was straightening out the business in the U.S., where "we were in a desperate position," recalls
Samsung America chief Oh, appointed in early 2001. "We had a lot of gadgets. But they had nowhere to go."
Samsung lured Peter Skaryznski from AT&T (T ) to run handset sales, and Peter Weedfald, who worked at
ViewSonic Corp. and ComputerWorld magazine, to head marketing.

Yun brought new blood to Seoul, too. One recruit was Eric B. Kim, 48, who moved to the U.S. from Korea at age 13
and worked at various tech companies. Kim was named executive vice-president of global marketing in 1999. With
his Korean rusty, Kim made his first big presentation to 400 managers in English. Sensing Kim would be resented,
Yun declared: "Some of you may want to put Mr. Kim on top of a tree and then shake him down. If anybody tries that,
I will kill you!"

The first coup in the U.S. came in 1997 when Sprint PCS Group began selling Samsung handsets. Sprint's service
was based on CDMA, and Samsung had an early lead in the standard due to an alliance in Korea with Qualcomm
(QCOM ) Inc. Samsung's SCH-3500, a silver, clamshell-shaped model priced at $149, was an instant hit. Soon,
Samsung was world leader in CDMA phones. Under Weedfald, Samsung also pulled its appliances off the shelves of
Wal-Mart and Target and negotiated deals with higher-end chains like Best Buy and Circuit City.

Samsung's status in chips and displays, which can make up 90% of the cost of most digital devices, gives it an edge
in handsets and other products. Besides dominating DRAM chips, Samsung leads in static random access memory
and controls 55% of the $2 billion market for NAND flash memory, a technology mainly used in removable cards that
store large music and color-image files. With portable digital appliances expected to skyrocket, analysts predict
NAND flash sales will soar to $7 billion by 2005, overtaking the more established market for NOR flash, which is
embedded onto PCs, dominated by Intel and Advanced Micro Devices (AMD ).

The company's breadth in displays gives it a similar advantage. It leads in thin-film LCDs, which are becoming the
favored format for PCs, normal-size TVs, and all mobile devices. Samsung predicts a factory being built in Tangjung,
Korea, that will produce LCD sheets as big as a queen-size mattress will help to halve prices of large-screen LCD
TVs by 2005. Samsung also aims to be No. 1 in plasma and projection displays.

If Samsung has a major flaw, it may be its lack of software and content. Samsung has no plans to branch out into
music, movies, and games, as Sony and Apple have done. Sony figures that subscription-to-content will provide a
more lucrative source of revenue. Samsung's execs remain convinced they're better off collaborating with content
and software providers. They say this strategy offers customers more choices than Nokia, which uses its own
software.

Yun has heard tech gurus, publications, and even Samsung execs warn him to forsake the vertical model. His
response: Samsung needs it all. "Everyone can get the same technology now," he says. "But that doesn't mean they
can make an advanced product." Stay at the forefront of core technologies and master the manufacturing, Yun
believes, and you control your future. Many tech companies have tried that strategy and failed. Samsung is betting
billions it can overcome the odds. 

Samsung targets the high-end to up margins and profits

From being a mass-market player—a game where it has seen tremendous success—
Samsung is now eyeing high-end segments in the various product categories it operates
in. Shipra Arora has more details on this strategy and also analyses Samsung’s moves on
this front, keeping in mind market conditions and the competition Samsung will face
Samsung’s meteoric rise in the Indian information technology
product space is a well-documented story. But while Samsung has
the pole position in many categories—a 52.5 percent share in
monitors, 53 percent of the hard disk drive (HDD) market, and 65-
70 percent of the optical drives market, Samsung Electronics India
Information & Telecommunication (SEIIT) is largely seen as a mass-
market player.

Being a mass-market player is not a bad thing in itself—and

Samsung’s success story is a testament to that. The Korean giant’s
Indian IT arm has gained a reputation for success, has achieved
mass reach, great brand visibility and excellent revenues. But in the current market, a
mass-market strategy does have its pitfalls. Sure, the consumer market is far from
saturation point, but it is the increasingly dwindling margins in the Indian IT hardware
industry that necessitates a question mark over any mass-market strategy. Further, driven
by price wars, average selling prices have also been on a constant fall, thus making
profitability an issue.

In effect, apart from brand visibility and its successful mass-market strategy, what
Samsung needs today is a separate focus on the high-end business and a better high-end
brand image to ensure higher margins and profitability.

Though Samsung has been a regular in terms of introducing products touching the higher
brackets, a specific ‘high-end business focus’ had been lacking in the past. To correct this,
the company has now initiated a conscious shift in its strategy, entailing a greater focus on
high-margin businesses. Vivek Prakash, general manager, sales & marketing for SEIIT
agrees, “Under the prevailing low-margin conditions there is a need to constantly upscale
the business.” This strategic shift seems a great idea when you consider the competitive
pressure from LG in the monitor market, where according to IDC the gap between the two
has narrowed significantly in the last few quarters. And with HP and Seagate holding on to
their ground in the printer and HDD markets respectively, there’s even more reason for
Samsung to go for the high-end to bolster its success story in the mass market.

According to Moninder Jain, national marketing manager, SEIIT, the company is now
trying to push in more and more high-end sales in the market. What could well evolve
over the next one to two years is a two-pronged strategy—leveraging on low- and mid-
range products to play the volume game, while playing the value and margins game with
its high-end product range.

The products that fall under the purview of Samsung’s high-end business include monitors
with larger screen sizes, TFT-LCD monitors, laser printers, multifunctional printers, combo
drives, and high-capacity 80 GB and 120 GB hard disk drives. The product strategy
roadmap being laid out by the company will focus on these lines. Laser printing is
emerging as the star product line with the focus heavily skewed towards this segment,
followed by TFT-LCD monitors. In fact the laser printer division is going to be branded the
star division for Samsung worldwide by 2005.

The high-end business accounted for 12 percent of Samsung’s total business in 2001, and
as a result of the new strategy that figure is estimated to grow to 35-40 percent by the
year-end. That begs the question: How does Samsung plan to go about meeting this stiff
target? While a Rs 10 crore investment has been laid out for laser printers over the next
one year, the company will be spending another Rs 5 crore specifically on popularising
TFT-LCDs over the next quarter itself. Apart from investments, Samsung has also recently
appointed a national distributor exclusively for its high-end products.

Another fallout of the high-end focus has been an increased emphasis on the corporate
segment, the most obvious market in this category. In order to strengthen its corporate
presence Samsung has introduced a ‘SPEAR’ channel programme constituting around 100
channel partners dedicated towards targeting large SMEs and corporates. The
products being routed through the SPEAR channel are laser printers, 17-inch
monitors and TFT-LCD monitors. 
Here’s how the scenario looks in the main segments that Samsung is targeting
as part of its high-end focus:

Monitors 
Samsung has been the undisputed leader in the Indian colour monitor market By next
with a 52.4 percent market share, according to IDC. As mentioned earlier, the year
Samsung
only cause for worry for Samsung here is the reinvigorated LG in the last 2-3 wants to
quarters. According to IDC there has been a significant narrowing in the gap establish
between these two players, thanks to LG’s regional distributor model showing 17-inch as
its
great results. standard
monitor
Samsung, which was four times the size of LG in the monitor market during size in
India, says
January-February-March (JFM 2002) quarter came down to being 2.5 times LG’s Moninder
size during the April-May-June (AMJ) quarter. And according to feedback Jain
received by IDC, the gap has further narrowed down during the July-August-
September (JAS) quarter, reveals an IDC source. “Of late, Samsung’s market
share in this business has gone down on account of competition from LG. Though LG is still
a distant No 2 to Samsung, it has come closer to the leader in the last few months,” adds
the source. This narrowing of the gap isn’t because Samsung has stopped growing in this
segment, as it is about LG’s rapid growth.

Samsung’s high-end focus is a perfect weapon to combat this challenge from LG. The
high-end monitor market is the unchallenged forte of Samsung, according to IDC. In the
high-end bracket (comprising of 19-inch, 21-inch and 21-inch flat), Samsung enjoys a
virtual monopoly, with LG being pretty weak in these categories. Even the TFT-LCD
monitor market is heavily in Samsung’s favour. According to IDC, Samsung scores a huge
plus over LG when it comes to introduction of the latest high-end technologies. In fact
Samsung was the first firm to introduce 19-inch flat and 21-inch flat monitors in the Indian
market, and it is now bringing in 24-inch. The company can leverage on this technology
leadership to create a niche for itself in the monitor market.

What Samsung needs to lay greater emphasis on is the creation of demand for these high-
end monitors that can bring in higher margins. According to IDC, though high-end
technologies like LCD, 17-inch monitors (and bigger sizes) are gaining greater momentum
in the Indian market, it will still take a few years for these products to become part of the
mainstream market.

Till a few months ago, 17-inch and above monitors only accounted for one-sixth of the
total monitor market, with 15-inch monitors accounting for almost half of the total market.
However, as IDC further points out, there is a definite shift happening from 15-inch to 17-
inch monitors in the Indian market, assisted by the fall in prices of 17-inch monitors
during the last year. The price differential between 15-inch and entry-level 17-inch
monitors has come down to Rs 2,000, as compared to Rs 7,000 earlier.

Samsung’s strategy on this front is to graduate home and SOHO customers to 17-inch
monitors. The key issue here is the speed at which the company is able to do so in order
to gain the early-mover advantage. Samsung’s strategy includes innovative promotions
and schemes (for instance, bundling Lexmark inkjet printers with its 17-inch monitors).
According to Jain, by next year Samsung wants to establish 17-inch as its standard
monitor size in India. The company’s track record does indicate that this is no idle boast.
Numbers, which are the best indicator of the truth of any claim, clearly show that the
contribution of 17-inch monitors to Samsung’s overall monitor revenues have grown to 22
percent by May this year, up from less than 14 percent last year. Thus, revenues from 17-
inch monitors are expected to overtake 15-inch revenues by mid-2003.

However, some industry experts point out that even 17-inch is no longer a high-margin
business, considering the fall in prices, and therefore might not play a significant role in
the company’s quest for a high-margin focus.

Nevertheless, Samsung seems to be smartly laying the foundation for the high-end in the
otherwise difficult home market by initiating their first steps towards the high-end market.
It’s easier to sell a 17-inch TFT-LCD monitor (undisputedly a premium product) to a user
who already understands the benefits of using a 17-inch monitor by using one, as
compared to a user who’s still using a 15-inch monitor.

Once this market has been created Samsung could leverage it later as it matures even
further. Besides, Samsung is also focusing on corporates and large SMEs for deriving great
margins, and further pushing in high-end products. According to IDC, the corporate
market is a tough nut to crack considering that it is largely a branded PC market. But
Samsung’s already powerful presence in the corporate assembled PC market can be
effectively leveraged to push its high-end offerings, though it will take some
time for significant numbers to pour in.

Laser printers
The other high-end business where Samsung is looking to establish itself in
terms of volumes as well is laser printers. The inkjet market is more or less
stagnant, but the laser market is growing at 20 percent, according to IDC, thus
Under the
explaining why Samsung is focusing on lasers. The company is in fact relying prevailing
heavily on this business segment to lead its high-end brigade. According to low-
Prakash Vaswani, senior analyst, peripherals research at IDC India, the entry- margin
conditions
level and mid-range laser printer market is predominantly HP’s forte with there is a
Samsung coming in second. During the AMJ quarter of 2002 HP accounted for 65 need to
percent market share in terms of units, with Samsung at 22.5 percent. Samsung constantly
upscale
says that its market share has grown to 35 percent for the quarter ending July the
2002, with a 600 percent growth over the last quarter. business,
says Vivek
Prakash
With the huge gap between HP and itself Samsung might still be far from
toppling HP from its pole position in this space-especially considering HP’s inkjet
advantage too—but considering Samsung’s growth record, HP can’t afford to take the
challenge from Samsung lightly. According to Vaswani, considering the fact that Samsung
has been there in this business for only about a year-and-a-half, it has made significant
growth strides. “For more than five to six years HP commanded over 90 percent of the
laser printer market, which has now come down to 65 percent. And it is Samsung that
been the biggest gobbler of HP’s share,” he adds. The reason for this is that most of the
growth in the laser printer market has been at the entry-level and HP and Samsung are
the only significant players in this segment.

While the spectacular growth seen in the last 1.5 years has built up a strong foundation for
Samsung’s challenge, success in the long term will depend largely on Samsung getting its
strategies right. According to IDC, the company’s strategy vis-à-vis HP revolves largely
around price points and pushing in freebies. Along with Wipro, Samsung has been at the
leading edge of the price war, bringing down the entry-level price to around Rs 12,500
early this year, down from the Rs 16,000 to Rs 20,000 prices seen last year. HP has been
a slow mover in this regard, bringing its entry-level price down to Rs 15,000 only.
Samsung has been more proactive in terms of schemes and offers as well, being the first
one to offer a free laser toner, an offer later followed by HP. Other offers have included a
free scanner and additional warranty. According to Vaswani, going by the speed at which
Samsung is moving, prices of entry-level laser printers are likely to drop further.

But while this price strategy has been fruitful in garnering early market share it cannot
remain a viable long-term strategy. Vaswani clearly states that working on pricing alone
can be a dangerous strategy to follow. “Laser printers are targeted at corporates where
brand image plays a more decisive role than attractive pricing. What Samsung lacks today
vis-à-vis HP, is a high-end brand image and stronger brand presence,” he adds. Hence,
what is needed is a shift in its strategy from a volume-led approach to a more value-led
approach in the laser printer business.

What Samsung perhaps needs to do today in order to gain an edge over HP is an

aggressive brand-building exercise as it has done earlier in the HDD market against
Seagate. With the company set to launch its high-end colour laser printers by next year,
branding and image will have to be looked at all the more seriously because the pricing
factor is not so important in this segment. Wipro’s aggressive launch of a sub-Rs 1 lakh
high-end laser printer was hardly able to dent HP’s similar offering at Rs 1.5 lakh.
Samsung seems to have taken the cue in this regard, having outlined a Rs 10 crore
marketing investment for laser printers.

Another area where HP has an advantage is in channel strengths in this segment.

Samsung has a relatively new channel set-up for laser printers, versus HP’s set channel
base. This is another area, where IDC believes Samsung will have to work on through
forging greater relationship building exercises.

Journal Article Excerpt  See below...

The growth pattern of Samsung Electronics: a strategy perspective.

by Seongjae Yu

For both economic and strategic reasons, Korean economic planners in the 1970s
advocated the advantages of developing a domestic electronics industry.
Economically, development of the industry was considered highly preferable
because of its potentially high value-added, linkage effects (economic and
technological), employment potential, and a fast-growing world market with high
income elasticity. Strategically, the electronics industry was believed to be
particularly suitable for a country like Korea with poor natural endowments but with
abundant highly skilled human resources (KIST, 1976). In addition, the industry
showed such characteristics as labor intensity,(1) knowledge intensity, low input
requirements of energy and raw materials, and the increasing importance of
electronic equipment in the emerging information industry.

Korea has successfully turned these potential advantages into reality. When the
Second Five-Year Plan ended in 1971, total output of the electronics industry was a
meager $0.14 billion. Over the next twenty-five years, however, it grew over 440
times (in current dollars) to $62 billion, making Korea the fourth-largest electronic-
goods-producing country in the world. Many of the large chaebols, such as
Samsung, LG, Hyundai, and Daewoo, have contributed to this phenomenal growth.
In particular, Samsung's role is of great interest, as it represents a microcosm of the
growth process of the Korean electronics industry.

Samsung Electronics Company (SEC), founded in 1969 as a member of the Samsung

Group, has grown into the largest manufacturer in Korea, with a sales turnover of
$23.9 billion in 1997, and accounting for 32.8 percent of the total output of the
electronics industry. In investment, product development, marketing, and
technology development, SEC has played the leading role in expanding the frontier
of Korea's electronics industry. Since the introduction of monochrome television
sets in 1971, Samsung has grown on average 38 percent a year, broadening its
product range from simple consumer electronics and home appliances to
sophisticated information and communications equipment, computers and
peripherals, and semiconductors. SEC claims that, in the area of semiconductors, it
has become the largest producer of dynamic random access memory (DRAM) chips
in the world, with a market share of 17 percent (Samsung Electronics Group, 1996,
p. 8), pulling ahead of such U.S. and Japanese giant corporations as NEC, Texas
Instruments, Hitachi, and Toshiba.

Samsung has many other products that compete well in the world market. In 1996,
for example, sales of computer monitors ranked first in the world, with 12.8 percent
 of the market; videocassette recorders were fifth with 9.5 percent; microwave
ovens were second with 18.2 percent; and static random access memory (SRAM)
chips were first with 15 percent. This achievement is remarkable, given that its
takeoff occurred in the 1970s, when the Korean domestic economy was in a
fledgling stage of development and Japanese companies were aggressively
dominating the world consumer-electronics markets, eclipsing such U.S. firms as
RCA, GTE, and Zenith.

This article investigates Samsung's growth strategies, which enabled the company
to catch up in technology and product development. Specifically, it focuses on
Samsung's strategic choices with respect to product development, technology,
manufacturing scale and scope, and export marketing. It also analyzes Samsung's
strategy in building the competitive advantages required to cope with the unfriendly
market environment dominated by world-class U.S. and Japanese electronics
corporations. There is a distinctive and coherent pattern underlying these strategic
choices, all of which are closely related to the evolutionary learning process of the
company and matched with prevailing environmental conditions facing Samsung.
However, not all factors that accounted for Samsung's success are considered - such
as the effect of government policies, corporate culture, and organizational
structure.(2)

Growth strategy

From the beginning, the goal of the late B.C. Lee, founder of the Samsung Group,
was to make SEC one of the largest manufacturers of electronics goods in the world
(Kang, 1996, p. 20). However, the initial conditions facing Samsung in technology,
market potential, industry infrastructure, and labor skill were too unfavorable to
achieve this goal.(3) The tasks required for Samsung were then: (1) to invest in
production systems; (2) to acquire the necessary know-how, and (3) to become
competitive in world markets.

Case Study
Developing innovative, high-tech products 30 percent faster
Samsung Electronics Co., Ltd.
Siemens PLM Software technology supports a fully dig ital process that encompasses the full spectrum of activities from creative design through to manufacturing

Leading the digital convergence revolution

Samsung Electronics Co., Ltd. is a global leader in semiconductor, telecommunication, digital media and digital convergence
technologies. Employing approximately 138,000 people in 124 offices in 56 countries, the company consists of five main
business operations comprised of 13 business units:Digital Media Business, LCD Business, Semiconductor
Business,Telecommunication Network Business and Digital Appliance Business. Recognized as one of the fastest growing
global brands, Samsung Electronics is a leading producer of digital TVs,memory chips, mobile phones and TFT-LCDs.
Like all companies in the business of high tech, Samsung must bring innovative products to market faster while ensuring
high quality and holding down costs. It is also faced with the challenge of working with global business partners and its own
geographically dispersed facilities. Samsung’s strategy for meeting its mission of “technology-based value innovation” relies
heavily on what it calls a digital convergence revolution.This revolution features two parts: a digital product development
infrastructure (involving design, validation and manufacturing) and digital collaboration.

Samsung is using product lifecycle management (PLM) technology from Siemens PLM Software as the foundation for its
digital convergence revolution. Siemens PLM Software is supporting a number of the company’s PLM initiatives including:
digital product design with automation, largesize data and bill of material (BOM) management, digital mockups, knowledge
management and concurrent engineering.

Fully digital design through manufacturing

Digital product development at Samsung begins with creative design, which takes place in a virtual environment built on an
in-house industrial design solution and Siemens’ NX® I-deas® software. Photorealistic rendering and virtual reality take the
place of physical prototypes.Tests of design variations and real-time motion simulation are also performed digitally,making it
possible to find and fix errors early in the design process.

Mechanical designers follow a configuration-based design process.Top-down design based on standard structures and
specifications is employed.A mechanical library management system based on Siemens’ Teamcenter® software enables
designers to find and re-use existing parts. Samsung has a fully automated part and assembly validation system based on
Teamcenter.The system performs more than 500 validation jobs every day in real-time.

Samsung has automated much of the mold design and manufacturing process.The automated system, which was
developed in-house, is based on rules and continuously updated corporate knowledge. It helps avoid human error and
allows the company to develop molds for a cellular phone in the amazingly short span of just 10 days.

Samsung’s process for product data management and BOM management was developed by Samsung Data Systems and
Siemens PLM Software engineers using Teamcenter to effectively manage the flow of product data and to automatically
generate bills of material, which are synchronized with the CAD product structure.

Benefits across the board

One of the advantages of this fully digital design-through-manufacturing approach is greater efficiency in product design.The
ability to find and re-use previously validated CAD data has helped shrink the development cycle by 30 percent. In addition,
Samsung’s process for evaluating design is now more effective. Using digital renderings and mockups has reduced the
need for physical prototypes by 30 percent.Automated BOM generation has reduced errors by 95 percent.

In the manufacturing realm, automation has also reduced errors, as evidenced by a 19-percent decline in corrections
needed to molds and a 50-percent reduction in errors found in first production runs. Collaboration has improved as well, with
work-in-process and release data shared globally in one integrated system, and CAD-BOM consistency maintained during
engineering changes.

Samsung is now preparing to migrate from NX I-deas to the NX product development solution. It also plans to expand its
use of Teamcenter overseas, and ultimately to have a concurrent engineering environment that includes all overseas
facilities.