Sumsang

1. What are the ingredients of SEC’s corporate turnaround strategy? What are the implications for marketing?

1) SEC was originally a low-cost manufacturer of relatively low-end electronic commodity products without strong self brand. In 1993, the Chairman launched the “new management initiative” to transform the company into a global business leader.

The ingredients of SEC’s corporate turnaround strategy included, firstly, massive investment in R&D. Samsung committed itself to digital innovation and its talented product developers were encouraged to produce pillar products. Besides technology advances, the company also benefited from its the fast speed of product realization, especially when the life cycle of digital products was becoming shorter and shorter.

Instead of outsourcing manufacture like many of its competitors, Samsung viewed manufacturing as a core competence and ensured its manufacturing competitiveness by forcing its own plants to compete with outside companies for internal business. Moreover, using vertical integration, Samsung had more control and flexibility over its production process and ensured its ability in reliable supply of high quality and even customized products.

Another ingredient was to focus more on hardware and devices rather than on software. This “open architecture” approach was believed to offer consumers greater access to different software.

Furthermore, Samsung enjoyed a greater level of product differentiation with innovation of premium products across all categories. Samsung was successfully ranked in top 3 in all of its major product categories.

Last but not least, Samsung had this long-term vision of digital convergence, leading the trend of merging different technologies into one major product and linking multiple technologies with one network. Samsung believed that stepping ahead and capturing digital home could help the company turn into a well-know successful global...