Samsung

Samsung Electronics Company has achieved a remarkable turnaround over the last two decades. Before the 1990s, Samsung was not highly regarded, and struggled with their brand identity and value. Samsung was known as a low cost Korean electronics brand that manufactured consumer VCRs and televisions. The entire company, as well as their products, did not compete well with industry leaders such as Sony for top-of-mind brand awareness.

Several key actions instigated corporate and product improvements since this time. Beginning first with personnel, the Chairman of the company (Kun Hee Lee) started the first movement within that would ultimately lead to their current lucrative position. Lee determined, in 1993, that Samsung could reposition itself as a first-class electronics brand that could distribute products world-wide.

Lee wanted to commit Samsung to long term goals and results and transform the company away from commodity based products, and instead produce luxury electronic items that would be highly innovative. At the time, electronic companies could venture into two different routes: software or hardware. The outlook for software development was very good in the 1990s, but Lee chose the route for developing hardware instead. This decision became one of the most critical ingredients to Samsung’s tremendous success of late. Manufacturing hardware components became the primary objective for the company, and one which they became highly invested into.

A second important ingredient to this turnaround strategy was how Samsung choose to structure themselves as company. Samsung wanted control of the whole process, from soup to nuts, and to be a company that could produce almost an entire electronic device in-house. This strategy was in line with a vertical integration approach and it offered Samsung an opportunity to continue serving business industries and consumers.

The combination of a vertically integrated hardware company has, over time, shown to be a...