Case Study of Samsung's Mobile Phone Business

KDI SCHOOL WORKING PAPER SERIES

Case Study of Samsung’s Mobile Phone Business

Boon-Young Lee Seung-Joo Lee

May 2004 Working Paper 04-11

This paper can be downloaded without charge at: KDI School of Public Policy and Management Working Paper Series Index: http://library.kdischool.ac.kr/publication/paper.asp The Social Science Network Electronic Paper Collection: http://ssrn.com/abstract= 556923

Case Study of Samsung’s Mobile Phone Business

Boon-Young Lee∗

aliceboon@kdischool.ac.kr

and Seung-Joo Lee∗∗

sjl@kdischool.ac.kr

Abstract: This paper examines Samsung Electronics successful growth strategy in the mobile phone business. It examines its early efforts at developing a competitive product in the domestic market, its globalization strategies, and some of the key challenges it faces today. The paper provide insights into how a late-comer to an industry can overcome certain disadvantages and successfully position itself as a widely respected and successful brand. JEL classification: L 63, M10 Key words: Samsung, mobile phone, strategy

∗

∗∗

MBA student, KDI School of Public Policy and Management Professor, KDI School of Public Policy and Management

I. Introduction

For Samsung Electronics, 2003 was a watershed year. It successfully positioned itself as one of the world’s best mobile phone manufacturers and its products were featured all over the media. Many were calling its mobile phones as “the best gift for Christmas”1 or “the Mercedes of mobile phones.”2 Samsung’s achievements were particularly remarkable considering that its primary focus had previously been in semiconductors and home appliances. Indeed, when it first made the decision to enter the mobile phone business, industry observers viewed the move as foolhardy and reckless. But, much to their surprise, Samsung’s foray into the market turned out to be a great success, contributing significantly to the company’s profit growth and brand reputation. In 2003, Samsung posted...