Chiến lược xâm nhập thị trường của Samsung Electronics

Samsung Electronics’ International Business Strategy
DANANG UNIVERSITY
OF ECONOMICS

Faculty of International Business

GROUP 4

46K01.3

INTERNATIONAL BUSINESS STRATEGY OF
SAMSUNG ELECTRONICS COMPANY
Academic Advisor: PhD. Huynh Thi Dieu Linh
Danang, 4/2022
International Business Management_46K01.3_Group 4

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Samsung Electronics’ International Business Strategy

TABLE OF CONTENTS
INTRODUCTION .............................................................................................................. 6
I.

General information about Samsung Electronics .................................................... 7
1. Corporate profile .................................................................................................... 7
2. The process of formation and development........................................................... 8
3. Core business values............................................................................................... 9
4. Products description ............................................................................................. 10
5. Samsung Electronics’ SWOT analysis ................................................................ 12

II. The strategy of international business .................................................................... 17
1. Strategic positioning ............................................................................................. 17
2. Value creation activities ....................................................................................... 18
3. Global Expansion ................................................................................................. 20
4. Choosing the international business strategy of Samsung Electronics ............. 21
III.

The organization of international business .......................................................... 23
1. Organizational structure ...................................................................................... 23
2. Control systems and incentives ............................................................................ 24
3. Organizational culture ......................................................................................... 25

IV.

The entry strategy ................................................................................................. 26
1. Penetration strategy .............................................................................................. 26
2. Reasons to choose the strategy ............................................................................. 26
3. Implementing strategy .......................................................................................... 27
4. Result ..................................................................................................................... 29

V. Global production and supply chain management ................................................ 31
1. Key criteria ............................................................................................................ 32
2. Six Sigma .............................................................................................................. 33
3. DMAEV ................................................................................................................. 34
VI.

Global human resource management ................................................................... 35
1. Staffing policy ....................................................................................................... 35
2. Training and management development ............................................................. 39

3. Compensating expatriates .................................................................................... 42
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Samsung Electronics’ International Business Strategy

4. International labor relations ................................................................................ 42
CONCLUSION ................................................................................................................. 44
REFERENCES ................................................................................................................. 45

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TABLE OF FIGURES
Figure 1. Logo of Samsung Company .................................................................................. 7
Figure 2. Samsung LCD QLed ........................................................................................... 10
Figure 3. Samsung Glaxy Z Flip 4 ..................................................................................... 11
Figure 4. Samsung’s camera............................................................................................... 12
Figure 5. Organizational structure of Samsung Electronics ............................................... 23
Figure 6. Market share of TV LCD Vietnam in March 2008 (Source:GFK) ..................... 30
Figure 7. Profit from Samsung Vina Joint Venture in billions VND (finandlife.com)...... 30
Figure 8. Export revenue of SEV 2010-2013 in billions USD (finandlife.com) ............... 31
Figure 9. Reason for early return ........................................................................................ 37

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Samsung Electronics’ International Business Strategy

INDIVIDUAL CONTRIBUTION EVALUATION
GROUP 4 – 46K01.3
Student name

Class

Number

% Contribution

Lê Thị Hà An

46K01.3

02

100%

Trần Đình Đình

46K01.3

08

100%

Nguyễn Thị Thùy Dương

46K01.3

10

100%

Nguyễn Nhật Lam

46K01.3

18

100%

Đinh Thị Phương Thảo

46K01.3

26

100%

Hoàng Thị Tường Vy

46K01.3

39

100%

5
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Samsung Electronics’ International Business Strategy

INTRODUCTION
When it comes to business, every company seeks to go forward with a view to
reaching the highest level of growth and achieving its own goals. Nevertheless, being the
market leader is not simple for any business. To outperform all of its competitors, a
company must adopt a unique style of thinking. Additionally, in the age of globalization,
the world economy has witnessed an integrated and interdependent trend, evidenced by a
significant increase in international business activities. Reduced tariffs, improved
communications and higher capital mobility have made it possible for enterprises to
connect to international markets and grow globally. As a result, companies increasingly
have a tendency to conduct business internationally and grasp these opportunities to achieve
their objectives, leading to a rapid rise in the concept of international business management
among companies.
The primary purpose of this report is to analyze the international business activities
of a multinational company based on the knowledge obtained in an international business
management course. As a result, our group decided to choose Samsung Electronics Co Ltd
as the research object. Samsung Electronics is a well-known multinational electronics
company with operations in a wide range of geographic areas all over the world. In detail,
we would investigate how Samsung Electronics achieved significant success in expanding
globally through its strategy of international business, organizational architecture, entry
strategy, global production & supply chain management and global human resources
management.

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I.

General information about Samsung Electronics
1. Corporate profile

Company’s name: Samsung Electronics Co Ltd.
Website: www.samsung.com
Overview: Samsung Electronics Co Ltd. (Samsung) is a
South Korean multinational electronics company which
specializes in consumer electronics, information
technology and mobile communications, and device
solutions.

Figure 1. Logo of Samsung Company

Headquarters: Seoul, South Korea
Year established: 1969
President & CEO: Kyung, Kye Hyun
Vice Chairman & CEO: Han, Jong Hee
Business philosophy: Samsung Electronics devotes its talent and technology to creating
superior products and services that contribute to a better global society. To achieve this,
Samsung sets a high value on its people and technologies.
Mission and value: “Samsung is committed to complying with local laws and regulations

as well as applying a strict global code of conduct to all employees. It believes that ethical
management is not only a tool for responding to the rapid changes in the global business
environment but also a vehicle for building trust with its various stakeholders including
customers, shareholders, employees, business partners and local communities. With an aim
to become one of the most ethical companies in the world, Samsung continues to train its
employees and operate monitoring systems, while practicing fair and transparent corporate
management.”
In addition, Samsung Electronics has its operations in a number of different geographic
areas, including the Americas, Europe, Africa, the Middle East, and Asia-Pacific.

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2. The process of formation and development
As a company with a long history in the electronics industry, the process of
establishment and development of Samsung Electronics went through 7 main stages
(Samsung n. , n.d.), specifically listed as follows:
1969 - 1979: Diversifying in electronics
Samsung Electronics was first established in 1969 and quickly became a major
manufacturer in the Korean market. During this initial period, the company witnessed a
burst of growth from burgeoning home electronics and started exporting its goods for the
first time. Additionally, Samsung Electronics purchased a 50% share in Korea
Semiconductor, enhancing its position as a market leader in the production of
semiconductors.
1980 - 1989: Entering the global marketplace
At this stage, Samsung Electronics has entered the international market. Two research and
development (R&D) institutes were established as a result of Samsung Electronics'

increased focus on technology, which helped the company further its reach into the fields
of electronics, semiconductors, optical telecommunications, and new areas of technological
innovation like nanotechnology and advanced network architectures. The combination of
Samsung Electronics and Samsung Semiconductor in 1980 marked a significant turning
point.
1990 - 1993: Competing in a changing technology world
In the early 1990s, high-tech companies faced several challenges. Competition and
consolidation were thriving while mergers, alliances, and buyouts were frequent. At this
time, rethinking technology and service offerings were essential for businesses.
Additionally, several businesses started to cross national and corporate boundaries. As a
result, Samsung Electronics took advantage of these chances by adjusting its corporate
strategy to better meet consumer needs.
1994 - 1996: Becoming a global force
In the mid-1990s, Samsung Electronics revolutionized its business by putting a priority on
creating goods of the highest quality, ensuring complete customer satisfaction and acting
ethically as a company. During this time, 12 additional items attained the top market
position in their respective categories, and 17 other products - ranging from semiconductors
to computer monitors, TFT-LCD screens to color picture tubes - climbed into the top five
products for worldwide market share.
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Being No.1 also includes maintaining corporate social responsibilities, whether they relate
to environmental protection, social welfare, sports, or cultural activities. In order to achieve
this, Samsung Electronics actively engaged in sports marketing. As a result of these efforts,
in July 1996, the company's chairman, Kun-hee Lee, was elected as a member of the
International Olympic Committee (IOC), considerably enhancing the company's reputation

as a major supporter of international athletics.
1997 - 1999: Advancing the digital frontier
Thanks to Samsung Electronics’ leadership in digital and network technologies and its
consistent focus on electronics, finances, and associated services, Samsung Electronics was
one of the few firms that continued to develop despite the 1997 financial crisis that had an
impact on almost Korean enterprises.
2000 - 2004: Pioneering the digital age
International business has experienced revolutionary innovation and potential thanks to the
digital era. Samsung Electronics has adapted by utilizing cutting-edge technology, offering
goods that are competitive and continuously innovating.
2005 - Present: Fortune global top company, Samsung.
With its success in the electronics industry, Samsung has positioned itself as a technology
sector leader and is currently among the top 10 worldwide brands.
3. Core business values
According to Samsung, success in business is a result of upholding strong values. For
this reason, Samsung Electronics prioritizes every decision the company makes on the
following core values along with a strict code of conduct.
● People: A firm is, in essence, its people. The goal of Samsung is to provide as many
chances as possible for each employee to develop to their full potential.
● Excellence: Everything action taken at Samsung is driven by an unyielding passion
for excellence and an unfaltering commitment to developing the best products and
services on the market.
● Change: Since the company's foundation, Samsung Electronics set its sights on the
future, anticipating market needs and demands so it can steer the company toward
long-term success.
● Integrity: Samsung Electronics was built on a basis of moral behavior. They always
engage with fairness, respect for all stakeholders, and complete transparency as the
company's orientation.
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● Co-prosperity: Samsung is dedicated to becoming a socially and environmentally
responsible corporate citizen in all of its communities all over the world.
Additionally, in 2005, Samsung Electronics introduced the "Five Samsung Business
Principles" as a statement of its dedication to Corporate Social Responsibilities (CSR) as a
global leader in the industry. The principles act as the framework for its worldwide standard
of conduct, which ensures conformity to moral and legal obligations as well as the
fulfilment of its corporate social responsibilities. Five Samsung business principles
include:
● Comply with laws and ethical standards.
● Maintain a clean organizational culture.
● Respect customers, shareholders and employees.
● Care for the environment, safety and health.
● A socially responsible corporate citizen.
4. Products description
The company's product portfolio consists of televisions (TV), refrigerators, washing
machines, air conditioners, medical devices, printers, monitors, computers, network
systems, and digital cameras. Additionally, it produces LCD and LED panels, cell phones,
smartphones, tablets, and associated accessories. Samsung Electronics also offers solutions
to retail, hospitality, healthcare institutions, finance, education, transportation, and
government sectors. In details:
Televisions
●
In 2007, Samsung officially launched the
"Internet TV" - a device that allows users to
watch traditional television shows while
simultaneously receiving information from the

Internet. Afterwards, Samsung created the
"Smart LED TV" which enables extra installed
smart television apps.
●
In 2009, Samsung held the greatest market
share in the globe for a fourth consecutive year
thanks to sales of almost 31 million flat-panel
Figure 2. Samsung LCD QLed
televisions.

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● In 2010, it began selling 3D televisions and unveiled the enhanced Internet@TV 2010,
which allows users to download apps from the Samsung Apps Store for free (or a
charge). Each region's needs will be met by uniquely tailored services.
Mobile phones
● The Samsung Galaxy S series of smartphones,
which are regarded as a direct rival to the Apple
iPhone, is Samsung's range of flagship mobile
devices.
● In 2013, sales of Samsung smartphones
increased in developing nations like India and
the Middle East, where consumers were drawn
Figure 3. Samsung Glaxy Z Flip 4
to more affordable devices. On its US website
as of October 2013, the business provides 40 smartphone models, including the

Samsung Galaxy Flip Z.
● In May 2022, the Samsung Knox Guard, which enables businesses to immediately
make phones inactive to perhaps discourage theft and lower the risk of fraud and data
breaches, was released by Samsung Electronics.
LCD and OLED panels
● By 2004, Samsung was the biggest OLED producer in the world.
● In October 2007, Samsung officially launched a 40-inch LCD television screen that is
10 millimeters thick.
● In 2009, a panel for forty-inch LED televisions with a thickness of 3.9 millimeters (0.15
inch) was successfully produced by Samsung.
● In 2013, Samsung unveiled the 55-inch curved OLED TV (model KE55S9C).
Semiconductors
● Since 1993, Samsung Electronics has produced the most memory chips in the world,
and it has surpassed all rivals to become the top semiconductor maker since 2017.
● In 2020, Samsung Electronics is expected to become a pioneer in the usage of extreme
ultraviolet lithography (EUV) by starting mass production of 5 nm chips.
● In 2021, Samsung Electronics would be creating new auto chips for Volkswagen cars.
The 5G telecommunications will be provided by the logic chips in entertainment
systems to fulfil the rising demand for high-definition video while travelling.
Hard-drives
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● In 2009, Samsung released a new hard drive that can store 250GB on a 2.5-inch disk.
● In 2010, the 320GB per disk HDD was first marketed by Samsung Electronics.
Furthermore, it concentrated more on marketing external hard drives.
Cameras

● Samsung launched a number of digital camera and
camcorder models, such as the WB550 camera, the
ST550 dual-LCD-mounted camera, and the HMX-H106
(64GB SSD-mounted full HD camcorder).
● In 2010, the next-generation interchangeable lens camera
- NX10 was introduced.
Figure 4. Samsung’s camera
Others
● Samsung introduced the first MP3 player (also known as the DAP) in 1999 in
collaboration with Yepp.
● 2009 saw the release of Samsung's R1, the tiniest DivX MP3 player ever.
● The netbook N210 and laptop R580 were two of the more energy-efficient devices the
business launched in 2010.
● Samsung proposed a constellation of 4600 satellites in 2015 that would circle the planet
at a height of 1,400 km (900 mi).

5. Samsung Electronics’ SWOT analysis
Strengths
● Research and Development
Innovative research and development have always been the core of Samsung. Due to
investment in these divisions, the corporation has one of the most extensive product
portfolios among its rivals. (Parker, n.d.)
● Brand Image
Samsung Electronics Co. Ltd. is a well-known brand all throughout the world. According
to Forbes Magazine, Samsung was the eighth-most valuable brand in the world in 2020.
Thanks to brand recognition value, Samsung Electronics could approach its target market
more simply. (Parker, n.d.)
● Brand valuation
Samsung is valued at $74.6 billion, placing it in the #5 spot among brands according to
Interbrand in 2021. (Parker, n.d.)

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● Award-Winning Brand
Credibility helped Samsung position itself as a pioneer in innovation. Samsung's products
have earned several awards. Samsung has been awarded the CES (Consumer Electronics
Show) owing to its product designs and innovation for many years and went on to receive
43 CES awards in 2022. Moreover, it secured 48 awards at the International Design
Excellence Awards (IDEA). (Parker, n.d.)
● Strong global presence
Despite the fact that Samsung’s headquarters is based in South Korea, it operates 14
regional headquarters and more than 228 subsidiaries throughout the world. (Parker, n.d.)
● Stronghold in the Asian Markets
Samsung continues to dominate Asian markets, especially India and China, which are both
developing markets with rapidly expanding marketplaces. As a result, Samsung has seized
the chance and received incentives in both nations. (Parker, n.d.)
● Dominates the Smartphone Market
For many years, Samsung Electronics has governed the smartphone industry. Regarding a
2021 report by Gartner, Samsung has retained the top rank internationally with a 19%
market share in smartphone sales. (Parker, n.d.)
● Samsung surpassed Intel as the largest chip seller
With 12.3% in a global market share for semiconductors in 2021, Samsung was highly
regarded as the top chip supplier, surpassing Intel's (market share of 12.2%) as a result of
Samsung's explosive growth. (Parker, n.d.)
● Environmentally Friendly Inventions
With its eco-friendly innovations, Samsung Electronics has enhanced its brand reputation.
It ranked 8th place on the Environmental Protection Agency's (EPA) 2022 Green Power

Partner list's Top 30 Tech and Telecom businesses. Additionally, it was honored with a rare
ENERGY STAR Corporate Commitment Award. Since 2009, about 270 million metric
tons of CO2 emissions have been reduced globally thanks to Samsung's production
efficiency. Since other businesses are not able to match this success, Samsung is more
appealing than all business units. (Parker, n.d.)
Weaknesses
● Hereditary Leadership
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Samsung has been run by the same family for three generations since it was founded. Even
while Samsung has seen tremendous stability as a result of keeping the leadership within
the family, the company might stagnate due to a shortage of innovative ideas. The Samsung
heir Jay Lee has promised to end hereditary succession after a series of scandals. (Parker,
n.d.)
● Depends heavily on American markets
According to estimates, Apple and Samsung sold at least 74% of all cell phones in the
United States of America. Although Samsung has expanded its operations in Asia and
diversified its resources, the company is still heavily dependent on American markets.
However, the American economy is quite unpredictable, and another recession might hurt
Samsung's operational resources and sales anytime. (ATP, 2022)
● Falling sales of smartphones
Since 2017, Samsung's smartphone sales have been plummeting. Similar trends were seen
as a result of the price sensitivity of the Chinese market. They dump a lot of such items at
a lower cost in the Indian market, which hurts Samsung's sales. Samsung made an effort to
focus on India, however, the strategy was unsuccessful in providing the company with
significant returns. (ATP, 2022)

● Product defects
Consumers' faith and trust in a company are affected by any product that puts their lives in
danger. Samsung has launched several defective products into the market, ranging from the
Samsung Galaxy A20e that exploded to a foldable phone that broke down. (Parker, n.d.)
● Reliance on low-end smartphones
A significant portion of Samsung's revenue comes from the selling of low-end smartphones.
This segment has been more negatively impacted by supply chain issues than the high-end
smartphone segment, which has resulted in a decline in Samsung's sales and market share
from 80 million smartphones sold and 22.1% market share in Q3 2020 to 69 million
smartphones sold and 20.2% market share in Q3 2021. (as per Gartner Report). (Parker,
n.d.)
● Bribery Scandal
In 2015, the company's reputation was weakened by the admission that the head of Samsung
had bribed South Korean authorities to support a merger. His conviction and one-year
prison term diminished consumer confidence in South Korea and throughout the world.
After completing 18 months in prison, Lee Jae-Yong was released in 2021. (Parker, n.d.)
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Opportunities
● HR Management
If Samsung makes an investment in HR management, it may achieve remarkable
transformative results. It would not only benefit its sales but also offer the company an
advantage over its opponent in the marketplace. The organization may boost employee
performance and productivity by leveraging its brand image and hiring highly trained and
talented individuals. (ATP, 2022)
● Diversification and Acquisitions

It is crucial that Samsung avoids the error of being restricted to a single market. It not only
attracts hazards from an economic standpoint but also draws undesirable political
polarization and negative media attention.
For this reason, the economies of Asia and Europe have a business gap where Samsung can
flourish. It is also necessary to expand the company's consumer base. Diversification and
business acquisitions will be able to do that. Due to its strong financial position, Samsung
as a well-known brand may generate remarkable income. (Parker, n.d.)
● Launch Innovative Products
Since the smartphone industry is quite dynamic, where the most recent trends quickly
falling out of vogue, Samsung can see tremendous development by setting the standard with
fantastic and innovative products like foldable phones. (Parker, n.d.)
● Triple Protection Proposition
The 'Triple Protection Proposition' air conditioner from Samsung, which combines cuttingedge technology and first-rate construction, is about to be released. The product is designed
to appeal to a specific demographic of customers to maximize client retention. (ATP, 2022)
● Samsung creates a powerful processor for gaming on next-gen smartphones
The leading Exynos 2200 CPU, which is combined with an AMD Xclipse GPU, was just
released by the South Korean tech giant.
Samsung's new Exynos processor, which is at the forefront of cutting-edge semiconductor
technology, is the next generation of mobile CPUs with several CPU cores for spectacular
and exciting mobile phone gaming visuals and performance.
The Exynos 2200 also has RT (ray tracing) technology and a modernized NPU (neural
processing unit). (Parker, n.d.)
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Threats
● Disputes involving patent infringement

Samsung has been involved in a number of problems that have put its business in danger.
A seven-year legal battle ended with a settlement after Apple filed a lawsuit alleging patent
infringement against Samsung. Samsung was forced to pay $1.049 billion in penalties after
a jury found that the company had in fact copied Apple's ideas. Both the company's
reputation and sales were affected by this issue. (ATP, 2022)
● An increase in competition
The level of competition among rivals has risen to an all-time high, especially among those
in the consumer electronics, smartphone, and computer industries. All technological rivals
including Apple, Xiaomi and Huawei are outwitting and surpassing one another in their
race to become the leading technology company, leading to a surge in the pressure on
Samsung in both terms of money and competition. (Parker, n.d.)
● Disruption in leadership
Performance may be impacted by any disruption in leadership. The Samsung CEO and heir
Jay Lee is currently the subject of a judicial hearing in South Korea. The CEO has been
hounded by new claims of stock-price manipulation and audit rule infractions, which could
put the business into another chaotic time without leadership. (Parker, n.d.)
● Legal and Regulatory threats
Since the world becomes more and more globalized and digitally oriented, governmental
authorities have started imposing regulations that offer significant legal and regulatory
concerns to enterprises all around the world. Everybody, even Samsung, is subject to these
limitations. These strict requirements restrict companies since laws vary from market to
market. A total market shutdown could happen to Samsung if compliance is not maintained.
(ATP, 2022)
● Economic instability
Sales of new smartphones have dropped as a result of the increased market uncertainty
brought on by recent events. Due to tight budgets, the number of customers purchasing
recycled or used phones has climbed by 24%. Consequently, Samsung's sales have already
decreased, and if the uncertainty persists, they might decrease considerably more. (Parker,
n.d.)
● Rise of Counterfeiting

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According to several studies, Samsung is by far the most often counterfeited phone brand;
roughly 36% of all counterfeit smartphones are Samsung knockoffs. The Samsung Galaxy
S7 Edge is the smartphone model that is most frequently imitated. (Parker, n.d.)
● Dissatisfied phone users
The inability of Samsung Galaxy S owners to clear their cache has generated a lot of
criticism online. According to one complaint, all of the data persisted even after a user
deleted their entire cache and entered the cache setting again. Regardless of how many
times you delete the cache, it remains. When the Samsung customer service team asked one
user if this was happening on other social media platforms like Instagram or YouTube, the
user said that the issue only affected the Samsung internet app. (Parker, n.d.)
● LG's technology for foldable displays may exceed Samsung
Although it doesn't seem like LG is making a big impact in the smartphone market, this
company does have several divisions. These divisions manufacture essential components
or parts for a variety of smartphones and mobile devices. (Parker, n.d.)
II. The strategy of international business
1. Strategic positioning
Recently, the shift in manufacturing technology and especially the development of
flexible manufacturing technologies has reduced the contrast between low-cost and
differentiation strategies. With the development of technology, companies have found that
they can easily achieve the benefits of both strategies. The reason is that flexible
manufacturing technologies allow companies to pursue a low-cost or differentiation
strategy, which means Samsung Electronics can combine the two.
The use of robots and flexible fabrication machine bolts helps to reduce production
line re-installation equipment costs and other costs associated with small batch production.

Indeed, one factor driving the current trend towards marketing niches and market segments
in many consumer goods industries such as mobile phones, computers, and electronic
devices is significantly declining costs.
In terms of differentiation, Samsung Electronics has invested billions of dollars in
innovation and design. Samsung has put substantial effort into building a design language
which helped to create a unique identity for the brand. For the time being, Samsung
products are highly differentiated with unique designs and outstanding innovation.
Moreover, the company also focused on standardizing components to ensure product
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quality as well as connect with international product demand, especially in the transition
period of integration with advanced telecommunications technologies. Although Samsung
is not the leading mobile phone brand in the market, they still have a place in the minds of
customers with extremely unique and different products. (Analysis Samsung Electronics
Company, 2018) (Samsung Company's International Strategy, 2022)
2. Value creation activities
R&D
Samsung has focused on researching and developing products to meet the needs of a
wide range of customers. In fact, Samsung spent more than 9% of its total global revenue
on research and development. In the electronics and electrical appliances industry – the
market in which Samsung has a strong presence-companies invest about 5% of their
revenues in R&D. In 2019, Samsung spent more than 16.8 billion USD on R&D. Through
superior development, the company can increase the functionality of products, which makes
them more attractive to consumers as well as cut production costs. Despite constantly
innovating and creating, quality is always a crucial factor that the company primarily
focuses on. In addition to product innovation, in 2021 the company also innovated

processes to keep supply chains and distribution networks from falling apart. The company
has R&D centers at Hwaseong, San Jose, Bengaluru, Xian, and Suzhou,... (Analysis
Samsung Electronics Company, 2018)
Production
Samsung Electronics has found growth through continuous diversification. The
company has kept entering new areas of business throughout its history to find growth.
Obviously, diversification has remained a core business strategy for the firm. With a
headquarters located in Seoul, South Korea, the company has also expanded its operations
to various parts of the globe, from its home country to the US and other several regions.
The firm has divided its business operations into four main independent business
divisions: CE (Consumer Electronics), IM (Information Technology & Mobile
Communications), DS (Device Solutions) and Harman (Harman International Industries,
Inc. and its subsidiaries). (Analysis Samsung Electronics Company, 2018)
Marketing and Sales
Marketing and sales are vital drivers of demand in the smartphone and electronics
industries. Samsung also invested in marketing to create a favorable impression in
customers’ minds as well as grow its market influence. Besides the digital marketing
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channels, the company also uses store promotions and other traditional channels like
running public marketing campaigns. Samsung has also built a strong global distribution
network. They utilize both online and offline channels for the sales of their electronic
products. Additionally, Samsung has also maintained a strong brand image as a technology
brand and built a long-lasting relationship with its customers. The company has managed
to strengthen its market position and brand image through continuous dedication to product
quality and technology innovation. (Analysis Samsung Electronics Company, 2018)

Customer service
Samsung has a global network of distributors and resellers and also provides after-sales
support to customers. After-sales support plays an essential part in marketing for most
physical hardware and electronics brands because the quality of customer service has a
direct effect on the brand image. Samsung has maintained an excellent concentrate on
customer service in all the market regions where it operates. Besides its large network of
service centers, the company uses online channels to provide after-sales support to its
customers. The company has established a large number of service centers in each of its
leading markets. Apart from personally visiting these service centers, customers can use
toll-free numbers and chat tools to reach out to customer service representatives from
Samsung Electronics. (Analysis Samsung Electronics Company, 2018)
Information systems
Samsung Electronics has different management systems from other companies and
the major systems used are local databases and process control. Through these systems,
Samsung is able to monitor industrial processes, make reports on performance to the
company management and access customer reviews and feedback easily. In that way,
companies can test the device's durability and maintenance quality as well as keep eye on
satisfying customers, reducing market size competition from other rivals. (Analysis
Samsung Electronics Company, 2018)
Logistics
Samsung Electronics is a multinational corporation with more than 2.500 supply chain
partners around the world. For a large company with a global sales presence, it is essential
to manage logistics strategically since logistics forms the backbone of its supply chain.
Samsung’s supply chain is mostly located in Asia. Apart from that, its suppliers are also
located in the US and UK. Raw materials originate from its suppliers located in Asia and
other regions. Then, the company’s logistics subsidiaries bring the raw material to its
manufacturing and R&D locations.
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Samsung has integrated subsidiaries to look after the entire logistics function, both
outbound and inbound. The two leading logistics subsidiaries of Samsung are Samsung
Electronics Logitech (SELC) and Samsung SDC. These subsidiaries have to bring raw
materials from the suppliers and also take care of the outbound logistics. The finished goods
have been transported to distributors and resellers throughout the world. Its subsidiaries
have strong logistics as well as digital capabilities that allow them to cater to the firm’s
logistics and supply chain management as well as distribution-related needs efficiently.
(Analysis Samsung Electronics Company, 2018)
Human resources
Samsung Electronics’ executive board is aware of the important role of human
resources in the company’s development. Therefore, they are committed to building
Samsung into a favorite leading company, where employees are always satisfied with the
working environment, welfare policy and promotion opportunities. Samsung's employees
are all capable, knowledgeable, progressive and always united to achieve the company's
goal, building Samsung into a premium brand for consumers. Currently, Samsung
Electronics has 320.000 employees worldwide, working in a friendly environment with
good career promotion. The most outstanding feature of working at Samsung is that
employees are always equipped with the most modern working facilities and they are able
to participate in the most advanced training courses both at home and abroad. (Analysis
Samsung Electronics Company, 2018)
3. Global Expansion
Location economies
Recently, Samsung is facing great competition in order to sustain itself in the industry.
The competitors have recovered their competitiveness by investing in offshore production.
Increasing overseas productions seem to be the key major component in their strategic
response. Consequently, international production gave Samsung opportunities to become
more competitive in the industry. Samsung Electronics can utilize cheap labor from Korea

and some developing countries. For example, China has a population of 1.3 billion, wide
lands and low labor costs as well as cheap resources and raw materials, therefore, setting
up factories in China or merging with Chinese companies can help the company to lower
the cost of value creation. In addition, the lands and rental fees are the ones that were often
put into consideration as expenses. China has good infrastructure and this country is
currently reported to invest in the outsourcing industry. For example, in Chengdu, Samsung
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is planning to have a high-tech zone with 1 million square meters spanning upward.
(Analysis Samsung Electronics Company, 2018)
Experience curve
Samsung Electronics has realized economies of scale in semiconductor production. In
fact, semiconductor devices can be performed a variety of control functions in electronic
equipment, such as Samsung smartphones. Thanks to continuous improvement, Samsung’s
semiconductor production successfully extended the R&D centers and production lines to
China and other countries and the products can be sold around the world, via mass
production to reduce costs.
Samsung has a cost advantage due to its large scope of operations. As a vertically
integrated-specialized supplier, Samsung is able to achieve economies of scale as well,
which allows it to maintain its position as a consumer electronics giant by leveraging the
ability to produce semiconductor parts and assemble products on a large scale and costefficient process.
Since its foundation in 1969, Samsung Electronics has continued to grow by
expanding its operations into new markets. The profitability of Samsung is evident since it
has risen from being a minor trading company to a conglomerate. Currently, Samsung is
the most profitable company in the electronics industry. As Samsung enjoys an extensive
market share, it can increase profits through a value-creation strategy. Analysis of business

strategies that Samsung uses in boosting its profits shows that it mainly exploits product
differentiation and diversification of its operations. Nowadays, intense competition is
raging in the electronics, smartphone, and computer industries, and thus, it threatens to
shrink the already established markets of Samsung. In this view, Samsung should take
advantage of its extensive market share by employing a value-creation strategy in
maintaining the established markets and exploiting potential markets globally. (Analysis
Samsung Electronics Company, 2018)
4. Choosing the international business strategy of Samsung Electronics
When analyzing Samsung's international business strategy, the company had
successfully applied the Global Strategy. This is a common strategy for enterprises dealing
in standardized products, competing mainly based on cost-price such as electronic
components, semiconductors, semi-finished products, etc. Samsung's international business
strategy allows each Samsung subsidiary to be responsible for delivering a service or
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product to a local customer's production line. With a global strategy, Samsung was able to
save costs by standardizing products and using the same marketing strategy.
However, in recent years, the international business strategy that Samsung mainly
used is the Transnational Strategy. A transnational strategy is a competitive strategy that
seeks to increase profits by cutting costs globally while adding value by adapting products
to each market. Business units have a high degree of autonomy in performing basic business
activities such as production and marketing (to adapt well), and at the same time have close
coordination with each other (to reduce costs). A transnational strategy can be chosen when
the business is facing great pressure both to reduce costs and to adapt to local conditions.
The reasons that Samsung chose the transnational strategy for its international
business strategy can be mentioned as follows:

- Pressure for locally responsive is high: due to the different tastes in each country
and the difference in the policies of the host country.
- Pressure to reduce costs is high: there are more domestic manufacturers with
modern and large production lines to compete.
For Samsung's international business strategy at this stage, Samsung has expanded
and built several production plants in new regions such as Egypt and South Africa.
Previously, when opening a factory in Nigeria, Samsung made appropriate adjustments to
the scale of operations and production lines due to differences in infrastructure and tax
preferential available in the location. Therefore, with the transnational strategy, Samsung
has been interested in the development of location economies.
Additionally, another example where Samsung also pays attention to the needs of
dynamic countries is the introduction of a low-cost smartphone line, named Galaxy A. This
smartphone line is not available in the United States because of the high average income as
well as the carrier's discounted purchase policies. So, Galaxy A is only sold in countries
outside the US, at an extremely affordable price. To become one of the most famous
corporations worldwide, Samsung has effectively built and implemented Samsung’s
international business strategies.

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III. The organization of international business
1. Organizational structure

Figure 5. Organizational structure of Samsung Electronics
The organizational structure of Samsung Electronics is highly differentiated into a
hierarchical structure, vertically and horizontally (Chun, 2015). Samsung Electronics has

had a product-type divisional organizational structure (DX division - Consumer Electronics
Division & Mobile division, DS division, and Harman division) since December 2021 (after
a repurchase of Harman Company in the US) (Samsung, SAMSUNG ELECTRONICS Co.,
Ltd., 2021). In addition, the organizational structure is also with a minor characteristic of
geographical groupings, and a centralized mechanism through the main headquarter in
Seoul, Korea (Samsung Group: Largest Producers Of Electronic Devices In The World ,
2021).
Centralized corporate hierarchy (Vertical Differentiation)
The firm headquarters are the most notable manifestation of this structure, ensuring that the
conglomerate’s operations are effectively directed toward economic growth. Daily,
strategic directions are from headquarters to different operations departments.
Product-type divisions (Horizontal Differentiation)
Each division is responsible for a distinct business area (product line). Therefore, Samsung
Electronics created divisions for Device Solutions, DX division, and Harman division. In

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fact, all operating decisions are decentralized to product divisions, and the headquarters
takes responsibility for the overall strategic development of the firm.
Geography groupings (Horizontal Differentiation)
Throughout the whole world, Samsung Electronics localizes its products to suit specific
market needs (such as China, Turkey, USA, India,..) In China, Samsung produces Ji Xiang
Fa TV F4280, and Ru Yi Hong TV F5080. The red color and the number 8 are considered
lucky, so Samsung’s Chinese product line includes LED TVs fitted with 8-shaped stands
and PC monitors with red back covers. In addition, Samsung also set up five Lifestyle
Research Labs in Beijing, Delhi, San Jose, London and Singapore to help forecast future

ways of living and describe innovation designs in different regions. (MBA Student of
Sultan Azlan Shah University, 2016)
In general, Samsung Electronics adopted some centralization through the main
headquarters in Seoul, Korea (vertical differentiation) and worldwide product division
(horizontal differentiation) by promoting each product line under two modes of exchange
including domestic and international markets. In addition, the organizational structure
started to have some changes due to geographical factors and decentration in subunits in a
few countries. Samsung Electronics focuses more on informal matrix structure (horizontal
differentiation) and both centralization & decentralization (vertical differentiation) with a
view to expanding a transnational strategy.
2. Control systems and incentives
Control systems
Samsung Electronics has pursued a transnational strategy, therefore, the effectiveness
of output controls is limited by substantial performance ambiguities between subunits or
subsidiaries. This promotes the company to tackle the problems through culture controls.
Samsung Electronics employees all over the world have to follow some compulsory
policies in the entire system, including:
Regarding working time, the working time is from 7 am to 4 pm, allowing the
employees to have enough time for social activities after 4 p.m. Regarding fixed wages and
bonuses, the total wage for each worker or staff is calculated depending on the amount of
working time (including overtime shift). This proves that Samsung Electronics has built a
culture control system of working schedules and evaluation activities for its employees
apparently and reasonably. The employees can balance work and daily life better (Chiến
lược quản trị nguồn nhân lực của Samsung, 2021).
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Samsung Electronics holds the GWP (Great Work Place) program to attract talented
people for each department in different nations. The company also encourages
extracurricular activities and meetings between managers and employees, as well as
promotes creative ability better between the levels of management. Employees who do not
achieve performance will be fired, and 5-10% of the best employees will be trained to
become leaders and senior managers. These points have created extremely strong cultural
control in different countries and increased the positive competitive ability between
individuals. (Chiến lược quản trị nguồn nhân lực của Samsung, 2021) (Văn hóa doanh
nghiệp của Samsung và cú chuyển mình đầy ấn tượng, 2022)
In general, the culture-controlling activities of Samsung Electronics enforces its
employees to raise their awareness about their behaviors to adapt to the organization and
improve their work efficiency. If the employees can not follow the policies controlling the
culture of the company, they can be at risk of being fined or getting punishment.
Incentives
The incentive systems refer to the way to reward employees' performance through the
quality of their output products, the level of compliance with the company rules, and
especially under the control of the human resources department. In Samsung Electronics,
the efficiency of employee performance is evaluated directly by the amount of working
time and the attitude at the company toward getting rewards or punishment. The Group has
used timekeepers and intelligent human resource management software to track this (Chiến
lược quản trị nguồn nhân lực của Samsung, 2021). In Vietnam, the employees can work
up to 3 hours per overtime shift and be paid 150% of the official salary (from Monday to
Friday) and paid 200% of the official salary (on weekends). The worker group can get a
salary of up to 10 million VND per month and from 18 - 25 million VND per month for
engineering staff (Quang, 2022).
3. Organizational culture
Samsung Electronics’ organizational culture encourages respect, fairness, and
transparency through strict terms, one of the most popular ethics trends on the global market
nowadays. In fact, the company pursues the philosophy “To devote its talent and
technology to creating superior products and services that contribute to a better global

society. To achieve this, Samsung highly values its people and technologies.” (Samsung,
SAMSUNG ELECTRONICS Co., Ltd., 2021). Therefore, there will be a lot of activities to
promote the organizational structure and bring “emotion” as well as balance to employees.
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