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Samsung Electronics Company: Global Marketing Operations

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Samsung Electronics Company: Global Marketing Operations

1. What are the ingredients of SEC's corporate turnaround strategy?

Samsung Electronics Company originally started as a product-driven company that focused on manufacturing commodity products at lower costs than its competitors. It was established as a top OEM supplier and highly efficient manufacturer of value brands. The “new management initiative” launched by Chairman Kun Hee Lee in 1993 aimed to change SEC’s direction of growth: once costs were under control and products were made, SEC changed its focus from low-end commodities to high-end premium goods. Currently, SEC has become a world class brand among the top companies preferred globally.

The following essential changes were implemented during different stages of their turnaround strategy:

Vertical Integration  Kept manufacturing as a core internal competence

 Internal manufacturing units have to compete with outside companies for supplying components for production of finished goods

 Flexible to plant locations where costs were low (i.e. China or India)

 Focus on customization of its production to keep high prices

Hardware Focus  Decided not to produce proprietary software

 Formed partnerships with content providers and allowed customers to choose

Product

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