1.0 INTRODUCTION TO PROJECT STUDY:

1.1 AIMS AND OBJECTIVES OF PROJECT

The main aim or the goal of this project is to gain good marks and going 1

step ahead towards professionalism. And know the stratergy of the company

and how the company functions.

The aim behind the visit to the company was to practically observe the

working and functioning of the company. Project aims are a statement of the

overall “Why” of the project. A project aim is a statement starting with the

words: “The aim of this project is…”

That statement tells the reader what your overall goal is, what it is you want to

achieve. It does not go into details or describe specific tasks. Project

objectives tell the “How” of the project aim. You want to achieve your goal and

the objectives state how this will be done – what major tasks will be

undertaken and what your major targets are.

1.2 SCOPE OF PROJECT

1. To understand and study in general the management of working capital

2. To analyze the distribution of gross working capital into various

components

3. To calculate the operating cycle period

4. To analyze the liquidity position of the company by analyzing the various

ratios.

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1.3 METHODOLOGY OF PROJECT STUDY & PRIMARY DATA

COLLECTION FROM

Personal tool was the main tool for the collection of primary data and

information.

This study has brought in use very little primary data in relation with the

elements of working capital

SECONDARY DATA COLLECTION FROM

Since the study is based on the financial aspects of the company so the

report of the organization, Trial balance, income and expenditure accounts of

the company brought in use. Besides the company profile and theoretical

aspects taken from the secondary data are practically implemented. Also the

various types of ratios were studied which helps in analyzing the financial

statements.

METHODOLOGY

Research in common parlance refers to a search for knowledge. Research

may be defined:-

As “manipulation of things, concepts or symbols for the purpose of

generalizing to extent, correct or verify knowledge, whether that knowledge

aids in construction of theory or in the practices of an art”

RESEARCH OBJECTIVES

The main objectives of research in management are:-

1. To verify and to test the existing facts and theories

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2. To gain familiarity with a phenomenon or to achieve new insights into it

3. To establish generalization in various fields of knowledge

4. To bring to limelight information that could have never been brought to the

knowledge under normal course.

1.4 LIMITATIONS OF PROJECT STUDY

The most important limitation is that we did not get sufficient time to complete

the project. Time limit is a drawback which we had to face. If we would have

had more time i.e. the time period would have been extended from 12 days to

a month we could have presented the project in a better and more

professional manner.

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2. STRATEGIC FREMWORK & MANEGEMENT

PROCESS

2.1. INTRODUCTION OF STRATEGIC MANAGEMENT &

PLANNING:

Strategic management is a field that deals with the major intended and

emergent initiatives taken by general managers on behalf of owners, involving

utilization of resources, to enhance the performance of firms in their external

environments. It entails specifying the organization's mission, vision and

objectives, developing policies and plans, often in terms of projects and

programs, which are designed to achieve these objectives, and then

allocating resources to implement the policies and plans, projects and

programs. A balanced scorecard is often used to evaluate the overall

performance of the business and its progress towards objectives. Recent

studies and leading management theorists have advocated that strategy

needs to start with stakeholders expectations and use a modified balanced

scorecard which includes all stakeholders. Strategic planning is an

organization's process of defining its strategy, or direction, and making

decisions on allocating its resources to pursue this strategy, including its

capital and people. Various business analysis techniques can be used in

strategic planning, including SWOT analysis (Strengths, Weaknesses,

Opportunities, and Threats), GE/McKinsey portfolio analysis, COPE analysis,

PEST analysis (Political, Economic, Social, and Technological), STEER

analysis (Socio-cultural, Technological, Economic, Ecological, and Regulatory

factors), and EPISTEL (Environment, Political, Informatics, Social,

Technological, Economic and Legal).

Samsung's powerful Strategic Planning Office, which has played a key role in

the group's management structure, is destined to disappear. Samsung's

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secretarial office was originally in charge of protocol and simple assistance for

the chairman and began to play a role as the command tower for group

management from the second half of 1967. Thereafter the secretarial office

became a powerful organization overseeing the group's overall operations,

including finance, audit, examination of new business projects, and personnel

management. After the 1997 crisis, the office turned into "Restructuring

Headquarters" and later renamed Strategic Planning Office. Despite its name

changes, the office's role as a group command center has largely remained

unchanged. Under the new reform plan, Samsung is to dismantle the group

command center and instead operate a small-scale administrative office

designed to support a council of affiliate CEOs. Strong leadership and focus

on growth linked with its international networks and experience within the

industry allows an end to end process to be owned and run by Samsung

Electronics. This is illustrated in the LCD TV market for which Samsung

Electronics develops and manufactures its own TV computer chips.

Leveraging these resources provides Samsung Electronics with a deep

understanding of the fast changing market and makes them distinct in their

competency to launch products to the market quicker than competitors.

Current Strategy

One of the key areas of strategy for any business is how it intends to grow.

This is central to Samsung Electronics as it wants to be a leader as

highlighted by their corporate vision; ‘Leading the Digital Convergence

Revolution”. The two key strategic methods employed are organic growth and

strategic alliances.

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Org

Organic Growth

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Organic growth is defined as the growth rate that a company can achieve by

increasing output and enhancing sales as opposed to profits or growth

acquired from takeovers, mergers or acquisitions (M&A). Coyle (2000) argues

that organic growth allows a firm to develop market position over the long

term, can help to achieve growth much cheaper than M&A and is well suited

to growing markets. This seems to fit well with Samsung Electronics current

strategic position as it is the industry leader and has the competencies to

grow into other markets. Also, although SEC has large cash reserves, organic

growth allows funds to be focused on other areas such as R&D. Finally, the

external environmental analysis pointed towards a growth in the LCD market

and the electronics industry as a whole thereby reinforcing the suitability of

this growth strategy.

However, is this sustainable? Based on the internal-environment analysis

Samsung Electronics has leaders focused on growth, an appropriate culture

for growth as well as excellent bonds with customers, effective sales and

unrivalled competencies in innovating. According to Forum (2008), a leading

company specialising in growth strategies, these are critical factors in

sustainable organic growth. So yes, Samsung Electronics growth is

sustainable but it may not always be the best strategy to adopt. This is

especially true when entering a new market/country which may require deep

local knowledge that Samsung Electronics lacks. Samsung Electronics tries to

balance this problem with strategic alliances.

Strategic Alliances

Strategic alliances are formal relationships between two or more parties to

pursue a set of agreed upon goals while remaining independent organisations

(Bleeke and Ernst, 1992). Since 2001 Samsung Electronics agreed 29

different alliances (About Samsung, 2009). According to Bleeke and Ernst

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(1992) alliances are an efficient ways to enter new markets, to gain skills,

technology, or products, and to share fixed costs and resources. It could be

said that Samsung Electronics does not need much skills or technology as

they are arguably the most innovative and therefore any alliance would be

disadvantageous because less competent competitors could learn from them.

However, in most cases the sharing of costs and resources provides a win-

win situation as illustrated by the Samsung Electronics and Sony alliance.

Also, organic growth can be used alongside alliances when entering new

markets to minimise the learning curve and associated costs. Nonetheless,

the applicability of this growth strategy when expanding operations to

emerging markets like China and India is questionable as most firms would be

imitators and mutual benefit for Samsung Electronics would most likely not be

achieved.

2.2. STRATEGY FORMATION:

The initial task in strategic management is typically the compilation and

dissemination of a mission statement. This document outlines, in essence, the

raison d'etre of an organization. Additionally, it specifies the scope of activities

an organization wishes to undertake, coupled with the markets a firm wishes

to serve.

Following the devising of a mission statement, a firm would then undertake an

environmental scanning within the purview of the statement.

Strategic formation is a combination of three main processes which are as

follows:

Performing a situation analysis, self-evaluation and competitor analysis:

both internal and external; both micro-environmental and macro-

environmental.

Concurrent with this assessment, objectives are set. These objectives

should be parallel to a time-line; some are in the short-term and others on

the long-term. This involves crafting vision statements (long term view of a

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possible future), mission statements (the role that the organization gives

itself in society), overall corporate objectives (both financial and strategic),

strategic business unit objectives (both financial and strategic), and

tactical objectives.

2.3. STRATEGIC IMPLEMENTATION:

Once a strategy has been identified, it must then be put into practice. This

may involve organising, resourcing and utilising change management

procedures:

Organizing

Organizing relates to how an organizational design of a company can fit with

a chosen strategy. This concerns the nature of reporting relationships, spans

of control, and any strategic business units (SBUs) that require to be formed.

Typically, an SBU will be created (which often has some degree of

autonomous decision-making) if it exists in a market with unique conditions, or

has/requires unique strategic capabilities (, i.e. the skills needed for the

running and competition of the SBU are different).

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Resourcing

Resourcing is literally the resources required to put the strategy into practice,

ranging from human resources, to capital equipment, and to ICT-based

implements.

Change management

In the process of implementing strategic plans, an organization must be wary

of forces that may legitimately seek to obstruct such changes. It is important

then that effectual change management practices are instituted. These

encompass:

The appointment of a change agent, as an individual who would champion

the changes and seek to reassure and allay any fears arising.

Ascertaining the causes of the resistance to organizational change

(whether from employees, perceived loss of job security, etc.)

Via change agency, slowly limiting the negative effects that a change may

uncover.

Samsung Electronics has restructured itself into four strategic divisions

namely semiconductor, telecom, LCD and digital media and each of these

four divisions have their well-defined strategies, customers, operational focus

and critical success factors. At a group level Samsung being a very large

conglomerate has separate businesses each which operate as separate

entities with their own mission and strategic objectives. In addition to the

above structure that positions Samsung very well in order to achieve its future

and present growth goals, and with its very high process orientation and

customer focus, the only other thing that Samsung would require would

investment into information technology that would help it to mine the wealth of

information that exists in the company come out with knowledge about the

customers and the market that will give it additional insights to leverage its

capabilities to ensure that it overachieves on its strategic objectives. Though

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this would be an information technology initiative that is supposed to bring in

organizational benefits, due to the strategic importance that this would play in

the overall organizational strategy, this initiative should be championed at the

executive level so that it is given the due importance that is necessary to

make this a success. Only when the senior management and then the

leadership and managerial team realize the importance of this to overall

strategy will this initiative work and hence the CEO should be the person

championing this program. Though Samsung would not have to change an of

their operating procedures, there should be orientation towards appreciation

of how this can transform their business and help them achieve the overall

strategy.

Samsung’s Continuous Improvement Program (CIP)

Samsung Company makes every effort to achieve excellent and consistent

product quality at fair prices, and at the right time to ensure customer

satisfaction. In order to achieve this goal, Samsung Company continuously

improves productivity by controlling the variation in various processes in a

stable way. Continuous improvement is implemented by a closed loop

methodology consisting of a selection of critical parameters, evaluation of the

measurement system, monitoring of critical parameters, process capability

improvement, and reaction plan. The main purpose of the CIP activities is

minimizing the variation around the target

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.

Activities

Real Time Monitoring (Activities for Special Causes):

Interlock System: Products and processes are monitored and controlled by

automatic interlock systems throughout the manufacturing process. In

FAB, a three stage protection system is working: Process Recipe Interlock

(Incoming Materials and Recipe Check), Equipment Parameter Interlock

and Process Output Interlock. At wafer sort, wafers are statistically

monitored based on various test results and yields before assembly.

Statistical Process Control (SPC) and Advanced Process Control (APC):

An advanced SPC system suitable for semiconductor manufacturing

processes has been implemented and used for random trend monitoring.

It includes short run, small change detecting, particle, and multivariate

SPC modules. Also, the APC system including real time control and run-

to-run control is successfully used for controlling deterministic process

behaviors.

Company-wide Improvement Projects (Activities for Common Causes):

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FAB Equivalency - "Copy Intelligently”: Samsung Equivalence Test

program checks the equivalency and non-equivalency of measurement

data of output characteristics from "Copy Intelligently" activities. Its

purpose is to lead us to make an action to standardize the output

characteristics between lines or equipment.

Statistical Post Processing: Statistical analysis of test results at wafer sort

not only optimizes test effort but also gives useful information such as

potential reliability and yield. With a help of statistical approach, wafers or

dies with latent risks can be effectively screened and dies can be binned

according to potential risks.

Virtual Metrology and Modeling: Virtual metrology is of great interest in

semiconductor manufacturing process. The idea is to construct predictive

models that can forecast the electrical/physical parameters of wafers

based on data collected from processing equipment. In this way, actual

measurements from wafers can be minimized or eliminated. Furthermore,

the APC combined with virtual metrology will lead to a shift from "Lot-to-

Lot control" to "Wafer-to-Wafer control".

2.4. STRATEGIC EVALUATION & CONTROL

The implementation of organization strategy involves the application of the

management process to obtain the desired results. Particularly, strategy

implementation includes designing the organization's structure, allocating

resources, developing information and decision process, and managing

human resources, including such areas as the reward system, approaches to

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leadership, and staffing. Each of these management functions has been the

subject of extensive writing and research by scholars and practitioners and

has covered in management books. Strategy implementation is "the process

of allocating resources to support the chosen strategies". This process

includes the various management activities that are necessary to put strategy

in motion, institute strategic controls that monitor progress, and ultimately

achieve organizational goals. Since full coverage of each management

function is beyond the scope of this thesis, I shall focus only on the factors

that are most critical to effective implementation strategy.

Pierce and Robinson say that "to effectively direct and control the use of the

firm's resources, mechanisms such as organizational structure, information

systems, leadership styles, assignment of key managers, budgeting, rewards,

and control systems are essential strategy implementation ingredients".

As Higgins has pointed out, "almost all the management functions -planning,

controlling, organizing, motivating, leading, directing, integrating,

communicating, and innovation -are in some degree applied in the

implementation process".

The implementation activities are in fact related closely to one another and

decisions about each are usually made simultaneously. I have split these

activities in the next chapters.

Samsung, being one of the best known brands and also one that has

witnessed very fast growth in recent times, must without a doubt have the

best information system that would not only allow it to execute its

organizational strategy but would also have features that would give it

feedback and reporting capabilities on a real time basis that would ensure

that Samsung can keep a very close track at required intervals on its strategic

and operational objectives so that it can monitor and make necessary

changes as and when required. However to ensure that it is able to measure

strategic factors, the usage of the balance scorecard is recommended that

would allow it to closely track strategic, financial and operational controls, so

that it can closely evaluate how it is progressing on its strategy and also bring

in control when necessary and make changes to operational strategy

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whenever needed. The balance scorecard is an established and well known

tool and should be used for evaluation on its progress on its strategic

objectives. To ensure that it can measure its performance at a granular level

by which it can break down its objectives and measure and pinpoint at by

area, unit, project or function, it has to leverage information technology

especially data warehousing and data mining that can give it the capability to

slice and dice real time data to ensure that it can generate real time reports,

extract exceptions and take necessary corrective actions in the quickest

possible time. In addition to the information technology, Samsung realizes

that people are the biggest asset that it has which can be seen in their

mission statement. The information technology system that it has and the

data that it captures about performance should be objective, detailed that

would give people insight into what is expected out of them so that they can

put in their best to deliver the best performance. Samsung should continue to

invest in people, encourage a performance based rewards system and ensure

very high motivation in its employees to ensure achievement of strategic

objectives. The second part of the report will draw on findings from the

internal and external environment. An ‘inside-out’ perspective will be taken

with theoretical frameworks being used to analyse and evaluate the corporate

level strategy of Samsung Electronics followed by recommendations for future

success.

Overall Evaluation of Strategic Choices

The advantages of adopting a primarily low cost and differentiated strategy is

that Samsung Electronics can achieve significant margins on their products

without necessarily charging premium prices. This is beneficial as customers

will recognise the value being given, reinforcing brand loyalty and increasing

customer satisfaction. Also, the strategy fits the internal competencies of the

business well which is extremely desirable because it means Samsung

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Electronics will be effective in implementing it. Further, the consistent focus

on differentiation means there is constant innovation in products and within

the firm. This means Samsung Electronics products will constantly be

adapting to the trends of the external-environment and ultimately the

customer. An example of this is Samsung Electronics response to social and

environmental consciousness shifts, reflected in their products as well as

strategy. Finally, it is a strategy well suited to hypercompetitive environments

as differentiation is key; ‘Your responses should be different and better, not

cheaper, faster, and the same’ (Boar, 1994).

On the other hand, whilst pursuing a differentiation strategy Samsung

Electronics needs to remain agile with their new product development

processes. Else, they risk attack on several fronts by competitors pursuing

Focus Differentiation strategies in different market segments. Samsung

Electronics mitigates this by creating new markets through innovation and

charging premiums for some key products. Another problem with a

differentiation strategy coupled with a cost leadership strategy is that

customers can come to expect the best value. This can squeeze margins

especially in financially weak times like the present. Furthermore, the problem

in pursuing a cost leadership strategy is that these sources of cost reduction

can be replicated by competitors which make it more important to

continuously find ways of reducing cost. However, imitations in cost reduction

can be minimised through strategic alliances with competitors; creating win-

win situations.

Thus, the combined strategies employed by Samsung Electronics allow it to

achieve sustainable growth and sustainable competitive advantages. Having

said this, there are still areas for improvement so recommendations will now

be given.

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3. INTRODUCTION TO BUSINESS CO-

ORPORATION (SAMSUNG ELECTRONICS)

3.1. COMPANY PROFILE

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Samsung Electronics Co., Ltd. is a Korea-based company principally engaged

in the provision of consumer electronic products. The Company operates its

business under two divisions. The End Product division manufactures and

sells digital media products such as digital televisions (TVs), monitors,

printers, air conditioners, refrigerators and others, as well as information and

communication products such as third-generation (3G) phones, smart

phones, communication systems and others. The Component division

manufactures and sells semiconductors such as memory chips, system large

scale integrated circuit (LSI) products, storages and others, as well as liquid

crystal display (LCD) products such as LCD displays used for TVs, monitors,

notebook personal computers (PCs) and others. The Company is also

engaged in solar cell business. In January 2011, it acquired a display

technology firm, Liquavista BV. On July 1, 2011, it sold its solar cell business

to SAMSUNG SDI CO., LTD.

Samsung, which is a dominant player in the colour and camera phone market,

is aiming to fuel its growth in the Indian market through new feature rich

handset introductions, strategic operator tie ups as well as by enhancing its

penetration in the Indian market. In the first half of this year itself, Samsung

has introduced 14 new advanced, innovative colour phones in the Indian

market. Last month, Samsung India gave a boost to its mobile distribution

network by appointing the Bangalore based, United Telelinks as its National

Distributor for Mobile Phones in the country. Samsung India which

commenced its operations in India in December 1995, today enjoys a sales

turnover of over US$ 1Bn in just a decade of operations in the country.

Headquartered in New Delhi, Samsung India has a network of 19 Branch

Offices located all over the country. The Samsung manufacturing complex

housing manufacturing facilities for Colour Televisions, Colour Monitors,

Refrigerators and Washing Machines is located at Noida, near Delhi.

Samsung “Made in India” Products like Colour Televisions, Colour Monitors

and Refrigerators are being exported to Middle East, CIS and SAARC

countries from its Noida manufacturing complex. Samsung India currently

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employs over 1600 employees, with around 18% of its employees working in

Research & Development.

Corporate name and logo

Samsung Electronics’ corporate name “Samsung” comes from the word

“three stars” that shine brightly. The hanja character “sam” has the double

meaning of three and strong while “sung” connotes “star” and “bright” (or

“shining”). The corporate name has auspicious meaning in it, meaning that it

foretells success.

Samsung’s logo design emphasizes flexibility and simplicity while conveying a

dynamic and innovative image through the ellipse, the symbol of the universe

and the world stage. The openings on both ends of the ellipse where the

letters “S” and “G” are located are intended to illustrate the company’s open-

mindedness and the desire to communicate with the world. The English

rendering is a visual expression of its core corporate vision, excellence in

customer service through technology.

The basic colour in the logo is blue, the colour that Samsung has had used in

its logos for years. The blue colour symbolizes stability and reliability, which

are precisely what the company wishes to accomplish with its customers. It

also stands for social responsibility as a corporate citizen, a company official

explained.

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Management and board of directors

In December 2010, Samsung switched its management system from the

single CEO system of last year under Choi Gee-Sung, to a two person

management team with Choi Gee-Sung, CEO and Vice President, and Lee

Jae-Yong, Chief Operating Operator and President. The team was credited as

being younger both in age and in outlook, and in keeping with the new focus

on youthfulness in spirit, some executives have even dyed their hair black.

Samsung also reorganized its overseas marketing bases in line with changes

in the market, including a combined Britain/Continental Europe regional

subsidiary, and a combined China/Taiwan regional subsidiary. Samsung

added a new digital imaging business division in 2010, and now consists of

eight divisions, including the existing display, IT solutions, consumer

electronics, and wireless, networking, semiconductor, and LCD divisions.

Samsung also reorganized its business organization to strengthen business

synergies, by merging its Digital Air Solutions Team and Samsung Electronics

Gwangju (consumer electronics and air conditioners, merged in 2010) under

the consumer electronics business division. The Set Top Boxes business was

merged with the Visual Display Business Division. Samsung's December

2010 reorganization was as follows: Among the eight divisions, the network

division and the digital imaging division experienced new appointments, while

the remaining divisions were maintained in accordance with their strong

results.

Chief Executive Officer, Vice Chairman: Choi Gee-Sung

Chief Financial Officer: President Yoon Ju-hwa

Chief Operating Officer, President: Lee Jae-Yong

Division heads

Semiconductor Division: President Kwon Oh-hyun

LCD Division: President Jang Won-ki

Visual Display Division: President Yoon Boo-keun

Mobile Communications Business: President Shin Jong-kyun

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Telecommunication System Business: Executive vice President Kim

Young-ki(newly appointed)

IT Solutions Business: Executive vice President Nam Seong-woo

Digital Appliances Business: Executive vice president Hong Chang-wan

Digital Imaging Business: Executive vice President Chung Hyun-ho(newly

appointed)

Regional Directors

North America: Executive vice President Kim Yangkyu (appointed)

Central and South America: Executive vice President Yoo Doo-yeong

Europe: Executive Director Kim Seok (newly appointed) (former Middle

East supervisor, Director Kim Jin-an) CIS: Executive Director Seo Chi-won

Middle East: Executive Director Bae Gyeong-Tae

Africa: Executive Director Park Gwang-gi

Southeast Asia: Executive vice President Lee Jong-Seok

China: Executive Director Kim Yeong-Ha (newly appointed)

Korea: Executive Director Park Jae-Soon

3.2. Company Products:

Samsung electronics is manufacturers and exporters in environment

solutions, Information solution as well as home solutions and

communications.

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Entertainment solutions: TV, DVD Player, Camcorder, Audio Home

Theater, Digital Audio Player, Digital Still Camera.

Information solutions: Note PC, HDD, CD/DVD ROM CD/DVD Writer,

Monitors, and Laser Printers & Laser Based MFPs Fax.

Home solutions: Microwave Oven, Refrigerator, Air Conditioner, Washing

Machine.

Communication solutions: GSM, CDMA.

Upon its 40th anniversary, Samsung Electronics adopted a new vision of

becoming an innovative leader that creates new markets to keep pace with

the fast changing global business environment

Semiconductors(DRAM)

For more than 20 years since 1993, Samsung has kept the title of the

world’s largest memory chip maker. In 2009, it began a strategy of “Green

Memory” by which it increased the global DRAM market share to 33

percent. It also started mass-producing 30 nm-classes NAND flash

memories in the same year whose world share rose as high as 42 percent.

It succeeded in 2010 in mass-producing 30 nm-class DRAMs and 20 nm-

class NAND flashes, both of which were the first time in the world.

According to market research firm Gartner, during the second quarter of

2010 Samsung Electronics took the top position in the DRAM segment

due to brisk sales of the item on the world market. Gartner analysts said in

their report, “Samsung cemented its leading position by taking a 35-

percent market share.

All the other suppliers had minimal change in their shares.” Samsung took

the top slot in the ranking, followed by Hynix, Elpida, and Micron, said

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Gartner. Another market researcher IC Insights predicted that Samsung

would become the world’s biggest semiconductor chip supplier by 2014

when it surpasses Intel. For the ten-year period from 1999 to 2009,

Samsung’s compound annual growth rate (or CAGR) has been 13.5

percent, compared with that for Intel paltry 3.4 percent. Extrapolating this

trend to the future, Samsung will be able to catch up with Intel by the year

2014, estimated IC Insights. IC Insights also said that Intel’s 2009 sales

revenue had been 52 percent higher than that for Samsung, but that

differential narrowed to only 21 percent during the second quarter of 2010

another hitherto not-well-publicized area where Samsung had significant

business in for years is the foundry segment. Samsung had begun

investment in the foundry business since 2006 and now positioned it as

one of the strategic pillars for semiconductor growth.

Televisions

Four years in a row, Samsung has taken the top spot in the world TV

market, with the launch of best-selling items. In 2009, it sold as many as

31 million flat-panel TVs, maintaining the top position for four consecutive

years in terms of world market share In early 2010, the company had set

the year’s sales goal at 39 million units (including 10-million LED TVs).

According to Display Search, the U.S. market research and consulting

firm, Samsung is forecast to take a 27-percent share for the global TV

market in the second quarter of 2010 while LG Electronics accounts for

26.2 percent of the market. The market researcher predicted that

Samsung’s leadership would continue in 2011

Samsung Electronics is creating a new market by introducing the “Finger-

Slim” LED TV. Launched in March 2009, the super-slim LED TV has thus

far been sold as many as 2.6 million units. In 2009 alone, it was sold more

than 2 million units, which brightens the future prospect. Samsung has led

the flat-panel TV market for the past five years with the 2006 introduction

of its “Bordeaux” line, followed by the 2007 Bordeaux model, the 2008

“Crystal Rose” line, and the “Finger-Slim” in 2009. The company retained

the leading position by successfully selling more than 1 million 3D TVs as

of August 2010.

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As rivals are jumping on the bandwagon, Samsung outstrips them by

consistently introducing new, better models. Today the company offers the

full line of TVs, at many price points. This company is developing new LED

TV models too. After expanding its TV line-ups, Samsung became the

industry-first 10-million-seller challenge. One of the new products to watch

is the full HD 3D LED TV that was launched the first time in March 2010.

Combining LED features with 3D functionality, the new 3D TV is expected

to lead the market for years to come. Samsung showcased the new TV in

the International Consumer Electronics Show (CES 2010) held in Las

Vegas early this year. In 2009, Samsung TVs were selected in major U.K.

publications and retailers as the best TV of the year. For example,

Samsung’s LED TV 7000 series was the winner of the “Gadget Awards

2009” by T3, U.K.’s most prestigious electronics magazine. The T3

magazine in its news article on “ten reasons why you should buy Samsung

LED TV” listed as the reasons superior picture quality, slim design, energy

efficiency and connectivity.

3D experience

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Samsung sold more than 1 million 3D TVs within six months of its launch.

This is the figure close to what many market researchers forecast for the

year’s worldwide 3D TV sales (1.23 million units). It also debuted the 3D

Home Theater (HT-C6950W) that allows the user to enjoy 3D image and

surround sound at the same time. With the launch of 3D Home Theater,

Samsung became the first company in the industry to have the full line of

3D offerings, including 3D TV, 3D Blu-ray play, 3D content, and 3D

glasses. The company is trying offer the 3D content streaming service on

its 3D TVs. Just like iTunes store, the Samsung 3D TV aims to allow the

user to connect to its own online store, Samsung Apps, and download

applications on the user’s hard disk drive.

Mobile phones

Samsung Electronics sold 235 million mobile handsets in the year 2009.

At the end of Q3 2010 Samsung had surpassed the 70 million unit mark in

shipped phones, giving it a global market share of 22% trailing Nokia by

12%. Overall, Samsung sold 280 million mobile phones in 2010,

corresponding to a market share of 20.2%.

Following the success of its “Anycall” brand mobile phones in Korea, the

company introduced numerous mobile handset models including premium

phones, full-touch screen phones, and environmentally friendly phones.

Samsung’s flagship mobile handset line is the Galaxy S, which many

consider a direct competitor of Apple's popular iPhone. It was initially

launched in Singapore, Malaysia and South Korea in June 2010.

Followed by US variants called Vibrant and Captivate in July and Epic and

Fascinate in August and September. It sold more than 1 million units

within the first 45 days of in the US alone.

Samsung’s I9000 Galaxy S and S8500 Wave smartphones were the

winners of the 2010 European EISA Awards in the smartphone and social

media phone categories. The I9000 Galaxy S was recognized for its

superior-quality screen and excellent connectivity while the S8500 Wave

for its Bada operating system with unparalleled social networking and

location-based services. Samsung’s 2010 smartphone shares worldwide

are rising rapidly. The share in the United States has doubled in the

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second quarter of the year from the previous quarter. In the second

quarter the company shipped as many as 3 million smartphones, a 173-

percent increase from the same period last year. While many other

handset makers tend to focus on supporting one (or at most two)

operating system, Samsung has kept supporting a wide range of operating

systems in the market. Although the Galaxy S adopts Google Android as

the primary operating system, it also supports other competing operating

systems such as Symbian, Microsoft Windows Phone, Linux-based LiMo,

and Samsung’s proprietary Bada. The company set the sales goal of the

2010 yearend at 20 million units. Samsung faces challenges in the phone

market. An alliance of Chinese low wage and Taiwanese technology is

catching up closely. Smartphone makers such as Apple, RIM, and HTC

are busy coming up with new models, and Samsung is working to maintain

its top position.

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Home appliances

In 2009, the year of worldwide recession due to the 2008 global credit

crisis, Samsung’s sales revenue rose 27 percent from the previous year,

the biggest increase in the industry. In the home market, Samsung held

the leading position thanks to strong sales of its flagship items, Zipel-brand

side-by-side and kimchi refrigerators. In the North American, European,

and Russian markets, it solidified its image as a premier home appliance

maker by selling so many refrigerators, washing machines, air-

conditioners, as well as new steam microwave ovens and “robot” vacuum

cleaners.

In a market clearly split into two extremes of upmarket and budget

categories, Samsung employs a two-pronged strategy to emphasize its

premium image for affluent consumers while marketing lower-end items

with fewer bells and whistles for emerging economies consumers.

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Other Products

In 2009, Samsung introduced a host of new products including a premium

mini-laptop computer N310 and slim-sized laptop X420. The N310 and the

X420 are the third-generation laptops with all the advanced features as

well as portability and connectivity. Thanks to these new market entrants,

Samsung could sell as many as 6 million laptops for the year.

In the printer business division, one of the next-generation strategic areas,

Samsung launched mono-laser printer, multifunction printer, and

enterprise-use high-speed digital multifunction printer models. Samsung

was ranked second in the world in the area of letter-size (A4) laser

printers. In other segments such as mono-laser printers, multifunction

printers, and colour laser printers, Samsung was first or second place in

the world. In the laser multifunction printer segment, it became No. 1 the

first time in its history, all of which indicates that Samsung is growing fast

in the printer business despite under the condition of severe economic

recession.

In 2010, Samsung introduced many new products boasting energy

efficiency and eco-friendliness, including the premium laptop R580,

netbook N210, the world’s smallest mono-laser printer ML-1660, and

colour laser multifunction printer CLX-3185.

In the area of wireless networking, the mobile telecom protocols such as

Mobile WiMax and WiBro, the protocols developed by Samsung and

adopted in 2007 as international standards, are in wide commercial use in

many overseas markets. Since mobile telecom service providers in the

United States, Japan, and Russia began deploying the standards, more

and more providers (as many as 139 providers in 75 countries) are

readying to take it up.

Digital cameras and camcorders are the areas Samsung cannot overlook.

The company has introduced several models in these areas such as the

WB550 (the premium camera), the ST550 (the dual-LCD-mounted

camera), and the HMX-H106 (64GB SSD-mounted full HD camcorder).

Samsung in 2009 took the third place in the compact camera segment.

Since then, the company has focused more on high-priced items. In 2010,

the company launched the NX10, the next-generation interchangeable

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lens camera, thereby commencing the race toward the new category of

camera market.

In the area of storage media, Samsung in 2009 succeeded in grabbing

more than 10 percent of the world market share by introducing a new hard

disk drive capable of storing 250Gb per 2.5-inch disk. In 2010, the

company started marketing the 320Gb-per-disk HDD, the largest in the

industry. In addition, it is focusing more on selling external hard disk

drives.

In the MP3 player segment, Samsung is doing quite well. It is launching a

host of new products including the M1, the premium MP3 player model,

and the world’s smallest DivX MP3 player R1.

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3.3. FUTURE STRATEGIC MANAGEMENT PLANNING OF

SAMSUNG ELECTRONICS

Samsung Electronics Aims at Top 10 Global Company by

2020

Samsung Electronics announced a plan at the 40th anniversary of the

company's foundation to become one of the world's top 10 enterprises by

2020 through creative innovation. Under the new vision Inspire the World,

Create the Future, Samsung is determined to produce new technologies,

innovative products and creative solutions, so enhancing people's quality

of life and contributing to global prosperity for years to come. The

electronics giant pledged to record US$400 billion of sales, become an

unrivalled industry leader, and belong among the top 10 global companies

by 2020. It also declared to rank worlds' 5th in brand value (Samsung

ranked 19th in the Best Brand Survey 2009 by Interbrand), become

among the world's top 10 respected companies, and transform to become

a top-tier environment-friendly enterprise by then. To realize these goals,

Samsung Electronics will expand its business to include medical, bio,

environment and energy sectors, which are related to the enhancement of

quality of life, said the company.

The company laid out six strategies to achieve these goals.

First, it will foster its number one position in the markets of memory

chips, LCDs, TVs and mobile phones while strengthening six other

industries including those of home appliances, computers and

printers.

Second, it will blaze a trail in the new fields of bio chips, medical

appliances, u-health service and solar cells manufacturing in order

to meet expanding needs of customers.

Third, it will further strengthen the analysis of customer groups and

lifestyles, so facilitating the application of diversified marketing

strategies.

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Fourth, it will pursue an "open innovation," through which outward

assistance is welcomed, R&D partnerships are reinforced, and

various collaboration channels with other organizations will be

established.

Fifth, it will build mature symbiotic relationship with its collaborators,

strengthen its corporate social responsibility and seek after

environment-friendly business management.

Last, it will cultivate a sound work environment by employing a

creative performance evaluation system and an advanced

personnel management.

At the 30th anniversary of foundation in 1999, the company declared that it

would within 10 years record 100 trillion won of sales and become among

the three biggest IT companies. The goals have been successfully

achieved.

Meanwhile, at the 40th anniversary were present about 400 employees

including previous CEOs and ranking officials. Vice Chairman Lee Yoon-

woo said during the commemorative speech that Samsung Electronics

should step up its efforts to produce differentiated products and create an

advanced value chain should it want to secure a dominant position in the

industry by 2020. Samsung should actively join the international trend to

protect the environment and seek harmony between human and nature,

he added. Video messages of congratulations from such international

celebrities as President of the International Olympic Committee Jacque

Rogge, former New York City Mayor Rudolph Giuliani and star figure

skater Kim Yu-na added to the amusement at the celebration.

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3.4 DIRECTORS SPEECH

Gee-Sung Choi

Gee-Sung Choi, the newly appointed CEO, has been a member of the

company's Board of Directors since March 2009. Having served Samsung

for more than three decades, Mr. Choi was appointed President of the Digital

Media & Communications Business in January 2009. He previously held the

position of President of the Telecommunication Network Business from

January 2007, helping Samsung to grow its market share to become the

world's second-largest mobile phone maker. He also played a key role in

developing the company's Visual Display Division from 1998, and was

appointed President of the Digital Media Business in 2003. Under his

leadership, Samsung became the global market share leader in both

monitors and televisions. Mr. Choi began his career at Samsung C&T's

International Trade Division in 1977. He holds a degree in International

Trade from Seoul National University.

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“It is a great honor and

pleasure for me to meet and

speak to you in this online

space.

I would like to take this

opportunity to reaffirm Samsung Electronics’ commitment to its guiding

principles -- providing new value to our customers, and shareholders, and

realizing a richer and more vibrant future for communities around the world.

Samsung's commitment remains steadfast even in the face of the turbulent

business conditions we witness today. Samsung is now making bold

investments in technology development and innovative products and services

to bring this future one step closer to reality.

Upon announcing Vision 2020 last year we strengthened our global

competitiveness which allowed us to post the highest sales and profits and

become an undisputed leader in electronics. Our steady ascent in brand value

has placed us shoulder to shoulder with the most trusted global companies.

This remarkable accomplishment could not have been possible without your

strong interest and support, and for this, I would like to thank you deeply on

behalf of everyone at Samsung. We look forward to many more years of

doing our best to serve you as our customers, shareholders, and

stakeholders.

2009 was also special for Samsung as it marked the 40th anniversary of the

company's founding, as well as for the announcement of a new vision:

"Inspire the World, Create the Future." Through this vision, Samsung is

charging towards $400 billion in revenue in 2020. Everyone at Samsung is

working hard to realize this goal.

Samsung is dedicated to being a globally respected company and a trusted

corporate citizen-- one that delivers new value through continuous innovation,

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and that fulfills its responsibility to the communities and stakeholders that

have enabled it to succeed.

I hope we can count on your continuous support and encouragement in the

future.”

4.0 CONCLUSION & RECOMMENDATIONS

4.1. Conclusion

The main aim or the goal of this project is to be familiar about the functionality of the company Samsung Electronics, which is one of the leading companies in its field. Moreover, the study also focuses on some other factors such as to know the stratergy of the company as well as to understand the strategic management of the company. The primary aim behind the visit to the company was to practically observe the working and functioning of the company.

This study involves a lot of co-operation and hardwork from all the team members in order to showcase the strategic management process.

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4.2 Recommendations

Three future strategies for continued success for SEC are given below.

Diversify Growth Strategy for Emerging Markets

Most emerging market competitors are imitators and SEC’s current strategy of

organic growth and strategic alliances is not very effective because mutual

benefit is unlikely to occur. Therefore, SEC should focus on seeking out and

acquiring resources in emerging markets. This would be applicable as it

would provide immediate market presence and the essential deep local

knowledge to effectively compete. Mergers are not recommended as they too

are unlikely to provide sufficient benefit to SEC who through acquisitions

could fully own their own operations. This diversification in growth strategy

would allow SEC to expand their global presence as well as employ a greater

diversity of people, ultimately moving SEC towards their corporate vision of

‘Leading the Digital Convergence Revolution’.

Continue Heavy R&D and Innovation

Continued investment in R&D especially in newer technologies such as OLED

and nanotechnology will allow SEC to widen the cost leadership and

differentiation gap meaning that they can produce more differentiated

products at lower costs. SEC should aim to be the first to launch products at a

premium price to maximise profits and continue innovating to ensure first-

mover advantage is maintained. This will also allow SEC to create new

markets and thus employ a more focused differentiation strategy so that price

premiums can be charged. This is especially important in the current

economic climate where margins are restricted.

Producing and promoting more environmentally friendly products should be

made an important part of future innovation and R&D to adapt to changes in

social and environmental consciousness of customers. This change however

should be driven from SEC being an organisation that is environmentally and

socially conscious in the way it conducts business so that the brand itself

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reflects customer preferences. It is also recommended that SEC innovate

internally and further invest in cutting edge IT resources to streamline

processes and effectiveness. This will allow SEC to further reduce costs and

increase competitive advantage.

Enhance Brand Loyalty

Retaining customers for longer by enhancing customer loyalty schemes will

help increase switching costs and therefore reduce the costs of customer

acquisition and reduce the complications of hypercompetitive environments.

This should include both domestic and business to business buyers. SEC

should also continue to highlight the quality and unique selling points of

products in marketing campaigns to ensure consumers feel products are

value for money even at a premium costs.

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