The Samsung Business Model - Leaders In Innovation

Samsung and Apple are probably the top 2 technology business gurus. They've been at each other's throat for a longtime making headlines all the time. But have you taken the time to sit down and read or make research on how Samsung and Apple have been so successful? There is a lot to find and you could get motivated to start or continue doing what you are doing to achieve your dream. I will be focusing on the business model of Samsung, how they started, what they are and do and the wide range of products they deal in.

Samsung unlike Apple which focusses on a less amount of products deals with a lot of products. Phones are just the tip of the iceberg. So, do make yourself comfortable as we get into how Samsung operates.

Samsung or Samsung Electronics is a South Korean technology giant that initially started as a trading company. It was founded by Lee BYung - Chull over 80 years ago in the month of March in the year 1938. That means, Samsung's birthday this year has already passed. Trading groceries was how Samsung started with just 40 people including employees who later diversified into electronics like television sets (TV) in 1969. The old school never to be forgotten black and white TV was the first to be manufactured by Samsung.

The technological successful business conglomerate have divided their products into LCD, semiconductors, digital media and telecommunication networks. Under these categories you'd find phones, laptops, TVs, air conditioners and a whole lot of other things.

Samsung started off trading groceries like fish, noodles, among others and then ventured into sugar refinery before starting production of electronics, semiconductors, digital media and telecom networks. They then ventured into real estate in Malaysia being involved with the Petronas Towers and then wooden mill in South Korea. Samsung after producing black and white TVs first produced colored TVs in 1995. The first smartphone was however introduced in 2000 which ever since has seen the company produce a variety of phones.

The growth of Samsung C & T Corporation has been on the rise maintaining economic growth and stability. It has totally transformed into a multi global business model from the initial small trading business. One way Samsung has been able to do this and is a big part of their business model is their electronics. The electronics model of Samsung did not just start off with mobile phones. They actually started off by making tape recorders, TVs, Video Cassette Recorders (VRs) and Personal Computers (PCs). Samsung has been able to grow as much as they have because of advertising as well.

These were not very successful in the beginning as Samsung saw a huge decrease in sales in the year 1993. Measures were put in place to make the company have a direction. They decided to make Liquid Crystal Display (LCD) TVs hoping for a huge turn in sales. It became a major hit and just like that, Samsung were on top. It was after all these, Samsung started the production of phones.

A board of directors run Samsung. The company is taxed under tax laws. According to the business model, the conglomerate has multiple divisions and the company's target age varies between ages 20+ and 50. Aside this, people from ages 14 to 25 years are also targeted to purchase Samsung products because the market of Samsung is that wide. Samsung gives everyone options to choose what they want and there are a lot of great innovations by Samsung.

The customers between ages 14 - 25 known as young adults and the adults who are between ages 20 and 50+ are able to buy the TVs, mobile phones, laptops, among others Samsung produces. One common theme associated with Samsung is "innovation" and they make that very clear in their their unpacking events for new products every year. It's the one company that will always give you a lot of options.

A business model such as Samsung's' is a cooperate business and controlled by a board of directors. Shareholders also play a key role in Samsung because they handle the investments and what not. Samsung is one company that can be called a business conglomerate but with a lot of divisions. 3 Chief Executive Officers handle the top level management of Samsung.

There is a CEO that heads the Device Solutions, one who heads the Consumer Electronics and the third heads the IT and Mobile Communications. Kim Ki Nam, Kim Hyun Suk and Koh Dong - Jin are the 3 CEOs respectively who have been in place since 2018.

The business model of Samsung also involves the market shares. In 2021, before covid, Samsung was the number one in the global market in the second quarter of 2021. This huge profits reduced due to the covid but Samsung has slowly bounced back and their electronics like the phones are seeing huge sales. The share of Samsung alone in the market was believed to be 19% in 2020 and the overall brand value then was a whopping $102.6 B. The phones of Samsung also hold 26.1% shares of the market in April 2023.

The business model of Samsung has products like life insurance, network and 5G, computers, phones, watches, among others. Samsung Electronics is the largest, followed by Samsung heavy industries. Samsung constructions known as Samsung C & T ranks 36th in the world and Samsung Everland involved in vacations are involved in Everland resorts.

Because Samsung have always wanted to serve the entire general public, they have a variety of products were some are labelled as "mid range" devices. They are supposed to be more affordable while the high end expensive ones with the best features are made available too.

Anytime Samsung introduces new products , it first skims the prices of the product. Samsung does this by trying to get the best high price during the start of sales when the product is released. They do this before the competitors come up with their products with probably cheaper prices. Samsung then drops the prices of their products when another country produces a similar product or when the product becomes old and new ones are about to drop.

Everyone is aware that Samsung's model battles Apple's model the most. They exchange positions all the time and as Samsung tries new innovations all the time, it helps them. The foldable phones like Z fold and Z flip have helped.

This is the model that Samsung uses to stay competitive which basically talks more about innovation and providing customers with the chance to choose what they want.

Thank you.