Samsung Case Study

Samsung Electronics, a Korean company, started off as a small export business in Taegu, Korea. Today, Samsung is one of the world’s leading electronics companies, specialising in a wide range of fields from digital appliances to system integrations (Samsung’s History, 2011: Consumer research plays a valuable role in any business, as this can give the company a competitive advantage and also make it the trend-setter.

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Samsung followed this pattern since 2003 when Chairman Lee Kun Hee noticed that Samsung products were cast in the shadows of other brands such as Sony Corp. He ordered that managers should concentrate less on saving costs, and more on designs and unique innovations. Thus the “design-orientated” strategy came into play and consumer research was catapulted to the front (Cravens & Piercy, 2009: 533). Now, researchers across major trend-setting cities in the world watch, experiment with, and monitor consumers to determine needs even before consumers are aware of those needs.

Samsung researchers study everything about products, from how consumers utilize them, to the tones digital devises make. Designers sit in at focus group discussions to evaluate feedback given by consumers. Designers spend time in trend-setting industries such as art, Italian furniture makers, fashion and industrial design houses to keep on top of the latest trends, so that the product designs fit into the lifestyle of its consumers (Cravens & Piercy, 2009: 534 – 535).

Samsung has also redesigned its management structure to make it more open for young designers to come up with new ideas, concepts and innovations and take these ideas to the ultimate decision makers (Cravens & Piercy, 2009: 535). This enables them to take research findings and create new concepts with the possibility that the concepts would be created. To keep products at the leading edge, Samsung brought changes to the entire company system, moving emphasis from cost-saving to designing.

Collaborating with outside design firms such as IDEO and other consultancies has given them a leading edge in designs as well as an “outside” view to the market (Cravens & Piercy, 2009: 534). Recruiting promising designers and enrolling them into Samsung’s Innovative Design Lab to study under top designers has helped Samsung to obtain promising designers. These designers tour prominent landmarks and museums throughout the world to give them insight into the different cultures and into different concepts of art (Cravens ; Piercy, 2009: 534).

Confucian hierarchies are being done away with in the design departments, giving designers the freedom to challenge managers on new ideas and concepts, and to take ideas to top management. Designers also work in teams of three to five persons from various specialty areas and levels of seniority (Cravens ; Piercy, 2009: 534-535). This gives designers freedom to pursue their unique designs without fear of “stepping out of line”. Samsung has design centres in its most important markets (London, Los Angeles, San Francisco, Tokyo and Shanghai) to keep track of emerging trends (Cravens ; Piercy, 2009: 534 – 535).

This also enables them to study the local culture and how people live their daily lives with regards to Samsung products. With this in mind, a usability lab was opened in Seoul where customers and engineers alike can test products. This enables Samsung not only to design sleek, modern and aesthetically pleasing products, but also improve user interface -the future life-line of the company (Cravens ; Piercy, 2009: 536).

Samsung has a unique way of inventing new products. Managment sets a goal, and then does all it can to accomplish this goal. In order to make this happen, Samsung’s chief executive, Yun Jong Yong, set up the Value Innovation Program. The Value Innovation Program (VIP) is a facility at Suwon. This is where specialists from all departments gets “locked up” for a couple of weeks to work on a project. These specialists brainstorm, design, argue, do the maths and finally create new products of value for Samsung and its customers.

The teams work against a deadline, which ensures that they make difficult decisions in a timely manner as not to hinder product launch dates (Cravens & Piercy, 2009: 537- 538). Over recent years, Samsung has grown to become one of the leading home appliance suppliers. In 2009, the company’s third-quarter profit doubled the total of its nine Japanese competitors combined (Samsung Electronics’ Success, 2009).

In 2010, the Financial Times (January, 2010) stated that Samsung Electronics has overtaken Hewlett-Packard as the world’s biggest technology company in sales. However, the Financial Times also note that Samsung won ground over other Japanese companies because of the weaker Won (currency), not necessarily for innovative products. According to the Korea Herold (March, 2010) “Samsung is now the world`s top maker of TVs and the No. 2 handset vendor. It also is the top maker of memory chips and LCD panels. “