三星电子的成功英文版.docx

三星电子的成功英文版.docx

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三星电子的成功英文版

ITHASbeenaremarkableyearforSamsungElectronics.Lastweekend,thecompanywasoneofthestarsatthegiantconsumer-electronicsshowinLasVegas,whereitunveiledaglitteringarrayofnewproducts.Amongthemwasanotablefirst:

amobilephonethatusesvoice-recognitiontechnologytoconvertspeechintotextmessages,offeringrespitetopeoplewhofindtypingmessagesontheirmobile'stinykeyboardfrustrating.AnotherSamsungmodelautomaticallyscansbusinesscardsandinsertsthedetailsintotheuser'saddressbook.

JustasimpressiveisthefactthatthisweekSamsungwillannouncerecord-breakingannualresults,notjustasSouthKorea'smostprofitable,butalsoasitsmostvisible,company.SamsunghasedgedclosertoitsJapaneserivalSonyastheworld'sleadingconsumer-electronicsfirm.Itisalreadythelargestproducerofmanydigitaldevices.ItispoisedtoovertakeAmerica'sMotorolaastheworld'ssecond-biggestmakerofmobilephones.

YetevenasSamsungwasclosingthebooksonatriumphant2004,itsfuturewaslookinglesscertain.TheKoreanwonsoaredtoaseven-yearhighagainstthedollar,reducingthevalueofmuchofitsoverseasearnings.Whileelectronicgadgetssuchasdigitalcameras,mobilephonesandflat-screentelevisionsremainaspopularasever,pricesarefalling.ThatcutsintoSamsung'sprofitmargins.Worstofall,thecompany'smemory-chipbusiness,byfaritsmostprofitableoperationin2004,isfacinghardertimesasthenotoriouslycyclicalsemiconductorindustryentersyetanotherdownturn.

ForSamsung'sbosses,thismayseemdishearteninglyfamiliar.In1995thecompanyalsosmashedearningsrecords,onlytoseechippricestumbleandcurrenciesheadintoturmoil.Bythedarkdaysofthe1997Asianeconomiccrisis,Samsungwasdeepindebtandheadingtowardsbankruptcy.Butthistimethingsshouldbedifferent.Thecompanyhasnowbeentransformedinsomanyways,maintainsYunJong-yong,acompanyveteranwhotookoveraschiefexecutivein1996,thatitcannotonlyweatherthecomingstorm,butwillsailontoevengreaterthings.

MrYunhastoplotanambitiouscourse.Thecompany'sstrategyisbasedonprovidingleading-edge,stylishproductsthatcanbesoldforapremium."Ifweweretocompeteonlyonprice,"admitsoneexecutive,"theChinesewouldslaughterus."

Sofar,thestrategyhaspaidoffhandsomely.Boostedbymarginsofmorethan40%onsemiconductorsinthesecondquarterof2004,SamsungElectronics'profitsbegantoriserapidly.Bythethirdquarter,thecompany'snetprofitwasalreadyalmosttwicewhatitearnedinthewholeof2003（seechart）.Thenthesignsoftroublebegan.Nevertheless,despitetherecentslowdowninearnings,asTheEconomistwenttopressanalystswereconfidentlyexpectingthecompanytoreportanannualnetprofitofaround10trillionwon（$9.5billion）onJanuary14th.

Thatisexcellentbyanymeasure.ButitisnotjustwithitsearningsthatSamsungwantstoimpress.Thecompanyisalsoinvestingheavilytoensurethathistorydoesnotrepeatitself.Researchanddevelopmentaccountedfor$2.9billionin2003,around8%ofrevenue.Morethan20,000ofSamsung's88,000employeesworkasresearchersin15R&Dcentresaroundtheworld.Capitalspendingismorethan$5billion.Thecompanyisbuildingtheworld'smostadvancedfactoryformakinggiantliquid-crystaldisplays（LCDs）,andbetweennowand2010intendstospendaround$24billiononnewchipmakingfacilities,despitefallingchipprices."Pre-emptiveinvestmentiscriticaltosuccessinthesemiconductorindustry,"saysLeeKun-hee,Samsung'schairman.

Andmoremoneywillbespentonbrand-building.Adecadeago,Samsungwasmostlyseenasaproducerofcheaptelevisionsandmicrowaveovens.MrLeecomplainedthat,whileSamsungcouldbuildaTVthatwastechnicallyjustasgoodasonemadebySony,hissetswouldsitatthebackofastoreorbepileduphighindiscountchains.Hewantedtomoveupmarket.ButSamsung,likemanyAsianproducers,wasabusinessgearedtopushingproductsoutofthedoorasquicklyandascheaplyaspossible.Switchingtacticswouldinvolvewrenchingchanges.

The1997financialcrisismadethetransitionpossible,saysMrYun."Ourcapitalwasalmostcompletelyeroded,"headds.ByJuly1998,thecompanywaslosing170billionwonamonth.AsemployeesrealisedthatevenafirmasbigasSamsungcouldgobust,arestructuringplanwaslaunched.Itsscope（anditssuccess）cameasashockinacountrythathassomeoftheworld'smostmilitanttradeunions:

around30%ofemployeeslosttheirjobsasthecompanyslimmeddownandsoldmorethan100non-essentialbusinesses.Therewasalsoadesperateneedtocutinventories,saysMrYun.Soheclosedfactories,sometimesforweeksatatime.Asmoreemphasiswasplacedondesigningbetter,moreattractiveproducts,thefirmalsomadeaconcertedefforttoraiseitsprofileinthemindsofconsumers.

In1999,EricKimwasrecruitedtorunaglobalmarketingoffice.HewasborninSouthKorea,butbroughtupinAmericawherehehadworkedforanumberoftechnologycompanies.AtfirstMrKimwastreatedwarily,buthesucceededinunifyingfragmentedsaleschannelsthatusedmorethan50differentadvertisingagencies.Healsomadethemostofthecompany'sprowessintechnology,launchingconsistentandmoredaringadvertisingcampaigns.Samsungalsousedproductplacementtogoodeffect;lotsofitsfuturisticgadgetsappearedinthecultmovie"MatrixReloaded".AndthecompanydecidedtobecomeaprincipalsponsoroftheOlympicGames.FollowingthesuccessoftheAthensgameslastyear,thishaspaidoff,withanotherbigincreaseinconsumerawarenessofitsbrand.MrKimmorethandoubledSamsung'sannualmarketingbudgettoabout$3billion.

InSeptemberlastyear,MrKimsuddenlydecampedtojoinIntel,Samsung'smainchipmakingrivalandacompanythatharboursitsownambitionstoexpandintoconsumerproducts.GregoryLee,whohasworkedwithanumberofAmericanconsumer-goodscompanies,tookontherole,inheritingaglobalreviewofSamsung'sadvertising.Thecomplexityofmodernconsumermarketinghasledsomebigcompaniestowanttodealprimarilywithjusttheparentcompanyofoneofthehandfulofglobaladvertisinggroupsratherthantryingtomanagelotsofspecialistagencies.WPP,aBritish-basedgroup,wonthatcentralroleforSamsung.

Planningisnowunderwayforthenextbigcampaign.AccordingtoInterbrand,aconsultancy,thevalueofSamsung'sbrandisnowclosetothatofSony.However,theSouthKoreancompanyis"notyetabrandthatcanlivewithouttheproduct,"saysJanLindemann,Interbrand'sheadofbrandvaluation.ThenextstepistoencouragecustomerstoturntotheSamsungbrandbeforetheythinkaboutwhatproducttobuy,ratherthanbeingledtothebrandbyaninterestingdevice.Togettothaticonicstatus,Samsunghastobeperceivedasevenmore"cool"thanitistoday.

ButtherewassomethingelsethatallowedSamsungtotransformitself.Therearetimesinanyindustrywhenastepchangeintechnologyletsnewleadersemerge,believesDavidSteel,vice-presidentofSamsung'sdigital-mediabusiness.HesaysthetransitionfromanaloguedevicestodigitalonesprovidedSamsungwithitsmoment.Theconvergenceofdigitalproductsandservicesmayprovideanother.Suddenlythereseemtobemoreopportunitiesthaneverbeforetocombinedifferentdevices.Forinstance,MP3players,whichcanstoremusicdownloadedfromtheinternet,arebeingincorporatedintomobilephones.Withtheadditionofalensandfastmemorychips,thephonesbecomeusableasdigitalcamerasandcamcorderstoo.

Manypeoplethinkthatthemobilephonewillemergeasacentraldeviceinthedigitalfuture.SouthKorea,wheremorethanthree-quartersofthepopulationhavemobiles,providesgoodevidenceforthis.Manypeoplealreadyusetheirhandsetsfore-mailandevenvideo-messaging-and20%ofthembuyanewhandseteverysevenmonths.Anewhigh-speedwirelessservicewillsoondeliverevenwhizzierservicestoportabledevices,includinghigh-definitiontelevision.ThefactthatSouthKoreaisnowoneofthemost-wiredcountriesintheworldhasprovidedSamsungwithanadvantage:

aready-madelaboratoryfortestingconsumerreactionstonewdigitaltechnologies.

Marvellousmobiles

ThemobilephonehascertainlydonethemosttohelpSamsung'snewimage.Handsetshavebecomefashionstatements,andanaidtosellingotherthings,saysInterbrand'sMrLindemann.Butadecadeagoitwasadifferentstory.SouthKoreans"didn'tseeusasahigh-qualitycompany,"saysChoiChang-soo,vice-presidentofSamsung'smobilecommunicationsdivision.Tochangethatperception,Samsungsetouttomakeahandsetthatcouldbemarketedasonethat"worksbetterinKorea".Itwas,forinstance,moresensitiveandsocouldreceiveandmakecallsinplacessuchasbasementrestaurantsthatareoftenshadedfromsignals.ThecompanyalsodevelopeditsownkeypadinterfaceforKoreancharacters.

ItwasalsoastruggletogetSamsung'shandsetsacceptedaspremiumproductsbyoverseasoperators,saysMrChoi.Buteventuallythebusinesstookoff.Samsunghelpedtopopularisethe"clamshell"designandin2004launchedthefirsthandsetthatwillworkwithboththeCDMAandGSMsystemsusedindifferentpartsoftheworld.AccordingtoGartner,afirmoftechnologyanalysts,inthethirdquarterof2004SamsungnudgedaheadofMotorolabysellingalmost23mphonesworldwide,givingita13.8%marketshare,thesecondbiggestafterNokia（seetable）.

Withmanyofitsmostprofitableproductsnowcomingunderpressure,isSamsung'sremarkableresurgenceabouttocometoanend?

MichaelHoosikMin,whofollowsthecompa