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In the middle of World War 2, when the nations were fighting for their alliances, there emerged a small trading company named Samsung Sanghoe in the Empire of Japan (today’s South Korea). Starting as a business that deals with groceries, fish and noodles, Samsung widened its path into various industries. The company has now become the most popular and successful conglomerate brand worldwide.
Samsung’s steady growth and expansion strategies has given the company the 8th highest global brand value. One of its subsidiaries, Samsung Electronics, was ranked 15th in the Fortune Global 500 list for 2021. The beginning of Samsung, its entry into the conglomerate industry, hardships faced during wars and the success it gained despite these challenges are all so uplifting. Read further to know the complete success story of the Samsung Group.
Samsung - Company Highlights
- Company Name-Samsung
- Headquarters-Seoul, South Korea
- Industry-Conglomerate
- Founder-Lee Byung-Chul
- Founded-1st March 1938
- Areas Served -Worldwide
- Website-samsung.com
Samsung - About
Samsung is a multinational conglomerate company based in Seoul, South Korea. The company was founded by Lee Byung-Chul in 1938. It was initially established as a trading company. The company today operates various businesses like shipbuilding, telecommunication, healthcare services, hospitality, clothing, construction, entertainment, etc., through its subsidiaries.
Of all the businesses it runs, Samsung is well-known for its Electronics and Home Appliances. The brand’s mobile manufacturing comes under this division which is controlled by Samsung Electronics Co. Ltd. It is one of the most valued brands worldwide. The Samsung Group contributes more than 15% of South Korea’s GDP.
Samsung - Industry
Samsung belongs to the conglomerate sector which refers to a multi-industry company. In other words, a conglomerate company is the one that runs different independent businesses under its control. Such companies are huge and multinational.
The United States has the most number of conglomerates followed by India. Usually, the US and the European companies are the ones to top the list of ‘World’s Largest Conglomerates’ in terms of market value. But the research shows that Asian companies are on the rise in recent years. As of April 2021, Reliance Industries is said to be the world’s 2nd largest conglomerate company with a market value of $164.9 billion as reported by Statista.
Samsung - Founders and Team
The following are the founders and key people of Samsung Group:
Lee Byung-chul
Lee Byung-Chul is the founder of Samsung. He was born in Uiryeong, South Korea on 12th February 1910. Byung-Chul belonged to a wealthy family and is considered to be one of the most successful businessmen in South Korea. He established Samsung in 1938 and led the company in an efficient way which in turn made it the largest business group in the country. Lee Byung-chul passed away on November 19, 1987, at the age of 77.
Lee Jae-Yong
Lee Jae-yong is the grandson of Byung-chul and is currently the Vice-Chairman of Samsung Electronics. He succeeded his father Lee Kun-hee in 2020. Jae-yong earlier served as the Chief Customer Officer and Chief Operating Officer of the company. He is considered to be the fourth wealthiest person in South Korea. Lee Jae-yong was convicted and arrested on the grounds of corruption and was released in 2021.
Jong-Hee Han
Jong-Hee Han is the new CEO and Vice-Chairman of Samsung from 2022. He earlier served in several executive positions in the company. The company said that Jong-Hee would lead the new SET division of Samsung which brings TVs, electronics and mobiles under its management.
Kye-Hyu Kyung
Kye-Hyu Kyung is the president and another CEO of Samsung. He is said to head the Device Solutions division of the company. Dr. Kyung was the CEO of Samsung Electro-Mechanics between 2020 and 2021. He was a part of Samsung for 30 years and is known to be an expert in semiconductor designs.
Samsung - Startup Story
Samsung, when it was established in 1938, wasn’t meant to be a leader in electronics or a conglomerate company. It was started as a small trading company that deals with groceries. Lee Byung-chul procured and exported noodles and other goods to China. The company was then named ‘Samsung Sanghoe’ and functioned with around 40 employees. This was the start of one of the largest conglomerates in the world.
Samsung - Mission and Vision
Samsung has a mission “to devote its talent and technology to creating superior products and services that contribute to a better global society." The company wanted its customers to receive only the best products and services. It is determined to achieve that quality by using its finest resources, both human and technology. Samsung follows strict ethical values and a code of conduct in all its operatives across the globe. It believes that innovation and intelligence combined with good values result in good business and this serves to be the vision of the company.
Samsung - Name and Logo
The name Samsung is derived from Korean Hancha which means ‘Three Stars’. The founder Lee Byung-chul further explained that the name refers to something big, powerful and numerous that remains everlasting and eternal.
The logo that Samsung uses currently is the one that was enhanced and improved in 2005 from its previous ones. It was carefully assessed and redesigned based on how human eyes would judge them. Everything right from the color, design, letter spacing, height and letter sharpness were taken into consideration. The company’s motive is to possess a logo that gives visual harmony to the people. Samsung has changed its logo six times over the years since its inception.
Samsung - Business and Revenue Model
Since Samsung is a conglomerate entity it is involved in various business operations. Like any other business, Samsung sells its products and services either online or through offline platforms. The company's areas of operations include electronics, home appliances, advertisements, shipbuilding, engineering and construction, life insurance, biopharmaceuticals, and healthcare.
Samsung generates the majority of its revenue through its electronics and semiconductor business. The product quality and its cost structure are the major success factor for the company’s growth. In 2021, Samsung’s Semiconductor business turned out to be the biggest revenue generator followed by smartphones and display panel businesses.
Samsung - Funding
Since Samsung has an 84-years long history most of its businesses were funded by the parent company or its affiliates. However, Samsung Electronics received two rounds of funding in 2017. The first round of funding went through on May 29, 2017, and the company raised $447.5 million through the round Samsung Electronics Supplier Financing Fund.
Samsung Automotive Innovation Fund round is the second one that was held in September 2017, where the company raised $300 million.
Samsung - Acquisitions and Investments
Samsung Group has made hundreds of acquisitions and investments over the years. These investments by Samsung are made by its subsidiaries through which the company runs its entire operations. The electronics division has made 37 investments and 46 acquisitions whereas Samsung Ventures has made 256 investments in startups.
Samsung - Subsidiaries
Samsung runs its conglomerate business operation through 12 of its major subsidiaries. Here is the list of those companies:
Samsung Electronics
It serves to be the forerunner for the entire Samsung Group. All the consumer electronics and home appliances like TVs, ACs, refrigerators, smartphones, semiconductors, etc., come under this division. It serves to be the leading revenue generator for Samsung.
Samsung Electro-Mechanics
This company manufactures mechanical and electronic parts for various companies. Its products include parts for mobiles, chips and camera modules.
Samsung SDI
Samsung SDI is involved in the production of energy solutions like rechargeable batteries for various electronic materials. It was established in 1970.
Samsung SDS
SDS stands for Samsung Data Systems which provides IT solutions and various technical outsourcing services. It is establishing itself in Artificial Intelligence, Blockchain and various other recent technological developments.
Samsung Engineering
Samsung Engineering was earlier known as Korea Engineering which was established in 1970. It is involved in the design and execution of chemical, petrochemical, oil refinery, fertilizer and power plants across the globe.
Samsung C&T Corporation
This is a construction company that was responsible for building various popular structures and civil projects across the world. Burj Khalifa, Petronas Towers and Mersey Gateway were all built by Samsung C&T Corporation.
Samsung Everland
It has been the subsidiary of Samsung C&T Corporation in December 2013. This company deals with food, textile, fashion and resort businesses. It operates in more than 50 countries.
Cheil Worldwide
Cheil is an advertising agency under Samsung Group and is one of the world's largest in terms of revenue. It is known for its creativity and has several big companies like Coca-Cola, Nestle, Adidas, Microsoft, etc. as its clients.
Samsung Life Insurance
Samsung Life Insurance is a Fortune 500 company and is the largest and most valuable company in South Korea. It offers health and life insurance and annuity services to people.
Samsung Heavy Industries
Shipbuilding is the primary activity undertaken by Samsung Heavy Industries. It is reported that around 30 ships are being launched every year from its docks. The company's other activities include procuring and transporting heavy machinery for various industrial and construction activities.
Samsung Fire and Marine Insurance
This company is involved in providing insurance and financial services for transportation and business activities. It provides automobile insurance, general insurance, enterprise risk management insurance, etc.
Samsung Biologics
Samsung Biologics is a biopharmaceutical company that develops medicines and antibodies for various diseases. This company has an R&D center in California and has obtained several ISO certifications.
Samsung - Growth
Samsung was involved in the trading business for 12 years until 1950 when the Korean war broke out. After the end of the war in 1953, Byung-chul decided to expand the business and focused on textiles. As a result, he started a woolen mill which was the biggest in the country at that time. The industrialization of that period and the government’s Protectionist policies helped him in boosting his business.
Samsung started acquiring diverse businesses by the late 1950s and took over three large banks in Korea, an insurance company, an industry that manufactures cement and fertilizers, department stores, an oil refinery, etc., over the years. It was only in 1969 that Samsung entered the electronics industry. Today the growth of Samsung Electronics is astounding. It tops the global rankings in mobile phones and electronics. The company also entered the telecom business in 1980.
After acquiring a lot of businesses, Samsung started creating subsidiaries to group those companies for efficient management. The death of its founder Lee Byung-chul in 1987 led to disagreements in management and Samsung was separated into five groups. Each group went away with its related industry where Samsung Group held back its electronics business in addition to the construction, security, energy and insurance business.
The company started to focus on electronics and semiconductors after its separation. It innovated and introduced many equipment and devices which helped Samsung achieve a successful reach in the global market. Samsung also stepped into the aerospace industry in 1999 and is involved in the production of aircraft engines and gas turbines.
Before establishing its smartphone unit in 2007, Samsung started developing its set-top box technology. The first Samsung smartphone was released in June 2009 and within 3 years of its introduction, in 2012, Samsung Electronics became the largest producer of smartphones in the world. Then the company started creating more benchmarks and achieved many milestones in smartphone production and sales. Today, Samsung has the world's largest mobile manufacturing plant which is located in Noida, India.
Samsung - Challenges Faced
Samsung was accused of several labor abuse and child labor law violations. Few of the suppliers of Samsung were brought under this allegation. The company investigated the matter and terminated business relationships with those suppliers that were confirmed to be violating laws.
In 2012, Samsung was taken before a court of law by Apple for the infringement of six of its patents. Apple claimed damages for $2.5 billion. Samsung, in return, accused Apple of violating its patents. Finally, it was ruled that Samsung had to pay damages of $1.05 billion and also said that Apple did not violate any patents. The ruling also rejected Apple’s plea to ban the selling of eight models of Samsung phones.
A major challenge that Samsung faced was after the death of its founder Lee Byung-chul in 1987. The company was split into five groups. Despite the hardships, Samsung focused on the growth strategies with the industries under its management and established itself as a global brand.
Samsung - Competitors
Since Samsung is a conglomerate company it has numerous competitors in all the industries of its business. Here are a few of its top rivalries:
Apple
As we all know, Apple is a popular brand that is involved in the manufacture of consumer electronics like mobile phones, tabs, laptops, etc. There have been direct conflicts between Apple and Samsung nevertheless they have a great competition among their products.
Intel
Intel is an American Company that manufactures and supplies microprocessors and chips for various popular companies. It was once the largest producer of semiconductor chips in the world but Samung captured the top position in early 2022.
LG Electronics
LG Corporation is another multinational conglomerate from South Korea similar to Samsung. LG is popular for its TV, computers, vehicle components, and other home appliances. This company is the second-largest manufacturer of TVs in the world. The first position is retained by Samsung
FAQs
When was Samsung founded?
Samsung was founded in 1938.
Who is the founder of Samsung?
Lee Byung-Chul is the founder of Samsung.
Who are the top competitors of Samsung?
Some of the top competitors of Samsung are:
- Intel
- Apple
- LG Electronics
What is the revenue of Samsung?
Samsung's global revenue is $244.4 billion in 2021.
What is the number of employees working for Samsung?
There are 287,000 employees in Samsung
