Samsung Electronics: Success by Design
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Case Code: BSTR228 Case Length: 16 Pages Period: 1993-2006 Pub Date: 2006 Teaching Note: Not Available |
Price: Rs.300 Organization: Samsung Industry: Consumer Electronics Countries: India Themes: Differentiation Strategies, Innovation |
Abstract Case Intro 1 Case Intro 2 Excerpts
"An enterprise's most vital assets lie in its design and other creative capacities. I believe that the ultimate winners of the 21st century will be determined by these skills."
- Kun-Hee Lee, chairman, Samsung Corp., in 2006.
"We want to be the Mercedes of home electronics."
- Yun Jong Yong, chief executive, Samsung, in 2004.
"Good design is not simply about aesthetics or making a product easier to use. It's a central part of the business process, adding value to products and services and creating new markets."
- Tony Blair, prime minister, UK.
Introduction
In the 2006 IDEA (Industrial Design Excellence Awards) competition, Korea-based Samsung Electronics Co. Ltd. (Samsung) won a gold (for a touch messenger) and two silver (for a portable digital projector and a digital presenter) awards. With these wins, Samsung held on to its number one position as the company that had won the most IDEAs in the last five years.
Samsung had made the decision to adopt design as a source of competitive advantage in the 1990s. Earlier, the company's products had been uninspiring and undifferentiated. In the early 1990s, the Group chairman, Kun-Hee Lee (Lee), initiated Samsung's transformation from a low-end OEM into a world-class electronics company.
Sharpening the company's design skills was a significant part of the initiative. However, this required major changes in culture, processes, and systems within the company. The decade-long initiative proved to be successful and Samsung came to be perceived as a company with an exciting product portfolio. The IDEAs and numerous other awards that Samsung won in the 2000s reaffirmed the company's newly-acquired design prowess. With stylish products in its portfolio, the company was able to record higher sales and higher profits. Interbrand7, a leading branding consultancy firm, named Samsung as one of the fastest growing brands in its 2005 brand survey. The top management attributed the company's success to a great extent to its new design capabilities. However, as of 2006, several small and big companies were following in Samsung's footsteps, and hiring design houses and consultancies to improve their product designs. It seemed that in the future, design itself was in danger of being commoditized....
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