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
Excerpts
Samsung's Focus on Design Innovation
Samsung's journey toward design excellence started in 1993. That year, Lee reportedly visited an electronics store in Los Angeles, USA. He noticed, to his dismay, that the Samsung products on display looked unattractive, while the products of Sony and some other companies looked much more appealing. He found too that the sales personnel at the store were themselves ignoring the Samsung products. Lee realized that Samsung was paying too much attention to volumes and the cost of production, while ignoring customer value. He recognized that in order to survive, Samsung would have to make high quality, exciting products.
Lee said, "…having taken responsibility for the management of the group for five years, I have come to realize that Samsung has reached a turning point where it simply has to change. We are not yet adapting ourselves to the new economic environment. Our management is still maintaining a policy that puts priority on quantity rather than quality. We have to change if we are to survive. That is our only chance."....
Bringing Cultural Changes
Although Samsung had no problems in funding and creating the design infrastructure, it faced a more difficult task in convincing the rank and file at the company that design was necessary for survival and growth. Most of the employees were more concerned about costs and volumes than design. "Samsung was a technology company whose management thinking came out of exporting rice,"said Bruce, "There was no design involved. It was all about keeping the price down and outselling the other guy."...
Systemic and Process Changes
Samsung redesigned its systems and processes to improve the design delivery process. First, the company modified its product creation process. Samsung earlier was an engineering-driven company and there was very little interaction between the company's engineers, marketers, and designers. The designers only took orders from engineers and product planners. However, this arrangement was done away with, and designers began to enjoy as much, if not more, authority as engineers and marketers. Collaboration between different departments became a key aspect of new product development...
Samsung's Design Successes
Samsung had a string of design successes in the 2000s. For example, the Syncmaster series of LCD monitors was lauded for its simple design and went on to win several awards. In the 2000s, LCD TVs and Plasma TVs were gaining in popularity, while the popularity of the much bulkier projection TVs was waning. Therefore, Samsung's design team started work on developing a slim projection TV based on digital light processing (DLP) technology. The result was the highly acclaimed HLP series of DLP TVs, which had the processing engine standing upright and functioning as a pedestal base...
Criticism
Some critics commented that even if Samsung's design capabilities had improved greatly, the company still lacked a coherent design. "Samsung has improved, but I don't see an identity in their design that really speaks to consumers,"said Jim Wicks, vice-president (in charge of designing cell phones), Motorola Inc. According to some other critics, the company still did not have the design culture of Apple Computer Corp., or the breadth and depth in design that Sony possessed...
Outlook
In September 2006, Samsung unveiled the Syncmaster 971P, an LCD monitor. The product was unique in the sense that it had a geometric shaped stand, unlike conventional LCD monitors (See Exhibit XI for a photograph of the Syncmaster 971P). The company claimed that the S-Shaped stand gave the monitor additional stability...
Exhibits
Exhibit I: Samsung Group of Companies
Exhibit II: Samsung's Design Approach
Exhibit III: The Samsung Wordmark
Exhibit IV: Samsung DLP TV
Exhibit V: Idea Winners between 2001 and 2005
Exhibit VI: Design Awards
Exhibit VII: Convergence Products
Exhibit VIII: The World's Largest Plasma TV
Exhibit IX: Improving Design Skills in the Electronics Industry
Exhibit X: Worldwide Sales (Revenue Percentage)
Exhibit XI: The Syncmaster 971p
Exhibit XII: Samsung's Income Statement
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