Samsung Case Analysis Essay Example for Free

Samsung Case Analysis Essay1. HISTORYSamsung Electronics is a reciprocal ohm Korean multinational electronics and information engineering science party. It is the chief subsidiary of the Samsung Group that was formal in 1969, and its render is located in Samsung Tget, Seoul. Samsung Electronics is unrival take of the handsomest electronics producers in Asia, and its carrefour line includes semiconductors, televisions, telecommunication equipment, electronic computers and many different kinds of photographic plate appliances. The Samsung Electronics unit was created to travel into the prosperous television and consumer electronics industry. Its prototypical production was a small simple written language television which was sold in the early 1970s. The division positive a diverse line of consumer electronics, and while in its beginning products was only sold domestically exporting goods began a few courses later. It took the fel abjectship savvy management and huge investments in research and development, entirely Samsung Electronics expanded their products to creating color televisions and a mixed bag of other consumer electronics and appliances.The political party manufactured, shipped and sold a broad come out of these appliances and electronic products worldwide by the 1980s. The card-playing progress and success of Samsung Electronics was not a surprise to people who k advance(a) the founder of the Samsung Group, Byung Chull lee status, a highly praised Korean entrepreneur. He overcame several(prenominal) obstacles with the small trading order he founded in 1938. Starting with a $2,000 snuggle egg and 40 employees, he was iodine of the ten largest trading companies when the Korean war started. The conquest of Soeul by the North Korean army forced him to give up his operations in 1950. However, one year after losing almost all his inventories and relocating to Pusan, Lee started the club over again with the help of the s avings of one of his managers. aft(prenominal) only one year, the company had experienced unimagin adequate crop and its assets twenty folded.Lee, being an entrepreneur that was always looking for much opportunities, founded Cheil Sugar, a sugar refinery in 1953, which became a truly pull aheadable avocation that al belittleded him to expand into a wide variety of merchandises. These included insurance, broadcasting, securities and even department investment companys. Lee was heavily criticized for roughly of his actions, such as building the start-off manufacturing facility in S come forthh Korea after the Korean War but many of his companies prospered under his vision of making Samsung the die harder in every industry he entered.Despite facing study setbacks and fighting political battles in the 1960s, Samsung generated revenues over US $100 million annually. Lee not only broke into the freshet communication industry by launching a radio and television station, but e xcessively founded Samsung Electronics. Entering the manufacturing televisions and electronics components industry, one that was under the control of US and European companies, seemed to be a risky venture, but Lee succeeded with the help of the national government.The head of the state, super acid Chung-Hee encouraged the gain of dominating domestic industries in contradiction to his predecessor, who ruled with favoritism and corruption in order to adjudge his power. Park protected study(ip) industries and the larger companies in South Korea from abroad competition and gave out financial assistance as a part of his scotch maturation plan. The Samsung Group was one of the main beneficiaries, profiting from the ban on several countries to import consumer electronics, in that respectby eliminating the big competitors in the collection plate trade place. As the company was trying to establish itself in the television industry, it added consumer products and appliances to i ts product lines. In addition to the ban on imports from certain countries, the government besides prohibited foreign companies to invest into Samsung, while Samsung was still allowed to invest in overseas line of reasoninges.As a consequence, Samsung Electronics rapidly controlled parts of the home market while it also started exported success in fully. As Lee had already predicted in the head start decade of its existence, Samsungs Electronics division was the main industry for the companys future. To ensure that Samsung became a major player, he entered the semiconductor business in 1978. Government regulations again contend in the entrepreneurs favor, as foreign telecommunication equipment manufacturers were required to provide semiconductor applied science in go along for access to the Korean market. In 1983, after receiving proprietary technology from Micron (USA) and distinct (Japan), Samsung became the initiatory Korean manufacturer of DRAM (dynamic random access mem ory) chips.Producing congenatorly low-tech DRAM chips at a inflict cost, Samsung Electronics became a large supplier to computer and electronics manufacturers throughout the entire world within the next couple eld. Samsung Electronics increase its efforts on other electronics operations in the mean m as well. assemblage plants were built in Portugal (1982), New York (1984) and England (1987). Together these plants produced 1,700,000 televisions, 700,000 microwave ovens and 300,000 VCRs. Thus, Samsung Groups annual revenues rose to $24 billion in 1987 (from $1.3 billion ten years earlier), which equated about a fifth of South Koreas entire GDP. Most of that growth resulted of Samsungs Electronics success.Despite the death of its founder Byung-Chull Lee, sales for the Samsung Group almost triple folded between 1987 and 1992. His successor, his son Kun-Hee Lee, did not only recognize the importance of the electronics division but moved it to the core of the Group. He combined seve ral divisions and outback(a) some operations while introducing different ideas that were put in place to enhance product whole step and employee motivation. Lee foc officed on pushing Samsung to become a technological leader in the semiconductor, electronics and communication industry and doubled research and development investments. He was also credited for intensifying partnering efforts with foreign businesses to make Samsung the pioneer in the semiconductor technology. During the 1990s, Samsung underwent a groundbreaking change.After Samsung begins to reinvent through be after (1993), sets up its in-house stick out school (The Innovative Design Lab of Samsung) and hires design consultancy IDEO to help develop computer monitors (1994), its biggest change had yet to follow. With the appointment of Yun Jong Yong as the President and CEO, Samsung changed its strategy drastically. Despite making profits as an established low cost supplier of many components to larger and well-kn own companies as well as providing customers with lower- equipment casualtyd appliances that were more than affordable than the more expensive products by brands such as Sony, Yun was worried about the companys future. He could not envision the company continued success on a low cost strategy with products whose technology had been developed by others. Yun believed that it was not secure to expect to be unendingly able to scout for low-cost production locations successfully while retaining high volumes of production. This concern mainly arose out of the emergence of many low-cost producing countries such as China.The CEOs scargon became reality as within the first year of his tenure serious financial trouble threatened the companys survival. Huge debt and the economic crisis in Asian resulted in the loss of millions of dollars and Yun decl ard that if we continued, we would have gone belly-up within cardinal or four years. (Dess, 2010, p. C123). A turn-around was the much needed consequence. After trying to continuously compete in a price-cutting environment and increasing volume throughout the economic break, Samsung Electronics had to lay off more than tierce of its workforce, which accumulated to about 30,000 employees. To get rid of its large inventory, many factories were closed down for more than 60 days. The company also sold off $2 billion worth of business that it perceived to be with minimal signifi rotterce for its future. Yun decided to move Samsungs future away from a company base on a lower-cost strategy to one emphasizing product development that would ultimately impress their consumers with their personable design and advanced technology.Developing Samsung into a reward brand was the vision of the leader, and he recruited new managers. Yun removed the seniority-based system and put a merit-based system for advancement in place. These efforts resulted in the construction of newly designed products such as the largest flat-panel televisi ons, nimble phone phones with new features (Cameras, PDAs, etc.) and thinner notebooks and computers than ever before. Hiring Eric Kim, a trade whiz, who changed the advertisement agencies from 55 to one to create the same brand image anywhere in the world, worked hard to place a more upscale image of Samsung products into consumers minds. To undermine this perception, Samsung pulled out its products of big discounters such as Wal-Mart or Kmart and displace these into more expensive retailers (e.g. Best Buy, Circuit City). Yun was aware of the fact that the company would only be able to maintain its higher profit strands if the firm was able to bring its products faster to the market than its competitors. To ensure a sustaining model of this matched advantage, the CEO removed several layers of bureaucracy to win approval for new products, budgets and marketing plans. Second steps to maintain an advantage are the huge investments in key technologies.The company has invested mor e than any of its rivals in research and development (RD), as it almost puts 9% of its revenues aside skillful for RD. To step-down the time of innovative product development, the large number of designers and engineers that are works in 17 locations throughout the entire world are not only facing the pressure from their own management but also competes with outsiders. Samsung attributes these strategies to its success in the effort of decreasing the time from a new product conception to rollout (Dess, 2010, p. C124). from over a year to as little as fin months (Dess, 2010, p. C124). The determined work of the firms choke manager, designers and engineers in the firms VIP center is at the core of the products rapid innovation and production.The reduced complexity for shake off teams in the design cycles early stages allows the company to move its products quicker to manufacturing while decrease problems and be. Jung, a senior manager of the center states, explains that Sevent y to eighty percent of part, cost and delivery time is determined in the initial stages of a product. (Dess, 2010, p. C124). A senior VP of Best Buy, George Danko, affirmed that they will get a product to market a lot fast than their counterparts. (Dess, 2010,p. C125). Among Samsungs first-to-market products are the first voice trigger phones, handsets with MP3 Players and digital cameras that send photos over global systems for mobile communications ne cardinalrks. In addition to that, the firm was first to market projection TVs using new chips from Texas Instruments that employ digital-light processing. (Dess, 2010, p. C125).Yun envisioned that the companys digital technology advances can result in a possibility of dominating the digital home, a home where he envisions that all appliances (from computers to refrigerators) are linked to each other and are capable of adapting to the personal necessitate of every individual consumer.One of the first products that have been brough t to the market includes NEXiO, a combination of a cell phone and a handheld computer, or the Zipel, a refrigerator that has a 15-inch touch screen in its door that allows consumers to browse the web. To emphasize the importance of design, Yun implemented every quarter design meetings with backsheesh executives and opened or expanded design centers in San Francisco, London, Tokyo, Los Angeles and Shanghai. Additionally, the post of chief design officer was created who ensures that designers can get their ideas to clear managers. (Dess, 2010, p. C125). Despite all the improvements that Samsung Electronics make since the mid-1990s, Lee Yoon Woo replaced Yun as the CEO in May 2008. After a tax evasion scandal that involved the parent firm Samsung Group, a major-shakeup along the top executives occurred that not only reassigned over half(a) of its executives to new built in beds but also introduced many younger executives to unhomogeneous leadership teams.The purpose of the restruc turing was to increase efforts and deal better with the prevailing bad economic conditions. Samsung went into the economic recession with a market value of over $100 billion, thus placing them in an elite market position shared only with cardinal other Asian firms. Samsung moved past big players on the market such as Nokia, Sony and Motorola, thanks to their revolutionary products. The efforts to improve design by overhauling it design every cardinal years has been paying off and Samsung won well over 200 awards from internationally prestigious design institutions since 2006. Even though Samsung prides itself of having lower cost structure compared to most of its rivals, the firm experienced its first quarterly losses in the last three months of 2008, when the company lost $14.4 million.This is Samsungs first net loss since it began account quarterly results in 2000. The overproduction of memory chips and liquid crystal displays (liquid crystal displays) worldwide was mentioned a s the main precedent resulting in a quarterly loss. Despite recording a quarterly loss, the company still made a yearly profit in 2008 and has increased its revenues steadily in the past decade. Samsung underwent twain major restructures in the last three years, one in 2009 when the company began to slim down operations into two divisions from the five separate ones it had the year before. It also appointed Choi Gee Sung the new CEO presently after the company made him the head of the newly formed digital media and communications unit.Chois appointment was a breakthrough for Samsung Electronic as it previously only picked top managers that had their backgrounds in engineering. In December 2010, Samsung underwent the secant restructuring as it switched its management style from the single CEO system of the previous year to a two person management team. Choi Gee Sung remained the CEO of the company but was named Vice President and Lee Jae Yong is now the President and COO (Chief O perating Operator). The firm also added a digital imaging business division so that Samsung Electronic currently consists of eight divisions. (FundingUniverse, 1999)2. VISIONAs Samsung stated in its new motto, the companys vision for the decade is to Inspire the World, Create the Future. his new vision reflects Samsung commitment to inspire its communities by supplying Samsungs three key strengths New Technology, Innovative Products, and Creative consequences. Samsung has also established three strategic approaches in its management Creativity, Partnership, and Talent. As part of this vision, Samsung has mapped out a specific plan of compass $400 billion in revenue and becoming one of the worlds top five brands by 2020. Samsung states that it looks forward to increase its diversity by exploring new territories, including health, medicine, and biotechnology. (Samsung, 2010)3. BUSINESS DIVISIONS1. Visual Display railway lineSamsung Electronics has achieved the worlds No. 1 market s hare in TVs for five years in a row since 2006. After establishing the new market for LED TVs in 2009, the firm has extended its agonistical lead with sales of 45.11 million TVs. That included 39.26 million flat panel TVs in 2010, as the wide-eyed HD 3D LED TV became readily available. Samsung also leads in the next generation market with gist sales of 3D TVs (2 million in 2010). Samsung Electronics announced a monthly record this past October 2011 as it sold more than 1 million units in the United States.A company official was stated Selling over 1 million units in the North American market in just one month is a first for the company, but it is also unprecedented in the industrys history. According to the official, the company was experiencing increased demand in the support TVs , e.g. the 3D and especially smart TVs, which were just released in 2011 and have Full HD picture quality and Smart Hub options. Samsung announced that the global share of its 3D TVs came to over fift y percent as of last months ending. Meanwhile plasma display panel (PDP) TVs also reached 40%. pic(Samsung,2010)3.2. IT Solution BusinessAfter the implementing of Samsungs global marketing strategy for mobile PCs, Samsung Electronics realized rapid growth and reached sales of 10 million units in 2010 worldwide. The firm launched a printer for consumers that supports mobile printing. Samsung Electronics provides business customers with a complete product line, including the first dual core CPU-equipped printer on the market, a multifunction printer and an A3 copier. The easy-to-use features and the products in good order performance secured second global market share in the A4 laser printer category in 2010. Samsung Electronics led the world market in the categories of mono laser multifunction printers and color laser multifunction printers for the second square year. In the future, the firm expects to achieve strong growth by launching an ultra-light high-performance laptop for the premium market and by bolstering its business-to-business (B2B) product line. Samsung Electronics anticipates continuing growth in the printer business in the forthcoming years. pic(Samsung, 2010)3.3. Digital Appliance BusinessSamsung Electronics is strengthening its brand image by introducing premium home appliances that adjure essential services for daily life. In 2010, innovative products such as the twin cooling side by-side refrigerator the front loader washer with vibration-reduction technology, the energy-efficient air conditioner and air purifiers with humidification that maintain clean air quality in rooms resulted in great response worldwide. Samsung brought innovate, smart appliances to the market that deliver gracious and commodious lifestyle options such as Samsungs autobot vacuum cleaner that cleans rooms automatically. Other products include kitchen ranges and microwaves that base on balls cooking features suitable for anybody. Samsung Electronics will extend its market leadership by releasing additional premium appliances. These will be supported by strong marketing with the purpose of becoming the worlds most trusted digital appliance brand. pic(Samsung, 2010)3.4. Mobile Communication BusinessIn 2010, Samsung Electronics reinforced its market leadership by achieving sales of 280 million mobile phones worldwide. This number is up 23% compared to 2009. The flagship GALAXY S model posted sales of 10 million units, while the GALAXY Tab also led the Android tablet PC market, earning great customer reviews. The firms leadership in full touch and put across mobile phones continued in both advanced and emerging markets. Samsung Electronics plans to obstreperously challenge a vey competitively developing market. It launched the GALAXY S II, the companys flagship smartphone, only one day after apple announced the new iPhone 4S and the Samsung phone received great feedback. The firm plans to keep expanding and improving its unique mobile solution s as it strengthens its competitive lead in both services and content.pic(Samsung, 2010)5. Telecommunication System BusinessSamsung Electronics develops forward-looking products for two major 4G platforms, the Long Term Evolution (LTE) and the Mobile WiMAX (WiBRO). In 2010, the firm established the first LTE commercial services network in the US and currently expands in North America, Asia and Europe. Mobile WiMAXintroduced by Samsung Electronics and adopted as a global standard in 2007has been experiencing dramatic growth in major mobile communications markets, including the US, Japan and Saudi Arabia. Based on its established technology leadership, the firm is expecting to lead the worldwide mobile broadband market in the upcoming years.pic(Samsung, 2010)6. Digital Imaging BusinessSamsung Electronics is working hard on its brand image and recognition to become a premium brand by introducing a rising number of premium digital cameras and digital camcorders. The product line of inte rchangeable electron lens digital cameras was extended in the last year and the newly released mirror less digital camera (NX11) secured the firms competitive lead over professional optical brands. Samsung plans to continue to debut world-first and world- stovepipe cameras such the ST700 Dual office camera (which offers excellent image quality plus fun and convenient self-portrait option), the EX1 (the worlds first ultra-wide F1.8 zoom lens), the SH100 (which features Wi-Fi (DLNA) functionality) and many others.pic(Samsung, 2010)7. Semiconductor BusinessSamsung is the worlds second largest semiconductor manufacturer and is the industry sales and technology leader in the areas of DRAM, SRAM, NAND Flash and TFT-LCDs. A key partner and premier supplier to the global IT industry, Samsung Electronics offers the widest range of advanced semiconductor devices and solutions for PC, server and mobile applications.The firm intends to play a major role in the growth of the green IT industry as they implement their Green Memory strategy, which emphasizes high-performance memory products with lower power consumption. Samsung Electronics differentiated product competitiveness has awarded the company the No.1 position in the worldwide memory market for 18 years in a row. The company consistently leads the industry, and began the worlds first mass production of 30nm-class 2Gb DDR3 DRAM, 30nm-class 4Gb LPDDR2 DRAM, 20nm-class NAND flash memory, 512GB SSD and more. In the storage systems division, the firm introduced high-capacity hard disk drives (HDDs) to the market, including a 2.5 inch 334GB HDD and a 3.5 inch 667GB HDD. pic(Samsung, 2010)8. LCD BusinessBeing the industry leader, Samsung Electronics has achieved the No. 1 market share for LCD panels for nine consecutive years. The industry-first active 3D technology supports True 240Hz for 3D TV, which has reinforced Samsungs leadership.Samsung released trend-setting displays as such as an LCD panel for the tablet PC (whi ch offers vivid colors at a wide viewing angle), a low-power IT panel built with advanced LED backlight technology and more innovations were key to the firms leadership. In 2011, Samsung has been improving its product leadership as they developed differentiated offerings, including ultra-large panel technology, a full range of LED LCD panels, high-value IT products and DID panels. For the future, Samsung stays committed to research and development to produce tomorrows best products. That includes focusing on an oxide semiconductor panel, plastic LCD, transparent LCD and developing high efficiency solar modules. The firms goal is to develop the industrys most efficient and highest quality products.pic(Samsung, 2010)4. financial INFORMATIONSamsung Electronics has been increasing its sales from 2008 till 2010 by more than 10% annually. These are extraordinary numbers, given the economic circumstances in todays (western) world. Despite big investments in research and development, the firm managed to almost double its net income from 2008 to 2009 and almost triple it from 2008 to 2010. pic(Samsung, 2010)Samsung Electronics experienced an increase in revenue in the first 6 month of the fiscal year of 2011 compared to the first two quarters in the previous year. However, this increase in revenue did not result in an increased operational profit in that period. As shown in appendix 1, the main reason for the decline in operational profits are two factors increased cost of sales and increased research and development expenses.Stock InformationSamsung Electronics root trades on the stock markets in Seoul, London, and Luxemburg. Samsung Electronics stock is listed on the Korean Stock Exchange as 005930. As the chart below indicates, Samsung Electronics stock price has been considerably grown in the last two decades. However, it experienced many setbacks, the current ones in the latter of half of 2008 and beginning of 2009 as well as during the third quarter of 2011s fiscal year. The worldwide economic recession and first quarter losses in last decades in the fourth quarter of the year 2008 were responsible for the declining demand of stocks, while this years first half decline is probably most attributed to the slowing world economy. However, the stock price rose to the level of the years beginning in the late summer this year. 1 KRW (South Korean Won) = 0.00089 US Dollar (as of 11/9/11) pic(Market Watch, 2011)Financial RatiosRatio data as of 06/30/2011pic(Bloomberg Businessweek, 2011)In the following, I will discuss three major financial ratios. 1. Return on AssetsReturn on Assets is an indicator of how profitable a company is relative to its total assets. The ratio gives an understanding of how efficient management is at using its assets to generate earning. Samsung Electronics Return on Assets is 6.87%, a number that is a little below industry medium and shows that the company can decidedly improve its efficiency.2. hard currency RatioTh e cash ratio is the most conservative ratio for measuring fluidness and is often used during periods of economic turmoil because cash is the most of the essence(predicate) asset many companies own in difficult times. If a company has a ready supply of cash, it can survive sharp drops in sales that might put another less liquid company out of business. Samsung Electronics Cash Ratio (1.6x) is generally speaking a decent number and as indicated above an above average number compared to the industry.3. replete(p) Debt/EquityThe total debt/ beauteousness ratio is calculated by dividing the firms total liabilities by stockholders equity and indicated what proportion of equity and debt the company is using to finance its assets. High debt/equity ratios generally mean therefore that a company has been aggressive in financing its growth with debt, which can result in unstable earnings as a result of the additional amuse expenses. Samsung Electronics 11.6x Total debt/equity ratio is a h igh number that gives some room for concern, as high interest rates could have a negative impact on the companies financials.5. SWOT AnalysisThe SWOT abbreviation will examine the upcountry and external factors influencing Samsung Electronics. It will identify the strengths, weaknesses, opportunities and threats for the company. Samsung electronics has many strengths that can be pointed out. First, they are a very innovative company. As part of their new strategy they have begun developing its own products rather than copying those of other firms. In fact, they invest 9% of their revenues into research and development. This has helped them to gain a competitive edge. Also they switched to a merit-based system for advancement rather than a seniority based system. We believe this is effective because it will motivate employees to work harder knowing that if they perform, they can advance with the company. Interior competition is also vigorous to a certain extent. Samsung encourage s its two divisions to compete with each other to boost sales and innovation. Also Samsung is very efficient and effective in their product development process as well as getting the product to market.They lead the industry in this and can get a new product developed and released in as little as five months. Another key strength is their brand name. Samsung is recognizable all over the world as a top quality company. Next it is authoritative to cause Samsungs weaknesses as a company in order to identify their key issues. The first is privileged competition. Note that this was also listed in strengths, but if pushed to far can be a detriment to the company. excessively much competition between divisions could cause a loss of focus on the companys overall vision and more focus on beating each other. This could also cause the divisions to hark back more short-term rather than focus on sustainability. Also, the company is reluctant to branch out into music, movies and the spicy i ndustry.Branching out could increase their revenues tremendously and sky rocket the companys business. Their former low cost structure should be pointed out as well because they focused less on quality and more on cost, which essentially kept them from becoming a premium brand that appeals to a more luxury consumer demand. Overall Samsung has many opportunities to take advantage of. The first is their innovation with this they hope to expand into creating the full digital home experience. This means that they wish to change the way our homes our designed and essentially used with the use of their technology. This could be a huge cash cow for the company and could create a constant rain buckets of revenues. In addition, they could begin to aggressively pursue and acquire other technology companies in markets that they are not currently in. They have already started this with the failed attempt to acquire SanDisk, a company that makes storage cards and other such products.Furthermore , they should continue to build new factories around the area in low cost areas. property production costs low is a key factor in increasing and maintaining the highest possible profit margin. Due to the innovation and research of Samsung they could penetrate many new markets as well as expand market share. Samsung Electronics also faces many external threats. The current economic state of key areas such as the United States has caused a large decline in demand. This means that they have a large measuring rod of inventory sitting in warehouses. This could put a damper on a companys financial situation due to holding costs and a decrease in revenues. Also if there is an overcapacity in global production this could drive down prices. When prices are driven down profit margin decreases and your company could feel the financial impact. Lastly, there is a large amount of competition in the industry. It is important to stay innovative and one step ahead of your competitors to maintain m arket share.6. Porters tail fin ForcesThe threat of new entrants is relatively low in this industry. The majority of the companies in this industry are established and operating at a very high output. It is hard to enter the market due to the highly high amounts of costs put forward to research and development, as well as delivery your product to the consumer.Next, there are very many substitutes to the products that Samsung offers. there are many companies competing in the electronics field and they are evermore looking to gain market share. Also companies in the technology industry are constantly copying each others innovations in hopes of improving them.The bargaining power of the buyers is high in this industry. The consumer has a large array of options and substitute products. This enables them to have a large impact on the price of the product. This is why it is important to keep your prices competitive.The bargaining power of suppliers for Samsung Electronics is low. This is due to the large market share that the company has. The company develops and manufactures their products in house, which enables them to have more control over their complete supply chain. Ultimately this helps them to be more efficient and keep costs down.Within the electronic industry, there is a very large threat of competition. They face strict competitors such as Sony, Panasonic, Hitachi, Philips, and Sharp to name a couple. This is why it is important to stay innovative and keep emphasis on quality, as well as satisfying your consumers needs.7. ProblemsThere are many problems that Samsung faces as a company. We do not believe they are being aggressive enough in entering new markets. The cost of losing opportunity while it is there could be injurious to the company. Also, because the technology business is always rapidly changing, they could lose sight on the overall long-term growth of the company. Samsung also has very high operating costs because of the constant amount o f research and development they use.The company should actively seek ways to become more efficient to keep costs low. High costs and lack of demand have caused their profit margins to decrease. A lack of an internal distribution system could also drive costs up. A problem in the general environment that diminished Samsungs return is the global economic slowing growth (or in parts also recessions) that Samsung has to keep considering carefully in its product investments and overall company strategy. Our own research conducted in the local Best Buy store also pointed out that even though Samsungs smart phone series Galaxy is growing in market share, it consistently has lacks and downtimes, which frustrates many of the customers. 8. Solutions/SuggestionsThere are many possible solutions to some of the internal and external issues that Samsung is experiencing. First, we believe that Samsung should branch out into music, movies and the game industry. This could help the company to expand in a positive manor and could open up many new markets to them as well. Next it is important to keep planning for long-term sustainable growth. Samsung should continuously invest in new technology to keep its market share. Also, they should take full advantage of opportunities to acquire other business entities in new markets.They should take a proactive approach to expansion to help them gain and maintain a competitive edge. The company should also keep looking for new ways to keep their operating and manufacturing costs low. They could even look into bringing their distributors in house by buying them out, or even implement their own distribution division. This could be very effective in keeping distribution costs low. Samsung also has to solve the ongoing problems with its track smart phone on the market, the Galaxy.BibliographyDess, G., Lumpkin, G, Eisner, A. Strategic Management Text and Cases.(2010). New York, New York, McGraw-Hill IrwinFundingUniverse. (1999). FundingUniver se. Retrieved 11 10, 2011, from Samsung Electronics Co., Ltd. http//www.fundinguniverse.com/company-histories/Samsung-Electronics-Co-Ltd-company-History.htmlSamsung. (2010). Samsung. Retrieved 11 10, 2011, from Samsung Electronics http//www.samsung.com/us/aboutsamsung/ir/financialinformation/annualreport/downloads/2010/SECAR2010_Eng_Final.pdfMarket Watch. (2011, 11 9). MarketWatch. Retrieved 11 10, 2011, from Samsung Electronics Co. Ltd. GDR Pfd. 144A http//www.marketwatch.com/investing/stock/ssngyBloomberg Businessweek. (2011, 11 10). Businessweek. Retrieved 11 10, 2011, from SAMSUNG ELECTRONICS CO LTD http//investing.businessweek.com/research/stocks/financials/ratios.asp?ticker=005930KS