三星電子的品牌策略:以手機行業的經驗為例 - 政大學術集成

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(1)論文題目三星電子的品牌策略:以手機行業的經驗為例 Thesis Topic Samsung Electronics’ Branding Strategy: Experience in Mobile Industry 研究生：表俊澕指導教授：李政明. 立. Student: Junehwa Pyo. 治Advisor: Ming Lee 大. ‧ 國. 學. 國立政治大學亞太研究. ‧. 英語碩士學位學程. er. io. sit. y. Nat. n. a lA Thesis Submitted toi v n Ch U engchi. International Master’s Program in Asia-Pacific Studies National Chengchi University In Partial Fulfillment of the Requirement For the degree of Master in Taiwan Studies. 中華民國 106 年 7 月 July 2017.

(2) Samsung Electronics’ Branding Strategy: Experience in Mobile Industry. Junehwa Pyo Professor Ming Lee, Thesis Advisor. 立. 政治大. ‧. ‧ 國. 學. Abstract. sit. y. Nat. In this thesis, the author will scrutinize Samsung Electronics’ corporate branding. Although there. n. al. er. io. are several studies about Samsung electronics’ development strategy or marketing strategy, only. i n U. v. few studies can be found about its corporate branding strategy. Hence, in order to understand. Ch. engchi. how Samsung Electronics has developed its corporate branding strategy, this study looks over its efforts by applying the VCI model and make sure whether alignment exist among company vision, corporate culture and stakeholders’ images. This research’s basis is on the case study with Samsung Electronics and literature analysis. The propose of this thesis is to gain helpful insights into the corporate branding by studying the case of Samsung Electronics and to emphasize the importance of proper corporate branding in order to create brand value for corporate prosperity.. Keywords: Samsung Electronics, brand value, corporate culture, mobile industry, VCI model.

(3) TABLE OF CONTENTS Chapter 1. Introduction…………….…………………………………………………………..….1 1.1 Background……………………………………………………………………………....1 1.2 Objective and Framework………………………………………………………………..1 1.3 Brand Value………………………………………………………………………………2 1.3.1 Strong Brands Grow Strong Businesses………………………………………….2 1.3.2 The Best Global Brand of 2016, Interbrand……………………………………...3 Chapter 2. Literature Review…..…………………………………………………………………4 2.1 Stengel 50: the World’s 50 Fastest Growing Brands…………………………………….4. 政治大. 2.2 Bringing the corporation into corporate branding……………………………………….6. 立. Chapter 3. Samsung Electronics…………………………………………………………………..8. ‧ 國. 學. 3.1 Company History………………………………………………………………………...8. ‧. 3.1.1 Early Stage (1969-1987)………………………………………………………….8 3.1.2 Transform into a Global Company (1988-2008)…………………………………9. y. Nat. io. sit. 3.1.3 Pioneering the Digital Age& Searching for Growth Engines (2009–Present)….10. n. al. er. 3.2 Overview of Samsung Electronics……………………………………………………...12. Ch. i n U. v. 3.2.1 Business Divisions of Samsung Electronics…………………………………….12. engchi. 3.2.2 Financial Snapshot………………………………………………………………15 3.2.3 Development of Samsung’s Marketing Strategy………………………………..15 3.2.4 Samsung Electronics’ Mobile Phone Business………………………………….20 Chapter 4. Branding……………………………………………………………………..……….22 4.1 Brand and Branding…………………………………………………………………...22 4.1.1 Branding…………………………………………………………………………22 4.1.2 Corporate Branding……………………………………………………………...22 4.2 The VCI Alignment Model……………………………………………………………23 4.2.1 Strategic Vision, Organizational Culture, Stakeholder Images…………………25 i.

(4) 4.3 Summing up Branding………………………………………………………………...26 Chapter 5. The application of VCI Alignment Model to Samsung Electronics………..………...27 5.1. The Strategic Vision of Samsung Electronics…………………………………………27 5.1.1 Vision 2020……………………………………………………………………...27 5.2 Corporate culture of Samsung Electronics……………………………………………29 5.2.1 Practiced Corporate Culture……………………………………………………..30 5.2.1.1 Human Talent…………………………………………………………….30 5.2.1.2 Be the World Best………………………………………………………..30 5.2.1.3 Effectiveness…………………………………………………………..…31. 政治大. 5.2.2 Desired Corporate Culture………………………………………………………31. 立. 5.2.2.1 Trinity Value System……………………………………………………..31. ‧ 國. 學. 5.2.2.2 Creative Organizational Culture…………………………………………34 5.2.2.2.1 Creative Performance-based System……………………………..34. ‧. 5.2.2.2.2 Dynamic Organizational Culture…………………………………36. Nat. sit. y. 5.2.2.2.3 Human Resource Management………………………………...…38. n. al. er. io. 5.3 Stakeholder Images of Samsung Electronics…………………………………….38. i n U. v. 5.3.1 Global CRM………………………………………………………………38. Ch. engchi. 5.3.2 Communication with Customers…………………………………………39 5.3.3 Customer Management System …………………………………………...43 5.3.4 Advertising & Marketing…………………………………………………..45 5.3.5 Process of Establishing Corporate Branding………………………………48 5.3.5.1 The Restructuring Headquarters’ Top-down Strategy……………...48 5.3.5.2 Consolidation of Ad Agency and Cohesive Brand Strategy………..49 5.4 Major Examples of Corporate Marketing…………………………………………50 5.4.1 Strategic Sponsorships……………………………………………………..50 5.4.2 Entertainment Marketing…………………………………………………..54 ii.

(5) 5.4.3 PR and Publicity…………………………………………………………...55 Chapter 6. Conclusion…………….……………………………………………………………...57 6.1 Aligning Vision, Culture, and Stakeholder’s Images……………………………...57 6.2 Conclusion and Suggestion………………………………………………………..60 Bibliography……………………………………………………………………………………..62 Appendix…………………………………………………………………………………………68 Figures 1.1 the List of the Best Global Brands of 2016, Interbrand…………………………..68 Figures 1.2 the List of the Global Top Growing Brands of 2016, Interbrand…………………68 Figures 1.3 Historical Trend of Brand Value of Samsung Electronics……………………….69. 政治大. Figures 2.1 the Stengel 50 VS S&P 500……………………………………………………....69. 立. Figure 2.2 Stangel 50 Corporate’s Brand Contribution 2001~2010…………………………..70. ‧ 國. 學. Figure 3.1 Organizational Chart of Samsung Electronics…………………………………….70 Figure 3.2 Operating Profit by Segment………………………………………………………71. ‧. Figure 3.3 Income Statement………………………………………………………………….71. Nat. sit. y. Figure 3.4 Financial Key Ratios……………………………………………………………….72. n. al. er. io. Figure 5.4 the Structure of Business Conduct Guideline……………………………………...72. i n U. v. Figure 5.5 Counselling Centers and Psychiatric Clinics………………………………………73. Ch. engchi. Figure 5.7 Customer Satisfaction Survey Results in 2015…………………………………....74 Figure 5.11 Eight-Point Battery Safety Check Test…………………………………………...75 Figure 5.13 structure of Future Strategy Department…………………………………………75. iii.

(6) Chapter 1.. Introduction. 1.1 Background When people consider the world's best IT brand, they usually think of Apple or Samsung Electronics. Few would deny the claim that Samsung Electronics, the largest South Korea conglomerate, has achieved remarkable success in the global market, and could be called one of the world's best brands. Samsung Electronics, Last year, was ranked in the top 10 of the world's most valuable Brands1 and within the world’s top 13 businesses by revenue as of 2016, according to Fortune.2 Many people all over the world recognize the brand Samsung Electronics. 政治大 brand than they do about South Korea, the country. Beside, we can easily find various marketing 立 and its flagship smartphone Samsung Galaxy; some people may even know more about the. ‧ 國. 學. campaigns everywhere such as the Samsung Electronics billboard in Times Square, New York City, or TV commercials on China central television (CCTV) channel in Mainland China.. ‧. Until mid-1990s, Samsung Electronics was considered as a boring, nondescript brand with low. sit. y. Nat. brand recognition in the world. How could Samsung Electronics achieve remarkable. io. 1.2 Objective and Framework a. er. performance in the world within less than two decades?. n. iv l C n Despite the successful growth of Samsung as a global brand, there has been few h e n gElectronics chi U. research of Samsung Electronics' corporate brand strategy. Accordingly, this study will focus on Samsung Electronics' corporate branding itself, and will try to carry out by narrowing the scope to mobile business. From the perspective of branding itself, 1996 represented a turning point for Samsung Electronics when the company’s executives recognized the importance of branding and made major changes in brand policy, including developing a corporate marketing strategy. Senior management of the company also began rapidly creating value, by investing in the brand, and 1. 2. Forbes The World’s Biggest Public Companies, accessed May 5th, 2017, https://www.forbes.com/companies/samsung-electronics/ Fortune 500, accessed May 5th, 2017, http://beta.fortune.com/fortune500/list 1.

(7) finding ways to increase value. As Samsung Electronics developed the latest products, they also recognized the need to develop deeper customer relationships and build the value of their brand as a whole. Through this study, I will try to elaborate how Samsung Electronics built and sustained its corporate brand value. In the coming chapter, I will look at the business development and marketing strategy of Samsung Electronics in a chronological way and its overall business status at present. Also, this research will explore how Samsung Electronics has conducted its corporate branding and use VCI model to measure whether the strong cohesion exists among company vision, corporate culture and shareholder’s image of Samsung electronics.. 政治大. The basis of this research is on the case study of Samsung Electronics and literature Analysis.. 立. The objective of this study is to gain helpful insights into the corporate branding by researching. ‧ 國. 學. branding activities of Samsung Electronics and understanding how successfully position itself as a top brand in the world. Purpose of this research will be to acknowledge Samsung’s effort on. ‧. corporate branding and to emphasize the importance of proper corporate branding in order to. Nat. sit. n. al. er. io. 1.3 Brand Value. y. create brand value which is the essential business asset for corporate prosperity.. Ch. 1.3.1 Strong Brands Grow Strong Businesses. engchi. i n U. v. Brand Value A brand is an intangible asset – name, term, design, symbol or any other feature – identifies one product from another and is often a corporation's most valued asset. The value of brands based on the implication that a well-known brand name can generate more money than from products with a less well-known name; brand valuation is the estimation of a brands total value.1 Strong Brands Grow Strong Businesses Strong brand enhances business performance mostly through their influence on three key 3. Statista, “Brand value of the 25 most valuable brands in 2017”, accessed May 10th, 2017 https://www.statista.com/statistics/264875/brand-value-of-the-25-most-valuable-brands/ 2.

(8) stakeholder groups – customers, employees and investors. ; It influences customer’s choice and creates loyalty; it attracts, retains and motivates talented employees; it lowers the cost of financing.. 1. Ultimately, brands help to shape perceptions and purchasing behavior, making. products and service less substitutable. Brands, therefore, create economic value by generating higher returns and growth. 1.3.2 The Best Global Brand of 2016, Interbrand South Korea’s electronics company Samsung Electronics was selected as the best global brand and global top growing brand in 2016 according to the world’s leading brand consultancy, Interbrand. It was ranked as world top 7th Company and its brand value grew by 14 percent to. 政治大. 51,801 million U.S dollars. (refer to figure 1.1 and figure 1.2). 立. About two decades ago, Samsung Electronics was already a top Electronic brand in Korea,. ‧ 國. 學. but was little famous low-end brand in other countries. When Interbrand started its brand ranking in 2000, Samsung Electronics only ranked as top 43th with USD 5,223 million. Since then the. ‧. ranking has constantly risen every year, and the company value reached USD 51,808 which is. Nat. sit. n. al. er. io. 4. y. the highest record ever. (refer to figure 1.3). Ch. engchi. i n U. v. ADQUAN, “Interbrand Releases 2016 Best Global Brands Report, Huawei and Lenovo Enter the Top 100 Brands”, accessed May 10th, 2017, http://en.adquan.com/post-13-1113.html 3.

(9) Chapter 2.. Literature Review. 2.1 Stengel 50: the World’s 50 Fastest Growing Brands1 Based on 10 years empirical research involving 50,000 brands, Jim Stengel and Millward Brown developed the list of the world’s 50 fastest growing brands and the study formed the backbone of the Book GROW: How Ideals Power Growth and Profit at the World’s Greatest Companies. ‘Stengel 50’ – the world’s 50 fastest growing brands– is the list of fifty brands, which built the deepest relationships with customers while achieving the greatest financial growth from 2001-2011. Former Procter and Gamble marketing officer Jim Stengel and brand consultants. 政治大. Millward Brown conducted the research and found a cause-and-effect relationship between a. 立. brand’s ability to serve a higher purpose and its financial performance. The list includes. ‧ 國. 學. numerous brands with strong reputations for sustainability like Hermès, VISA, and Samsung. ‧. Electronics.. Stengel had implemented research activities over a long period of time and explained in this. y. Nat. n. al. er. io. The 4 profound finding of the Stengel’s study are as below:. sit. book about the results of the secret to grow company into a first-class.. i n U. v. . Brand ideals drive the performance of the highest growth businesses.. . The highest growth businesses are run by business artists, leaders whose primary. Ch. engchi. medium is brand ideals. . Business artists excel in similar practices that constitute an operating system for generating and sustaining high growth.. . The brand ideals of the highest growth businesses center in one of five fields of fundamental human values.. The researchers found out the most successful brands were built on an ideal of improving lives in. 1. Stengel Jim. GROW: How Ideals Power Growth and Profit at the World’s Greatest Companies, (Danvers: Crown Business, 2011. 4.

(10) some way, irrespective of size and category. And they also uncovered that this ideal is a source of inspiration externally among customers, as well as a guide for internal employees. The analysis also discovered that the company centered their businesses on ideals had a growth rate triple that of competitors. In addition, investment in ‘the Stengel 50 ‘ companies over the past decade would have been 400% more profitable than an investment in the S&P 500. (refer to figure 2.1) How Ideals Impact the Consumer Mind According to the study, the 50 brands have ideals touch on five fundamental human values. . Eliciting Joy: Activating experiences of happiness, wonder, and limitless possibility.. . Enabling Connection: Enhancing the ability of people to connect with each other and. 立. 政治大. the world in meaningful ways.. Inspiring Exploration: Helping people explore new horizons and new experiences.. . Evoking Pride: Giving people increased confidence, security, and vitality.. . Impacting Society: Affecting society broadly, from challenging the status quo to. ‧. ‧ 國. 學. . Nat. er. io. sit. y. redefining categories.. Based on Stengel 50 listing, Samsung Electronics was one of the 50 companies with ideals that. al. n. v i n can be classified as a brand that “Inspiring C h exploration”.UAccording to the Stengel, Samsung’s engchi brand ideal is “exist to inspire imagination and enrich life in a world of unlimited possibilities.”. The vision and business philosophy of Samsung electronics is all about inspiration and creativity, which is also in line with Stengel 50’s value classification. This will be explained in-depth in chapter 5.1. Through variety corporate branding activities, the company seems to be successfully inspiring external shareholders to join them in exploring the digital world.. 5.

(11) 2.2 Bringing the corporation into corporate branding In the European Journal of Marketing Vol. 37(Jul. – Aug., 2003) pp.1041-1064, Mary Jo Hatch and Majken Schultz published the paper, Bringing the corporation into corporate branding. The paper began with the brief introduction of transformation in marketing emphasis to corporate branding. The authors emphasized that in the era of sophisticated customers and complex markets, differentiation requires positioning the whole corporation. While arguing marketing as support for the shift to corporate branding, Ackerman(1998); Balmer (1995, 2001a); de Chernatony (1999, 2001; Ind, 1997) described that the corporate branding brings to marketing. 政治大. the ability to use the vision and culture of the company explicitly as part of its unique selling. 立. proposition. In addition, Balmer (2001a) noted the importance of corporate branding to a. ‧ 國. 學. multiplicity of stakeholders such as customer attractiveness, staff motivation. Parallel to this shift,. ‧. de Chernatony (2001) also argued for the importance of strategic vision to branding, as a means to integrated brand building.. y. Nat. io. sit. Despite great emphasis on related arguments for creating a more comprehensive and coherent. n. al. er. framework for analyzing who the company is and what it stands for to multiple stakeholders,. Ch. i n U. v. these authors did not relate these contributions to the concept of corporate branding.. engchi. Therefore, the authors described corporate branding as an organizational tool and introduced a framework of corporate branding model – simultaneous interplay between vision, culture and image. According to the authors, this mix of underlying factors requires companies to address the organizational implications of shifting to corporate branding in an organizationally integrated, cross-functional way.. 6.

(12) Figure 2.3. 政治大. Successful corporate brands tap the attractive force that draws stakeholders to. 立. the organization. ‧ 國. 學. Source: Mary Jo and Majken Schultz, Bringing the corporation into corporate branding,. ‧. (European Journal of Marketing Vol. 37, Jul. – Aug. 2003) pp.1041-1064. https://doi.org/10.1108/03090560310477654. io. sit. y. Nat. n. al. er. The authors showed the example of use of model by examining the stages of development. Ch. i n U. v. of British Airways in the creation of its corporate brand. The paper concluded that corporate. engchi. brand management is a dynamic process with continuously adjustments of vision, culture and image. In this paper, the authors did not specifically describe how to simultaneous interplay underlying elements, but they suggested an approach to corporate branding that is organizationally integrated and cross-functional, hence the thesis that it is important to bring the corporation into corporate branding.. 7.

(13) Chapter 3.. Samsung Electronics. 3.1 Company History From its inception as a small export business in Taegu, Korea, Samsung Electronics has grown to become one of the world's leading electronics companies, specializing in digital appliances, semiconductors, memory, and system integration. Today, Samsung's innovative and top quality products and services are world recognized. 3.1.1 Early Stage (1969~1987) Samsung Electric Industries, which later changed its name to Samsung Electronics, was. 政治大 mainly produced home appliances such as electronic clocks, black and white TVs, refrigerators, 立. established in 1969 in Suwon, South Korea. In 1970s, the early stage of business, Samsung. ‧ 國. 學. washing machines, audio and microwave ovens. In 1975, 'Econo TV', which did not require a preheating process, made a big hit, and it laid the foundation for corporate development.. ‧. Samsung Electric Industries, already a major manufacturer in the Korean market, began to. sit. y. Nat. export its products for the first time during this period. In 1978, Samsung Electric Industries. io. al. million black-and-white televisions by 1981.. er. became the world's No. 1 black-and-white TV manufacturer, and had manufactured over 10. n. v i n Cacquired Samsung Electric Industries also h e n ga 50c hpercent i Ustake in Korea Semiconductor, for. the purpose of further solidifying its position as a leader in semiconductor manufacturing. In February 1983, the company declared its entry into DRAM market, later dubbed as ‘Tokyo declaration’, Samsung Electric Industries spent only 10 months to develop the 64K DRAMS to the world market.1 During this period, Samsung Electronics did not have a strong reputation in global market; the company was regarded as a relatively low-end product manufacturer that made cheaper alternatives to the high-end Japanese products.. 1. Wikipedia Samsung Electronics, accessed May 24th, 2017, https://en.wikipedia.org/wiki/Samsung_Electronics 8.

(14) 3.1.2 Transform into a Global Company (1988–2008) New Management Initiative Lee Kun-hee, the third son of founding Chairman Lee Byung-Chull, became Chairman of Samsung Group in December 1987. And since chairman, Lee announced “New Management Initiative” In 1993, Samsung group aggressively re-aligned every aspect of Samsung’s management system to its new quality-driven goal and invest preemptively in R&D, brand marketing, and design capabilities for emerging digital products. During this period, Samsung Electronics strengthened its global management system by aggressively entering emerging markets and pursuing robust overseas business. Becoming a Global Corporate. 立. 政治大. Samsung Electric Industries merged with Samsung Semiconductor and Communications. ‧ 國. 學. to form Samsung Electronics in November 1988. And as a part of New Management Initiative, the company started to challenge itself to restructure old businesses and enter new ones with the. ‧. aim of becoming the world's top five electronics companies.. Nat. sit. y. The Asian financial crisis occurred in late 1997, caused profits to drop from 194 million. n. al. er. io. dollar in 1996 to 87 million dollars in 1997. To cope with its difficulties, Samsung Electronics. i n U. v. started a bold restructuring initiative, which aimed to restructure the company in accordance with. Ch. engchi. global standards. Samsung decided to lay off its employees, and it sold or spun off unprofitable business units and manufacturing facilities. The company also shifted more resources to the Liquid Crystal Display (LCD) and mobile phone businesses in order to diversify its revenue sources, which had previously relied on the semiconductor business. Through these efforts, Samsung Electronics became more competitive in global market and became more robust in its financial structure; and swung back to profitability in 1999. Business Performance The company’s unyielding emphasis on quality, innovation, and globalization resulted in significant changes within the organization, became its foundation for future growth. During this 9.

(15) period, Samsung Electronics had a number of technological breakthroughs with its ceaseless innovation. In 1992, DRAM ranked as No.1 in the world market share, and in 1995, SRAM topped on the list. In 1994, the company developed the world's first 256 mega-DRAM, and ranked first in the world, surpassing the US and Japanese companies in terms of technology.1 Meanwhile, Samsung Electronics launched its first mobile phone the SCH-100, a mobile phone that weighs 450 grams and is the size of a brick, in 1988 in the South Korean market. Sales were initially poor; Samsung only held 10 percent market share by the early 1990s. Its mobile phone division struggled with poor quality issue and inferior products until the. 政治大. mid-1990s. In 1993, Samsung Electronics released the 'SH-700', which weighs 100g, and. 立. launched a bestseller cellular phone 'Anycall' in Korea.2. ‧ 國. 學. Samsung Electronics was ranked as the world's No. 1 LCD maker in 2002, and then was ranked world number one on TV in 2006. Since then, the company has become a world leader in. ‧. applications such as DRAM, SRAM, flash memory, display drive chips (DDI), LCDs, TVs,. Nat. n. al. lead the global TV market by introducing high. er. io. and it is keeping the first place. Samsung has. sit. y. computer monitors, A4 laser multifunction devices, MP3 players, smart card chips for SIM cards,. i n U. v. technology products such as OLED, UHD, SUHD, curved TV with curved display after LCD TV and PDP TV.. Ch. engchi. In 2004, Samsung Electronics developed the world's first 8Gb NAND Memory chip and a deal to supply Apple with memory chips was sealed in 2005 and, it has remained the key supplier of Apple components. 3.1.3 Pioneering the Digital Age and Searching for Growth Engines (2009–present) This period can be described as Samsung Electronics’ age of digital pioneering and it continues to strive to search for growth engines. In 2009, Samsung Electronics overtook Hewlett-Packard and became the world largest 2 3. Wikipedia Samsung Electronics, accessed May 24th, 2017, https://en.wikipedia.org/wiki/Samsung_Electronics Wikipedia, Ibid., accessed May 24th, 2017. 10.

(16) technology company, amassing revenues totaling USD 117.4 billion. Since then, the business performance of Samsung Electronics has continued to perform well. Emphasis on Insecurity and New Strategic Vision Despite the company’s consistent development, its chairman Lee Kun-hee, after returning from a two year retirement, emphasized the importance of financial stability and the potential for future crisis. Therefore, the company set an ambitious strategic goal called “the Vision 2020”. In a company statement in March 2010 he said: “This is a time of real crisis. Global companies are crumbling. Now, we have to start a new. Let’s move on, with eyes set straight ahead. Samsung Electronics' future is not guaranteed. 政治大. because most of our flagship products will be obsolete in 10 years from now." 4. 立. This statement was issued partially due to iPhone’s launching in South Korea in December of. ‧ 國. 學. 2009, which was referred to the iPhone shock.. However, with a sense of possibility of crisis and endeavoring toward continuous. ‧. development, Samsung achieved record earnings in the third quarter of 2013. Their operating. Nat. sit. y. profit rose to about KRW 10.1 trillion. This was due to smartphones sales especially low-price. al. n. customers like Apple.5. er. io. cellular phone sales from emerging markets, and was boosted by memory chip sales from. Ch. Searching for New Growth Engines. engchi. i n U. v. Recently, due to heavier smartphone competition from Apple as well as a slew of Android competitors, Samsung Electronics needs to look for new growth engines for the future. The company bought two smart home appliance makers “SmartThings” and “LoopPay”. These companies are magnetic secure transmission (MST) technology firms that can help Samsung Pay compete against other mobile payment services like Apple. In June 2016, Samsung Electronics 4. AFP, SEOUL, "Lee Kun-hee Returns to Samsung", Taipei Times, March 25th, 2010 accessed May 25th,2017 http://www.taipeitimes.com/News/worldbiz/archives/2010/03/25/2003468850 5 Jungah Lee, Lulu Yilun Chen, "Samsung's Record Pressures Rivals as HTC Posts Loss", Bloomberg, October 5 th, 2013, accessed May 26th, 2017 https://www.bloomberg.com/news/articles/2013-10-03/samsung-profit-beats-estimates-on-cheaper-galaxy-smartp hones 11.

(17) announced its acquisition of the cloud-computing company “Joyent”, for the purpose of growing its cloud-based services for its smartphones and Internet-connected devices.6 In November 2016, Samsung Electronics also purchased American automotive equipment maker Harman for USD $8 billion.7 Through these acquisitions, Samsung is expected to gain a solid footing in the automotive component business, as Harman is a Tier 1 supplier, with deep relationships with a wide range of car makers. These acquisitions will also allow Samsung Electronics to diversify their revenue source.. 3.2 Overview of Samsung Electronics 3.2.1 Business Divisions of Samsung Electronics. 政治大. Samsung Electronics Co., Ltd. is a South Korea-based multinational electronics and. 立. information technology company, which is the flagship affiliated company of the Samsung. ‧ 國. 學. Group. It is also South Korea's the biggest chaebol, which is a traditional, family-run. ‧. conglomerate with nearly 90 subsidiaries.. As of the end of 2015, Samsung had 325,677 employees in 80 countries and 199 worldwide. y. Nat. n. al. Ch. er. io. R&D center and 6 global design centers.8. sit. operation hubs, including 15 rational head offices, 38 manufacturing subsidiaries, 34 global. i n U. v. Since 2013, Samsung reinforced a global management system into three key divisions; IM. engchi. (IT and Mobile Communications), CE (Consumer Electronics) and DS (Device Solutions). (refer to figure 3.1 and table 3.2). 6. Catherine Shu, "Samsung will acquire cloud-computing company Joyent", Techcrunch, June 15th, 2016, accessed May 26th, 2017 https://techcrunch.com/2016/06/15/samsung-joyent/ 7 Full Bio, “Why Samsung Is Buying Harman”, Forbes, Nov 16 th, 2016, accessed May 26th, 2017 https://www.forbes.com/sites/greatspeculations/2016/11/16/why-samsung-is-buying-harman/#31b0934352e5 8 Samsung Sustainability Report 2016, p11, accessed May 26th, 2017 http://www.samsung.com/us/ 12.

(18) Table 3.2 Business Divisions of Samsung Electronics Classification. Major Products. IM. HHP (Handheld Player), network system, computer. CE. TV, monitor, refrigerator, laundry machine, Air conditioner, medical equipment. DS. DRAM, NAND Flash, mobile AP, LCD panel, OLED panel. IT and Mobile Communications Division IT and Mobile Communications (IM) Division is divided into mobile communication. 政治大. business and network business.. 立. The operation profit of IM division is about KRW10.8 trillion which is 37.0% of total. ‧ 國. 學. operating profits in 2016, its telecommunication network business area includes multi-service DSLAMs and fax machines; cellular devices such as mobile phones, PDA phones, mobile. ‧. intelligent terminals (MITs); and satellite receivers.. Nat. sit. y. According to Strategy Analytics report in 2015, Samsung Electronics was ranked as No.1 vendor. n. al. er. io. in both Mobile phone (21.2%) and smartphone (22.2%) market and No.2 vendor in Tablet. i n U. v. market (15.0%). Samsung Electronics seems to firmly maintain its leader position in the global. Ch. engchi. mobile business by keep providing cutting-edge innovation products. In addition, in recent year Samsung Electronics seems to constantly develop future growth engines like Samsung pay, wearable devices, and Internet of Things (IoT), while also reinforce products line not only for high-end market but also for low-end market like Galaxy A and Galaxy J series. At the same time, Samsung Electronics seems to do great job in networks business as well. The company has played a pioneer role in the network equipment market based on its 4G LTE communications technology and now it pursues leadership position in newly emerging 5G communications technology market.. 13.

(19) Consumer Electronics Division Consumer Electronics (CE) Division is divided into visual display business and digital appliance business, printing solutions business and heath/medical business. The operation profit of CE division posted KRW 2.6 trillion in operating profit which accounts 8.9% of total operating profits in 2016, and its main products are TV, monitor, refrigerator, laundry machine, Air conditioner, medical equipment etc. In the visual display business sector, Samsung TV was once again ranked as the world’s No.1 with 27.6% of TV market share in 2015, and it has been for the last 11 years consecutive. Particularly, Samsung Electronics is leading company in global UHD TV market; it accounted. 政治大. 34.1% market share in 2015. The market of high-end TV such as UHD and curved TVs is. 立. predicted to grow continuously; the company is expected to keep its leading position in the. ‧ 國. 學. premium TV market in the future. Even if the consumer electronics division’s profit contribution is relatively low (see Figure 3.2 ), Samsung Electronics continues to lead in digital appliance and. ‧. medical equipment sector, and business is anticipated to achieve even greater growth by. Nat. sit. y. combining future promising technologies like Internet of Things (IoT) and Big data technology. n. al. er. io. which will also serve to strengthen the company’s dominancy.. i n U. v. On the other hand, Samsung sold Printing solution Business to HP for $1.05 Billion in. Ch. engchi. September 2016, and the transaction including regulatory approval is expected to close within 12 months.9 It seems to be the part of the business portfolio slimming down, and it can be seen as an action to strengthen and concentrate on the better-performing sector. Device Solutions Business Device Solutions (DS) business is divided into two business units; memory business and system LSI business. And its System LSI business division is largely divided into four segments; system on chip (SoC) team which develops mobile APs, LSI development team, which designs. 9. Clark Don and Jeong Eun-Young, “HP Agrees to Acquire Samsung Printer Business for $1.05 Billion”, The Wall Street Journal, Sept. 12, 2016, accessed May 20th, 2017 https://www.wsj.com/articles/hp-to-acquire-samsung-printer-business-in-1-billion-deal-1473667204 14.

(20) display driver chips and camera sensors, foundry team and support team.10 Samsung Electronics has lead the global memory semiconductor industry for 24 consecutive years; According to IHS research report, the company accounted 45.3% of market share in DRAM market and 39.1% market share in NAND Flash market in 2016. 3.2.2 Financial Snapshot In recent years, the world economy showed constant uncertainties, such as changes in U.S. monetary policy, increased volatility in emerging market stock markets, fluctuating exchange rates, and a radical drop in international oil prices, and so on. At the same time, Korea’s economy also had continuous difficulties such as increased household debts and the business restructuring. 政治大. of the shipbuilding and steel industries.. 立. Despite such uncertain economic conditions, Samsung Electronics delivered sales of KRW. ‧ 國. 學. 201.9 trillion and earned KRW 29.2 trillion in operating profits on a consolidated basis in 2016. (refer to figure 3.3) From the financial perspective, Samsung maintained a financial structure by. ‧. recording a debt ratio of 35.87 percent, a return on asset ratio of 9.0 percent, and a return on. Nat. sit. y. equity ratio of 12.2 percent on a consolidated basis in 2016. (refer to figure 3.4). al. n. 1990s. er. io. 3.2.3 Development of Samsung’s Marketing Strategy. Ch. engchi. i n U. v. Samsung electronics went into the cellular phone business in 1988 – Samsung launched its first mobile phone in 1988 in South Korea.11 Even though the company took full advantage of its strong manufacturing capacities, the technology was still undeveloped at that time. The branding of Samsung was extremely fragmented. During the early 1990s, Samsung had developed numerous sub-brands to the U.S market such as Planp, Tantus and Yepp.12. 10. Cho Jin-young , “System Semiconductor Business: Will Samsung Electronics Create Fabless, Foundry Business Divisions?”, BusinessKorea, Nov 23th, 2016, accessed May 5th, 2017 http://www.businesskorea.co.kr/english/news/ict/16557-system-semiconductor-business-will-samsung-electronic s-create-fabless-foundry 11 Michell, Tony. Samsung Electronics: And the struggle For Leadership of the Electronics Industry. Hoboken: John Wiley & Sons, 2010. 12 Michell, Tony op. cit., pp93-94. 15.

(21) 1999-2004 When Samsung became the leading manufacturer of mobile phones in the Korean domestic market in 199613, the chairman of the company, Gun Hee Lee, started to pay more attention to the expansion of its business into the overseas market. It was during this year that Samsung moved away from sub-brands to a single-brand strategy. According to the press interview by Samsung’s former chief marketing officer, Greg Lee, the change was made by the chairman of Samsung, because he wanted to build a brand, not just a product.14 This was the start of the Samsung making a shift to a single master brand strategy.. 政治大. The company understood that the master-brand strategy was the only way to reach present. 立. day consumers and to be competitive in the global market. At that time, BMW, which was and. ‧ 國. 學. still is a high-end, prestigious car brand, was regarded as an excellent example of a solid brand identity for Samsung Electronics to imitate.15. ‧. When Eric B.Kim joined Samsung Electronics in 1999, he was responsible for executing. Nat. sit. y. the master-brand strategy. In 2001, the chairman of Samsung agreed to run a test campaign in the. n. al. er. io. U. S market, and based on those results, the company would decide whether to go global or not.. i n U. v. The marketing campaign was very successful, –resulting in doubled sales, so Samsung. Ch. engchi. Electronics launched its new global advertising campaign to position it as a leader in digital-convergence applications. The name of campaign was “DigitAll-Everyone’s Invited”.16 The marketing campaign focused on appealing to the emotions of consumers and changing to a premium brand strategy. During Eric Kim’s leadership, the company also promoted the concept of “The Journey to be a Global Brand” which mean its transformation into a global leader in the consumer electronics 13. Lee Dongyoup, “samsung Electronics – the Global Inc.”, YSM, 2006. Michell, Tony, op. cit., p94. 15 Bloomberg BusinessWeek,“ Online Extra: Samsung's Goal: Be Like BMW”, August 1st, 2005, accessed May 3th, 2017. https://www.bloomberg.com/news/articles/2005-07-31/online-extra-samsungs-goal-be-like-bmw 16 Harvard Business Review. Samsung Electronics Company: Global marketing Operations, Brighton, MA: Harvard Business Review. Fab, 2005. 16 14.

(22) business. To actualize this goal, Samsung Electronics also invested heavily in the innovative design and technology. The success of the single brand strategy was also a result of massive investment. In 2002, Samsung’s overall marketing expenses exceeded 900 million U.S dollars, of which the company spent about 20 percent of the budget on the advertisement of Samsung brand. This company spending represented an increase of more than 21 percent over the previous year. By the end of 2004, market valuation of Samsung had risen to USD $62 billion, and after-tax profits reached USD $10 billion; which was the highest among electronics and hardware companies in South Korea and second globally.. 政治大. Although Samsung Electronics improved its brand image as an innovative technology, high-end. 立. design, and new sensation, people still thought of the company brand as “cold”.. ‧ 國. 學. 2005-2008. In 2005, Samsung Electronics was on their way to success, indicated by the company. ‧. stealing market share from Sony.. sit. y. Nat. However, promotion of the company’s brand in customer’s mind had not run enough and as a. al. n. status at that time.. er. io. result didn’t close much of the gap between Samsung Electronics’ target brand image and its. Ch. engchi. i n U. v. The successor of Eric B.Kim, Gregory Lee, tried to make some changes during his tenure which included sport marketing and Entertainment marketing strategies. In 2006, Samsung Electronics began to unveil its new storyboard “The Journey to be a Global Brand”; in which the company highlighted its transformation from market follower to global leader. Samsung Electronics used the Olympics as a great lever to establish itself as a premium global brand. Gregory Lee and top executive believed that the Olympics were a great way to be recognized as a global brand. Therefore, Samsung became sponsor of the 1988 Seoul Olympic Games, the company later on became part of TOP–The Olympic Partners– for every Olympic Games. Samsung’s Olympic sponsorship and other local sports sponsorships, for sure, 17.

(23) could increase brand awareness by highlighting the company’s name at international and local sporting competitions. However, within sport marketing it is very challenging to convey the concept of Samsung’s design, technology and desire or innovation. The entertainment marketing strategy was a concept that promoted Samsung products in collaboration with key Hollywood filmmakers. Successful examples of movie marketing were seen in “The Matrix Reloaded” in 2003 and “The Fantastic Four” in 2005.17 Award-winning marketing contributed to an increase in brand awareness and raises market position; however it didn’t correspond with the goal of building brand value of Samsung Electronics. To build a company image as one of the world’s leading producers of lifestyle enhancing. 政治大. products; Samsung Electronics launched the first phase of a new worldwide advertising. 立. campaign, called “Imagine”. It showed examples of the many ways that innovative products. ‧ 國. 學. from Samsung Electronics could brighten lives wherever and whenever people lived, worked, or played. Each advertisement asked consumers to imagine how their world could be more fun,. ‧. exciting, and productive with the creative design and technology of Samsung Electronics.18. Nat. sit. y. Gregory Lee, chief marketing officer for Samsung Electronics, commented,. n. al. er. io. "With this new campaign, our aim is to expand on this recognition to build a warmer, more. i n U. v. emotional connection with our customers. The only limit is their imagination." 2009-Present. Ch. engchi. 2009 was a monumental year for Samsung Electronics’ marketing strategy. The company’s new vision “Vision 2020: Inspire the World, Create the Future” — emphasized new technology, innovative products and creative solutions—served as guidance for marketing strategy. At the same time, the first Samsung Galaxy (GT-I7500), flagship smartphone of Samsung electronics, was launched on June, 2009.. 17 18. Lee Dongyoup, Op. cit., pp.63-64. Businesswire, “Samsung Electronics Introduces First Phase of New Global Brand Marketing Ad Campaign”, Businesswire, June 9th , 2005, accessed May 15th, 2017 http://www.businesswire.com/news/home/20050609005432/en/Samsung-Electronics-Introduces-Phase-GlobalBrand-Marketing 18.

(24) The company identified a clear direction and goal with tech and innovative products, the role of Younghee Lee was to shine. Younghee Lee, who used to work for cosmetic brands L’Oreal and Lancome before joining Samsung Electronics in 2007, has led the next wave of change until now. With her previous experience as an executive at a cosmetics company, she tried to reshape Samsung Electronics brand image from one of engineering based technology brand into fine and fashionable brand. She wanted consumers to start feeling something about Samsung Electronics and its products instead of just thinking about the company.19 Younghee Lee also introduced consumer-oriented strategies, understanding and conveying the story to consumers in meaningful ways; the company started to understand the needs of. 政治大. customers and all technologies of the company were translated into consumer language.. 立. For instance, “A Fighting Chance” was a documentary of Samsung Electronics directed by. ‧ 國. 學. Morgan Neville, an Academy Award-winning documentary director. The film was about having big dreams and the challenges, and converting those dreams into reality. The campaign featured. ‧. the company’s philosophy of ‘inspiring the world’, by inspiring people to ‘never give up. sit. y. Nat. regardless of what their circumstances are, because that is the only way we progress as humans’.. n. al. er. io. The "unboxing" advertisement took viewers on a journey through Samsung Electronics'. i n U. v. history of impacting technology and culture. The story included the first phone ever launched,. Ch. engchi. the world's first commercially available watch phone, and the world's first 3G call made from Everest and so on. The featured devices were showcased for their respective contributions to everyday life and culture. According to recent research, the top words associated with Samsung Electronics were "innovation, technology and dynamic". And the brand attitude survey showed, key attributes of Samsung Electronics were "innovative" and "fast-paced".. 19. Ina Fried, “Samsung’s Marketing Chief Aims to Stir Passion for Korea’s Electronics Giant”, AllThingsD, Jan 30th , 2012, accessed May 15th,2017 http://allthingsd.com/20120130/samsungs-marketing-chief-aims-to-stir-passion-for-koreas-electronics-giant/ 19.

(25) 3.2.4 Samsung Electronics’ Mobile Phone Business Due to stronger demand from the market of developing countries, global smartphone shipments grew 3 percent annually and recorded 1.49 billion units in 2016. And Samsung was again ranked as the largest manufacturer of mobile phones and smartphones in the world, thanks to the popularity of its Samsung Galaxy product line; it maintained its top position with 309.4 million unit shipments in 2016. Even though, Samsung once lost top rank to Apple in fourth quarter of 2016 smartphone market share20 as a result of its Note 7 recall issue, it regained the top position in the global smartphone market in the first quarter of 2017, even before the release of its latest flagship Galaxy S8; Samsung produced 80.1 million units of smartphones in the first. 政治大. quarter and accounted for 26.1 percent of the global smartphone market.21 (refer to figure 3.2-5). 立. Newly launched Samsung's flagship smartphone Galaxy S8 and Galaxy S8 Plus is expected to be. ‧ 國. 學. savior of 2017 by providing state-of-the-art technology22, and Samsung seem to keep its leading position in smartphone market.. ‧. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. 20. Linda Sui, “Apple iPhone Retakes 1st Place as Global Smartphone Shipments Hit 439 Million in Q4 2016”, Strategy Analytics, Jan 31th, 2017, accessed May 15th,2017 https://www.strategyanalytics.com/strategy-analytics/blogs/devices/smartphones/smart-phones/2017/01/31/global -smartphone-shipments-hit-a-record-1.5-billion-units-in-2016#.WQHwn8sVE5s 21 Cho Jin-young, “Samsung Electronics Came Back As the First Runner in Global Smartphone Market”, BusinessKorea, April 12th, 2017 accessed May 10th,2017 http://www.businesskorea.co.kr/english/news/ict/17808-regain-1-spot-samsung-electronics-came-back-first-runne 22. r-global-smartphone-market Haselton Todd, “Samsung says its new phone is selling well, showing consumers have gotten over the Galaxy Note 7 disaster”, CNBC, Apr.10th, 2017, accessed May 10th,2017 http://www.cnbc.com/2017/04/10/galaxy-s8-selling-faster-than-galaxy-s7.html 20.

(26) Figure 3.5 Global Smartphone Vendor Shipment and Market Share Source: Strategy Analytics. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 21. i n U. v.

(27) Chapter 4.. Branding. 4.1 Brand and Branding 4.1.1 Branding In recent years, from marketers to business executives, from small and medium-sized businesses to global leading companies, they all emphasize the importance of branding. Then what is branding and why is it so important for the company? Branding provides a way for a firm to differentiate its products offering from those of its competitors and can be used to represent the name of a firm and its entire products assortment, one product line or single item.1. 立. 4.1.2 Corporate Branding. 政治大. ‧ 國. 學. When the company reaches a certain level of success, it starts to think of corporate branding as branding strategy. Then what is corporate branding? In a narrow definition, as opposed to. ‧. product branding of specific products or services, corporate branding can refer to the practice of. sit. y. Nat. promoting the brand name of a corporate entity which means all of the firm’s products are. io. al. er. branded with same name or at least part of name.2. n. Then what role does the corporate branding play in the business especially in today's highly competitive business environment?. Ch. engchi. i n U. v. If a company possesses strong company brand with name recognition and consumer confidence, it can facilitates to achieve positive and consistent image with consumer loyalty. Especially, important concepts of corporate brand are differentiations and belongings. Corporate brand attracts people around the recognizable values and symbols that differentiate the company.3 At the same time, if corporate branding works, it is also because it expresses the values of desire that attract stakeholders to the corporation and encourage them to feel a sense of belonging.. 1 2 3. Dhruv, Grewal and Michael, Levy. Marketing. New York: McGraw-Hill Education, 2013. Wikipdeia Corporate Branding, accessed May 10th,2017. https://en.wikipedia.org/wiki/Corporate_branding Hatch, Mary Jo and Schultz, Majken. Bringing the corporation into corporate branding. Bingley, WY: The Emerald Research. 2001. p.6. http://www.emeraldinsight.com/ 22.

(28) Moreover, corporate branding also results in significant economies of scope since an advertising campaign can be used for every product marketed by a firm.4 And when the company focuses all that investment into one brand like Samsung Electronics, it gets a lot of brand leverage effect. Meanwhile, if the company focuses its communication around not just the uniform brand message, but around focused products, it is called flagship products such as Samsung Galaxy.5 It’s been about less than 20 years ago, since Samsung Electronics started to build so called corporate branding in the customer’s mind. This will be explained in more detail in the next chapter. According to the Corporate Excellence business foundation,. 立. 政治大. Corporate brand is used not only to ensure the application of business strategy but. ‧ 國. 學. also to design it. Brands are increasingly becoming cultures, manners of seeing life and ways of doing things that have to be shared with customers, although they. ‧. first have to be cultures created and defended by employees. “6. sit. y. Nat. n. al. er. io. Therefore, the importance of corporate branding is increasing; it not only affects multiple. i n U. v. stakeholders, which includes employees, customers, investors, etc., but also impacts many. Ch. engchi. aspects of companies such as the evaluation of product and services, corporate identity and culture, sponsorship, employment applications.7. 4.2 The VCI Alignment Model The basic principle of the Vision - Culture - Image (VCI) Alignment Model is the greater coherence between what the company’s top management seeks to accomplish, what the. 4 5. 6. 7. Wikipedia Corporate Branding, op. cit. Bloomberg BusinessWeek, “Online Extra: Samsung's Goal: Be Like BMW”, August 1st, 2005, Special Report, accessed May 15th, 2017. https://www.bloomberg.com/news/articles/2005-07-31/online-extra-samsungs-goal-be-like-bmw Corporate Excellence Centre for Reputation Leadership. Linking a brand’s DNA to a company’s strategy: the vital role played by identity and culture. Madrid: the Corporate Excellence Centre for Reputation Leadership, 2012.p.1. Wikipedia Corporate Branding, op. cit. 23.

(29) company’s employees know and believe, and how its external shareholders perceived the company, the stronger brand will be.. 立. 政治大. ‧. ‧ 國. 學 the VCI Alignment Model8. er. io. al. sit. y. Nat. Figure 4.2. Source: Schultz, Majken and Hatch, Mary Jo. Taking Brand Initiative: How Companies Can Align Their. n. v i n Strategy, Culture and Identity ThroughC Corporate San Francisco: Jossey Bass, 2008. p.11. h e nBranding. gchi U. Figure 4.2 shows the framework of corporate branding as underpinned by processes linking strategic vision, organizational culture and corporate images. These three elements form the foundation of corporate branding. To enhance or maintain corporate brand alignment, the company must pay attention to these three elements simultaneously.. 8. Schultz, Majken and Hatch, Mary Jo. Taking Brand Initiative: How Companies Can Align Their Strategy, Culture and Identity Through Corporate Branding. San Francisco: Jossey Bass, 2008. p.11. 24.

(30) 4.2.1 Strategic Vision, Organizational Culture, Stakeholder Images The combination of corporate vision, organizational culture, and stakeholder images should represents in one way or everything the organization is.9 The definitions of each element are as below. Strategic vision Strategic vision is the core idea of the company which expresses top management’s aspiration for the company future to be.10 Organizational Culture Organizational culture is the internal values, beliefs among employees that embody the. 政治大. heritage of the company and manifests in the ways employees feel about the company.11. 立. Stakeholder Images. ‧ 國. 學. It is views and impressions of corporation developed by its external stakeholders; includes the view of customers, shareholders, media, general publics, and so on.. ‧. Changes in stakeholder expectations cause an increasing number of corporations to integrate. Nat. sit. y. marketing, communications and corporate social responsibility into corporate branding.. n. al. er. io. Corporate branding needs to be managed effectively throughout the life of the company to gain stakeholders’ enduring trust.. 12. Ch. The Alignment Problem and Gaps. engchi. i n U. v. Every corporation needs specialists and specialized functions to do business such as strategic planning, human resources, customer relations, marketing. However, when it comes to branding, integrate across functions is imperative. If different groups doing different things, they pull the brand to different directions and fail to realize synergies. Lack of integration fragments the company identity conversation and puts corporate brand at risk. VCI alignment will help the company achieve the corporate integration. 9. Schultz, Majken and Hatch, Mary Jo. op. cit., p.13. Schroeder, Jonathan E. and Salzer-Morling, Miriam. Brand Culture. Abingdon: Routledge, 2005. p.16. 11 Schroeder, Jonathan E. and Salzer-Morling, Miriam. op. cit., p.16. 12 Schroeder, Jonathan E. and Salzer-Morling, Miriam. op. cit., p.16. 25. 10.

(31) According to Majken Schultz and Mary Jo Hatch, it is useful to keep addressing the three central questions of the VCI model: Who are we? What do others say about us? Who do we want to be in the future and what will our stakeholders think about us when we get there? These questions will help the company in finding VCI gaps that threaten corporate brand. Alignment Assessment Tools Majken Schultz and Mary Jo Hatch found helpful tools to diagnose VCI alignment which can also be used in combination: Stakeholder surveys (survey members of organization along with other stakeholders), dialogue between middle managers from key business functions, dialogue between brand managers and stakeholders and events that connect stakeholders to each other via brand.. 立. 政治大. 4.3 Summing up Branding. ‧ 國. 學. The corporate branding requires very complicated and sophisticated organizational practices and. ‧. requires organization-wide support. It needs to be managed in relation to the interplay between vision, culture and image; and it requires effective communications among top management,. y. Nat. io. sit. members of the organization and external stakeholder.. n. al. er. Today, in the era of high competition, the corporate branding is getting more important.. Ch. i n U. v. People care about the corporation itself behind the products, and their opinions about the. engchi. company affect the opinions of company’s products or services.. 26.

(32) Chapter 5.. The application of VCI Alignment Model to Samsung. Electronics 5.1 The Strategic Vision of Samsung Electronics 5.1.1 Vision 2020 1 In 2009, Samsung introduced its ten-year plan known as “Vision 2020”. Its vision for the new decade is “Inspire the World, Create the Future.” The vision reflects Samsung’s commitment to inspiring its communities by leveraging its key strengths; new technology, innovative products and creative solutions— and to promoting new. 政治大. value for its core networks — industry, partners and employees. Samsung hopes to contribute to. 立. a better world and a richer experience through these efforts.. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. 1. Ch. engchi. i n U. Samsung US, accessed May 15th, 2017. http://www.samsung.com/us 27. v.

(33) 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Figure 5.1. Ch. engchi. i n U. v. Vision 2020. Source: Samsung, http://www.samsung.com/us. A set of specific objectives is incorporated into vision 2020. By 2020, Samsung Electronics seek to reach annual sales of 400 billion U.S dollar while becoming predominantly No.1 in the global IT industry and placing its overall brand value among the global top 5. Samsung also mapped out a qualitative plans; being the Innovative company; being the respected company; 28.

(34) becoming Top 10 world’s best work places; being creative leader; building new markets and being global enterprise that attracts the world’s best talents.2 To this end, Samsung has also established three strategic approaches in its management; Creativity, Partnership and Talent.. Vision 2020 Future Business Area Samsung Electronics has 9 tier 1 products — memory chips, LCDs, CDMA handsets, display devices, and so on — in the global electronics market. In Vision 2020, Samsung Electronics aimed to strengthen its core component businesses like memory chip and LCD, as well as focus on high valued products like system LSI, optical components. According to Samsung’s announcement, the company will also focus on core components such as System On a. 治政 Chip (SOC), System On a Panel (SOP) that are essential for大 network products based on core 立 R&D technology and E-Process.. ‧ 國. 學. Next chapter will elaborate major corporate culture of Samsung Electronics and its effort to. ‧. stretch the vision of corporate.. y. Nat. n. er. io. al. sit. 5.2 Corporate culture of Samsung Electronics. v. The concept of organizational culture can be divided into two; desired corporate culture and. Ch. engchi. i n U. practiced corporate culture. Normally, the practitioners within a company set the desired corporate culture that matches well with its company vision and core values, and constantly persuade employees to carry out. Organizational culture can be a source of competitive advantage, only when brand value cooperates with its organizational culture and core values. This requires careful reflection on the present organizational culture and how this culture has been expressed historically.. 2. Samsung UK, accessed May 12th, 2017, http://www.samsung.com/uk/aboutsamsung/ 29.

(35) 5.2.1 Practiced Corporate Culture. 5.2.1.1 Human Talent (the Best Talent Strategy) "Talent Management" is one of Samsung's three management philosophies that have been important from the beginning of the business and is also an important part of Samsung's corporate culture. Human resource is considered to instrumental to the success of Samsung’s talent management strategy. Samsung Electronics’ business philosophy — devotes human talent and technology to create superior products and services to contribute to global society—defines that “human talent”. 治政大market leader strategy through In terms of Human resource, the company also supports 立. creates the best products and services to the global society.. price-based annual salary system, and core talent incentive.. ‧. 5.2.1.2 Be the World’s Best (No.1 Policy). 學. ‧ 國. securing core manpower, opening up internal labor market, globalization of manpower, market. y. Nat. Since its formation, one of Samsung Electronics’ most important core values is "number. er. io. sit. one principle on crisis consciousness". The company aims to be the best company based on the crisis consciousness; which states:. n. al. Ch. “If we do not change, we will go bankrupt. If. engchi. v i n we cannot U. become No.1, We will go. bankrupt”. If we are not creative, we will go bankrupt".. In other words, the No.1 policy of Samsung Electronics means "The goal should be to be the best, and then the person who carries out the goal must be the best, and also give the best in performance." Samsung Electronics' No.1 policy before the New Initiative was to expand market share in the country, but after the New Initiative, the company chose “The world's best company” as its vision with the motto "best" and "first". Samsung Electronics' No1 policy has been developing, changing and spreading into its major corporate culture as a result of the New Initiative, major business restructuring after the 30.

(36) financial crisis. In recent years, Samsung Electronics has been redefining No.1 policy as not only market share, but also the culture creator and pioneer enterprise in the industry. 5.2.1.3 Effectiveness (Pursuit of Rationality) “Pursuit of Rationality” was one of the founding ideals of Samsung. After Samsung Electronics’ New Initiative, it was related to the effectiveness of the goal being achieved. In order to implement its market pioneer strategy, the company sought to launch innovative new products that could satisfy customers ahead of competitors. Samsung Electronics' organizational culture focuses on effectiveness and includes business development based on market economy logic, responsible management, systematic education and training for employees, ability and. 政治大. achievement-oriented personnel management, and clean organizational culture.. 立. ‧ 國. 學. 5.2.2 Desired Corporate Culture. ‧. 5.2.2.1 Trinity Value System. sit. y. Nat. The management philosophy and spirit of Samsung Electronics has been partially amended. n. al. er. io. as its vision has changed. In 1993, in celebration of the 5th anniversary of the New Initiative, the. v. company revised its vision to a new vision - being a world-class enterprise. In 2005, Samsung. Ch. engchi. i n U. reorganized its core values and management principles in addition to the management philosophy of 1993 in line with changes in external and internal environments. (refer to Figure 5.2) In recent years, Samsung Electronics had to cultivate corporate culture to enhance its competitiveness in response to the deepened global competition. At the same time, in response to its increased social status, the company had to respond to the demands of its external stakeholders to fulfill their social responsibilities as well as respond more actively to the ethical management and environmental management required by the international community.. 31.

(37) Figure 5.2. 立. 政治大. Trinity Value system of Samsung Electronics. ‧. ‧ 國. 學. Source: samsung.com. Business Philosophy, Core Values, Business Principals. sit. y. Nat. To support its strategic vision “Inspire the World, Create the Future”, Samsung Electronics. n. al. er. io. has built up its value system. The value system, consisting of management ideology, core values,. i n U. v. and management principles, is rooted in its business philosophy; business philosophy of the. Ch. engchi. company is “Devote our human resources and technology to create superior products and services, thereby contributing to a greater global society”. Samsung Electronics has continuously strived to create superior products and services under its business philosophy that focuses on human resources and technology and contributing to humanity. Based on this philosophy, Samsung aims to fulfill its social responsibility as a global citizen as well as implement business activities to increase corporate economic value. To this end, Samsung Electronics also established 5 business principles (Fig. 5.1-3): . Comply with laws and ethical standards.. . Maintain a clean organizational culture. 32.

(38) . Respect customers, shareholders, and employees.. . Care for the environment, safety, and health.. . Be a socially responsible corporate citizen.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Figure 5.3. Ch. engchi. i n U. v. Core Value and Business Principals of Samsung Electronics. Source: Samsung Sustainability Report 2016. To implement its corporate value specifically, Samsung Electronics further established the Business Conduct Guidelines as stated in figure 5.4; it is the standards for employees to abide by while carrying out various business activities. Business Conduct Guidelines Based on the five core values of Samsung, the guidelines consist of 41 basic guidelines 33.

(39) within 14 high-level categories of items, including the preface. Beside, the company conducts various initiatives and programs through the Sustainability Management Council, which consists of 14 related departments that handle issues from 10 different areas, including society and environment. As described above, Samsung Electronics’ strategic vision is supported by its whole value system which serves as guidance for its employees to make major business decisions. Strategic vision and organizational culture are strongly linked and there is a need for perceived long-term mutual support between them.. 政治大. 5.2.2.2 Creative Organizational Culture. 立. In the 2000s, Chairman Lee Kun-hee advocated creative management, and Samsung. ‧ 國. 學. Electronics has been striving to create a creative organizational culture. To this end, Samsung Electronics has introduced and promoted various internal programs to reduce the discipline of its. ‧. employees and enhance its autonomy. A great workplace program, self-discipline system, and. Nat. sit. y. self-attendance system are part of its effort for creating creative corporate culture.. n. al. er. io. Although this system does not directly raise the creativity of the company members,. i n U. v. Samsung Electronics has been making efforts to change the management method by imposing. Ch. engchi. autonomy on style and process of working, but control them on the basis of performance. Moreover, Samsung Electronics strives to increase the diversity of the workforce; its organizational culture is changing to recognize diversity and utilize flexible management methods.. 5.2.2.2.1 Creative Performance-based System The concept of Samsung Electronics’ performance-based philosophy is where there is performance, there is a reward. Its evaluation and reward system encourage employees to work with autonomy and achieve high performance. 34.