Paradox of Samsung’s Rise

The Paradox of Samsungs Rise, examines the strategic management decisions that led to Samsungs emergence as one of the mans most successful companies from an ordinary original equipment manufacturer just 30 years ago. Samsung Electronics change itself through a hot management initiative in 1993 that combined Western best-practices with essentially Nipponese management methods to produce a exceedingly profitable hybrid system, resulting in recording intermission internet of $13.9 billion on $138 billion in revenue in 2010. As todays emergent giants face the challenge of moving beyond their home markets, they bemuse much to learn from the path breaking experience of South Koreas Samsung Group, arguably the most successful globalizer of the previous generation.Twenty years ago, few concourse would have predicted that Samsung could transform itself from a low-cost original equipment manufacturer to a world leader in R&D, marketing, and design, with a brand more valuable than Pe psi, Nike, or American Express. Fewer still would have predicted the success of the path it has taken. For two decades now, Samsung has been grafting Western business practices onto its essentially Japanese system, combining its traditional low-cost manufacturing prowess with an ability to bring high-quality, high-margin branded products swiftly to market.Like Samsung, todays emerging giantsHaier in China, Infosys in India, and Koc in Turkey, for instanceface a paradox their continued success requires turning away from what made them successful. The tightly integrated business systems that have worked in their home markets are unlikely to secure their future in global markets. Samsung has steadily navigated this paradox to transcend its initial success in its home markets and move onto the world stage.To move to the next level, they, too, must reinvent themselves in ways that may seem contradictory. And when they reach parvenue plateaus, they will need to do so again. For seven ye ars, we have traced Samsungs progress as it has steadily navigated this paradox to transcend its initial success in its home markets and move onto the world stage. It is a recital we believe holds many important lessons for the current generation of emerging giants seeking to do the same.The Rise of a World LeaderThe two sets of business practices could not have seemed more incompatible. Into an organization focused on continuous process improvement, Samsung introduced a focus on innovation. Into a homogeneous workforce, Samsung introduced outsiders who could not speak the address and were unfamiliar with the companys culture. Into a Confucian tradition of reverence for elders, Samsung introduced merit pay and promotion, displace some young people in positions of authority over their elders. It has been a path marked by both disorienting disequilibrium and intense exhilaration.Founded in 1938, the Samsung Group is the largest corporate entity in South Korea, with $227.3 billion i n revenue in 2010 and 315,000 employees worldwide. Best known for its flagship, Samsung Electronics (SEC)producer of semiconductors, cell phones, TVs, and LCD panelsthe groups highly diversified businesses span a wide range of industries, including financial services, information technology services, machinery, shipbuilding, and chemicals.By 1987, when Lee Kun-Hee succeeded his acquire as only the second chairman in the companys history, Samsung was the leader in Korea in most of its markets. But its overseas position as a low-cost producer was becoming indefensible in the face of intensifying competition from Japanese electronics makers, which were setting up manufacturing plants in Southeast Asia, and climb domestic wages in South Koreas newly liberalizing economy.In the early 1990s, Lee spotted an probability in the reluctance of Japanese companiesthe analog market leadersto adopt digital technology, which consumers were flocking to in cameras, audio equipment, and other ele ctronic products. This opened the door for Samsung to surpass its rivals if it developed the agility, innovativeness, and creativity to succeed in the new digital market.Success Mantra interbreeding outline- Mix and Match of Japanese strategy and Western Strategy. Implementation of western strategy on Japanese strategy. Excellence in all department, such as, Marketing, Production, IT, Finance and especially in HR. The Hybrid Strategy Diversification. Capital Management. Type of operation. Supplier Relation. HR aspects- -Type of Labor, -Recruitment, -Promotion and Compensation.Other Reasons Outsiders in- Insider abroad policy. Diversification Advantage. Flexibility. Implementation of 6 sigma. a la mode(p) advanced IT systems. Financial positions.ConclusionIf you act according to market, Market will react according to you