Samsung Electronics: Success by Design

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Case Details:

Case Code : BSTR228
Case Length : 16 Pages
Period : 1993-2006
Organization : Samsung
Pub Date : 2006
Teaching Note :Not Available
Countries : Worldwide
Themes: Differentiation Strategies | Innovation
Industry : Consumer Electronics

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Samsung's Focus on Design Innovation

Samsung's journey toward design excellence started in 1993. That year, Lee reportedly visited an electronics store in Los Angeles, USA. He noticed, to his dismay, that the Samsung products on display looked unattractive, while the products of Sony and some other companies looked much more appealing.

He found too that the sales personnel at the store were themselves ignoring the Samsung products. Lee realized that Samsung was paying too much attention to volumes and the cost of production, while ignoring customer value. He recognized that in order to survive, Samsung would have to make high quality, exciting products.

Lee said, "…having taken responsibility for the management of the group for five years, I have come to realize that Samsung has reached a turning point where it simply has to change. We are not yet adapting ourselves to the new economic environment. Our management is still maintaining a policy that puts priority on quantity rather than quality. We have to change if we are to survive. That is our only chance."

Bringing Cultural Changes

Although Samsung had no problems in funding and creating the design infrastructure, it faced a more difficult task in convincing the rank and file at the company that design was necessary for survival and growth. Most of the employees were more concerned about costs and volumes than design. "Samsung was a technology company whose management thinking came out of exporting rice,"said Bruce, "There was no design involved. It was all about keeping the price down and outselling the other guy."...

Systemic and Process Changes

Samsung redesigned its systems and processes to improve the design delivery process. First, the company modified its product creation process. Samsung earlier was an engineering-driven company and there was very little interaction between the company's engineers, marketers, and designers. The designers only took orders from engineers and product planners. However, this arrangement was done away with, and designers began to enjoy as much, if not more, authority as engineers and marketers. Collaboration between different departments became a key aspect of new product development...

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