Background

Samsung Group is South Korea's largest company and exporter

and the world's second largest conglomerate, only behind the
U.S. based General Electric.[6] Currently helmed by Lee Soo
bin, CEO of Samsung Life Insurance, it has been run by
generations of one of the world's wealthiest families, formerly
by chairman Lee Kun-Hee, the third son of the founder,
Lee Byung-Chul. Samsung Group is recognized as the most
prestigious firm in South Korea, attracting many of the
country's most intelligent and talented pupils, with 25% of its
employees having a PhD degree or equivalent. Samsung Group
also owns the Sungkyunkwan University, a major private
university in South Korea, with many of its graduates being
employed by Samsung Group affiliates. South Korean Samsung
employees are also highly loyal to the company, working for
very long hours with no weekends or holidays until they retire.
Many major South Korean corporations such as
CJ Corporation , Hansol Group , Shinsegae Group and
Joong-Ang Ilbo daily newspaper were previously part
of the Samsung Group, split apart by the government
in order to reduce its power. Many leading companies
in South Korea, notably iriver, the No.1 MP3 Player
maker in South Korea and Naver, the No.1
Search Engine portal in South Korea, were established
by ex-Samsung employees. A large number of South
Korean firms, particularly those in the electronics
industry, are dependent on Samsung for the supply of
vital components or raw materials such as
semiconductor chips or LCD panels. Consequently,
Samsung is able to artificially moderate prices and
has been criticised for handicapping other rivals,
leading to bankruptcy of mid to small sized
businesses as they cannot compete with Samsung. As
a result, many have been taken over by Samsung
Group, leading to a complete dominance by Samsung
Group in many industries.
 Samsung Group accounts for more than 20% of South
Korea's total exports[citation needed], with strong
government support, including the ability to access
unlimited amount of funds from major banks in South
Korea. In many domestic industries, Samsung Group is
the sole monopoly dominating a single market, its
revenue as large as some countries' total GDP. In 2006,
Samsung Group would have been the 34th largest
economy in the world if ranked, larger than that of
Argentina.[7] The company owns or has taken over so
many mid to small sized businesses that it is often called
a 'colonial empire' or 'hungry dinosaur'. Samsung is
known as "Another Family" (Korean: 또 하나의 가족 ) in
South Korea and many Koreans are highly loyal to the
Samsung brand, considering it a symbol of national pride
. The company has a powerful influence on the country's
economic development, politics, media and culture,
being a major driving force behind the
Miracle on the Han River; many businesses today use its
international success as a role model.
 History
1930s - 1980s
• 1938: Lee Byung-Chul founded his small business as
'Samsung Store' at Daegu
• 1950: Lee Byung-Chul founded Samsung trading
company in Seoul (YPM)
• 1953: Samsung starts sugar production, which has
since been spun off into the CJ Corporation
• 1954: Cheil Industries founded
• 1958: Samsung starts insurance business
• 1963: The first Shinsegae department store opens in
Seoul
• 1964: Samsung starts Tongyang Broadcasting
Company (TBC), which later merged with KBS
• 1965: Samsung starts the Joong-Ang Ilbo daily
newspaper, which is no longer affiliated with the
company
• 1969: Samsung Electronics was founded
• 1974: Samsung Petrochemical and Heavy Industries
were founded
• 1976: The company was awarded an export prize by
the government as a part of the country's development
program
• 1977: As a result of this export prize, Samsung
Construction emerged. In addition, Samsung
Shipbuilding is formed
• 1982: Samsung establishes a professional baseball team
• 1983: Samsung produces its first computer chip: a 64k
DRAM chip
• 1996: Commercialization of CDMA Handset/System
• 1997: Commercialization of GSM Handset
• 2000: Commercialization of World’s 1st
Handset/System - CDMA2000 1X
• 2002: Commercialization of World’s 1st
Handset/System - CDMA2000 1X EV-DO
• 2003: Commercialisation of World's 1st Silver Nano
washing machine using antibacterial silver
nanoparticles
 Lee Byung-Chul founded Samsung in 1938. It started
as a small trading company with forty employees,
located in Seoul. The company did fairly well until the
Communist invasion in 1950 which caused great
damage to his inventories. He was forced to leave and
start over in Suwon in 1951. In just a year, the
company’s assets had grown twentyfold. In 1953, Lee
created a sugar refinery—the South Korea’s first
manufacturing facility after the Korean War. “The
company prospered under Lee’s philosophy of making
Samsung the leader in each industry he entered”
(Samsung Electronics). The company started moving
into service businesses such as insurance, securities,
and department store. In the early 1970s, Lee
borrowed money from foreign companies to begin the
mass communication industry by launching a radio and
television station (Samsung Electronics).
South Korean President Park Chung-hee’s regime
during the 1960s and 1970s, helped Samsung
Electronics and many other Korean firms. Park put
great importance in increasing economic growth and
development, and assisted large, profitable
companies, protecting them from competition and
aiding financially as well. His government banned
several exterior companies selling consumer
electronics in South Korea. “To make up for a lack of
technological expertise in South Korea, the South
Korean government effectively required foreign
telecommunications equipment manufacturers to
hand over advanced semiconductor technology in
return for access to the Korean market” (Samsung
Electronics). This enormously helped Samsung to
manufacture the first Korean dynamic random access
memory chips. “Furthermore, although Samsung
Electronics was free to invest in overseas companies,
foreign investors were forbidden to buy into
Samsung” (Samsung Electronics). Samsung quickly
thrived in the domestic market.
Samsung Group later formed several electronics-
related divisions, such as Samsung Electron
Devices Co., Samsung Electro-Mechanics Co.,
Samsung Corning Co., and Samsung
Semiconductor & Telecommunications Co., and
grouped them together under Samsung
Electronics Co., Ltd. in 1980s. Its first product
was a black-and-white television set (Samsung
Electronics).
In the late 1980s and early 1990s, Samsung
Electronics invested heavily in research and
development, constructing the company as a
leader in the global electronics industry. “By the
1980s Samsung was manufacturing, shipping,
and selling a wide range of appliances and
electronic products throughout the world”
(Samsung Electronics). In 1982, it built a
television assembly plant in Portugal; in 1984, it
built a $25 million plant in New York; and in
1987, it built another $25 million facility in
England (Samsung Electronics).
In 1993 and in order to change the strategy from the
imitating cost-leader to the role of a differentiator,
Lee Kun-hee, Lee Byung-chul’s successor, sold off ten
of Samsung Group's subsidiaries, downsized the
company, and merged other operations to
concentrate on three industries: electronics,
engineering, and chemicals (Samsung Electronics).
Samsung became the largest producer of memory
chips in the world in 1992. In 1995, it built its first
liquid-crystal display screen. Ten years later,
Samsung grew to be the world's largest manufacturer
of liquid-crystal display panels. Sony, which had not
invested in LCDs, contacted Samsung to cooperate.
In 2006, S-LCD was established as a joint venture
between Samsung and Sony in order to provide a
stable supply of LCD panels for both manufacturers.
S-LCD is owned by Samsung and Sony 51% to 49%
respectively and operates its factories and facilities in
Tangjung, South Korea.
Samsung has also tried hard to improve its
international image. It has spent more than $6
billion since 1998 on marketing, sponsoring the
last five Olympics and erecting a large video sign
in Times Square in 2002 (Lee kun-hee).
Samsung is very involved in the Asian Games,
contributing Samsung Nations Cup Riding
Competition, Samsung Running Festival,
Samsung World Championship, and still many
more around the globe. (Samsung Electronics).
The 1990s saw Samsung rise as an international
corporation. Not only did it acquire a number of
businesses abroad, but also began leading the way in
certain electronic components.
Samsung's construction branch was awarded a contract
to build one of the two Petronas Towers in Malaysia,
Taipei 101 in Taiwan and the Burj Dubai in
United Arab Emirates , which is the tallest structure ever
constructed. In 1996, the Samsung Group reacquired
the Sungkyunkwan University foundation.
Compared to other major Korean companies, Samsung
survived the Asian financial crisis of 1997-98 relatively
unharmed. However, Samsung Motor Co, a $5 billion
venture was sold to Renault at a significant loss. Most
importantly, Samsung Electronics (SEC) was officially
spun-off from the Samsung Group and has since come
to dominate the group and the worldwide
semiconductor business, even surpassing worldwide
leader Intel in investments for the 2005 fiscal year.
Samsung's brand strength has greatly improved in the
last few years.
Considered a strong competitor by its rivals, Samsung
Electronics expanded production dramatically to
become the world's largest manufacturer of DRAM
chips, flash memory, optical storage drives and it aims
to double sales and become the top manufacturer of 20
products globally by 2010. It is now one of the world's
leading manufacturers of liquid crystal displays and
next generation mobile phones.
Samsung Electronics, which saw record profits and
revenue in 2004 and 2005, overtook Sony as one of the
world's most popular consumer electronics brands, and
is now ranked #20 in the world overall.
By late 2005, Samsung had a net worth of US$77.6
billion.