AIB Featured Business Samsung
To most, Samsung is commonly known as one of the world’s leading technology companies. Many of you might be surprised, however, when you learn more about its diverse history in the Asian and international business market. Samsung all started in 1938 when it was created as a trading company by Korean businessman Lee Byung-Chul. It dealt mostly in locally grown produce and food production, and becoming a state of the art technology leader was never even considered at this time in history. After initial success in the 1940s, Samsung diversified into other industries such as food processing, insurance, textiles, securities and retail. It was clear from the outset that Samsung was not slowing down and that it was committed to achieving great things.
It was not until the late 1960s that Samsung entered the electronics industry. Around the same time, it also began working in the construction and shipbuilding industries, truly diversifying its portfolio. These areas led to drive its subsequent growth and this business model remains true to the present day. Current Chairman Lee Kun-hee recently stated, “Samsung’s future hinges on new businesses, new products and new technologies. We should make our corporate culture more open, flexible and innovative”. Samsung is unique as it hasn’t limited itself to one product or industry – it has developed into a conglomerate, which deals across numerous industries. In the beginning, Samsung Electronics dealt mostly in televisions, releasing its first black and white TV in 1970. With time, it diversified substantially into other electronics, including mobiles. In 1999, it released one of its first internet-ready phones – a product which would eventually grow into one of Samsung’s most profitable products.
One very interesting business decision of Samsung’s occurred in 1993. As told in Fortune’s book “The Greatest Business Decisions of All Time”, Lee Kun-hee felt that the culture was too inwards looking. The Korean culture is very distinct and he wanted the company to build contacts across the world. As such, he sent a handful of “his brightest young employees to faraway corners of the globe – not to work, but to immerse themselves in the culture, learn the language, and build networks that someday Samsung would profit”. This proved to be very successful as in the years after, Samsung tackled the international market like never before, experiencing great triumphs up against already popular brands.
After almost 80 years of business, Samsung is currently considered the largest South Korean conglomerate and the ‘world’s largest information technology company’ based on revenue. It has numerous subsidiaries and affiliated businesses such as Samsung Heavy Industries, Samsung Engineering and Samsung Life Insurance. It also has its own theme park – Samsung Everland, as well as owning the world’s 15th largest advertising agency, Cheil Worldwide. According to Wikipedia, Samsung’s total assets are estimated to be worth US$529.5 billion, and it employs around 489,000 employees. As such, it has an extremely powerful influence on South Korea’s economic development, politics and culture, as it is a major driving force behind the county’s agenda.
What do you think?
Were you aware of the depth and diversity of Samsung’s history? I’d love to hear about what you admire most about its journey, and what lessons you can take away from it.
This article was written by Laura Hutton on behalf of the Australian Institute of Business. All opinions are that of the writer and do not necessarily reflect the opinion of AIB. The following sources have been used to prepare this article: Wikipedia; Business Insider; Samsung; Samsung Performance; Bloomberg
Image Credit: Gil C / Shutterstock.com