Samsung Electronics
Samsung Electronics
IB-T323WSB-3
December 2, 2023
Table of Contents
I. Executive summary 1
V. Advantages and drawbacks for implementing business across markets in the global
economy 7
1. Advantages 7
2. Drawbacks 8
IX. Appendix 16
4. Appendix 4. Different prices of Samsung Galaxy A05 in Vietnam, Malaysia and Thailand
markets 18
Samsung Electronics Co., Ltd. (Samsung Electronics or Samsung), a subsidiary of the Samsung
Group, is regarded as one of the biggest multinational companies in the world. This research aims to
provide in-depth insights into the international business activities of this company. In particular, it
will address the company's basic information, followed by the political, economic, legal, and
cultural aspects of South Korea - the country where Samsung was established. It will also show
readers Samsung Electronics' international business strategies and operations. Furthermore, several
recommendations will be generated to help the organization improve its business performance.
Samsung Electronics was established by Lee Byung-Chull in 1969 in South Korea, with four
business areas, consisting of “consumer electronics”, “IT and mobile communications”, “device
solutions”, and “R&D centers”. Samsung’s primary objective is to lead the electronics industry
globally by offering its customers innovative products, services, and technologies. According to
Samsung Newsroom (2022), Samsung Electronics' brand value increased for two consecutive years,
contributing to Samsung being recognized as the top five Best Global Brands 2022 by a global
allocating and concentrating human resources for the full development of a particular product type
(Evans, 2023). The organization is headed by the president, followed by CEOs belonging to three
main divisions: “consumer electronics”, “IT and mobile communications”, and “device solutions”.
Consumer electronics division creates and markets consumer electronics products with user-friendly
designs and innovative features in their products. IT and mobile communications focus on
TVs. In the device solutions division, IT solutions for customers are guaranteed to operate
efficiently and electronic devices' internal components are optimized for longevity, performance,
and dependability (Samsung, n.d.). Samsung's organizational structure facilitates the division of
departments and operations, expertise promotion, specific to the task focus, and rapid
In 2020, Samsung Electronics decided to move its manufacturing operation from China to Vietnam
during the COVID-19. Due to the tense epidemic situation worldwide, the prime minister expected
Samsung to help Vietnam implement the vaccine policy to prevent the disease from spreading. In
investigation, and domestic vaccine production. Mr. Choi Joo Ho, General Director of Samsung
Vietnam Complex, appreciated Vietnam's strong disease control, which contributed to Samsung's
Throughout the challenge of COVID-19, Samsung Vietnam has made several attempts to assist
supplier enterprises and overcome problems. Several steps have been taken, such as following the
time, the corporation also planned frequent visits and motivation for its staff. Furthermore, the
Ministry of Industry and Trade has committed to keep helping companies, particularly about
production by increasing the number of production workers, allowing domestic trade, enacting
particular—in overcoming challenges by the pandemic, which might protect worker health and
Tensions between the Koreas have existed for a long time and have gradually increased as defense
cooperation between the US and South Korea becomes stronger. This creates an unstable
environment for businesses, hindering their development. Therefore, the relationship between the
US and Korea can be considered extremely important for businesses operating in Korea.
Additionally, businesses are also affected by the domestic political context and stability in Korea.
South Korea has transitioned to a vibrant democracy, but there can be political and policy changes
depending on the ruling party. The level of domestic political support for major foreign policy
The driving force behind South Korea's success today is the country's main export orientation.
Therefore, Korea has focused on expanding to foreign markets and becoming one of the world's
exporters. The evidence is that GDP, thanks to exports, has increased significantly in recent years,
showing the importance of international trade to the Korean economy is enormous. Not only does it
provide exports, but the government also steps up to improve the business environment to attract
foreign investment and foster entrepreneurship. These reforms include measures to streamline
regulations, strengthen intellectual property protection, and provide support for startups and small
GDP, increasing productivity, creating more jobs for people, and bringing prosperity to this country.
Furthermore, protecting innovation and creativity and providing legal recourse in case of violation
is the main goal of regulations and laws in Korea. In particular, businesses are protected by
intellectual property rights including patents, trademarks, and copyrights. Therefore, businesses
must understand and comply with the laws to protect their rights. In addition, Korean workers are
fully protected in many aspects of the workplace such as working hours, salaries, contract
termination procedures, etc. Therefore, to create a fair and legal working environment, businesses
emphasizes respect for education, authority, and age. In other words, the higher the seniority, the
more respect and influence one receives. Furthermore, having many social connections plays a
crucial role because business decisions are often made through personal networks. Business
meetings also often include socializing activities such as meals and drinks to further strengthen
partner relationships.
Samsung Electronics recognized that to succeed globally and focus on low prices and
differentiation, they decided on a transnational strategy, which allowed them to cut costs and adapt
their products to local market needs. It would be difficult to lower costs while still satisfying unique
consumers, but competing with rivals was also crucial. Samsung has specifically oriented its
strategies when choosing any market. For example, it realized that developing high-tech
as an important national project, Samsung has gained significant support from the Vietnamese
government. The government supports it with tax breaks when importing components for assembly
in Vietnam. Samsung chose a technology hub near Bac Ninh city to access talent, aiming to bring
Samsung has shown its attention to local needs by introducing the Galaxy A smartphone series.
This line of more affordable devices was noticeably absent from the United States market
(Appendix 4). This could be because Samsung realized Americans generally have higher incomes
compared to other regions, and carrier policies in the US also focus more on discounts for high-end
phones than subsidizing lower-cost options. Thus, the Galaxy A series targeted markets with low
average incomes instead of the US (Appendix 5). By pricing these phones extremely affordably in
other countries, Samsung was willing to adapt some components to suit the economies of the
countries in which they operate. This helped them better serve price-conscious customers globally
Samsung Electronics is one of the major electronics brands in the world, accounting for 20% of the
mobile phone market share from 2011-2023 (Appendix 1). Through direct export, concentrated
export, and manufacturing in foreign markets, Samsung has successfully broken into global
markets. This means that the company has been selling its products on the international market
without going through any intermediary marketplaces. In this form of export, the corporation
makes use of channels including direct sales, agents and distributors, subsidiaries, and commercial
sales. The coordinated export is based on the commercialization of items on the international
market with the help of a third party. Contracts such as “piggyback”, “export consortium”, “joint
ventures”, “European Economic Interest Grouping”, “franchises”, and “strategic alliances” can be
Moreover, marketing is essential for Samsung to effectively contend with other prominent
its integrated marketing model, including search engine marketing, influencer marketing
(Appendix 2) and content marketing (Appendix 3). To better understand its customers and how they
engage with Samsung products and the brand as a whole, Samsung actively searches out social
comprehensive approach that emphasizes diversity, the use of local talents, and constant education
and development for all workers. Samsung prioritizes hiring locals in its overseas areas because it
understands it will offer the firm an advantage in knowing local markets and cultures. The firm's
strong corporate culture and shared values mitigate the consequences of growing localization.
opportunities for training and growth to employees worldwide. This strategy not only promotes
V. Advantages and drawbacks for implementing business across markets in the global
economy
1. Advantages
The advantage of Samsung when conducting business in the global economy is related to supply
Firstly, it allows the company to establish a strong network across nations, reducing dependence on
specific areas and mitigating risks during uncertain events such as COVID-19 pandemic. The
lockdown of China in 2020 had postponed the production activities, reducing GDP in relevant
countries. Including Vietnam, Malaysia, and Nigeria, experienced declines in GDP of 5.2%, 3.6%,
and 3.1%, respectively (Guan et al., 2020). By having factories in various locations, Samsung was
able to continue production activities and minimize the impact of China's lockdown (Donthu &
Gustafsson, 2020). Secondly, the flexible supply chain enabled Samsung Electronics to quickly
adapt the demand for electronic devices during work-from-home scenarios. According to News 18
(2020), Samsung’s memory chip demand soared during the work-from-home trend, benefiting
laptop manufacturers and data centers. To make Samsung Electronics maintain their position in the
Implementing the international business strategy helps Samsung Electronics to expand the
consumption market on a global scale. Instead of selling products in local areas solely, the company
opening more retailing stores around the world to reach customers globally. Having more retailing
stores in the world helps Samsung to interact with foreign consumers easily. As a result, when
products are reached to targeted consumers, people may want to purchase it, contributing to the
South America in 2022 was nearly 40%, while the sales in Korea was around a half with 16%.
Therefore, the annual sales of products of Samsung in other countries were considered to be higher
than the sales of it in Korea. With thousands of retailing stores in different countries, Samsung
Electronics has attracted more customers internationally, helping it to increase the revenue
effectively.
2. Drawbacks
Besides benefits from operating globally, Samsung Electronics has faced numerous difficulties,
Samsung has experienced periods of economic instability. Firstly, the COVID-19 pandemic made
the global economy unstable, leading to bankruptcy and layoffs of many companies on a large scale.
A drop in the purchase demand of customers was witnessed, leading to a sharp decline in sales and
profits of Samsung. According to Kollewe (2023), Samsung reduced its chip production due to a
decrease of 96% in profits. Secondly, currency fluctuations also make the economic situation more
volatile. Due to transactions in different types of currency when working on a global scale, currency
fluctuations bring impacts on exchange rates, resulting in difficulties in budgeting and financial
planning as well as effects on the company's revenue and profits. For instance, the falling won-USD
exchange rate in 2020 made Samsung face a foreign exchange loss of 5.38 trillion won (Jung,
2021).
Supply chain disruption can be considered unavoidable when Samsung operates globally, especially
during the Covid-19 pandemic. Due to the government's lockdown, firstly, Samsung is restricted
from producing and exchanging materials and goods between countries. Additionally, some of its
factories around the world had to temporarily close and narrow the labor force, such as three
work pressure for the remaining workers. Secondly, the company might face a component shortage
due to restrictions on movement between nations. According to Vietnam Plus (2020), Samsung was
interrupted in the process of importing components from China and Korea to Vietnam because
China closed its border gates while Korea had an COVID-19 outbreak. This could be delayed in the
following stages of the production line, which affected sales and profits of Samsung.
There are several recommendations for Samsung Electronics to improve its performance. Firstly,
Samsung's localization strategy should be promoted more strongly. Samsung can consider
producing unique features for specific markets. Through marketing campaigns, Samsung can launch
limited editions with images that promote the culture of the operating markets on their great and
special occasions. This can stimulate local people's curiosity and ethnic pride, creating good
impressions on local people (Tsai et al., 2020). Thus, Samsung products can become one of the
choices worth considering for users, which can help the company's market penetration more
effectively and product diversification. However, it is argued that the localization strategy seems to
be more costly than the transnational strategy- the international business strategy of this company.
Samsung Electronics can combine both of these strategies by developing the localization strategy in
several target markets which have its large production facilities. Thus, other costs such as labor
force price, transportation and storage costs decrease, which can partially offset the cost of
localization changes. Combined with the reception of local customers, it is still possible that sales
and profits are likely to not be affected. Secondly, sustainability policy needs to be focused more.
With the flexibility in the supply chain in different locations, environmental issues greatly become
the concentration of Samsung. The company has created a green image globally for a long time but
has made no effort to conduct it. According to IPEN, Samsung's factory intentionally released
chemicals into the air and water by ignoring design flaws in pollution control systems in Vietnam.
In conclusion, this report provides policies, strategies, and activities, advantages, and challenges of
Samsung Electronics in the international arena to give readers a better understanding of the
company. Nonetheless, there may still be some limitations in this study because of the data
collected from the Internet. Some of them may be insufficient or outdated. Thus, it should be
recommended to conduct this project more thoroughly in the future to get more precise results.
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Nguyen Kim
22003303 International business strategy 100%
Bao Chau
Executive summary
Nguyen Hong
21001289 Samsung Electronics' background and 100%
Han
organization structure
Tu Nguyen
22003431 International activities and operations 100%
Quoc
Samsung cooperated with BlackPink to launch Samsung Galaxy A80 special edition in 2019
Thailand markets