Transcript LCD 사례 (1) : Achievement

Samsung Story
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2005
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Jung, Ku-Hyun
Samsung Economic Research Institute
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Samsung Economic Research Institute
Samsung Electronics joins ’$10billion club’.
• Samsung Group as a whole also made record
profit in 2004.(Won 19 trillion)
• Members of this exclusive club include:
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Samsung Economic Research Institute
Significance of Samsung’s Rise
◈ Samsung vis-à-vis global competitors (2003)
순이익/자기자본
ROE
평균매출액
Sales Avg.
(42.4)
(42.4)
40%
3M
30%
Nokia
20%
SEC
삼성전자
(54.3, 19.8%)
▲
AB ElectroLux
평균수익률
ROE Avg.
(16.0%)
(16.0%)
Intel
10%
HP
Hwelet-Packard
Microsoft
Sony
0%
0
10
20
30
40
50
60
70
80
매출액(십억
달러)
Sales (bil. US$)
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Samsung Economic Research Institute
Samsung : 1987~2003
◈ Sales / Profit / Market Value
-
Sales : US$ 13.6 bil. → US$ 96.5 bil. (7-fold increase)
-
Profit : US$ 239 mil. → US$ 8.6 bil. (36-fold increase)
-
Market Value : approx. US$ 75.1 bil. (Mar. 2004)
Net sales (tril. Won)
Profit before Tax (tril. Won)
140
12
120
10
100
8
Sales
80
6
Profit
60
4
40
2
20
0
0
(2)
87
89
91
93
95
97
4
99
01
03
Samsung Economic Research Institute
Samsung Today
◈ Work force : 210,000 employees (2004.12)
135,000 (domestic) / 75,000 (overseas)
◈ Globalization: 67 countries / 287 branches (2004)
◈ 22 World best products (DRAM, Flash memory, TFT-LCD…)
◈ Brand Value
Year
2000
2001
2002
2003
2004
Ranking
Brand Value
(bil. US$)
43
42
34
25
21
5.2
6.4
8.3
10.8
12.6
Source: Interbrand / Businessweek (2004. 8.2, p.68)
◈ Ranked the 32nd for ‘The Most Admired Company’ (FT, 2004)
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Samsung Economic Research Institute
Samsung Today
◈ Business Portfolio : Electronics / Finance / Trade & service
(64 companies)
Service (5%)
Shipbuilding (1%)
Finance (-4%)
Chemical (4%)
Finance
(29%)
Sales(2003)
Service
(12%)
Profit(2003)
Electronics
(51%)
Electronics
(90%)
Shipbuilding (4%)
Chemical (4%)
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Samsung Economic Research Institute
Significance of Samsung’s Rise
◈ Quantum leap
-
Domestic → Global company
-
Low → High value-added products
-
Manufacturing → Technology-driven company
Past
Present
OEM
Private Brand
Light industry
Heavy industry
IT industry
Labor intensive
Capital intensive
Knowledge
intensive
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Samsung Economic Research Institute
Paradox of Samsung Management
◈ Management of 4 paradoxes
Legacy
from the past
Transformation
since 1987
Big
Organization
Small
(speedy & flexible)
Diversified
Strategy
Specialized
Family
Governance
Professional
Japanese
Management
System
American
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Samsung Economic Research Institute
Chairman Lee’s “New Management (新經營)”
◈
◈
◈
◈
◈
The Beginning (1987)
Paradigm Shift in the 1990s
Launch of “New Management” in 1993
Economic Crisis in 1997~98
Lee’s Vision and Perseverance
Paradigm Shift
in the 1990s
Economic Crisis
In 1997~98
Globalization
IT Revolution
“New
Management”
in 1993
Restructuring
Vision
Leading
Global
company
in 21C
End of Cold War
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Samsung Economic Research Institute
How It All Happened: the story of semiconductors
◈ Short history
Turning points
1974 Korea Semiconductor Co - acquired
1988 Samsung Semiconductor & Telecommunications Co. - merged with SEC
1983 Entry into the VLSI Business
1988 SEC Semiconductor business
came out of the red.
- US-Japan Semiconductor Agreement
1987 Kun-Hee Lee appointed as Chairman
1992 No. 1 in DRAM market worldwide
1996 Unprecedented Worldwide depression
in Semiconductor industry
- SEC strengthened non-memory business
Developed world's first 64M DRAM
1993~2002 Top in the global memory chip market
2001 SEC declined Toshiba’s joint venture
proposal in NAND flash memory
- 2001 M/S : SEC (26%), Toshiba (45%)
- 2004 M/S : SEC (65%), Toshiba (30%)
2003 No. 1 in Flash memory market worldwide
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Samsung Economic Research Institute
How It All Happened: the story of semiconductors
Semiconductor Industry
Characteristics
Speed driven
SEC’s Key Success Factors
1. Goal stretching
2. Aggressive investments
3. Technology-push
Technology
driven
4. Emphasis on top talents
Capital driven
5. Self-driving org. culture
6. Speed (time to market)
7. Synergy from clustering
Global
competition
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Samsung Economic Research Institute
Core Competence
Core Competences
Major Factors
Decision-to-action
Speed
Time-to-market
R&D capability
Innovative
Learning
Manufacturing skills
Management innovation
Knowledge sharing
Synergy
Cost efficiency
Economies of
scope
Digital convergence
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Samsung Economic Research Institute
Core Competence
◈ Core Competence (1) - Speed
Speed
Major Factors
Culture & System
Decision-to-action
- Ownership
- Empowerment
- Simple decision-making process
- Goal stretching / Self-driving
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Time-to-market
- IT infrastructures (SCM, ERP)
- Vertical integration
- Incentive system (PS, PI)
- Passion of employees
Samsung Economic Research Institute
Core Competence
◈ Core Competence (2) - Learning
Innovative Learning
Major Factors
Culture & System
R&D
capability
Manufacturing
skills
- Goal stretching / Self-driving
- Attention to detail
- Learning-oriented corporate culture
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Management
innovation
- HR development system
- Professional learning teams
- Change agents (6 sigma)
- Clustering
Samsung Economic Research Institute
Core Competence
◈ Core Competence (3) – Synergy: economies of scope
Synergy
Major Factors
Culture & System
Cost
efficiency
Knowledge
sharing
- CEO as a coordinator
- Corporate culture: shared values
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Digital
Convergence
- HQ’s control & monitoring function
- Inter-organizational committees
- Clustering
- Knowledge management system
Samsung Economic Research Institute
Case study #1 – Mobile Phones:
Developing intangible competitive advantages
1. Achievements
 Design and product innovation
becoming a key factor: Innovator
in mobile phone market (watch
phone, TV-phone, MP3-phone,
‘intenna’ phone..)
 Global market leadership:
High-end market across all
markets
 Samsung Brand Value: finally
overcoming a ‘me-too product’
image
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Samsung Economic Research Institute
Case study : Mobile Phones (cont.)
2. Key success factors
 Speed: simple decision making
process, cross functional meetings,
short time to market
 Innovative Learning: adopting
American technology and
improving it to commercial use.
 Mass-customization: Maintaining
multi-platform products and
adapting to global market
segments
 Synergy: Knowledge, technology,
information, know-how sharing
with other business units in SEC
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Samsung Economic Research Institute
Case study #2 – TFT-LCDs:
Replication of SEC semiconductor success
1. Achievements
 Similar product and technology
characteristics as memory chips
 No. 1 global leader in TFT-LCD
as of 2003 : caught up with
advanced rivals in a short period
of time
 Leading technological and
market standards
 Overwhelming cost leadership :
excellent yield rate
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Samsung Economic Research Institute
Case study : TFT-LCDs (cont.)
2. Key success factors
 Synergy: resource transfer from
semiconductor business unit
 Innovative Learning: intra-firm
knowledge transfer
 Speed: Aggressive investments and
time-to-market (going on now)
 Preempt product standards:
alliances with global top companies
 Vertical integration and regional
clustering
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Samsung Economic Research Institute
Samsung Management System:
Old and New Configuration
Leadership
Leadership
Patriarchal
Goal-stretching
Strategy
Strategy
Quantity-driven
Quality-driven
Structure
Hierarchical
Culture
Pride
Process
Attention to
detail
Structure
Empowerment
Process
Culture
Self-driving
Human Resource
Compensation
Human Resource
Internal Sourcing
Seniority System
Transfusion
[ Old Configuration ]
Speed
Compensation
Performance
-based
[ New Configuration ]
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Samsung Economic Research Institute
Interpretation of Samsung Way
◈ Window of opportunity vs. Strategic thrust
◈ Unique system vs. Do It Better
◈ Pre-1987 vs. Post-1987
◈ Samsung Electronics and Other Business
◈ Chairman Lee’s Leadership and Sustainability
◈ Core competence
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Samsung Economic Research Institute
Who will be next ?
$.mil. 2004
Company
Revenue
Operating
Income
Operating Profit
Margin(%)
Samsung Electronics
50,387
10,509
21.0
Hyundai Motors
24,041
1,964
8.0
LG Electronics
21,560
1,093
5.1
POSCO
17,305
4,419
26.0
SK Corporation
15,213
1,413
9.3
KT Corporation
10,434
1,989
19.1
SK Telecom
8,484
2,063
24.3
Korea Gas
8,001
540
6.7
S-OIL Corporation
9,016
960
10.6
LG Philips LCD
7,281
1,511
20.7
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Samsung Economic Research Institute