In 2005 the Samsung Group was the largest conglomerate in South Korea. The Group operated in 58 countries and was an employer for more than 212,000 people worldwide. Among the core business sectors within the Group, Samsung Electronics is the most prominent one, with $78.5 billion in net sales, $66 billion in assets and 113,000 employees by the end of 2004. The organizational structure of Samsung Electronics consists of 5 business departments, including Semiconductors, Digital media, Telecom, LCD, and Digital Appliances. Significant successes in such industries as mobile phones, liquid crystal displays, and memory products enabled Samsung to show the second-largest net profit among non-US electronics companies in 2003.
However, current successes do not guarantee the leading position on the market in future. The main features of electronics market are high level of market competition, price conscious customers, and relatively short product lifecycle. In order to operate successfully on this market, it is necessary to make right-time decisions concerning investments into research and development, and provide flexibility, shifting production between existing manufacturing facilities in anticipation of changing market demand.
For instance, the current situation on the memory products market is characterized by some factors, which may produce some threats for further Samsung dominance. In particular, the memory chip industry is expected to suffer a cyclical downturn, aggravated by a tougher market competition from Chinese manufacturers, which are known for their aggressive market expansion policy and low manufacturing costs. Moreover, it is known that Chinese companies co-operate with some prominent memory chip manufacturers as Elpida Memory and Infineon in order to get the necessary technology licenses.
Recent data showed the growing importance of the semiconductor industry, which enjoyed $200 billion in sales in 2000, and...