Samsung Group
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| Samsung Group 삼성 三星 | |
|---|---|
| Image:Samsung Logo.svg | |
| Type | Public (traded on the Korea Stock Exchange) |
| Founded | 1936 |
| Headquarters | Image:Flag of South Korea.svgSeoul, South Korea |
| Key people | Lee Byung-chul, Lee Kun-Hee |
| Industry | Conglomerate |
| Revenue | Image:Green Arrow Up Darker.svg $158 billion (2006) |
| Net income | Image:Green Arrow Up Darker.svg $12.9 billion |
| Employees | 254,000[1] |
| Slogan | Imagine the Possibilities |
The Samsung Group is South Korea's largest conglomerate (chaebol) and one of the largest multi-billion dollar corporations in the world leading several major global industries. It is composed of numerous multinational businesses, all united under the the prestige Samsung brand, one of the most valued global brands, including Samsung Electronics, the world's largest electronics company,[1] Samsung Heavy Industries, one of the world's biggest shipbuilders and Samsung Engineering & Construction, a major global construction company. These three businesses form the core of Samsung Group and reflect its name — the meaning of the Korean word samsung is "tristar" or "three stars". The Samsung brand is the best known Korean brand in the world and in 2005, Samsung overtook Sony as the world's No.1 consumer electronics brand and became part of the Top 20 global brands overall. Samsung Group is also the leader in several other industries domestically, such as the Financial, Chemical, Retail and Entertainment industries.
Samsung Group is South Korea's largest company and exporter and the 5th largest transnational corporation in the world. It has been run by generations of one of the world's wealthiest families, currently helmed by chairman Lee Kun-Hee, the third son of the founder, Lee Byung-Chul. Samsung Group is recognized as the most prestige firm in South Korea, attracting and owning many of the country's most intelligent and best talented pupils, with 25% of its employees having a PhD degree or equivalant. South Korean Samsung employees are also highly loyal to the company, working for very long hours with no weekends or holidays until they retire.
Samsung Group accounts for more than 20% of South Korea's total exports, 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 developing countries' total GDP. The company has a powerful influence on the country's economic development, politics, media and culture. Many Koreans consider Samsung Group a symbol of national pride and businesses use its international success as a model, with the company being known as "Another Family" in South Korea.
Contents |
[edit] History
| It has been suggested that History of Samsung be merged into this article or section. (Discuss) |
[edit] 1950s - 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.
- 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.
- Towards the end of the 1980s, Samsung pushed its efforts in petrochemicals and electronics.
Samsung means “three stars” in Korean. Lee Byung-Chull 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 force 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-Chull’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, eventually equalizing its technology to Sony’s (Lee kun-hee).
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).
[edit] The 1990s and present
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 in September 1993 and the Burj Dubai in 2004, which is the tallest structure ever created by mankind. 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.
[edit] Price fixing
On November 30 2005, Samsung pled guilty to a charge it participated in DRAM price fixing collusion during 1999-2002 that damaged competition and raised PC prices. In a deal with prosecutors, Samsung Electronics Co. Ltd. and its U.S. subsidiary, Samsung Semiconductor Inc., were to pay a $300 million fine. As a result of this investigation, Hynix was to pay $185 million in 2005, and Infineon $160 million in 2004. Micron Technology, the US firm who initiated the case, cooperated with prosecutors and no fine is expected. Also, five Samsung executives along with four executives each from Infineon and Hynix, plus one each from Elpida and Micron Technologies, received prison sentences, with the longest being that of Young Hwan Park, then-president of Samsung Semiconductor Inc., at a length of ten months. [2]
In October 2006, Samsung was again subpoenaed for an industry-wide investigation into memory price fixing, this time SRAM, along with Mitsubishi, Sony, Toshiba, and Cypress Semiconductor.
[edit] Criticisms
To this date, Samsung maintains a strict "no labor union" policy (무노조 정책 munojo jeongchaek) inside Korea, by closely monitoring workers and sometimes establishing "ghost labor unions" to prevent the creation of real ones.[3][4] (Under Korean law, a company can have at most one labor union.) Although this has drawn intense criticism from Korean labor activists, many conservative media, including Joongang Ilbo with its close ties with Samsung group, actually views this as a case study of why labor unions are bad for economy and should be suppressed at each company's discretion (because Samsung has been immensely successful as a company).
Recently (2007), a large number of consumers are complaining to Samsung Electronics after they found out that some LCD tvs, PC monitors and laptops they have bought under the Samsung name are actually built on mostly inferior Taiwan and China-made LCD panels. Several Samsung LCD tv and monitor models, including the 20-inch XL20 model and the LE32R8 LCD tv, are built on non-Samsung panels either because the company does not produce that specific size, or because it is more affordable.[5]
[edit] Independent probe into Samsung bribery scandal
On November 23, 2007, South Korean lawmakers passed a bill to create an independent investigation into Samsung's alleged illegal activities including bribery, fraudulent accounting, tax evasion, embezzlement, violation of privacy laws, perjury, and obstruction of justice. The passage of the bill follows a series of public disclosures by internal whistleblower Kim Yong Chul, a former legal counsel for Samsung.[6] Kim has alleged the following:
- 200 billion won (approximately $200 million U.S.) slush fund was created through Samsung Corporation's foreign offices. [7]
- Samsung Group subverted media ownership laws by creating a trust, which appears to be an independent from the Group, but is actually controlled by Samsung chairman Lee Kun-hee, and transferring the ownership of Joongang Ilbo to the trust. [8]
- In 2000, losses incurred by Samsung's heavy industries affiliates became too big to hide through fraudulent accounting. To fill in the losses, Samsung Group architected a scheme in which Samsung Electronics would buy parts at inflated prices from these troubled affiliates. Using the scheme, affiliates illegally siphoned total of 7.2 trillion won ($72 billion U.S.) from Samsung Electronics.[9] After accounting for circular ownerships among Samsung affiliates, Lee Kun-hee and his family own less than 5% of Samsung Electronics, which means that at least 95% of the funds siphoned from Samsung Electronics can be thought of as being taken from outside shareholder's pockets.
- Hong Rah-hee, Samsung chairman Lee Kun-hee's wife, embezzled 60 billion won ($60 million U.S.) of the company money to purchase expensive art works[10], among them Roy Lichtenstein's Happy Tears[11], which hangs in Chairman Lee's mansion.
- Samsung financially supported the former president Chun Doo-hwan during his exiles at Baek Dam Sa buddhist temple under the orders of then-chairman and Lee Kun-hee's father Lee Byung-chul.[12] At that time, Chun was hiding from inquiries into his role in planning and executing 1980 Gwangju massacre where up to 2,000 demonstraters are thought to have been killed by military officers under Chun's command.
- Lee Kun-hee ordered various Samsung affiliates to issue stock-convertible debts at a very small fraction of market price to his son Lee Jae-yong, enabling him to take control of the Samsung Group with just 4 billion won ($4 million U.S.). It would have cost more than 10 trillion won ($10 billion U.S.) to buy the shares in the open market. [13]
[edit] Markets
Currently, Samsung has sixteen products that have dominated the world’s market share, including: DRAM, color cathode-ray tube TVs (CPT, CDT), SRAM, TFT-LCD glass substrates, TFT-LCD, STN-LCD, tuner, CDMA handset, color television (CTV), monitor, flash memory, LCD Driver IC (LDI), PDP module, PCB for handheld (mobile phone plates), Flame Retardant ABS, and Dimethyl Formamide (DMF).[citation needed]
Plus in the Television market, Samsung and LG make the only screens for LCD TFT televisions and then later sell them on to the other companies.
According to Interbrand and BusinessWeek, Samsung’s brand value ranked 43rd (USD 5.2billion) in 2000, 42nd (USD 6.4 billion) in 2001, 34th (USD 8.3 billion) in 2002, 25th (USD 10.8 billion) in 2003, 21st (USD 12.5 billion) in 2004, and 20th (14.9 billion) in 2005 among top global companies.
In terms of export that directly contributes to the Korean economy, Samsung took up 18.1% of the all exports with USD 31.2 billion in 2000 and 20.7% with USD 52.7 billion in 2004. In addition, Samsung's tax payments to the Korean government in 2003 was KRW 6.5 trillion, which is about 6.3% of total tax revenue.
The market value of Samsung in 1997 reached KRW 7.3 trillion in 1997, which amounted to 10.3% of the Korean market but this figure increased to KRW 90.8 trillion taking up 22.4% in 2004.
Moreover, the annual net profit of Samsung marked KRW 5.8 trillion in 2001, KRW 11.7 trillion in 2002, KRW 7.4 trillion in 2003, and KRW 15.7 trillion in 2004, showing forth a steady increase.
In order to enhance the working environment and build a strong and trustworthy foundation, the semiconductor sector of Samsung Electronics has been conducting a ‘Great Workplace Program’ called GWP since 1998. Then, in 2003, GWP has spread throughout the entire Samsung Group as Samsung Fire and Marine Insurance, Samsung SDI, Samsung Everland, Samsung Corporation, Cheil Industries, Samsung Networks, and others started to apply its core principles. In 2006, 9 subsidiary companies of Samsung Electronics, 80 overseas branches, and 130 overseas business sectors have reported that they are actively applying the GWP.
Dramatic surge in Net Profits starting in the late 90's: $2.2Bil (1999), $7.3Bil (2000), $8.9Bil (2002), $11.8Bil (2004).
Samsung's Brand Value conducted by Interbrand of the world's top 100 brands: $6.4Bil (2001), $8.3Bil(2002), $10.8Bil(2003), $12.5Bil(2004), $14.9Bil(2005).
Market Capitalization (Ratio to the total market value of all Korean listed stocks):A dramatic increase from 7.3 trillion KRW, 10.3% of the total national listing value in 1997. At the end of 2004 national listing value in 22.4%.
Samsung's Annual Profits Growth: $4.5Bil (2001), $8.9Bil (2002), $5.6Bil (2003), $11.8Bil (2004) and Debt-to-Equity Ratio Decrease: 104% (2000), 78% (2001), 68% (2002), 56% (2003), 51% (2004).
[edit] Circular investment
The relations of Samsung companies are very complicated. According to the Financial Supervisory Service of South Korea, Samsung Everland owns 13.3% of Samsung Life Insurance; Samsung Life Insurance holds 34.5% of Samsung Card and 7.2% of Samsung Electronics, as well as more of other Samsung companies; Samsung Electronics in turns keeps 46.0% of Samsung Card and stocks of other Samsung companies; and finally, Samsung Card holds 25.6% of Samsung Everland.
The family of Lee Kun-hee owns 40% of Samsung Everland, whilst Samsung Card holds 25.6%, and related people have another 30%. Thus it is thought that Lee controls 95% of Samsung Everland. Control of one company, through the circular investment, enables the Lee family to control other Samsung companies despite having only relatively minor holdings.
[edit] Lawsuits against the company
According to reports, Samsung was sued in 2006 by companies 20th Century Fox, Paramount Pictures, Time Warner, Walt Disney, and Universal Studios. The big five US movie studios claims that one of Samsung's DVD players can be used to avoid encryption technology.
A Samsung spokesman "guessed that the film makers take issue with DVD-HD841, which Samsung sold in the United States between June and October 2004. If so, I do not know why the movie studios are complaining about the products, of which production was brought to an end more than 15 months ago. We stopped manufacturing the model after concerns erupted that its copy-protection features can be circumvented by sophisticated users."
[edit] Sports sponsorship
Samsung owns the professional soccer club Suwon Samsung Bluewings and the baseball team Samsung Lions, in South Korea.
Samsung signed the second biggest sponsorship deal in English football history with Premiership member Chelsea. Their five-year deal is estimated to be worth £50 million.
The company sponsors the rugby league team the Sydney Roosters in the Australian National Rugby League 1995-1997 2004-present.
It also sponsors the Melbourne Victory football club in the Australian A-League. The deal with Victory is also believed to be the largest in Australian club football history.
Also, Samsung supports Sport Club Corinthians Paulista in Brazil's Série B. Besides Corinthians, Brazil's subsidiary sponsors the Officer Motorsports racing team, which participates in the Brazilian Stock Car championship. Other [sports sponsorships of Samsung Brazil] are the football league of Rio Grande do Sul ('Campeonato Gaúcho'), the Samsung Masters (golf) and the Samsung 10K (running).
Samsung was an official partner of the Rio 2007 Pan American Games.
Samsung is a sponsor of the April NASCAR Nextel Cup race at Texas Motor Speedway, the Samsung 500. This sponsorship, initially with RadioShack from 2002-2006, was in doubt after the 2003 race because of NASCAR's ban on wireless telecommunication sponsors effective the 2004 season, but was grandfathered into the Nextel contract. (Nextel uses exclusively Motorola equipment.) However, after Sprint's merger with Nextel, the ban was rescinded for Samsung, because of Sprint's sale of Samsung products.
Samsung also sponsors Show Jumping's Nations Cup Super League since 1996.
Samsung is a Worldwide Olympic Partner for since 1997 in the Wireless Communications category.
Samsung has been active in endorsing video game competitions, serving as a sponsor for the World Cyber Games. In the popular PC Game StarCraft, Samsung sponsors a professional team known as Samsung Khan.
[edit] Subsidiaries of the Samsung Group
[edit] Electronics industries
- Samsung Camera[14]
- Samsung Electronics
- Samsung Opto-Electronics
- Samsung Electro-Mechanics
- Samsung SDI (Samsung Display Interface)
- Samsung Fiberoptics
- Samsung Mobile
- Samsung Corning
- Samsung SDS (Samsung Data System)
- Samsung Networks
- Samsung Corning Precision Glass
- Samsung Techwin
- Samsung Multi-campus
- Samsung Semiconductor
- Samsung Telecommunications
[edit] Machinery and heavy industries
[edit] Chemical industries
- Samsung Total
- Samsung Petrochemicals
- Samsung Fine Chemicals
- Samsung BP Chemicals
- Samsung Cheil Industries
[edit] Financial services
- Samsung Life
- Samsung Fire
- Samsung Card
- Samsung Securities
- Samsung Investment Trust Management
- Samsung Venture Investment
[edit] Retail services
- Samsung Plaza
- Home Plus (Joint Venture between Tesco & Samsung)
- Samsung Mall
[edit] Engineering & construction
[edit] Entertainment
- Suwon Samsung Bluewings
- Everland and Caribbean Bay
- Samsung Lions
- Hotel Shilla
- Seoul Samsung Thunders
[edit] Others
- Samsung Advanced Institute of Technology
- Samsung Economic Research Institute
- Cheil Communications
- S1 Corp.
- Renault Samsung Motors
- Samsung Cheil Apparel
- Samsung Medical Center
- Samsung Manpower Association
- Samsung Culture Association
- Samsung Welfare Association
- Samsung Media Association
- Samsung Hoam Association
- Sungkyunkwan University
- Samsung Corporation
[edit] Main Competitors
- Toshiba
- Sharp Corporation
- Hitachi Group
- General Electric
- Sanyo Electric
- Matsushita
- LG Group
- Sony
- Mitsubishi
[edit] See also
- List of Korean companies
- List of Korea-related topics
- FidoBag, a hoax by Samsung
- List of digital camera brands
- Samsung Sens
- Anycall
- Samsung Lee Kun Hee Scholarship Foundation
- Korean consumer electronics industry
[edit] References
- ^ The Korea Herald: The Nation's No.1 Newspaper Quote: "Samsung Electronics, the world's largest electronics manufacturer"
- ^ Samsung exec to plead guilty of price-fixing
- ^ If there is a labor union, there is no Samsung? An article (in Korean) by Hankyoreh 21 (September 18 2003): http://h21.hani.co.kr/section-021064000/2003/09/021064000200309180476044.html
- ^ Samsung's labor union shattered again; A follow-up article (October 152003): http://h21.hani.co.kr/section-021025000/2003/10/021025000200310150480023.html
- ^ Non Samsung LCD complaints at the Wayback Machine[dead link – history]
- ^ South Korea Lawmakers Seek Independent Samsung Probe (Update2) Bloomberg.com News. November 23, 2007, retrieved on November 26, 2007.
- ^ 김용철 "삼성,삼성물산 통해 해외비자금 조성"…퇴사 직원 협박편지 받기도 조선일보. November 26, 2007.
- ^ 김용철 "중앙일보,삼성 계열분리는 '위장분리'" 조선일보. November 26, 2007
- ^ 김용철 "삼성중공업,2조원 분식회계…삼성전자 돈으로 메워" 조선일보. November 26, 2007.
- ^ “이건희 회장 부인, 삼성 비자금으로 미술품 사” 한겨레. November 26, 2007.
- ^ Auction record for pop artist BBC News. November 15, 2002, retrieved on November 26, 2007.
- ^ 김용철 "삼성, 백담사 있던 전두환도 지원" 프레시안. November 26, 2007.
- ^ 삼성의 도련님 부자 만들기 마술쇼 한계레21. November 13, 2007, retrieved on November 26, 2007.
- ^ http://www.samsungcamerausa.com/about.asp
[edit] External links
- Samsung Korean website
- Samsung global website
- Samsung Advanced Institute of Technology
- Yahoo! - Samsung Group Company Profile
- Show Jumping Nations Cup Super League
- The Korean Times:Samsung Uses Non-Samsung Panels in Monitors
- Samsung mobile phones
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