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The History of Samsung

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Overview:

The Samsung Group is a South Korean based conglomerate company that includes a number of subsidiaries. Samsung’s primary focus is in the electronics, heavy industry, construction, and defense industries. Other major subsidiaries of Samsung include insurance, advertising, and entertainment industry businesses. Samsung is one of the largest businesses in Korea, producing nearly one fifth of the country’s total exports.

Company History:

Samsung was formed in 1938 by Lee Byung-chull as a trading company based in Su-dong. The small company started as a grocery, trading goods produced in and around the city as well as its own noodles. The company grew and soon expanded to Seoul in 1947 but left once the Korean War broke out. After the war, Lee expanded in to textiles and built the largest woollen mill in Korea.

The successful diversification became a growth strategy for Samsung, which rapidly expanded in to the insurance, securities, and retail business. Samsung was focused on the redevelopment of Korea after the war with a central focus on industrialization.

Samsung entered the electronics industry in the 1960's with the formation of several electronics focused divisions. The initial electronics divisions included Samsung Electronics Devices, Samsung Electro-Mechanics, Samsung Corning, and Samsung Semiconductor & Telecommunications. Samsung built their initial facilities in Suwon, South Korea, where they started producing black and white television sets.

In 1980, Samsung entered the telecommunications hardware industry with the purchase of Hanguk Jenja Tongsin. Initially building telephone switchboards, Samsung expanded in to telephone and fax systems which eventually shifted to mobile phone manufacturing. The mobile phone business was grouped together with Samsung Electronics which began to invest heavily in research and development throughout the 1980's. During this time Samsung Electronics expanded in to Portugal, New York, Tokyo, England and Austin, Texas.

In 1987 with the death of Lee Byung-chull, the Samsung group was separated in to four business groups leaving the Samsung Group with electronics, engineering, construction, and most high-tech products. Retail, food, chemicals, logistics, entertainment, paper, and telecom were spun out among the Shinsegae Group, CJ Group, and Hansol Group.

Samsung grew as an international corporation throughout the 1990's. The construction division of Samsung secured several high profile construction projects, including one of the Petronas Towers in Malaysia, Taipei 101 in Taiwan and the half mile tall Burj Khalifa Tower in the UAE. Samsung 's engineering division also includes Samsung Techwin, an aerospace manufacturer that manufacturers aircraft engines and gas turbines as well as supplying parts used in jet engines on Boeing and Airbus aircraft.

In 1993, Samsung reorganized to focus on three industries, electronics, engineering, and chemicals. The reorganization included selling off ten subsidiaries and downsizing. With renewed focus in electronics, Samsung invested in LCD technology, becoming the largest manufacturer of LCD panels in the world by 2005. Sony partnered with Samsung in 2006 to develop a stable supply of LCD panels for both companies, which had been an increasing problem for Sony which had not invested in large LCD panels. While the partnership was nearly a 50-50 split, Samsung owned one share more than Sony, giving them control over the manufacturing. At the end of 2011, Samsung bought Sony's stake in the partnership and took full control.

Samsung's focus in the future is centered on five core businesses including mobile, electronics and biopharmaceuticals. As part of it bio-pharma investment, Samsung formed a joint venture with Biogen, investing $255 million to provide technical development and biopharmaceutical manufacturing capacity in South Korea. Samsung has budgeted nearly $2 billion in additional investment to pursue their bio-pharma growth strategy and leverage the advantages of their joint venture.

Samsung has also continued to expand in the mobile phone market, becoming the largest manufacturer of mobile phones in 2012. To remain a dominate manufacturer, Samsung has earmarked $3-4 billion to upgrade their Austin Texas semiconductor manufacturing facility.

 

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