ompany Background

Key Facts

Name Samsung Electronics Co., Ltd.

Logo

Consumer electronics (digital cameras, camcorders, TVs, blu-rays,

laptops, home theaters, displays, tablets)
Industries Telecoms equipment (phones, smartphones)
served Semiconductors (DRAM, V-NAND, SSD, UFC)
Home appliances (washers, refrigerators, microwaves, dishwashers,
vacuums)

Geographic
Worldwide (79 countries)
areas served

Headquarters Suwon, Gyeonggi Province, South Korea

Current CEO Oh-Hyun Kwon

Revenue
174.047 billion (2016) 0.6% increase over 173.001 billion (2015)
(US$)
 Profit (US$) 19.594 billion (2016) 19.2% increase over 16.433 billion (2015)

Employees 308,745 (2016)

Parent Samsung Group

Apple Inc., Nokia OYJ, Intel Corporation, LG Display and LG

Electronics, Sony Corporation, Texas Instruments Inc., Lenovo
Main Group Limited, Hewlett-Packard Company, Sanyo Electric Co., Ltd.,
Competitors Toshiba Corporation, SK Hynix Inc., Western Digital Corporation and
many other consumer electronics, telecommunications equipment,
semiconductor and home appliance companies.

Samsung Electronics Co., Ltd. (further Samsung), a part of the Samsung Group, is the world’s
second largest technology company by revenue. The company produces consumer electronics,
telecommunications equipment, semiconductors and home appliances. Samsung operates three
business divisions:

 Consumer electronics - Visual Display Business, Digital Appliances Business, Printing

Solutions Business and Health & Medical Equipment Business.
 IT and Mobile communications - Mobile Communications Business and Networks
Business.
 Device solutions - Memory Business, System LSI Business and LED Business.

The company is the world’s largest mobile phone and smartphone vendor. It is also the largest
memory chip and TV manufacturer. Samsung operates in 79 countries, where it sells a range of
more than 100 products.

Samsung SWOT Factors

Strengths
1. Very high research and development (R&D) expenditure resulting in one of the
strongest patent portfolios among technology companies.
Innovation is crucial to succeeding in the technology sector. Usually, the more a business invests
in R&D, the more innovations it creates. Samsung operates 34 R&D centers across the world.
The company has spent US$12.753 billion on R&D in 2016, which was the 3rd largest amount
spent in the world.[1] R&D spending strongly correlates with a company’s revenue growth and
expansion into the new product markets.

Figure 1. R&D spending by Samsung and its largest competitors (in US$ billions
and percentages)

Company 2015 As a % of 2016 As a % of

revenues revenues

Samsung Electronics 12.802 7.4 12.753 7.3

Apple 8.1 3.4 10.0 4.6

Microsoft 12.0 13.1 12.0 14.1

Intel 12.128 21.9 12.740 21.5

Amazon.com 12.540 11.7 16.085 11.8

LG Electronics 2.050 4.2 2.128 4.5

Source: Companies’ respective financial reports[1][2][3][4][5][6]

In 2016, Samsung’s investment in R&D was the 2nd largest among technology companies only
behind Amazon.com. Samsung’s R&D budget was also used efficiently as the company spent
only 7.4% and 7.3% of its total revenues on R&D in 2015 and 2016, respectively.

Samsung’s high R&D spending has resulted in it developing the largest patent portfolio among its
key rivals. The following table shows the number of patents granted for each company in the
U.S. during 2014-2016.

Figure 2. Utility patents granted in the U.S.

Company 2014 2015 2016 Total

Samsung Electronics 4,936 5,059 5,504 15,499

Apple 2,003 1,937 2,101 6,041

Microsoft 2,829 2,408 2,398 7,635

Intel 1,573 2,046 2,779 6,398

Amazon.com 741 1,136 1,662 3,539

LG Electronics 2,119 2,241 2,426 6,786

Source: U.S. Patent and Trademark Office [7][8][9]
The more patents a company has, the better position it is in to defend its innovations from being
copied by rivals. Currently, Samsung’s patents portfolio is one of the strongest in the technology
industry.

Both its R&D spending and patent portfolio are factors that indicate Samsung’s strong
competitive position in the markets in which it operates.

2. Product innovation and design capabilities.

Samsung has long been viewed as an innovative company that is capable of producing well
designed and ecologically friendly products. This is proven by the many awards the company has
received over the years. The prestigious Consumer Electronics Show (CES) awarded Samsung
for its innovation and product design 13 years in a row. The company received 35 innovation
awards in 2016, including the CES ‘Best of Innovation’ award, and has received more than 350
awards over the last 11 years.[19]

In 2016, Samsung has also received 5 International Design Excellence Awards (IDEA)
awards.[20] Since 2009, Samsung has won the most (IDEA) awards among all nominated
companies”.[21]

The company’s commitment to producing ecologically friendly products and to decrease its
greenhouse gas emissions has also been recognized. Since 2009, Samsung has consistently
been recognized for its leadership in driving eco-innovations. For the fourth consecutive year the
company received the Environmental Protection Agency’s (EPA) annual ENERGY STAR Partner
of the Year – Sustained Excellence Award.

Samsung also made its way onto the EPA’s 2016 Green Power Partner list for Top 30 Tech and
Telecom companies recognized for significant renewable energy investments.[22]

Few other companies have received as many awards for innovation and eco-friendly product
design as Samsung. This enhances the company’s reputation, increasing brand awareness and
sales.