Sony vs Samsung The Inside Story of the Electronics Giants' Battle For Global Supremacy

by Chang, Sea-Jin

• ISBN13: 9780470823712
• ISBN10: 0470823712
• Edition: 1st
• Format: Paperback
• Copyright: 2008-08-08
• Publisher: WILEY

Summary

This book compares key strategic decisions by Sony and Samsung Electronics with respect to technology, marketing, and globalization from the mid 1990s to 2006, and then analyzes these firms' organizational process and top executives to examine the context of how those functional decisions were made. By doing so, this book highlights both strategy content and process in these two companies and how their decisions might have affected their performances. An important conclusion drawn from this analysis is that the performance differences between Sony and Samsung Electronics cannot be attributable solely to their strategies. Rather, organizational processes and executives' leadership might have determined their performances. This book further examines the challenges that Samsung Electronics faces, despite its remarkable performance, and evaluate Sony's potential, despite its current struggles.

Author Biography

Sea-Jin Chang is a Kumho Asiana Group Endowed Chair Professor of Business Administration at Korea University. He received his BA and MA in economics from Seoul National University, and Ph.D. in strategic management from the Wharton School of the University of Pennsylvania, where he was a Dean’s Fellow.

Prior to his return to Korea, he was a professor at the Stern School of Business of the New York University. He also had visiting appointments at Stanford Business School, INSEAD, London Business School, Hitotsubashi University, and the Wharton School of the University of Pennsylvania. He is a leading researcher on the management of diversified multinational firms. His current research includes strategies for corporate growth through joint ventures and acquisitions, foreign direct investment, and comparative management studies of Japan, Korea and China. He serves on the editorial boards of several prestigious publications and has extensive consulting experience.

Table of Contents

Preface	p. ix
Sony and Samsung: Portraits of Two Global Competitors	p. 1
The Fall of Sony and the Rise of Samsung Electronics	p. 1
A Turning Point	p. 1
The Media Hype	p. 4
Comparison of Sony and Samsung Electronics: Motivations and Limitations	p. 7
The History and Business Areas of Sony and Samsung Electronics	p. 9
Sony	p. 9
Samsung Electronics	p. 14
Sony and Samsung Electronics' Performance	p. 16
Sony's Stagnation	p. 16
The Rise of Samsung Electronics	p. 19
Strategy Content and Strategy Process	p. 22
Strategic Analysis
Prince and Pauper in the Analog World	p. 25
Sony, the Prince of Analog	p. 26
Founding Principles and New Product Development	p. 26
Relying on Internal Research and Development	p. 28
A Wide Range of Products	p. 30
Obsession with Its Own Standards	p. 32
The Late-Starter, Samsung Electronics	p. 33
Relying on Borrowed Technologies	p. 33
Success in the DRAM Business	p. 33
Production Process Technology	p. 37
Focus on Technologies with Clear Trajectories	p. 37
Digital Dream Kids and the Digital Sashimi Shop	p. 41
Digital Revolution	p. 42
Shifts in Competitive Advantages	p. 42
Two Different Approaches	p. 45
Sony's Digital Dream Kids	p. 46
Idei's Network Strategy	p. 46
Flat Panel Displays: Investment Decision	p. 48
Confusions around Digital Music Players	p. 51
The Heterogeneous PlayStation Business	p. 53
Samsung Electronics' Digital Sashimi Shop	p. 54
Daring Investment, High Speed Battle	p. 54
Vertical Integration	p. 57
Lack of Creativity and Originality in New Product Development	p. 58
Apple's iPod	p. 61
New Kids on the Block	p. 65
Sony's Marketing Strategy: Focusing on New Products	p. 67
New Product Development and Brand	p. 67
Product Design and Advertisement	p. 69
Distribution and Price Policies	p. 70
The Marketing Strategy of the Latecomer, Samsung Electronics	p. 71
Marketing Strategy in Transition	p. 71
Advertising and Brand Strategies	p. 72
Distribution Channels and Pricing Strategies	p. 75
New Product Development Strategy	p. 77
Increasing Bargaining Power of Retailers	p. 80
Consolidation of Distribution	p. 80
The Responses of Sony and Samsung Electronics	p. 81
Samsung's New Management Movement	p. 82
Wannabe Globals	p. 87
Sony's Global Strategy	p. 88
Global Localization Strategy	p. 88
Losing Control over Overseas Subsidiaries	p. 90
Excessive Investment in the Bubble Period	p. 93
Samsung's Globalization Strategy	p. 94
Electronics Complex and Local HQ System	p. 94
Problems of Excessive Localization	p. 95
Return to a Global Organization	p. 97
Problems with External Globalization	p. 98
External Globalization	p. 98
Securing Global Managers	p. 99
Organizational Process and Leadership
Same Silos but Different Outcomes	p. 105
Sony's Company Structure	p. 106
The Culture of Freedom and Openness	p. 106
The Introduction of a Company System	p. 108
Changes in the Company Organization	p. 110
Problem with Sony's Organizational Structure	p. 114
Short-Term Performance and Legacy	p. 114
Conflicts among Companies	p. 118
Separate Content Business	p. 120
Absence of HQ's Control Function	p. 123
Corporate Culture and Organizational Structure of Samsung Electronics	p. 126
Corporate Culture of Samsung Electronics	p. 126
GBM Structure	p. 128
Office of Secretaries	p. 131
The Problem of Samsung Electronics' Organizational Structure	p. 134
Severe Internal Competition	p. 134
Organizational Fatigue	p. 135
From Founders to Professional Managers	p. 137
Sony's CEO and Governing Structure	p. 138
Founders and the Inner Circle	p. 138
Idei and Board Reform	p. 140
Problems with Sony's Governing Structure	p. 141
Succession and Leadership	p. 141
Internal Politics	p. 144
Applicability of a Western-Style Governance Structure	p. 147
Samsung's Powerful Owner-Centered Structure	p. 149
Emperor Management	p. 149
The Problems with Samsung's Governing Structure	p. 151
One Man Decision-Making Structure	p. 151
Sustainability of Family Control	p. 153
The Inner Circle within Samsung	p. 159
Leadership of Professional Managers	p. 160
The Future of Sony and Samsung Electronics	p. 163
Superficial Crisis and Internal Crisis	p. 164
The Internal Crisis of Samsung Electronics	p. 164
Sony's Ordeals and Potentials	p. 166
Lessons Learned by Sony and Samsung Electronics	p. 168
The Focusing Strategy of a Latecomer	p. 168
Core Competences and the Competence Trap	p. 169
Fit of Corporate Culture, Organization, and Leadership	p. 170
Conversion from a Family-Owned Company to a Professional Management System	p. 171
Challenges in Becoming a Global Enterprise	p. 172
Endnotes	p. 175
Glossary	p. 187
Index	p. 189
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