CASE STUDY

Samsung Electronics Company

 HISTORICAL BACKGROUND OF THE COMPANY
Lee, with the help of Sanyo,
establishes Samsung Electronics.
After the Korean War, Lee It produces inexpensive TVs,
forms profitable Cheil Sugar, microwave ovens and other
which is followed by textile, consumer products for Western The company is
banking and insurance companies such as Sears and exporting electronics
enterprises. General Electric. under its own name.
1938 1961 1970s

1953 1969 1980s

Samsung is Despite a political coup, charges Under a government policy
founded by Lee against Lee of illegal profiteering of rapid industrialization,
Byung-chull as a and a 1966 family scandal of Samsung launches a number
trading company. smuggling, the company grows of enterprises in ship
by diversifying into paper building, petrochemicals and
products, department stores and aircraft engines.
publishing.
 HISTORICAL BACKGROUND OF THE COMPANY
Samsung Semiconductor
Telecommunications merges with
Samsung Electronics. Its core
business focus is home Samsung
appliances, telecommunications Motors is
and semiconductors. formed.
1983 1987 1988 1990 1994 1996

Samsung begins Lee's son, Lee Samsung Semiconductor Lee Kun-hee is involved
production of Kun-hee, and Telecommunications in a corruption scandal
personal assumes control merges with Samsung and gets a suspended
computers. of Samsung. Electronics. Its core sentence for bribery.
business focus is home
appliances,
telecommunications and
semiconductors.
HISTORICAL BACKGROUND OF THE COMPANY
Samsung Electronics becomes world's
largest mobile phone-maker by unit
sales, overtaking Nokia, the market
leader. U.S. jurors rule Samsung must
Samsung develops the
pay Apple (AAPL) $1.05 billion in
first speech-recognition
damages for violating six Apple patents
phone.
on smartphone technology.
2016 2017 2018 2019
Samsung completes Samsung Group is
the development of accused of political
flat-screen televisions bribery and influence-
and begins the first peddling throughout
mass production of the South Korean
digital TVs. Samsung government, judicial
Motors delivers its branch and the media.
first cars.
 SAMSUNG ELECTRONICS:
Settles Class Action over Defective TVs
 SAMSUNG ELECTRONICS:
Settles Class Action over Defective TVs
Samsung Electronics America (SEA) issued a notice Thursday,
Feb. 23 that it has agreed to offer free repairs to Oklahoma
residents who purchased certain LCD, Plasma, and DLP TVs from
the company that have malfunctioned due to capacitor issues.
A class-action suit was filed last Oct. 17 by Oklahoma residents
Ryan Russell and Philip Bourne on behalf of themselves and other
Oklahoma residents who had purchased defective televisions from
the company. SEA stated that it "denies the allegations in the
lawsuit, but has agreed to settle the lawsuit to avoid the costs and
uncertainty of continued litigation."
 SAMSUNG ELECTRONICS:
Settles Class Action over Defective TVs
The original suit alleges that malfunctioning capacitors caused certain
Samsung-branded TVs manufactured between Jan. 1, 2006 and Dec.
31, 2008 (see list of models below) to "experience symptoms such as
not turning on, a significant delay in turning on, making a clicking
sound, cycling on and off, and other similar problems."

The terms of the settlement call on Samsung to conduct service visits

to claimants with televisions covered in the suit to determine if they
have a capacitor problem. The company has agreed to replace faulty
capacitors and in some cases, a television's power board after
determining if a claimant's TV is malfunctioning due to problems with
those components.
 SAMSUNG ELECTRONICS:
Settles Class Action over Defective TVs
Samsung Electronics America is also prepared to reimburse
owners of affected TVs for past repairs and will pay those who no
longer possess them $300 if they can prove previous ownership.

SEA said in a statement that "[a]pproximately 1 percent of

Samsung televisions sold in the U.S. from 2006 to 2008 have
experienced some performance issues" caused by capacitor problems
and that it had "voluntarily provided free repairs for U.S. customers
with affected televisions" since confirming the problem in early 2010.

Samsung has had some other legal entanglements in the U.S.

in recent months.
 SAMSUNG ELECTRONICS:
Settles Class Action over Defective TVs
Samsung and six other Asia-based companies agreed late last
year to pay out $553 million as part of an agreement to settle claims
in a multi-state lawsuit that they conspired over eight years to fix
prices for liquid crystal display (LCD) screens.

A few weeks earlier, class-action lawsuits were filed by

smartphone owners in California and Missouri that alleged violations
of federal wiretap laws by Samsung, HTC, and mobile software
developer Carrier IQ.
 I. Time Context
The problem was encountered by the company
in the year 2010 in United States of America.
 II. View Point
This case study is analyzed under the view point of
Mr. Gee-Sung Choi, the Vice Chairman, President and
CEO of Samsung Electronics Co. Ltd.
 III. Statement of the Problem
A class-action suit was filed by Oklahoma residents Ryan Russell and
Philip Bourne on behalf of themselves and other Oklahoma residents who
had purchased defective televisions from the company. Samsung Electronics
America stated that it "denies the allegations in the lawsuit, but has agreed
to settle the lawsuit to avoid the costs and uncertainty of continued
litigation.“
The original suit alleges that malfunctioning capacitors caused certain
Samsung-branded TVs manufactured between Jan. 1, 2006 and Dec. 31,
2008 to "experience symptoms such as not turning on, a significant delay in
turning on, making a clicking sound, cycling on and off, and other similar
problems."
 III. Statement of the Problem
SEA said in a statement that "approximately 1 percent of
Samsung televisions sold in the U.S. from 2006 to 2008 have
experienced some performance issues" caused by capacitor
problems and that it had "voluntarily provided free repairs for
U.S. customers with affected televisions" since confirming the
problem in early 2010.
 IV. Objectives/Goals
The company’s reputation with
customers must be stronger and the
levels of customer satisfaction must
be higher than the competitor’s by
having quality priorities and making
“improving quality” as a daily
activity.
V. Areas of Consideration

SW
O T
 V. Areas of Consideration
Strengths Weaknesses
 Hardware integration with many open  Patent infringement
source OS and software  Too low profit margin
 Excellence in engineering and producing
 Main competitors are also largest
hardware parts and consumer electronics buyers
 Innovation and design
 Lack its own OS and software
 Focus on environment
 Focus on too many products
 Low production costs
 Largest share in mobile phones and 2 place
in smartphones sales
 V. Areas of Consideration
Opportunities Threats
• Growing smartphone market • Saturated smartphone markets in
• Growing mobile advertising industry developed countries
• Growing demand for quality application
• Rapid technological change
processors
• Declining margins on hardware
• Growth of tablets market
production
• Obtaining patents through acquisitions
• Breached patents
• Apple’s iTV launch
• Price wars
 VI. Courses of Action
 To Provide Quality Control
Advantage: It will eliminate defective products and will avoid such cases
that will greatly affect the brand and might decrease brand trust and loyalty.
Disadvantage: Improving quality control means of additional expenses to
incur.
 Settle the Lawsuit Filed
Advantage: Providing what the claimant’s need which is to repair or replace
the damaged products and give them the settlement they want will
immediately resolve the case filed.
Disadvantage: It might not resolve the real issue which is the defective
product.
 VI. Courses of Action
 Deny the Issue
Advantage: By doing this, the brand image of the company will not
be harmed.
Disadvantage: There is no assurance that the issue will not be
revealed.
 VII. –VIII. Recommendation and Conclusion
Based on the stated alternative courses of actions, the best way to resolve
the issue is to provide a quality control. Total quality management will assure
that there will be no ineffective products to produce. But it doesn’t end by just
changing or improving the quality system. They still need to settle the case and
provide the claimants the after service they need like to repair the damaged
products and apologizing for the incident. Then assure them that quality system
has been improved and it will not happen again. After that, they can ask not to
leak the issue since the problem has been solved and there is assurance of the
quality of the products to be released.
Thank You !
GOD BLESS!