How Samsung reinvented itself
13 TIMES before outselling Apple
How many times did Samsung pivot their business before becoming the No.1 smart phone seller in the world, beating Apple at their own game? 13 TIMES! Here’s how…
START HERE – Lee Byung-chull launched Samsung to sell groceries in South Korea in 1938
PIVOT No.1 – By the early 1940s, in a competitive grocery market, Lee changed tack, went vertical and Samsung began producing and selling their own noodles
PIVOT No.2 – By 1950, with the Korean War ruining his business, Lee left Seoul and turned Samsung into a sugar company with its own sugar refinery
PIVOT No.3 – After the war, in 1954, Lee switched Samsung’s focus again, launching the largest woollen mill in Korea
PIVOT No.4 – As Korea developed, Lee switched to cater for the growing population, focusing Samsung on selling insurance and securities.
PIVOT No.5 – By 1960, Lee had switched Samsung again to focus on electronics, with its first electronic product being a black & white TV.
PIVOT No.6 – By 1980, Lee moved Samsung into telecoms, producing telephone switch boards and fax systems
PIVOT No.7 – When Lee died in 1987, Samsung separated into four companies – Department stores; Chemicals & logistics; Paper/Telecom; and electronics.
PIVOT No.8 – By 1980, Samsung Electronics decided to focus on international investing, investing in plants and semiconductor facilities around the world.
PIVOT No.9 – By 1990, Samsung began moving from investing to property, and became a world leader in construction, with building contracts on 3 of the world’s tallest buildings: Petronas Towers in Malaysia, Taipei 101 in Taiwan and Burj Khalifa in UAE.
PIVOT No.10 – In an attempt to rationalise during the 1990s recession, in 1993 Lee’s son, Lee Kun-Hee, began downsizing, selling many subsidiaries and merging the rest.
PIVOT No.11 – By the late 1990s, the merging of electonics, engineering and chemicals in Samsung led to the company becoming the largest producer of memory chips in the world
PIVOT No.12 – As memory chips became more competitive, in 1995 Samsung switched to liquid-crystal displays, and over the next 10 years became the world’s largest manufacturer for flat screen TVs.
PIVOT No.13 – By 2010, with liquid-crystal displays becoming more competitive, Samsung launched a 10 year growth strategy, with smart phones being a key focus. At this point, they were already providing Apple with many components for the new iPhone.
END HERE! (For now) – This year, in 2012, Samsung became the world’s largest mobile phone and smart phone maker, outselling iPhones two to one.
With so much change, what remains the same? When Lee began his company all those years ago, he called it ‘Samsung’ which means‘Three Stars’ in Korean. His three meant ‘big, numerous, powerful’ and the stars meant ‘eternal’. From the beginning, his vision for Samsung was to leave a legacy as a leader in whichever market made sense at the time.
That strategy has led to Samsung having sales today of over $250 billion and producing about a fifth of South Korea’s total exports.
How many times have you pivoted your business onto a new wave of success when things aren’t going your way? What is the bigger purpose you are pivoting your business around?
In fast changing times, take Samsung as an example: Set a bigger purpose, with long term vision and short term results, and have the courage to switch when you need to.
It takes courage, it takes commitment and, as Samsung says in their most recent ads, ‘It doesn’t take a genius’.
Are you currently in the right business?