Your browser does not support JavaScript!

Samsung Electronics: Navigating Sustainability and Innovation Amidst Global Challenges

GOOVER DAILY REPORT July 2, 2024
goover

TABLE OF CONTENTS

  1. Summary
  2. Response to COVID-19
  3. Sustainability Initiatives
  4. Marketing and Brand Strategy
  5. Historical Overview and Technological Milestones
  6. Conclusion

1. Summary

  • The report titled 'Samsung Electronics: Navigating Sustainability and Innovation Amidst Global Challenges' highlights Samsung Electronics' strategies and achievements in sustainability and innovation, particularly during the COVID-19 pandemic. The company tackled supply chain interruptions by moving 5,000 containers to mitigate port congestion and supported communities through initiatives like Carry The Load and SMART Health Cards. On the sustainability front, Samsung aims for net-zero carbon emissions by 2030 for its Device eXperience division and by 2050 company-wide, investing over $50 billion in green energy and recycling efforts. In marketing, Samsung's strategic shift to high-tech innovation solidified its market position, leveraging social media and customer engagement to maintain leadership. The report also summarizes Samsung's historical milestones, tracing its journey from a fertilizer company to a global technology leader known for its smartphones, televisions, and semiconductor products.

2. Response to COVID-19

  • 2-1. Supply Chain Management

  • The COVID-19 pandemic brought numerous challenges to the economy and industry, including the disruption of global supply chains. On October 2021, Samsung Electronics North America President and CEO KS Choi met with Vice President Kamala Harris, Transportation Secretary Pete Buttigieg, and National Economic Council Director Brian Deese, along with other CEOs to discuss solutions to these supply chain issues. In response, Samsung committed to moving an additional 5,000 containers out of the Los Angeles and Long Beach ports over the next 90 days, increasing nearly 60%. This initiative was implemented with the collaboration of supply chain partners and trucking providers, leveraging the ports' 24/7 operation. Despite having a strong manufacturing presence in the U.S., especially in Texas and South Carolina, the urgency of resolving port congestion was highlighted to ensure U.S. consumers receive the home appliances and consumer electronics they need.

  • 2-2. Community Support

  • Samsung Electronics America demonstrated its commitment to community support by engaging in several initiatives during the COVID-19 pandemic. One significant activity was supporting Carry The Load, a non-profit organization dedicated to honoring military, veterans, law enforcement, firefighters, and first responders. Samsung employees across the nation participated in socially distanced in-person and virtual activities to raise funds and support programs benefiting military service members and their families. These activities included a national walk/cycle relay, the 'Dallas Memorial March' during Memorial Day weekend, and various fundraising opportunities. This effort underscored Samsung's dedication to the military community where it operates and highlighted the company's broader commitment to supporting communities during challenging times.

  • 2-3. SMART Health Cards

  • Samsung Electronics America, in collaboration with the Commons Project Foundation, introduced SMART Health Cards displaying COVID-19 vaccination status within Samsung Pay. Announced on August 2021, this feature allows U.S. consumers to download a verifiable digital version of their COVID-19 vaccine record from leading pharmacies, providers, or health systems and securely store it in Samsung Pay via the CommonHealth app on supported Samsung Galaxy smartphones. This initiative aimed to provide a safe and easily accessible means of vaccination verification, crucial for travel and entry to various venues. The COVID-19 vaccine credential can be shared as a QR code with trusted parties. Rob White, Sr. Director of Product for Samsung Pay, emphasized the importance of making COVID-19 vaccination records more accessible in an increasingly digital world. This effort was part of Samsung's overall strategy to make life easier and adapt to new health and safety requirements during the pandemic.

3. Sustainability Initiatives

  • 3-1. Net Zero Carbon Emissions Goal

  • Samsung Electronics has set ambitious targets for achieving net-zero carbon emissions. The company's goal is to achieve net-zero emissions by 2030 for its Device eXperience (DX) division, which includes mobile and home appliances, and by 2050 company-wide, including its chips division. As of 2022, Samsung is 31% complete in its transition to net-zero emissions by 2030, which represents an 11% increase from the previous year. The company has managed to secure a 10-million tonne CO2 reduction in scope 1 and scope 2 emissions in 2022, rising 59% from the previous year. Samsung operates on 100% renewable energy in the U.S., Europe, and China since 2020 and has achieved the same goal in Korea, as well as in manufacturing sites in Vietnam, India, and Brazil.

  • 3-2. Green Energy Investments

  • Samsung has set forth a comprehensive plan to bolster its sustainability efforts through significant investments in green energy. The company's investment in green initiatives is more than $50 billion, aimed at achieving enterprise-wide net-zero carbon emissions. As of 2022, use of renewable energy rose by 65%. Samsung aims to secure 100% clean energy for its foreign operations by 2027, and for South Korea by 2030, despite renewable energy making up just 9.4% of electric power generation in South Korea as of 2022. Samsung joined RE100, an initiative to shift to 100% renewable electricity, and announced plans to increase energy efficiency by 30% in its seven biggest-selling products.

  • 3-3. Circular Economy and Recycling Efforts

  • Samsung is also making significant strides in its circular economy and recycling efforts. The company has increased its consumption of reused water by 29% in 2022, totaling 117 million tonnes. In terms of electronic waste, Samsung collected 600,000 tonnes in 2022, marking a 9% increase from 2021. The amount of recycled resin used in plastic parts reached 99,000 tonnes, a three-fold increase over the previous year. The company aims to use recycled resin in 50% of all plastic parts by 2030 and 100% by 2050. Samsung has also incorporated recycled ocean-bound materials into its products, such as using reclaimed and recycled fishing nets in the Galaxy S23 series. Furthermore, the company has expanded its self-repair program initiated in the U.S. in 2022 to Korea and Europe, which allows consumers to access tools, repair kits, and official Samsung parts for self-repairing devices.

4. Marketing and Brand Strategy

  • 4-1. Market Position and Brand Value

  • Samsung has solidified its position as a leading innovator in the technology industry, which is reflected in its impressive financial metrics. As of June 2024, Samsung's market capitalization stands at $363.77 billion, and its brand value is estimated at $99.4 billion. This success is attributed to a strategic shift from low-cost, budget-friendly products to pioneering technological innovations, which has set them apart from low-tier competitors and established them as a formidable force in the global market. Notably, Samsung's membership in the exclusive 'Brands club' for four consecutive years underscores its enduring prestige and market strength.

  • 4-2. Marketing Mix and Social Media

  • Samsung employs a comprehensive marketing mix, known as the 4 Ps: Product, Place, Price, and Promotion. The company offers a diverse range of high-quality products that cater to evolving market trends and consumer demands. They distribute these products through an extensive network of retail stores and online platforms, ensuring global reach and customer accessibility. With a dual pricing strategy—price skimming for new releases and competitive pricing post-launch—Samsung stays ahead in the competitive smartphone market. Their promotion strategy includes significant investments in digital campaigns, influencer collaborations, and a robust social media presence. For instance, Samsung Mobile's Twitter (formerly X) account has 12.4 million followers, while its Facebook page boasts 162 million likes. These platforms, along with a dedicated SEO team, enhance Samsung's digital footprint, yielding a 12% increase in keyword rankings and a #1 ranking in various online categories.

  • 4-3. Customer Engagement and Innovation

  • Customer engagement lies at the heart of Samsung's marketing efforts. The company actively engages with its audience through meticulously crafted social media campaigns and proactive customer service. Samsung's marketing strategy includes impactful campaigns like 'Do what you can’t,' which highlights their innovative features, and collaborations with global influencers to promote flagship products like the Galaxy Z Flip5. Additionally, Samsung's commitment to social causes, such as the 'Look at Me' project for autistic children, showcases their dedication to creating positive societal impacts. By maintaining strong connections with consumers and continuously enhancing product offerings, Samsung drives sustained customer loyalty and market leadership.

5. Historical Overview and Technological Milestones

  • 5-1. Company Background

  • Samsung Electronics Co., Ltd., abbreviated as SEC, was established as part of Samsung Group on January 13, 1969. Initially, the conglomerate was known for trading fertilizers and sweeteners. Despite early technological challenges and limited resources compared to its competitors, Samsung Group partnered with Japanese companies, leading to the creation of Samsung Electric Industries. By focusing on exports, the company overcame significant resistance and public outcry about the alliance. Samsung Electric soon diversified into joint ventures such as Samsung-Sanyo Electric and Samsung-NEC, manufacturing products ranging from televisions to air conditioners.

  • 5-2. Industry Leadership

  • Samsung Electronics is headquartered in Yeongtong-gu, Suwon, South Korea, and is the largest subsidiary of the Samsung chaebol. It has a significant global presence, with assembly plants and sales networks in 74 countries and employing over 270,000 people. As of 2019, it was the world's second-largest technology company by revenue, with a market capitalization of USD 520.65 billion. Samsung has led the global smartphone market since 2011, primarily through its Galaxy brand, including the production of 5G-capable and foldable phones. Samsung is also the leading manufacturer of televisions and soundbars, apart from being a primary supplier of semiconductors and electronic components to many major tech companies.

  • 5-3. Technological Breakthroughs

  • Samsung Electronics has consistently been at the forefront of technological advancements. Starting with the development of DRAM chips in the 1970s, Samsung produced the first 64KB DRAM in 1984, bridging a significant technological gap with international companies. The company achieved numerous milestones, such as the world's first 64MB DRAM in 1992 and the first 256MB and 1GB DRAMs in 1994 and 1996, respectively. In 2004, Samsung created the first 8GB NAND flash memory chip and entered into a strategic partnership with Apple to supply memory chips. Samsung continued to innovate by developing 5G technology and acquiring companies to bolster its technological capabilities, such as cloud-computing firm Joyent in 2016 and automotive equipment manufacturer Harman International Industries in 2017.

6. Conclusion

  • Samsung Electronics has proven its resilience and innovative prowess amidst global challenges, notably its effective response to COVID-19 disruptions and ambitious sustainability targets. The company's efforts to enhance supply chain logistics during the pandemic and support community initiatives demonstrate its strong social responsibility. With goals to achieve net-zero carbon emissions by 2030 for its mobile and home appliances and by 2050 company-wide, Samsung is investing heavily in renewable energy and circular economy practices. However, challenges remain, particularly meeting renewable energy targets for its semiconductor operations. Samsung's robust marketing strategy, focusing on technological innovation and customer engagement, has fortified its market dominance. Future prospects include continued advancements in green technologies and expanded recycling programs, with practical applicability in enhanced consumer repair and recycling initiatives. Overall, Samsung's comprehensive approach positions it as a benchmark for sustainability and industry leadership in the tech sector.

7. Glossary

  • 7-1. Samsung Electronics [Company]

  • A South Korean multinational corporation specializing in consumer electronics and devices, known for its significant market share in smartphones, tablets, televisions, and electronic components. Key player in the Samsung chaebol with a history of technological innovation and strategic market positioning.

  • 7-2. COVID-19 [Event]

  • A global pandemic that significantly impacted supply chains. Samsung addressed supply chain issues by committing to move 5,000 containers out of ports and introduced SMART Health Cards to provide easy access to vaccination records.

  • 7-3. Net Zero Carbon Emissions [Goal]

  • Samsung's ambitious target to achieve net zero emissions by 2030 for its mobile and home appliances businesses and by 2050 company-wide. Significant progress includes increased renewable energy use and efforts in recycling and water reuse.

  • 7-4. Marketing Strategy [Strategy]

  • Samsung's approach involving a balanced marketing mix, strong social media presence, and customer engagement to maintain market leadership. Focuses on innovation, sponsorships, and partnerships to boost sales and enhance customer relationships.

  • 7-5. Circular Economy [Concept]

  • A system aimed at eliminating waste and the continual use of resources. Samsung's initiatives focus on increasing the use of recycled materials, reducing waste, and improving product repair options.

8. Source Documents