Samsung's success: R&D investment has reached $14.6 billion

"Like father, like son" is perhaps the best description of the relationship between Samsung Group and Samsung Electronics.

Samsung Electronics, which owns the Galaxy series of smartphones, Gear watches and semiconductor businesses, has world-renowned products. Its parent company, Samsung Group, is an "aircraft carrier-class" enterprise that includes chemicals, finance, machinery, hotels and other businesses.

This time, the reporter of Daily Economic News visited Samsung Electronics in South Korea to try to uncover the secrets of the success of this well-known Korean company. During the visit, the staff of Samsung Electronics told the reporter that its R&D investment has reached an astonishing 14.6 billion US dollars, and it has registered 4,676 new patents in the United States alone.

As a huge business empire, Samsung Group is involved in all aspects of industry.

In March 1938, Samsung Group founder Lee Byung-chul established the Samsung Chamber of Commerce, which was mainly engaged in food trade at the time. In the 1950s, the business of Samsung Chamber of Commerce gradually expanded to manufacturing; in the 1960s and 1970s, it entered the electronics industry; in the 1990s, Samsung ushered in a historic turning point. Lee Kun-hee, then chairman of Samsung, proposed a new business declaration of "changing everything", and Samsung became the fifth largest group in the world in 1996.

Recently, a reporter from the Daily Economic News visited Samsung Electronics in South Korea to explore the success genes of Samsung Electronics and the entire Samsung Group through the management philosophy of this company that has an absolutely strong position in the Samsung Group.

From a fruit and vegetable exporter to a global electronics giant

On March 1, 1938, Samsung Group founder Lee Byung-chul established the Samsung Chamber of Commerce in Daegu, South Korea with 30,000 won. Samsung Chamber of Commerce was engaged in food trade in the early days, mainly exporting Korean dried fish, vegetables, fruits, etc. By the 1950s, the business of Samsung Chamber of Commerce gradually expanded to manufacturing industries such as sugar, pharmaceuticals, and textiles, and it was established as a family-owned enterprise.

In 1969, Samsung Sanyo Electric was established (later renamed Samsung Mechatronics in March 1975 and merged with Samsung Electronics in March 1977). Samsung began to get involved in the electronics industry. At the beginning of this stage, the booming home electronics business experienced explosive growth, and Samsung Electronics began to export color TVs for the first time. In addition, Samsung Electronics acquired a 50% stake in Korea Semiconductor, further consolidating its leading position in semiconductor manufacturing. In December 1983, Samsung successfully developed a 64K DRAM (dynamic random access memory) VLSI chip, making it a world leader in semiconductor products. Prior to this, Samsung only produced semiconductors for the domestic market.

In Korean, "Samsung" literally means "three stars", and the three-star logo has always been Samsung's logo, witnessing Samsung's early development.

By the 1970s, Samsung had made deep investments in heavy industry, chemicals, and petrochemicals. In the subsequent development, Samsung's diversification approach brought more profit growth points and laid the foundation for its eventual growth into a world-renowned global company. However, with the rapid expansion of Samsung's business, there were too many non-related businesses, which caused the company to suffer from "big enterprise disease".

In 1993, Samsung ushered in a historic turning point. Lee Kun-hee, then chairman of Samsung, put forward a new business declaration of "changing everything".

In fact, Lee Kun-hee had already seen various problems in Samsung's management when he first took office, such as low internal efficiency and emphasis on quantity over quality. At the same time, the company's external environment had also undergone major changes, with international competition intensifying in its various industries.

In the context of internal and external troubles, Lee Kun-hee proposed the "new management" idea and advocated that Samsung establish a sound sense of crisis. As for the goal of change, he made it clear that Samsung's future direction is to become a world-class enterprise. In terms of the slogan of change, Lee Kun-hee proposed "Except for wife and children, everything else must be replaced!" This slogan later became the symbol of Samsung's change and a world-famous saying. Lee Kun-hee required all senior executives of the company to start with themselves immediately, reorganized the highest power structure, and proposed to establish a corporate culture in line with the spirit of the times.

To this day, it is generally believed that the "creative destruction" carried out by Samsung in its journey to become a global leading company is the main cornerstone supporting Samsung's competitiveness, corporate culture and values ​​today.

With the radical change in its business philosophy, Samsung's previous "three stars" logo was also transformed into a world-renowned logo - the oval represents flexibility and simple purity, while the blue symbolizes stability, reliability and corporate social responsibility. In Korean, "Sam" means "strong, many", and "sung" means "eternal", and the combination means "eternal power".

1994 to 1996 was the "New Management" era in Samsung's history. The entire company was repositioned on the basis of "quality first". During this period, 17 different products, from semiconductors to computer monitors, from TFT-LCD screens to color picture tubes, jumped to the top five in global market share in their respective fields. In some fields, such as LCD, Samsung was number one from the beginning.

Under the leadership of Lee Kun-hee, Samsung became the world's fifth largest group in 1996.

4,676 patents registered in the United States

Samsung Electronics holds an absolutely strong position among the subsidiaries of Samsung Group. In the 2014 Fortune Global 500 ranking, Samsung Electronics ranked 13th, and other subsidiaries of Samsung Group on the list include Samsung Life Insurance (458th) and Samsung C&T (460th).

Regarding Samsung Electronics, let's look at a set of data: Among South Korea's registered patents in the United States, patents applied for by Samsung Electronics account for more than 40%; among the 100 most famous trademarks in the world, Samsung Electronics is the only Korean trademark and is a symbol of South Korea's national industry.

Since its founding in Suwon, South Korea in 1969, Samsung Electronics has grown into a global information technology leader with more than 200 subsidiaries around the world. As South Korea's largest electronics industrial enterprise, Samsung Electronics' annual sales reached US$185 billion in 2014.

Samsung Electronics' products include home appliances (such as TVs, monitors, printers, refrigerators and washing machines), and major mobile communications products (such as smartphones and tablets). In addition, Samsung is also a trusted supplier of key electronic components (such as DRAM and non-storage semiconductors).

Innovation is the inexhaustible driving force for Samsung Electronics' continued growth. Samsung Electronics has always made bold investments in the research and development of future technologies. A Samsung Electronics staff member told the Daily Economic News that its R&D investment has reached a staggering $14.6 billion, and it has registered 4,676 new patents in the United States alone, ranking second in the total number of patent applications in the United States for eight consecutive years.

Samsung Electronics is actively pursuing its "2020 Goal" to inspire the world and create the future. This new goal reflects Samsung Electronics' commitment to achieve this goal, and Samsung Electronics has developed a specific plan to strive to achieve a total revenue of US$400 billion in 2020 and become one of the world's top five leading brands. To this end, Samsung Electronics has also formulated three strategic guidelines in management: "Creativity", "Partnership" and "Talent".

At the end of 2013, Bloomberg Rankings counted the number of times company names were mentioned in the "Risk Factors" and "Competitors" sections of the annual reports of the top 50 U.S. technology companies by market value, and ranked them according to the number of times they appeared. Among the top ten competitors, Samsung Electronics was the only non-U.S. company.

Currently, Samsung Electronics has established 36 R&D centers around the world, 7 of which are located in China. Samsung Electronics China has established dozens of production and sales departments in Beijing, Tianjin and other places, mainly producing semiconductors, mobile phones, displays, notebooks, televisions, refrigerators, air conditioners, digital cameras and IT products.