2
Cost Management, Strategy, Technique
Samsung and Benchmarking
Samsung, a South Korean company, has dominated the global market with its diverse
products, including innovative electronics (television, phones) and household appliances such as
refrigerators and laundry. Samsung quickly became the leading Korean exporter, accounting for
20% of the total (Kornelakis & Petrakaki, 2024). Before 1996, Samsung struggled in the
consumer market because there was little innovation and a lack of luster in the design to set itself
apart from competitors. When Mr. Lee, appointed chairman of Samsung, laid out a clear plan to
revolutionize the company to become top-class and recognized by the world. In the bible it
states, "Write the vision; make it plain" (English Standard Version, 2001, Hab 2:2). Writing our
vision and goals down helps us focus and be diligent in reaching the end.
For years, Nokia, Apple, and Samsung were leading companies in the smartphone industry.
When Apple introduced its first iPhone, it propelled Apple forward while Samsung faced a
period of stagnation. However, Samsung's resilience and determination were evident when, in
2009, it introduced its first Samsung Galaxy phone, putting the company on an equal footing
with Apple. The fierce competition between the two giants prompted Samsung to make internal
changes within its organization, build its brand, and produce quality products for the market. The
heavy financing of the research and design (R&D) department and the recruitment of top
engineers and designers were pivotal in this transformation. Chairman Lee's strategic
management style, which combined Western and Asian approaches, was a key factor in this
transformation, impressing the industry with its effectiveness.
3
Benchmarking, one of the six contemporary management techniques, played a crucial role in
shaping Samsung into what it is today. In the era of globalization and technological
advancements, companies must prioritize meeting consumer demands while simultaneously
producing goods for profits in a shorter time frame. According to Blocher et al. (2022),
benchmarking is when companies identify success factors and study other companies'
performance to gain knowledge and insight into improving their internal processes. Jang et al.
(2019) emphasize that organizations prioritizing innovation experience positive outcomes,
leading to the development of new products. Samsung Electronics (SE) achieved profitable
growth by making technological breakthroughs and producing unique products at a lower cost.
Unlike Apple, which has continued to produce the same design, lacked cutting-edge technology
features and is inefficient in its distribution, Samsung opted to produce a wide range of designs,
demonstrating its commitment to meeting diverse consumer preferences. By studying consumer
feedback, SE understood Apple's strengths and weaknesses and capitalized on them by
prioritizing areas of improvement. For example, the Android operating system is a more
manageable application tool and offers higher-quality camera specs. Samsung continues to push
boundaries by offering different types of phones (Galaxy Note, flip phone) and new features such
as instant translator app that is real-time and can be voice recognition or typed. Samsung
outpaced Apple due to "market penetration and new product releases at a faster pace than Apple"
(Yun et al., 2019, p. 3), which increased the demand for more. Samsung's use of benchmarking
management techniques gained rapid attraction in the market, significantly increasing its profit
shares and developing a strong brand and loyal client base. Samsung continues diversifying its
portfolio through its ingenuity in offering consumers a wide range of products and services. SE
continues to improve its design and engineering, from computers to home appliances, while
4
keeping a low-price tag. By investing heavily in the R&D and technical innovation departments,
Samsung continues to make outstanding strides and produce unparalleled products, resulting in a
strong foothold in the consumer market.
References
Blocher, E., Juras, P., & Smith, S. (2022). Accounting for Decisions Making Text and Study
Guide (9th ed.). McGraw-Hill.
English Standard Version. 2001. Crossway Bibles. https://www.biblegateway.com/passage/?
search=Habakkuk%202%3A2-3&version=ESV
Jang, S. H., Lee, S. M., Kim, T., & Choi, D. (2019). Planting and harvesting innovation - an
analysis of Samsung Electronics. International Journal of Quality Innovation, 5(1).
https://doi.org/10.1186/s40887-019-0032-x
Kornelakis, A., & Petrakaki, D. (2024). Technological innovation, industry platforms or
financialization? A comparative institutional perspective on Nokia, Apple, and Samsung.
Business History, 1–26. https://doi.org/10.1080/00076791.2024.2377688
Yun, B. S., Lee, S. G., & Aoshima, Y. (2019). An analysis of the trilemma phenomenon for Apple
iPhone and Samsung Galaxy. Service Business, 13(4), 779–812.
https://doi.org/10.1007/s11628-019-00405-5
