Part 5: Aiming at Turnover of $10 Billion in Appliances
Part 5: Aiming at Turnover of $10 Billion in Appliances
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  • 승인 2004.12.01 12:01
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Moon-Yong Lee

Executive Vice President of Samsung Electronics

Based on a policy of selection and concentration in the high value added area of electrical and electronic household appliances and a revamping of the company's manufacturing base at home and abroad, Samsung Electronics has devised a blueprint to promote itself as a worldwide brand through to 2007.

The world appliance market is forecast to grow about by 3% to 2010. Samsung Electronics intends to accomplish a turnover in appliances of over $10 billion within a short period of time (i.e., a market share of approximately 10%) and become a 'top tier' player in a crowded field of competing brands on the basis of its leading technology in the home network field.

To this end, the company plans to focus on high value business while boosting its profit rate, plus its networking and convergence technologies. It has also augmented its R&D staffing levels at home and abroad to 1,600 persons. In particular, Samsung Electronics is promoting new product and new model development by transferring 300 specialists in technology software who possess masters or doctorate degrees in their particular fields to assist toward the company's efforts in the household appliance market.

Moon-Yong Lee, executive vice president of Samsung Electronics Co., Ltd said in an interview with The Korea IT Times, "At our head office in Suwon we aim to recruit and nurture the best research talent in the business to maximize synergy with our telecommunications laboratory, SOC research institute, DM laboratory as well as our mechatronics center".

On the basis of its sophisticated technology infrastructure, Samsung Electronics aims to boost its share of the high-end appliance market from 55% last year to 65% next year by accelerating new product innovation with a view to complementing the users' life style. Contrarily, the company's focus on low-end products such as small-sized air conditioners will be reduced in the interests of concentrating on advancing new technology development capability and a high-end brand image.

Aiming for the top spot globally in built-in refrigerators, vacuum cleaners Based on such a competitiveness advantage, Samsung Electronics is striving to promote its image as a producer of premium products by strengthening its Houzen and Ziple brands that claim a combined 64% of the domestic market brand and 10% globally by major product. For example, the company plans to capture the drum washing machine market from the beginning of next year by creating new products via a strategic alliance with Maytag of the U.S.A. that will involve a common developmental base and product supply system.

In the market for double-door refrigerators in which it holds the No. 1 position in 40 countries worldwide, Mr. Lee notes that Samsung Electronics aims to achieve quantitative and qualitative growth by focusing on the true built-in refrigerator market to occupy the top market slot in 50 countries.

Samsung Electronics made its entry into the U.S. true built-in refrigerator market in May this year and now claims a 12% share of the entire U.S. household appliance market that is growing at 15% per annum. In the area of air conditioners, the company has launched a model that consumes 30% less power than established products. The system air conditioner market is forecast to grow rapidly by 10% annually over the next 5 years. In the vacuum cleaner market Samsung Electronics has advanced to become one of the world's top 3 last year and intends to enhance its market share on the basis of its outstanding product competitiveness.

Mr. Lee stressed, "Samsung Electronics will continuously advance the company's competitive edge in the state-of-the-art household appliance applications such as home networks and robotics in cooperation with global corporations through pooling our semiconductor technology and R&D capability." He emphasized, "Getting to the top in the appliance business is only possible through ceaseless innovation and a future-oriented attitude toward your marketing, research and development, and manufacturing efforts.

In that regard, he asserted, "Samsung Electronics plans to consolidate its world-class position by a commitment to high value-added products and creating a stable profit base.

Gwangju: a future center ubiquitous household appliance technology

Samsung Electronics has completed the reorganization of its business structure in August of this year to promote its position as a producer of first-rate appliances. Specifically, the company has integrated process throughout its domestic factories from Suweon to Gwangju and has maximized production competitiveness in its plants in China, Mexico, Thailand, India and Malaysia.

Its Gwangju plant, to which the company's washing machine and air conditioner line were recently transferred, will be utilized as a base to meet domestic demand for premium products and advance global manufacturing innovation. In particular, Samsung Electronics will nurture its Gwangju operation area as a center of ubiquitous appliance technology in cooperation with the city of Gwangju to capitalize upon such emerging markets as home network-based refrigerators and robotic vacuum sweepers. To support Samsung Electronics in this effort, Gwangju will contribute to the necessary industry infrastructure as part of the city's program to boost output by the local electronics industry to 105.5 billion won annually over the next 5 years. Samsung Electronics, for its part, views Gwangju as a future all-around appliance production base for 'white items' such as washing machines, air conditioners and air cleaners. As of September, this year, Samsung Electronics upgraded its Gwangju complex by installing over 20 production lines including 2 for washing machines and 7 for air conditioners.

Samsung Electronics plans to increase turnover at its Gwangju operation to 3 trillion won by 2005 through capturing world markets for highest-end products.

Mr. Lee said, "Promotion of the Gwangju complex, specialized as it is on household appliances will be a win-win strategy for the corporation and local community since it will play a decisive role in the future of the regional economy."

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