Prof Jasper Kim from Ewha Womans University wrote this article for the BBC and I have to say that I agree with him.
Although I thought from a slightly different angle on the situation.
I believe that part of the decline of the electronic giants in Japan was due to the lack of creativity in their products. While they could make very good products creativity was always lacking.
I also believe the same is true of Samsung having spoken to some high level employees who have had their creativity squashed.
Here is the link to Samsung risks following Sony and IBM's slide
Liam - It's an interesting article for sure, but it's not a new story. Even Samsung says the same things publicly. Regardless of whether some high-level employees feel having their creativity squashed is an indicator of deeper problems or not, the wider issue is that companies from China, such as Lenovo, enjoy competitive advantages that will eventually overrun Samsung in its current businesses and Samsung must move on to newer industries. What those are remains to be seen. It seems that IBM made the transition successfully; Sony is still struggling.
Steven - It's not a new story but it got my attention because of the author more than anything.
I had a conversation with a group of Koreans about this today and they were adamant that Samsung had no problems. This view of Samsung being in trouble as it were seems to be the view of non Koreans generally (even if Samsung do say so publicly) rather than the average Korean.
It would be great if a Korean on KBC could give their view.
There is a huge difference between Sony, IBM and Samsung - although they look similar on the outside (#1 companies).
What do I mean, you ask? Well, for example, let's examine the quote from Professor Jasper Kim's so called viewpoint. Specifically, that Samsung is almost a country within a country - where Professor Kim creates and eludes to the Samsung state. As we all know, it's often stated that the state of California (US) would be the 5th largest country in terms of economic output, if it were to become an independent nation.
Well, we need to recognize that Samsung's (with her 50 to 60 or so listed and non-listed affiliated and sister companies) entire industrial output is much larger than that of North Korea; and it probably has a greater operating budget as well - although I haven't really checked the actual figures.
In other words, if Samsung were to become a country - hypothetically speaking - it would become a bigger nation than today's North North but smaller than South Korea. So, it's no joke that Samsung is almost a country within a country. Could you say the same about Sony and IBM?
If, and when, the sun were to set on Samsung - going back to the sunrise/sunset analogy as noted from Professor Kim's viewpoint article - it very well means that South Korea's economy (what were the numbers 13% of exports where exports are 48% of South Korea total GDP) will be hit hard as well - perhaps a new era of darkness may dawn upon the peninsula rather than bright prosperity.
For such reason, 99.9% of South Koreans (including myself) support Samsung and are a very proud of Samsung's achievements (stemming from patriotism), even though we may not agree with everything they do. Perhaps better put....cheering for the home team just because they are the home team.
For example, when push comes to shove, 99.9% of Americans will strongly support their troops and military personnel although they may not agree 100% with the concept of war and inflicting life-shattering harm to innocent children and women when wars are fought by the Americans to create peace, spread democracy and protect freedom.
From my point of view, it would be interesting to see when and how selling off portions of Samsung, as IBM had sold its PC business, will benefit Samsung's monetary shareholders - virtually every Korean is stakeholder from a non-financial perspective. Let's wish them - also Sony and IBM - good luck.
I agree with Mike, to an extent. If title of the article was
Samsung LG risks Sony and IBM's slide, I'd be a believer... but then again, we've already read that story; 1 year ago.
The author failed to provide any meaningful comparison between Sony/IBM and Samsung (other than industry and scale). There were some nice Mad Men-esque anecdotes, and yes South Korea has notoriously long working hours (and lacking productivity) but are there any industry numbers to show that it applies to Samsung? Is Samsung losing market share to Chinese companies? I don't think so, except possibly in consumer appliances. In fact, the mobile phone market is undergoing consolidation, with several companies being left in the dust While Nokia, LG, and RIM flouder, Samsung has thrived. I guess other consumer electronics industries will face a slowdown (TVs, refrigerators) and might be spun off... but I applaud Samsung for having the foresight to diversify now (biotech) rather than wait.
Today, there was an article in the JoongAng that Samsung was establishing a factory in China. The factory will supply memory chips to electronics companies in China, which goes counter to the argument that Samsung will feel the sting of Korea's shrinking labor supply. In fact, the argument has been made that foreign companies moving into China will cause/has caused Chinese companies to worry about the availability and cost of local labor. The days of cheap labor in China are coming to an end shortly. But I digress and say the author has his opinion, but I will respectfully disagree with him.
Should the sun rapidly set on Samsung within the next 3~5 years, it is likely that they will follow in the footsteps of GM (General Motors) in relation to coping with hardship --- as opposed to Sony/IBM.
The reason for why I say this is because Samsung (should they fail) will most likely need some form of massive (South Korean) government (tax-payer) aid due to their relative size and iconic status -- too many people, and too many small companies/suppliers, will become adversely impacted. We all know how Jay Leno (in his late night talk show) had joked about GM - GM standing for Government Motors.
There is an interesting point about Samsung and GM under this government-to-the-rescue type of (sunset) scenario ....which is....Samsung is famous for having no labor union. GM workers are/were with the UAW - an opposite.