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Dynamic capabilities at Samsung Electronics : Analysis of its growth strategy in semiconductors

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Dynamic Capabilities at Samsung Electronics: Analysis of its Growth Strategy in Semiconductors
Seung-Joo Lee
Professor KDI School of Public Policy and Management sjl@kdischool.ac.kr August 2011
Abstract
Samsung Electronics has emerged as the world’s largest memory chip maker with a leading position in the DRAM and NAND flash markets. This paper explores and analyzes the key success factors of Samsung in the semiconductor industry using the dynamic capabilities framework. Based on literature review and case studies, the following five dimensions of dynamic capabilities were identified to explain Samsung’s successful growth in semiconductors: 1) opportunity recognition and entrepreneurial insight by top management, 2) rapid catch-up through technology acquisition and learning, 3) leapfrogging competitors through product and process innovation 4) product line diversification leveraging existing capabilities and resources, 5) resource release through restructuring during the financial crisis. This study provides insights on the growth strategy of a latecomer firm striving for global leadership and illustrates the importance of dynamic capabilities in creating competitive advantage and sustaining growth.
JEL Codes: L63, M10, N80 Key words: Dynamic capabilities, Samsung, growth strategy, semiconductors
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I.
Introduction
Samsung Electronics has emerged as a world-class competitor in the semiconductor industry, challenging Intel’s global market leadership (See Exhibit 1). Since 1993
Contents

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Title Dynamic capabilities at Samsung Electronics
Similar Titles
Sub Title

Analysis of its growth strategy in semiconductors

Material Type Reports
Author(English)

Lee, Seung-Joo

Publisher

Seoul:KDI School of Public Policy and Management

Date 2011-08
Series Title; No KDI School Working Paper Series / 11-07
Pages 35
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Industry and Technology < Entrepreneurship
Holding KDI School of Public Policy and Management

Abstract

Samsung Electronics has emerged as the world’s largest memory chip maker with a leading position in the DRAM and NAND flash markets. This paper explores and analyzes the key success factors of Samsung in the semiconductor industry using the dynamic capabilities framework. Based on literature review and case studies, the following five dimensions of dynamic capabilities were identified to explain Samsung’s successful growth in semiconductors: 1) opportunity recognition and entrepreneurial insight by top management, 2) rapid catch-up through technology acquisition and learning, 3) leapfrogging competitors through product and process innovation 4) product line diversification leveraging existing capabilities and resources, 5) resource release through restructuring during the financial crisis. This study provides insights on the growth strategy of a latecomer firm striving for global leadership and illustrates the importance of dynamic capabilities in creating competitive advantage and sustaining growth.