Samsung Electronics Business Model Canvas

Samsung, while a leading semiconductor manufacturer, strategically partners with various external component suppliers to bolster its supply chain.

This dual strategy, combining internal production with external sourcing, provides crucial flexibility and resilience, especially vital given supply chain disruptions impacting the electronics sector in 2024.

Such collaborations mitigate risks and ensure access to specialized technologies and components, like advanced display panels or certain memory types, that may not be produced in-house.

These partnerships are essential for maintaining efficient production schedules and managing costs across Samsung’s extensive portfolio of consumer electronics and mobile devices.

Samsung's key partnerships span technology providers like Google for Android, global telecom carriers for distribution, and external component suppliers for supply chain resilience. Collaborations with retail giants and content platforms enhance market reach and user experience, driving sales. These diverse alliances are crucial for Samsung's competitive edge, supporting its 20.8% global smartphone market share in Q1 2024.

Samsung Electronics’ global supply chain management is a critical daily activity, overseeing a vast network of over 2,500 primary suppliers and numerous manufacturing facilities worldwide in 2024. This logistical function ensures components are sourced efficiently and finished goods are delivered to diverse markets on time. Effective management is paramount for profitability, especially given the KRW 71.92 trillion consolidated revenue reported in Q1 2024. It also builds resilience against geopolitical shifts and economic disruptions, safeguarding continuous operations.

Samsung Electronics’ key activities focus on extensive Research & Development, with a record KRW 28.34 trillion invested in 2023, driving innovation in areas like AI and semiconductors. High-volume manufacturing, expanding its 3nm GAA process in 2024, ensures efficient production capabilities. Global supply chain management, overseeing over 2,500 primary suppliers in 2024, secures timely component sourcing and product delivery. Additionally, global marketing and sales, alongside software ecosystem development like One UI on over 1 billion devices in 2024, build brand loyalty and market presence.

Samsung Electronics benefits immensely from its global brand equity, recognized worldwide for innovation and quality. This powerful brand, valued at an estimated $99.7 billion in 2024, ranks among the top five global brands, significantly aiding market penetration and supporting premium pricing across its diverse product portfolio. Such strong brand recognition fosters consumer trust and preference, acting as a critical intangible asset driving sales in categories from smartphones to home appliances. This consistent brand strength ensures a competitive edge and sustained customer loyalty.

Samsung Electronics commands its market position through core resources like its vast intellectual property portfolio, including 8,581 U.S. patents granted in 2023, and capital-intensive advanced manufacturing facilities, such as the $17 billion Taylor, Texas fab. Its global brand equity, valued at $99.7 billion in 2024, alongside a highly skilled workforce of over 270,000 employees, drives continuous innovation. Furthermore, a robust balance sheet, evidenced by KRW 8.4 trillion in Q1 2024 capital expenditure, underpins its strategic investments and market resilience.

Samsung Electronics offers a diverse, high-quality product portfolio, catering to a wide spectrum of consumers from premium flagship models to accessible mid-range and budget options. This strategy provides extensive choice and quality assurance across various price points, ensuring strong market penetration. For example, in Q1 2024, Samsung solidified its lead in the global smartphone market with a significant share, driven by its varied device offerings. This value proposition centers on delivering reliable, well-designed products for nearly every consumer segment and need, from mobile devices to home appliances.

Samsung delivers cutting-edge technology, like advanced displays and memory, across a diverse product portfolio, from premium to accessible options. Customers gain a seamless, interconnected experience through SmartThings, unifying devices for enhanced convenience. This extends to robust enterprise solutions, emphasizing reliability and security via platforms like Knox, making Samsung a trusted technology partner.

Samsung builds long-term trust through its extensive global customer service network, comprehensive warranty programs, and premium support services like Samsung Care+, which expanded to include AI-powered diagnostics in 2024. Loyalty is further encouraged by the Samsung Rewards program, offering points for purchases across its ecosystem, redeemable for discounts. This strategy focuses on retaining customers and maximizing their lifetime value, evidenced by continuous investment in post-purchase engagement.

Samsung fosters diverse customer relationships, from mass-market advertising building aspirational brand identity to direct digital engagement via its Samsung Members app, which had over 150 million users. Post-purchase support like Samsung Care+ now includes AI-powered diagnostics for 2024, enhancing loyalty. Physical Experience Stores provide hands-on product interaction, while dedicated B2B managers secure enterprise partnerships, contributing KRW 12.89 trillion in Q1 2024 revenue for the B2B segment.

Samsung.com serves as a pivotal direct-to-consumer channel, allowing Samsung Electronics to meticulously control the entire brand experience. This platform facilitates offering exclusive products and deals, directly enhancing customer engagement and capturing higher profit margins. By operating this channel, Samsung gains invaluable first-party data on consumer behavior and preferences, informing future product development and marketing strategies. The focus on direct online sales continues to be a key strategic pillar for Samsung in 2024, reflecting the broader industry shift towards owned digital retail.

Samsung Electronics employs a multi-faceted channel strategy, leveraging extensive third-party retailers and telecommunication carrier stores for mass consumer reach. Direct online sales through Samsung.com enhance brand control and margins, while major online marketplaces expand global accessibility. A dedicated direct sales force and specialized distributors cater to B2B clients, ensuring comprehensive market penetration in 2024.

Samsung Electronics caters to a broad Enterprise & Business (B2B) customer segment, serving organizations from small businesses to vast multinational corporations and public sector entities. This diverse group demands highly reliable and secure technology solutions, including specialized enterprise-edition smartphones and tablets, alongside digital signage and various IT hardware. Their core requirements revolve around enhancing productivity, ensuring robust security, notably through Samsung Knox, and simplifying device manageability. For instance, Samsung's enterprise mobility solutions continue to see strong adoption, with their B2B revenue streams contributing significantly to overall growth projections for 2024.

Samsung targets a vast global Mass Consumer Market with diverse electronics and engages Tech Enthusiasts with cutting-edge flagships like foldable phones, projected to reach 27.8 million units in 2024. Its B2B arm provides enterprise solutions, contributing significantly to 2024 growth. Creative Professionals and Gamers seek high-performance devices, with Samsung's gaming monitor share at 22% in Q1 2024. Samsung also acts as a critical B2B component supplier for memory and OLEDs, holding over 40% of the DRAM market in early 2024.

Marketing and sales expenses for Samsung Electronics are substantial, encompassing global advertising campaigns, extensive brand promotions, and sponsorships vital for maintaining its top-tier brand presence. This also includes the significant costs of operating its vast sales channels worldwide. Driving sales in a highly competitive electronics market requires continuous, substantial marketing investment. For instance, Samsung's selling and administrative expenses, which include these costs, were approximately ₩58.8 trillion in 2023, reflecting ongoing strategic outlays. These expenditures also cover commissions and fees paid to numerous retail and carrier partners globally.

Samsung's cost structure is heavily driven by capital-intensive manufacturing and substantial R&D investments, crucial for innovation and production scale. Significant marketing and sales outlays are essential for maintaining its global brand presence. Managing its vast global supply chain and general administrative overheads also represents considerable expenditures. These financial commitments underpin Samsung's market leadership and operational scale.

Samsung Display Corporation (SDC) generates substantial revenue by supplying its cutting-edge display panels, particularly OLED screens, to numerous external clients.

This critical business-to-business (B2B) stream sees SDC selling to major competitors like Apple and other prominent smartphone manufacturers.

In Q1 2024, SDC maintained over 50% share in the global smartphone OLED panel market, highlighting its technological leadership.

This segment leverages Samsung's advanced display manufacturing capabilities, contributing significantly to the company's overall financial strength.

Samsung’s revenue primarily stems from direct sales of consumer electronics like smartphones and TVs, with its DX division posting KRW 4.01 trillion operating profit in Q1 2024.

Substantial income also comes from semiconductor component sales to other manufacturers, where the DS division achieved KRW 1.91 trillion operating profit in Q1 2024.

Further streams include display panel sales to external clients, intellectual property licensing, and growing service offerings like Samsung Care+.

The company’s consolidated revenue for Q1 2024 was 71.92 trillion Korean Won.