Samsung Electronics sells electronic goods in several different categories (TV, Mobile, Refrigerators, Washing Machines, etc). The business is focused on an important investment in R&D and a strong marketing budget to take dominance of a particular market. In the Argentinean offices, from where the company also controls the business in Uruguay and Paraguay, Samsung only had around 100 employees by 2011, who mainly covered Marketing, Sales and Logistics positions.<\/p>\n
Operating Model<\/strong><\/p>\n Samsung imports all its products from its factories located mainly in Asia. Before 2011, the imports were mainly CBU (complete built units) and only a small quantity of CKD (complete knock down) that was assembled in local factories. After the DJAI announcement, CBU products were almost banned, unless a substantial part of the imports were CKD. While the competitors were lobbying with the government to keep on importing CBUs, Samsung was building strong partnerships with the main factories, located in Rio Grande, 3,000 km away from Buenos Aires, and quickly took the lead in the market share war in almost all of the categories.<\/p>\n With these new partnerships, the local factories now import CKD products from Samsung Asian factories, and assemble them under the watch of Samsung local engineers to ensure the quality. The operating process can be described in six steps:<\/p>\n This whole process takes a minimum of 18 weeks, so planning and forecasting are two of the most important jobs for the business. The company rewards forecasting accuracy and continuously pushes to improve it.<\/p>\n Measuring Performance<\/strong><\/p>\n The long logistics process, from production to retail stores, demands employees to focus on three main areas: logistics, planning and factory control. The company established several incentive rules and goal measurements to ensure that its model remain advantageous over its competitors. The KPIs were reviewed weekly and adjusted constantly to give more accurate information to Asian factories, so they could prepare the kits faster and easier. The local and Asian teams worked closely to improve Asian planning, shipping times, packaging and parts design.<\/p>\n The Expansion Era<\/strong><\/p>\n By 2007, Samsung was only another player in the electronics industry, where Sony, Dell, Hewllet Packard and Nokia were the main leaders in several categories. At that time, Samsung was initiating its CKD assembly business in Rio Grande, a model that expanded from a small quantity of laptops assembly, to cellphones, TVs and air conditioners by 2011.<\/p>\n When the imports were closed in 2011, all the retailers saw how the shelves in their stores were quickly becoming empty. Samsung sales boosted and the company expanded its operations, partnering with even more local factories. In each of these factories, there was at least one Samsung engineer that controlled the process and managed the forecasting of products going to the market.<\/p>\n The planning of incoming parts was done meticulously between the Demand Planner and Sales Reprecentatives. The input they gave to the factory in Asia was crucial to get first to the market with every new products, either the newest smart TV or the latest Galaxy phone.<\/p>\n The planning, the partnership with local factories, appealing products and an important investment in marketing, led Samsung to the leading position in air conditioners, TVs, mobile phones and other products. Obviously, after seeing that the imports were going to remain closed, the competitors started developing plans to assemble their products in local factories as well. But Samsung had already partnered with the most important factories, which also owned the main retailers in Argentina, so the barrier of entry was not easy.<\/p>\n The main reason of success in this era of expansion was the Korean culture of Samsung. Headquarters always sent the message of moving fast and go for all. Argentinean management saw the opportunity and moved fast to become the most important consumer electronics company in the region.<\/p>\n What\u2019s next?<\/strong><\/p>\n Now, after the election of the new president, Argentina\u2019s new administration is very likely to revert this closed import policy, which means that new players may come in. It\u2019s too soon to predict what will happen in the near future with Samsung, but its strong brand, and the relationship with main distributors and retailers, will probably give them the advantage to keep on being the winning team.<\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n Sources:<\/p>\n www.lanacion.com.ar<\/p>\n www.industria.gob.ar<\/p>\n\n
![\"\"](\"http:\/\/www.samsung.com\/mx\/consumer-images\/product\/mobile-phones\/2015\/SM-G920IZKATCE\/features\/SM-G920IZKATCE-403979-0.jpg\")
<\/p>\n