The Paradox of Samsung's Rise

Tarun   Khanna; Jaeyong  Song; Kyungmook  Lee

Article | Harvard Business Review | July – August 2011

The Paradox of Samsung's Rise

by Tarun Khanna, Jaeyong Song and Kyungmook Lee

Abstract

Twenty years ago, few people would have predicted that Samsung could transform itself from a low-cost original equipment manufacturer to a world leader in R&D, marketing, and design, with a brand more valuable than Pepsi, Nike, or American Express. Fewer still would have predicted the success of the path it has taken. For two decades now, Samsung has been grafting Western business practices onto its essentially Japanese system, combining its traditional low-cost manufacturing prowess with an ability to bring high-quality, high-margin branded products swiftly to market. Like Samsung, today's emerging giants—Haier in China, Infosys in India, and Koç in Turkey, for instance—face a paradox: their continued success requires turning away from what made them successful. The tightly integrated business systems that have worked in their home markets are unlikely to secure their future in global markets. Samsung has steadily navigated this paradox to transcend its initial success in its home markets and move onto the world stage. It is a story that holds many important lessons for the current generation of emerging giants seeking to do the same.

Keywords: Organizational Design; Research and Development; Marketing; Business Processes; Brands and Branding; System; Globalized Markets and Industries; Transformation; Cost; Forecasting and Prediction; Production; Quality; China; India; Turkey;

Format: Print

6 pages

Find at Harvard Purchase

Citation:

Khanna, Tarun, Jaeyong Song, and Kyungmook Lee. "The Paradox of Samsung's Rise." Harvard Business Review 89, nos. 7-8 (July–August 2011): 142–147.

The case is built around video clips from top business leaders in emerging markets who were interviewed for Harvard Business School’s innovative Creating Emerging Markets oral history project. The case is focused on the issue of innovation in emerging markets from a business perspective. It considers the nature of innovation, the challenges of accessing knowhow and technology, and leapfrogging. The Video Supplement to the case contains short excerpts from eleven business leaders in India, Kenya, Malaysia, Peru, South Africa, Sudan, Turkey, and the United Arab Emirates addressing these issues.

Faculty & Research

The Paradox of Samsung's Rise

Abstract

Citation:

About the Author

More from the Author