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322 PART 4 BUILDING STRONG BRANDS

six Olympics, and ran several global ad campaigns and without acquiring major competitors. It has more
themed “Imagine,” “Quietly Brilliant,” and “YOU,” all which than doubled its employees from a decade ago to over
included brand messages such as “technology,” “design,” 164,000 around the world. With record sales of $110 billion
and “sensation” (human). In 2005, Samsung surpassed in 2008, the company’s CEO, Lee Yoon-woo, announced
Sony in the Interbrand brand ranking for the first time and the firm hopes to hit $400 billion in revenue by the year
continues to outperform Sony today. 2020. To accomplish this aggressive goal, Samsung
The economic downturn during 2008 and 2009 sig- will explore areas like health care and home energy
nificantly affected the semiconductor industry, overall products.
consumer electronics sales, and Samsung’s bottom line.
To survive, Samsung slashed profit margins, decreased Questions
production, and cut inventories. As a result, the company
emerged at the end of 2009 with record-high quarterly 1. What are some of Samsung’s greatest competitive
profits despite significantly smaller profit margins. strengths?
Today, Samsung is the global leader in flat-panel TVs 2. Samsung’s goal of $400 billion in sales by 2020
and memory chips, and the number two player in mobile would bring it to the same level as Walmart. Is this
phones. It is focused on growing technologies such as feasible? Why or why not?
smart phones and has partnered with both Microsoft’s
Windows Mobile and Google’s Android software. In addi- Sources: Moon Ihlwan,“Samsung Is Having a Sony Moment,” BusinessWeek, July 30, 2007, p. 38;
Martin Fackler, “Raising the Bar at Samsung,” New York Times, April 25, 2006; “Brand New,”
tion, Samsung has formed a green partnership with
Economist, January 15, 2005, pp. 10–11; Patricia O’Connell, “Samsung’s Goal: Be Like BMW,”
Microsoft to help create energy-efficient computers. BusinessWeek, August 1, 2005; Heidi Brown and Justin Doeble, “Samsung’s Next Act,” Forbes,
Unlike rival firms, Samsung has become a global July 26, 2004; John Quelch and Anna Harrington, “Samsung Electronics Company: Global
Marketing Operations,” Harvard Business School, January 16, 2008; Evan Ramstad, “Samsung’s
leader by making both components for electronics
Swelling Size Brings New Challenges,” Wall Street Journal, November 11, 2009; “Looking Good?
products and the actual devices sold to consumers, LG v. Samsung,” Economist, January 24, 2009.

Marketing Excellence custom-built solutions for businesses. Watson also created
the company’s first slogan, “THINK,” which quickly became
a corporate mantra.
>>IBM From the 1910s to the 1940s, IBM’s growth ex-
ploded, led primarily by sales of tabulating machines,
which helped underpin the Social Security system in the
1930s, and of war-related technologies developed for the
military during World War I and World War II.
IBM evolved in the 1950s when Watson’s son,
Thomas J. Watson Jr., took over as CEO. It was under his
management that the company paved the way for innova-
tions in computation. IBM worked with the government
during the Cold War and built the air-defense SAGE com-
puter system at the price of $30 million. In 1964, the firm
launched a revolutionary large family of computers called
the System/360, which used interchangeable software
and peripheral equipment. For it to succeed, however,
IBM had to cannibalize its own computer product lines
International Business Machines Corporation (IBM) manu- and move its current systems to the new technology.
factures and sells computer hardware and software, offers Fortunately the risk paid off, and IBM architecture became
infrastructure services, and provides global consulting ser- the industry standard. By the 1960s, IBM was producing
vices. It dates to the 1880s but became known as IBM only approximately 70 percent of all computers, beating out
in 1924, under the leadership of then-president Thomas J. early competitors General Electric, RCA, and Honeywell.
Watson Sr. Watson led IBM for four decades and helped es- The 1980s—the beginning of the personal computing
tablish some of its most successful and continuing business era—were pivotal for IBM. In 1981, the firm launched the first
tactics, such as exceptional customer service, a professional personal computer, which offered 18KB of memory, floppy
and knowledgeable sales force, and a focus on large-scale, disk drives, and an optional color monitor. IBM also opened