Preface ix
Sony and Samsung: Portraits of Two Global Competitors 1
The Fall of Sony and the Rise of Samsung Electronics 1
A Turning Point 1
The Media Hype 4
Comparison of Sony and Samsung Electronics: Motivations and Limitations 7
The History and Business Areas of Sony and Samsung Electronics 9
Sony 9
Samsung Electronics 14
Sony and Samsung Electronics' Performance 16
Sony's Stagnation 16
The Rise of Samsung Electronics 19
Strategy Content and Strategy Process 22
Strategic Analysis
Prince and Pauper in the Analog World 25
Sony, the Prince of Analog 26
Founding Principles and New Product Development 26
Relying on Internal Research and Development 28
A Wide Range of Products 30
Obsession with Its Own Standards 32
The Late-Starter, Samsung Electronics 33
Relying on Borrowed Technologies 33
Success in the DRAM Business 33
Production Process Technology 37
Focus on Technologies with Clear Trajectories 37
Digital Dream Kids and theDigital Sashimi Shop 41
Digital Revolution 42
Shifts in Competitive Advantages 42
Two Different Approaches 45
Sony's Digital Dream Kids 46
Idei's Network Strategy 46
Flat Panel Displays: Investment Decision 48
Confusions around Digital Music Players 51
The Heterogeneous PlayStation Business 53
Samsung Electronics' Digital Sashimi Shop 54
Daring Investment, High Speed Battle 54
Vertical Integration 57
Lack of Creativity and Originality in New Product Development 58
Apple's iPod 61
New Kids on the Block 65
Sony's Marketing Strategy: Focusing on New Products 67
New Product Development and Brand 67
Product Design and Advertisement 69
Distribution and Price Policies 70
The Marketing Strategy of the Latecomer, Samsung Electronics 71
Marketing Strategy in Transition 71
Advertising and Brand Strategies 72
Distribution Channels and Pricing Strategies 75
New Product Development Strategy 77
Increasing Bargaining Power of Retailers 80
Consolidation of Distribution 80
The Responses of Sony and Samsung Electronics 81
Samsung's New Management Movement 82
Wannabe Globals 87
Sony's Global Strategy 88
Global Localization Strategy 88
Losing Control over Overseas Subsidiaries 90
Excessive Investment in the Bubble Period 93
Samsung's Globalization Strategy 94
Electronics Complex and Local HQ System 94
Problems of Excessive Localization 95
Return to a Global Organization 97
Problems with External Globalization 98
External Globalization 98
Securing Global Managers 99
Organizational Process and Leadership
Same Silos but Different Outcomes 105
Sony's Company Structure 106
The Culture of Freedom and Openness 106
The Introduction of a Company System 108
Changes in the Company Organization 110
Problem with Sony's Organizational Structure 114
Short-Term Performance and Legacy 114
Conflicts among Companies 118
Separate Content Business 120
Absence of HQ's Control Function 123
Corporate Culture and Organizational Structure of Samsung Electronics 126
Corporate Culture of Samsung Electronics 126
GBM Structure 128
Office of Secretaries 131
The Problem of Samsung Electronics' Organizational Structure 134
Severe Internal Competition 134
Organizational Fatigue 135
From Founders to Professional Managers 137
Sony's CEO and Governing Structure 138
Founders and the Inner Circle 138
Idei and Board Reform 140
Problems with Sony's Governing Structure 141
Succession and Leadership 141
Internal Politics 144
Applicability of a Western-Style Governance Structure 147
Samsung's Powerful Owner-Centered Structure 149
Emperor Management 149
The Problems with Samsung's Governing Structure 151
One Man Decision-Making Structure 151
Sustainability of Family Control 153
The Inner Circle within Samsung 159
Leadership of Professional Managers 160
The Future of Sony and Samsung Electronics 163
Superficial Crisis and Internal Crisis 164
The Internal Crisis of Samsung Electronics 164
Sony's Ordeals and Potentials 166
Lessons Learned by Sony and Samsung Electronics 168
The Focusing Strategy of a Latecomer 168
Core Competences and the Competence Trap 169
Fit of Corporate Culture, Organization, and Leadership 170
Conversion from a Family-Owned Company to a Professional Management System 171
Challenges in Becoming a Global Enterprise 172
Endnotes 175
Glossary 187
Index 189