Samsung to Split Into Two Major Divisions
Jan 16, 2009, 8:53 AM by Eric M. Zeman
updated Jan 16, 2009, 8:58 AM
Samsung announced a restructuring plan that has the company dividing operations in half. One half will focus on cell phones, TVs and other consumer products. It will be called the Digital Media and Communications division. The other half will focus on the manufacture of components such as displays and memory chips and will be called the Device Solution division. Samsung remains the world's largest manufacturer of Flash memory chips and LCDs. The move is being made in response to softening demand for Samsung's products.
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Comments
Long Overdue Decision
Speaking as a former employee, this split is vital to their survival as a player in tech.
At its very roots, Samsung is a manufacturer and is very good at making lots of 'stuff' very quickly and efficiently. When they decided to be a player in the furious world of electronics as a branded name, they had no experience at sales and marketing but was over confident enough that their name would make them a fast and huge success.
Their fatal flaw has always been that they did not fully grasp how business is done in America which is for the most part the front lines of the tech industry and is the toughest market to penetrate. They brought their manufacturer mentality and their culture to the U.S. expecting a slam dunk. They were often very conf...
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At its very roots, Samsung is a manufacturer and is very good at making lots of 'stuff' very quickly and efficiently. When they decided to be a player in the furious world of electronics as a branded name, they had no experience at sales and marketing but was over confident enough that their name would make them a fast and huge success.
Their fatal flaw has always been that they did not fully grasp how business is done in America which is for the most part the front lines of the tech industry and is the toughest market to penetrate. They brought their manufacturer mentality and their culture to the U.S. expecting a slam dunk. They were often very conf...
(continues)
Question
I know this may sound stupid, but there are a lot of companies now splitting in two different sections. Samsung is one, but then Citibank, and another company will be as well. Why do this instead of operating as one? It seems more cost efficient to manage one. Feedback on this..
I know Samsung put a bid in to purchase Sandisk. Could it be that they're trying to compete since Sandisk declined? It sounds like they're at least trying that, if not preparing for something else. I can't think of any other reason though.
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Because then at least 1 of the 2 companies is an attractive investment option. If they were 1 company, the bad division would cause the company as a whole to be a bad investment.
