CASE STUDY

DMI021

Design Strategy at
Samsung Electronics:
Becoming a Top-Tier
Company

Distributed by
Harvard Business School Publishing
Customer Service Department
60 Harvard Way
Boston, MA 02163
www.hbsp.com
DMI Case Studies
This case study came from the Case Study
Research and Development Program at the
Design Management InstituteSM. The
Institute conducts research and develops
educational materials on the role of design
and design management in business suc-
cess. Case studies, the Design Management
Review, reprints from the Review, and other
educational materials are available from the
Design Management Institute.Visit
www.dmi.org to see a catalog of DMI pub-
lications.
Publisher
Design Management Institute
101 Tremont Street, Suite 300
Boston, MA 02108 USA
Phone: 617-338-6380
Fax: 617-338-6570
Email: dmistaff@dmi.org
Website: www.dmi.org
Distributor
Harvard Business School Publishing is the
exclusive distributor of this publication.
To order copies or to request permission to
photocopy, please call 617-495-6117;
in the US call 800-545-7685; or visit
Harvard Business Online website:
www.hbsp.com
Authors
Dr. Karen J. Freeze, Senior Research Fellow,
Design Management Institute
Dr. Kyung-won Chung, Professor,
Department of Industrial Design, Korea
Advanced Institute of Science and
Technology (KAIST)
Acknowledgements
We would like to thank all the Samsung
people who shared their insights, chal-
lenges, and pride with us. Only those who
appear in the case, however, are listed in the
Appendix. Unless otherwise noted, all
quotes are from interviews carried out in
2006. Special recognition goes to two mem-
bers of the design planning group of the
design strategy team at the Corporate
Design Center: Seung-Eun Erin Chung,
manager, and Soo-Hyun Sean Cho, design-
er. They organized our visits, provided
insight into design management at
Samsung, and shepherded the case through
company review processes. Dr. Yu-Jin Kim,
Assistant Professor, Department of Media
Image Art and Technology, Kongju National
University, ably served as research assistant.
Dr. Thomas Lockwood, president of DMI,
provided valuable insights during the
research and development of the case.

Copyright 2008
The Design Management Institute
All rights reserved.
No part of this publication may be repro-
duced without written permission. The
Design Management Institute, DMI, and
the design mark are service marks of the
Design Management Institute.
DESIGN MANAGEMENT INSTITUTE
CASE STUDY
This Case Study was prepared by Dr. Karen J.
Freeze, senior research fellow at the Design
Management Institute, and Dr. Kyung-won
Chung, Professor, Department of Industrial
Design, Korea Advanced Institute of Science
and Technology (KAIST), solely as a basis for
class discussion. All exhibits are from compa-
ny documents unless otherwise noted. Cases
are not intended to serve as endorsements,
sources of primary data, or illustrations of
effective or ineffective management.
Design Strategy at
Samsung Electronics:
Becoming a Top-Tier
Company
T
hink about why I called this conference in
Milan, of all places. Samsungs products must
meet global premium standards. In order to do that,
we must strengthen competitiveness in soft areas,
such as design and brand, and leap over emotional
walls in addition to functional and technical ones.
Kun-Hee Lee,
Chairman of Samsung 1
(14 April 2005, Milan, Italy)
1. http://news.hankooki.com/lpage/economy/200803/h2008033103151421540.htm
Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company
On the fourteenth floor of the Corporate
Design Center in a red marble skyscraper in
Seoul, South Korea, Samsung Electronicss
top two design officers were sipping ginseng
tea and taking stock of their new strategic
direction in preparation for a meeting with
key design managers. It has been nine
months since Chairman Lees challenge and
our declaration of the Second Design
Revolution, said Geesung Choi, chief design
officer, to his colleague and guest, senior vice
president and leader of the design strategy
team at the Corporate Design Center, Kook-
Hyun Chung. Weve attempted to balance
our technology with more emotional con-
tent, and weve launched a new campaign to
resonate with the emotional experience of
our products. But is it working? How far do
you think weve come? Have we made it over
those emotional walls?
Ever since Samsungs executives met in
Milan, designers and their leadership
throughout the company had been focusing
their energy and imagination on how to
implement the chairmans strategic direc-
tion. It was the top priority for both Chung
and Choi, who was also president of
Samsung Electronicss Digital Media
Business. At the same time, the challenge had
permeated the design organization at every
level. New buzzwords and phrases articulat-
ed the goals of designers in Seoul and engi-
neers in Suwon. Everyone knew that
Samsung intended to be a tier-one compa-
ny and would dedicate all necessary
resources to achieve that status.
If this years design awards mean any-
thing, weve become a leading design compa-
ny already, Chung offered. Samsung had
accumulated 62 awards in 2005 and had,
moreover, achieved a most coveted prize. It
had surpassed Sony and was now number 20
in Interbrands annual assessment of brand
value, while Sony was number 28.2
We have come a long way indeed, Choi
said, nodding, but we havent arrived yet.
We need a product that can represent
4 2008 Design Management Institute
Samsung and that consumers can sponta-
neously associate with us. An iconic product.
I think we need to figure out what it will take
to come up with something everyone in the
world must have. That would really mean we
were a premium global player.
This is an ongoing discussion, of course,
and it will be on the agenda of the upcoming
Global Design Advisory Board meeting,
Chung noted pensively. What is this elusive
thing anyway, an iconic product? Do we
need it to be a tier-one company? If so, how
do we achieve it? It wasnt the first time
Samsungs management had asked this ques-
tion, but everyone looked forward to the
product that would signal the answer.
The Context: The Korean Miracle
In 2005, South Korea was one of the most
technologically advanced countries in the
world. It ranked first in broadband access,
with more than 80 percent of households
wired for high-speed Internet service (next
came The Netherlands at 60 percent), when
only 45 percent of Americans enjoyed typi-
cally slower broadband technologies. Mobile
phone penetration was similarly high.
Analysts described the country as a sophisti-
cated laboratory for consumer electronics
testing, which suited companies like
Samsung. Most striking was the speed at
which the country had achieved this position.
Occupied by Japan from 1910 to 1945,
Korea emerged from World War II devastat-
ed and divided. Having scarcely begun to
recover, it was plunged into a conflict
between the communist North, backed by
China and the Soviet Union, and the demo-
cratic South, strongly supported by the
United States and 15 other members of the
United Nations. This war ended in 1953
with no permanent peace agreement and a
country divided just 50 km north of the
South Korean capital, Seoul. For another
decade, the countrys annual per capital
2. BusinessWeek, 1 August 2005.

income was less than $100; with that, South
Korea ranked among the most impoverished
nations of the world.
In 1961, the government established the
Economic Planning Board (EPB) to formu-
late consecutive five-year plans for economic
development.3 In addition to investing in
essential infrastructures, the Ministry of
Commerce, Industry, and Energy supported
specific industries by means of direct finan-
cial subsidies and trade advantages. During
the next 20 years, many companies had their
start, including Samsung Electronics (f.
1969) and Hyundai Motor Cars (f. 1967).
Their stories were not unlike those of the
Japanese companies of a generation earlier.
With government support and hard work,
companies such as Honda (f. 1945) and Sony
(f. 1946) had transformed themselves by the
mid-1970s from followers into world-class
brands.
In the 1960s and 1970s, many Korean
companies, including Samsung, took Japan
as their model, ramping up with imitative
and low-quality products, until they could
establish themselves as companies with sin-
gular identities. As their economy began to
take off in the late 1980s, change came rapid-
ly. Korean presence in universities in Europe
Exhibit 1. The Korean miracle. Source of data: The Bank of Korea.
Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company
and the US increased dramatically and part-
nerships with Western organizations became
more common. New influences and new self-
confidence resulted in strong growth and
higher-quality products.
Then, in 1997, disaster struck. In what
became known worldwide as the Asian cri-
sis and in Korea as the International
Monetary Fund, or IMF, crisis, the South
Korean economy collapsed and the govern-
ment had to ask for a bail-out loan from the
IMF. Many companies went bankrupt and
others, including Samsung, took drastic
steps to survive. The government embarked
on several initiatives to build the countrys
technological infrastructure and to support
quality and exports, including company
restructuring and the opening of South
Korea to foreign investment. By the early
twenty-first century, leading Korean compa-
nies, such as Samsung Electronics, LG, and
Hyundai Motors, had achieved solid reputa-
tions worldwide and were expected to enter
the ranks of premium global companies
within a few years. (Exhibit 1 illustrates the
Korean miracle.)
3. The EPB became the Ministry of Finance and
Economy in 1998.
2008 Design Management Institute 5
Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company

The Company: Samsung Electronics worked in various capacities in Samsung

since 1966, the younger Lee soon began to
Background redirect the company strategically. In 1990,
When Samsung Electronics hired two an industrial design department was estab-
designers in 1971 to develop models based lished under Kook-Hyun Chung, who had
on advanced products, including Japanese joined the company in 1977 as an industrial
TVs, no one could have imagined the com- designer. This and other measures became
panys future. With the turn of the twenty- known as the new management. The new
first century, the company would rapidly management philosophy was most notably
become a powerful, design-driven leader in stated in the younger chairman Lees
the global electronics industry. Frankfurt Declaration of 1993, when he told
senior Samsung managers assembled in the
Origins
German city, Change everything but your
Samsung Electronics Company (SEC) had its
family. This revolution aimed at quality
beginnings in Samsung-Sanyo and Samsung-
first, without compromises. From the begin-
NEC, established in 1969 and 1970 as units
ning, Lee emphasized the strategic impor-
of Samsung, an already powerful conglomer-
tance of design, along with R&D and
ate in the Korean economy that had origi-
technological development. As part of the
nated as a trading company founded in 1938
new managements emphasis on design, the
by Byung-Chull Lee. These alliances enabled
decision was quickly made to establish the
Samsung to acquire cathode ray tube and
Product Planning and Design Center, with
other advanced television technologies. In
Kook-Hyun Chung at its head; it soon
1972, Samsung Electronics started to make
involved 160 employees. Several design edu-
black-and-white television sets for domestic
cation initiatives (see below) were launched
and original equipment manufacturer
during this period.
(OEM) markets in its factory in Suwon, 40
In 1994, the Product Planning and Design
km south of Seoul. In 1977, Samsung
Center moved from the Suwon factory to
acquired Korea Semiconductor and began
Seoul, taking over a building near the Seoul
making memory chips. By the end of the
train station. The move attracted outstand-
decade, Samsung was a successful manufac-
ing designers and enhanced user-trend
turer of television sets and home appliances
research; the location facilitated travel
that sold under various labels.
between the factory and headquarters. It
In 1984, Samsungs electronics businesses
caused, however, a minor rebellion among
consolidated into Samsung Electronics Co.,
the division managers, who said they would
Ltd. Samsung acquired Korea Telecommuni-
hire their own designers if design moved to
cations in 1980 and merged it with Korea
Seoul. Nevertheless, the design center
Semiconductor, forming Samsung Semicon-
remained in the capital city.
ductor and Telecommunications, which then
In 1995, Samsung began to mass-produce
merged with SEC in 1988. In the mid-1980s,
LCD displays for both computers and TV
the small design function (about 10 people)
sets, having developed expertise in this field
was divided into three product areas
since 1991. Vertical integration of electronics
domestic appliances, telecommunications,
hardware, from chips to monitors, was
and computersserving an engineering-
becoming a critical advantage. The company
driven culture in Suwon.
also increased production of communica-
The New Management Philosophy tions devices, but not without problems.
When Byung-Chull Lee passed away in Embarrassed by defective cordless phones
November 1987, his son, Kun-Hee Lee, coming from the Gumi factory in southeast-
became Samsungs chairman. Having ern Korea, Lee, Samsungs chairman, deter-

6 2008 Design Management Institute

 Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company

mined to underline the seriousness of the
new management philosophy, ordered
phones and other products worth 15 billion
won4 burned as employees watched. News of
this incident traveled around the world,
demonstrating Samsungs commitment to
uncompromising quality.
The First Design Revolution
In 1996, Lee announced the Year of the
Design Revolution, declaring that design
would be Samsungs strategic edge and pri-
ority for investment.
The First Design Revolution
An enterprises most vital assets lie in its
design and other creative capabilities. I
believe that the ultimate winners in the
twenty-first century will be determined
by these skills. I have designated 1996 as
the Year of the Design Revolution for all
Samsung products. Let us focus our
strength in developing unique designs
that reflect the Samsung philosophy and
soul.
Chairman Kun-Hee Lee,
New Years Address, 1996
sumer electronics business and was heading
Samsungs operation in Japan when he was
called back to Seoul.5 In 2000, he was named
vice chairman.
The IMF Crisis and Recovery
This new quality and design trajectory was
temporarily thwarted by the IMF crisis of
1997, which brought Samsung to the brink
of bankruptcy. Samsung used the occasion to
sell off some 100 businesses and to downsize
the companys workforce by 50,000 people.
Samsung Electronics alone lost about 27,000
employees.6 Analysts praised the move,
which signaled a cultural shiftno longer
would lifetime employment be a given at this
Korean conglomerate.
As part of SECs recovery, the business
units were decentralized under the global
business management (GBM) system.
Within a few years, the company was sus-
taining a sharp upward course on all fronts.
(Exhibits 2a and 2b show financial trends
since 2000.) It greatly accelerated R&D
investments, building a state-of-the-art
research and development laboratory in

Now design received accelerated injec- 2000 2001 2002 2003 2004 2005
tions of support into personnel and facilities. Consolidated Sales 34.6 35 48.7 54.1 78.5 79.5
Samsung hired university advisors and for-
Nonconsolidated Sales 27.2 24.4 33.3 35.4 55.2 56.7
eign consultants to stimulate thinking about
the role of design and to develop partner- Domestic 8.6 7.9 9.3 7.8 9.6 10.2
ships in design activities. The company Exports 18.6 16.5 24 28.6 45.6 46.5
recruited designers worldwide and strength- Net Income 4.8 2.2 5.9 5 10.3 7.5
ened training programs for them. It organ-
R&D Expenditure 1.59 1.81 2.42 2.95 4.59 5.34
ized a two-day course for some 200 people in
senior management to introduce them to $ billion
design and design management principles; Exhibit 2a. Samsung Electronics, financial highlights, 20002005. Source: Samsung annual reports.
the course included a field trip to top design
companies in Japan. The message to man-
4. Approximately $15 million in 1995. See Michal
agers: Adopt a designers mind and broad- Lev-ram, Samsungs Identity Crisis, Monthly
en your concept of product development. Business 2.0, 6 August 2007.
In December 1996, Samsung appointed 5. Information and quotes from Jong-Yong Yun are
in Peter Lewis, The Perpetual Crisis Machine,
Jong-Yong Yun president and CEO of Fortune 152:4 (5 September 2005), pp. 35-41.
Samsung Electronics. Yun had joined 6. See Ha-sang Hong, An Equation of Samsungs
Samsung in 1966 after earning his electronic Success, NikkeiBiztech, No. 3, October 2004, pp. 80-
engineering degree from Seoul National 127 (in Japanese), and Sunghong Kim and Inho Wu,
10 Years of the Lee Kun-Hee Reformation, Gimm- Exhibit 2b. Percentage of sales by region, 2005.
University. He rose to the top of the con- Young Publishers, Inc., 2003, p. 59. Source: Samsung annual reports.

2008 Design Management Institute 7

Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company

Giheung. Once again, the business units Design Moves to the Top
clamored unsuccessfully for their own design At the end of 1999, the designers asked for a
departments back in Suwon, but design management audit that would evaluate their
remained firmly in Seoul, having moved contributions to the companys strategy. By
from marketing to GBM. As chair of the then, they had something to show and their
newly established Corporate Design leader, Kook-Hyun Chung, complied in order
Committee, Jong-Yong Yun was instrumen- to cope with the ongoing demands for
tal in increasing the size and influence of the decentralizing the design function. At this
design department in Seoul and worldwide. point, the company employed about 175
In 1998, Tom Hardy, an American, was designers. The audit not only legitimized
invited to help articulate Samsungs design their new role and mission but also con-
values for internal education and common tributed to a symbolically new environment.
goals. Hardy, formerly IBMs chief designer, In 2001, the designers moved downtown to a
had served as an advisor to Samsung since corporate design center, a five-minute walk
1996 and worked with the company until from Samsungs HQ. Chung, now a senior
2003. The most enduring achievement of vice president, drove design innovation as the
this goals group was its visualization, emerg- head of the design strategy team. He reported
ing from traditional Korean to the newly appointed chief design officer,
Harmony
culture as represented in who was succeeded in 2004 by Geesung Choi,
Taegeuk, the dual principle of president of the Digital Media Business. Choi
yin and yang, of the compa- reported directly to vice chairman and CEO
Reason Feeling nys tone and manner and Yun. With Samsung for more than two
Rational Emotional design principles. The overar- decades, Choi was well-situated to facilitate
Intellectual Adaptable ching theme was harmony, communication between Suwon and Seoul
Technological Humanistic expressed by the phrase bal- two locations an hour apart by car, but much
ance of reason and feeling. (See further apart by culture.
illustrations in Exhibits 3a In the early 2000s, Samsungs design
Exhibit 3a. Design tone and manner at Samsung, 1996. and 3b.) awards began accumulating rapidly. In
November 2004, topping off a good year,
Lifestyling Comprehend Lifestyle Needs: Kun-Hee Lee, chairman of Samsung, won
Problems, Trends, Behavior,Values, Unmet needs the Design Leadership Award of the Hong
Reason Innovative Stay One Step Ahead: Kong Design Centre for his strong commit-
Differentiation, Fresh, Inspiring, Clever, Unique ideas ment to innovation and design in business.
His success in Korea and worldwide demon-
Coherent Balance Consistency and Variety:
Identifiable, Unified, Market-sensitive, Integral strates how strong corporate leadership and
design can be integrated to make a huge dif-
ference to a growing international enterprise
in a fiercely competitive business world.7
Harmonious Harmonize with Environment:
Systems, Safety, Green, Appropriateness, Accord The Second Design Revolution
In April 2005, at the opening of Samsungs
Feeling Intuitive Convey Agreeable Use and Meaning:
sixth global design center in Milan,
Instinctive, Direct, Friendly, Simple
Chairman Lee gathered his chief executives
Interactive Design for the Experience:
Exciting, Fun, Sensible, Cool, Satisfying
7. For the full text of the award and Kun-Hee Lees speech,
Exhibit 3b. Design principles at Samsung, 1996. see http://www.hkdesigncentre.org/awards/dla2004.asp.

Source: Tom Hardy, with Kook Hyun Chung and Shin T. So, Strategic Realization: Building Fundamental Design Values,
Design Management Journal 11:1 (Winter 2000), p. 67.

8 2008 Design Management Institute

 Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company

Concurrent with these design goals, by

As we approach the end of an era charac- the end of the year Samsung had revealed
terized by competitive structure, price, and
technical prowess in several domains, intro-
quality considerations, design capability is
emerging as a key determinant of future ducing world firsts in the memory, mobile
commercial success Design is not simply phone, and TV businesses.
a way to express identity, but rather must
Business, Markets, Competitors
be seen as a communication channel
between a business and its customers that In 2005, Samsung Electronics, unlike its key
is capable of drawing all of society closer competitors, remained a vertically integrated
together Design must enable a business hardware company that eschewed participa-
to take a further step toward the expression tion in software businesses. Defying the con-
of its core philosophy and culture Design ventional wisdom that software is where the
is not simply the physical representation of
money is, Samsung pointed to Sony and
the face of the company, but rather per-
sonifies the spirit of those employees work- other companies for whom media had not
ing within it. proven as profitable as expected. To maintain
manufacturing as a critical competency, it
Chairman Lees thank-you address
kept production in-house, in factories locat-
to the Hong Kong Design Center
(November 2004) ed worldwide.
In 2005, the company reorganized into
and addressed them with directives that five businesses: Digital Media, Telecommuni-
inspired the Second Design Revolution not cation Networks, Digital Appliances, Semi-
only in name, but in action.8 Samsung would conductors, and LCDs. Many of its products
now (1) create remarkable designs and estab- enjoyed the leading market share worldwide.
lish a user interface (UI) identity; (2) recruit (Exhibit 4 shows market shares of the three
and secure the worlds best designers; (3) top competitors in selected categories.)
nurture a creative corporate environment;
8. The following information about this Milan meeting
and (4) reinforce its molding technology is from Dong-Hee Oh, A Challenge to World-Class
infrastructure. The presidents of all three Premium Products: Crossing the Wall of Emotion,
Digital Times, April 15, 2005, and Ha-sang Hong,
consumer product businesses responded
Lee Kun-Hee, Seeking for World-Class Talents, Bookfolio,
immediately with full support and specific 2006, p. 178. See also the article by Lee Hyun-Sang in
goals. As president of the Digital Media the Joong Ang Ilbo, April 15, 2005.
Business, Choi promised to do our best to
establish an original identity for Samsung
and to recruit world-class designers to
achieve this. Ki-Tae Lee, president of the
Telecommunication Network Business,
intended to upgrade Samsungs mobile
phones into world-class premium products
by focusing on user interface issues. We will
improve the user environment by . . . recruit-
ing more than 200 new experts in user inter-
face. President Hyun-Bong Lee of the
Digital Appliances Business was determined
to focus on cutting-edge molding technology
by doubling the size of its design molding
group, with the goal of concentrating our
capabilities to establish a premium brand.
Exhibit 4. Samsung market shares 2004, selected categories, top three competitors. Source: Company document.

2008 Design Management Institute 9

Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company

Digital Media Business More than 16 million of its BlueBlack slider

Home of color TVs, audio and video equip- phones, introduced in 2004, had been sold by
ment, and computers and computer periph- the end of 2005 (see the slider in Exhibit 7).
erals, Digital Media was the first business to Having formidable in-house strengths,
be associated worldwide with the Samsung including displays and memory chips,
brand. Starting as a mass-producer of OEM Samsung accelerated its research and design
products, by 2000 it had become a recog- efforts in this category, where it reckoned the
nized supplier of high-quality, if not exciting, product lifecycle was less than six months.
devices. Because Samsung was the leading Aware of the implications of this for the
innovator in LCD panels, its media and environment, Samsung led in the establish-
telecommunications products enjoyed cut- ment of recycling centers for cell phones in
ting-edge technology in this field. By 2004, it Korea; the company also developed an envi-
was winning awards for TV set designs with ronmentally friendly paint for cell phones,
different types of screens and associated for which it won an iF Material Award in
technologies, such as LCD, plasma, DLP pro- 2004. Digital convergence was the watch-
jection, and CRT. word, and Samsung aspired to be the first to
In 2004, Digital Media led in global mar- combine technologies and functions for
ket share in both TVs and DVD/VCRs, ever-multiplying consumer applications.
where its very close competi-
Digital Appliances Business
tors were Philips and Sony.
In this sector, slower moving than cell
With a range that included
phones because of the longer life of these
flexible, portable two- and
appliances, Samsungs main products were
three-hinged models, it led in
refrigerators, air conditioners, washing
computer monitors; it was sec-
machines, microwave ovens, and vacuum
ond to Hewlett Packard in
cleaners. These were key players in Korea,
mono laser printers. (Exhibit
5 shows an ergonomic hinged
monitor.) Digital Media also
planned an ambitious market
strategy to differentiate its
MP3 player from the iPod,
which had a secure hold on
the MP3 player market.
(Exhibit 6 shows a Samsung
Exhibit 5. Three-hinged, flat-folding monitor. MP3 player in January 2006.)

Telecommunication Network
Business
The TNB could be said to be
Samsungs ambassador to the
wired generation. In 2003,
Samsung pioneered the anten-
na-less clamshell cell phone
that was widely distributed
through wireless service
providers. More recently, it
offered such innovations as a
phone with a screen that
Exhibit 6. Samsungs YP-Z5 MP3 player. swiveled to a landscape view. Exhibit 7. Samsungs Blue/Black slider late 2005.

10 2008 Design Management Institute


where Samsungs major local competitor
was LG. Worldwide, Whirlpool (US) was its
principal competitor, with Haier (China)
creeping up in the sales rankings. Samsung
led the market in side-by-side refrigerators
in 32 countries.
Yet these large domestic appliances were a
tricky business for a company that wished,
since the turn of the twenty-first century, to
compete globally rather than merely to sup-
ply its local market. Home appliance prod-
ucts are rooted in the lifestyles of each
country, explained Jeongmin Kim, a manag-
er in the system appliances design group, so
we need to understand them if we are to go
into global markets. Other criteria were
salient, as wellfor instance, these appli-
ances were big and heavy and therefore the
company had to consider shipping costs to
distant markets, or decentralized manufac-
turing. Or, in Samsungs case, to aim for the
premium market segment. Technically
advanced and designed with consumer pref-
erences in mind, including environmentally
safe materials and energy efficiency,
Samsungs high-end SBS refrigerators were
Exhibit 8. Samsungs side-by-side refrigerator, January 2006.
Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company
available in Korea, the US, Europe, Latin
America, the Middle East, and China. All but
US customers could choose striking colors,
such as cranberry, cobalt blue, black, and
bronze, which could be changed through a
clever, inexpensive replaceable panel system
(see Exhibit 8).
Semiconductor Business
Samsung made its first memory chip in
1977, and by 1992, less than two decades
later, it was the worlds leading manufacturer.
In 2004, it led in market share by a large
margin in several categories, including
DRAM, SRAM, Flash, and MCP or DDI
products, and in 2005 it continued to intro-
duce world firsts. As the leading supplier
worldwide, the company put a little bit of
Samsung into many competitors products.
Its ownership of this sector enhanced its
time-to-market in such volatile fields as
mobile phones.
LCD Business
The thin film transistor liquid crystal display
business (TFT-LCD), launched in 1995, was
emblematic of Samsungs success in aggres-
sively focusing on digital, rather than analog,
technology. Company spokespersons suggest-
ed that as a relative newcomer (compared
with Sony and other Japanese companies),
Samsung was not so invested in the older
technology and could more easily make the
switch to digital products. Samsungs LCD
technology went directly into the companys
own computer monitors, notebook PCs, LCD
TVs, and mobile phones, as well as to outside
customers.
By 2004, Samsungs lead in LCD displays
was such that Sony bid to get in on the
ground floor of the next factory. The result
was a 50-50 joint venture between Samsung
and Sony. Called the S-LCD Corporation, it
owned and operated Line 7-1, the worlds first
seventh-generation LCD plant producing pan-
els exclusively for televisions. This enterprise
pushed Samsungs quality still further and
ensured a customer for half its output from
the new factory, which opened in July 2004.
2008 Design Management Institute 11
Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company
A Structure for Global Competitiveness
As a global company, Samsung Electronics
did not hold its business disciplines within
Korea, but decentralized them, locating them
throughout the world.
Research & Development
As early as 1987, Samsung had determined
that basic research was critical to its compet-
itive capability. R&D investment grew from
$1.81 billion in 2001 to $5.34 billion in
20059.4 percent of sales. With some
32,000 researchers (25 percent of SECs
workforce) in 16 research centers (6 in
Korea), Samsung had one of the largest R&D
organizations in the world. In 2005, alone, it
registered 1,641 US patents, ranking fifth at
the US Patent Office.
The heart of Samsungs R&D was the
Samsung Advanced Institute of Technology,
SAIT, opened in Giheung, near Suwon, in
1987. With a mission to make the world
better, it engaged in activities in support of
both current core businesses and future pos-
sibilities. It sought to bolster the synergy of
the various Samsung units and sponsored
specialized initiatives, such as an eco-group
and an energy group.
Engineering
For a quarter century, Samsung was an engi-
neering-driven organization whose engineers
were seldom allowed to demonstrate their
creative abilities. Their task was to manufac-
ture commodity TVs and home appliances,
and they were rarely challenged to inno-
vateexcept as a way of lowering costs. Until
the early 1990s, engineers made all the deci-
sions, and designers reported to them. For
example, noted YoungJun Kim, vice president
of the Design Research Lab and head of the
visual display design group, Global compa-
nies in the 1980s were already design-led and
were making camcorders small; at Samsung,
the engineers made them big!
The Frankfurt Declaration of 1993
nudged Samsungs culture in a new direc-
12 2008 Design Management Institute
tion. Beginning in 1996 with the First Design
Revolution, engineers became acquainted
with industrial design as something other
than superficial form and a nice color.
Engineerings continued resistance to
designs wishes had reasonable origins, how-
ever, as senior engineer Hyeonjoo Lee of
Digital Media explained. Return on invest-
ment (ROI) comes from small inputs that
cause large outputs. To increase ROI, rules
and regulations ask us to standardize and use
the same devices. Any innovation that push-
es a product in a new direction goes against
these rules. Yet, as Hyeonjoo Lee pointed
out, It doesnt matter how difficult the
design is, the circuit engineers and mechani-
cal engineers can solve the problem. The
question is cost.
Wooyoung Kan, a principal engineer in
digital media, suggested that if engineers con-
tinually learned new skills, had self-confi-
dence, and exercised creativity, they would
earn the respect of all other team members,
including designers. He valued designers such
as Yunje Kang, his partner in an innovative
TV project, who was willing to change and
adapt. Designers like him feed engineers
and help them do their jobs well, he said.
In 2005, to celebrate the continually
improving relationship between design and
engineering, the company instituted the
MacGyver Awards to honor engineers who
developed creative technological solutions to
the challenges inherent in innovative designs.
Wooyoung Kan received the first honor.
Manufacturing
Samsung operated some 27 manufacturing
plants in 13 countries across the globe. In
Korea, the company maintained state-of-the-
art facilities in such plants as the new sev-
enth-generation LCD plant, built in 2004 in
cooperation with Sony. Samsungs manufac-
turing was characterized by flexibility,
according to Choi: We [digital media] can
change our products any time we want. We
have a human-oriented production system
 Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company

with cell lines, not conveyor belts. We get platform with the goal of positioning itself as
more productivity that way, and we can the leader in the digital convergence era.
adjust inventories faster. We dont know Under the new global brand campaign
which products consumers will buy, so we Samsung DigitAll, Everyones Invited
have to respond quickly. Samsung redefined itself as an inclusive
provider of digital products. In 2000,
Marketing
Samsung consolidated its advertising under
As an engineering-driven company for more
one agency, which helped the company to
than two decades, Samsung had not given
execute holistic marketing campaigns with a
priority to either marketing or design. They
consistent look and feel across traditional
were add-onsthe companys engineers had
media, outdoor advertisements, POP (point-
assumed that if their products were good
of-purchase), and exhibitions. The company
enough, they would sell. In fact, most mar-
also promoted name recognition beyond the
keters had been engineers. Although
sports arenas; in 2005, people could not walk
Samsung had successfully positioned itself as
anywhere in major Central and Eastern
a leading brand within South Korea, its
European cities, such as Prague and Moscow,
brand power remained weak internationally
without seeing blue and white Samsung ban-
until the mid-1990s, and it was seen as an
ners fluttering from light poles and Samsung
OEM or low-price brand that provided
ads covering buses and trams.
mediocre products.
By 2004, Samsungs marketing depart-
Lacking a marketing strategy to change
ment had greatly expanded and was no
global brand perceptions, Samsung could
longer dominated by engineers but by people
not overcome this perception. That began to
with marketing and other business experi-
change quickly with the First Design
ence. Late in the year, the company hired
Revolution of 1996, as Chairman Lee recog-
Gregory Lee as senior vice president and
nized the importance of developing a global
head of marketing. Lee was a Korean
brand strategy and empowered Samsungs
American who had worked at major US
PR team to do so. In 1997, after a year of
companies, including Kellogg, Johnson &
intense discussion and research, the team
Johnson, and Procter & Gamble. In 2005, the
announced Samsungs global brand strategy.
company launched a new marketing and
First, it would focus on promoting a single
advertising campaign, Imagine. As Gregory
Samsung brand for Samsung Electronics,
Lee explained, With this new campaign, our
with emphasis on mobile phones and digital
aim is to expand on this [name] recognition
TVs; second, marketing communications
to build a warmer, more emotional connec-
would be unified globally; third, the global
tion with our customers. The only limit is
brand campaign would focus initially on
their imagination.9
already developed markets; and finally,
Samsung would utilize sports marketing as a Design
key brand awareness tool. By 2005, Samsung was clearly a design-driv-
In the next few years, these principles en company with worldwide ambitions and a
were implemented globally. For example, the basketful of awards that proved its viability at
company established a sports marketing the top of the game. A look at the design
team in 1998 that launched Samsungs organization more closely illuminates its
involvement as a major sponsor of the challenges.
Olympic Games, resulting in high exposure
for Samsung mobile phones.
In late 1999, Samsung redefined its brand 9. Samsung press release, 9 June 2005.

2008 Design Management Institute 13

Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company
Design at Samsung Electronics
Since its founding in 2001, Samsungs
Corporate Design Center had been the incu-
bator for numerous winners in the competi-
tive markets of the companys three
consumer businesses. Located in downtown
Seoul, in a historic red marble skyscraper
named after the citys major daily newspaper,
the Joong Ang Ilbo, the CDC employed 600
people. As formal head of the CDC, chief
design officer Choi reported directly to vice
chairman and CEO of Samsung Electronics,
Jong-Yong Yun, who chaired the Corporate
Design Committee. Kook-Hyun Chung, sen-
ior vice president, managed the design strat-
egy team, the operating institution of the
CDC, which also supervised the Global
Design Centers and three working groups:
design planning, design innovation, and
user-interface strategy. (See the organization-
al chart in Exhibit 9.) The CDC also housed
the Design Research Lab, headed by vice
president Young Jun Kim. It was responsible
for advanced design and user-sensing, or
strategic in-depth research into consumer
behavior for future forecasting and other
critical projects.
Given the CDCs achievements over the
past four years, it seemed to new recruits
and others that design must have a long tra-
dition at Samsung. The companys 62 design
prizes in 2005 included 3 from the US
Exhibit 9. Organization chart of the Corporate Design Center, January 2006. Source: Company document.
14 2008 Design Management Institute
(IDEA), 35 from Germany (iF and Red
Dot), 20 from Japan (G-Mark), and 4 from
China (Design for Asia Award, iF China). It
ranked first (with 19 prizes) among IDEA
(Industrial Design Excellence Award) win-
ners from 2001 to 2005 (Apple was second
with 17). Yet these achievements were essen-
tially the result of investments made since
1993 and major changes in the companys
priorities only since 2001. Senior vice presi-
dent Kook-Hyun Chung noted wryly,
Young designers think design has been
important at Samsung for a long time. They
dont know what we went through!
Managing a Centralized Institution
By 2005, opposition to a central design
organization had receded, mostly due to
increased collaboration and better under-
standing among engineers and designers.
Yunje Kang, a principal designer in the visual
display design group, emphasized that the
balance between design and engineering
cannot be well maintained in Suwon. We
have to be close to the consumersto their
lifestyles. So we have to be in Seoul. Kook-
Hyun Chung filled in the details: The pri-
mary advantage of having design together is
that the designers can have common experi-
ences. As they share their experiences here,
their skills improve dramatically. Sanguk
Jung, vice president and head of the design
group in the Digital Appliance Business,

agreed: When the design team was at the
factory site, we tried to understand the man-
ufacturing process. But this also limited our
creativity. After we came to Seoul, we could
develop this creativityhere we can think
more things. This facilitated recruitment, as
wellmore talented designers wanted to
work in Seoul than in Suwon. The task force
system, which brought cross-disciplinary
teams together in the value innovation pro-
gram (VIP) for developing new products,
had improved the ability of all players to
understand each other.
Geesung Choi, chief design officer and
president of the Digital Media Business,
noted that we try to motivate designers to
come to Suwon often by providing a good
working environment, with materials, colors,
tools, new engineering ideas; wonderful
products cant come out without engineering
support. Up in Seoul, as CDO, Choi saw his
responsibility as providing a favorable envi-
ronment for developing a design capability
to meet corporate objectives. As a non-
designer, he wondered about this function:
Sometimes Im touching areas beyond my
capabilitiesI even have to give comments
on kitchen products!
Building Foundations: Design Education
In the early 1990s, Samsung launched the
first of several design education initiatives
that provided highly trained designers not
only for the company, but for all of South
Korea. A Design Membership program
(1993) took some 50 top university students
each year from all over Korea and put them
through one- to three-year design training
programs. At first, only about half the gradu-
ates entered Samsung Electronics; by 2005,
80 percent joined the company.
In 1995, Samsung founded the Samsung
Art and Design Institute (SADI) to intro-
duce Western-style undergraduate design
education, focusing on fashion and commu-
nication design. We adapted a curriculum
from Parsons [the New School of Design, in
New York City] to come up with an appro-
Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company
priate program for Korea, explained Young-
Chun (Rich) Park, professor of the
Foundation Department since 1995. Park
had an engineering degree from Korea and
an industrial design degree from Philadel-
phia College of Art; he was teaching at
Parsons when he was recruited to SADI.
Since most of the students were just out of
high school, Park explained, We empha-
sized a foundation program, which other
design programs did not have; one founda-
tional area was visual intellectuality.
After two years in Seoul, SADI students
spent two years at partner colleges abroad,
such as Parsons, Carnegie Mellon, or other
American and British schools. SADI gradu-
ates joined various Samsung companies or
other Korean enterprises. In 2005, the insti-
tute added industrial (product) design to the
curriculum; chaired by Young-Chun Park, it
accepted mostly masters-level students. At
the same time, SADI also changed the 2 + 2
program to a three-year program in Seoul,
which offered a certificate qualifying gradu-
ates for entry-level jobs. Graduates could still
study abroad, as well. According to Sung-
Han Kim, a designer with 10 years experi-
ence at SEC and an MS from the Illinois
Institute of Technology (through Samsungs
Design Power programsee below), We
plan to keep the exchange program with the
foreign schools via summer schools, visiting
faculty, and practical experience. Their stu-
dents can come here too. In 2005, some 250
students were enrolled in the three-year pro-
gramapproximately 40 in each class in
fashion and communications, plus 20 in
first-year product design.
Also in 1996, Samsung established the
Innovative Design Lab of Samsung (IDS), as a
think-tank of Samsung design educating out-
standing in-house designers at the global
level. When Samsung initiated the program,
Art Center College of Design (Pasadena,
California) collaborated by helping to develop
the curriculum and dispatching its own pro-
fessors to Korea. One of them, Gordon Bruce,
2008 Design Management Institute 15
Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company
served as a professor of IDS from August
1995 to July 1998.
Finally, to provide high-level continuing
education for in-house designers, Samsung
inaugurated the Design Power program in
2003. It provided the companys best and
most promising designers with opportunities
to study and work abroad. Each year, approx-
imately 20 designers with eight to ten years of
service enjoyed six-month visits, and four
who had more than ten years experience at
Samsung could be away for up to two years.
Getting Close to the Consumer:
Design Research
The difference between marketing research
and design research, explained Young Jun
Kim, vice president of the Design Research
Lab, is that marketing research is focused on
the current situationmarket share, and so
forth. Design research is focused on user
behavior and user experience. Samsung
designers visited people in their homes to see
how they actually used products. With this
kind of research, Kim continued, we can
persuade the marketing team what will
work, for example, in the North American
market. To understand users, the Design
Research Lab also carries out trend research
on home interiors, furniture, fashion, and so
ontrying to apply those trends to product
development. As Soo-Hyun Sean Cho, a
researcher in the design strategy team at the
Corporate Design Center, explained: By
bringing to the CDC advanced product and
user research capabilities, looking as much as
5 to 10 years ahead of todays market
research, we can reverse the typical product
development process, which begins with
product planning and ends with design.
Instead, designers will often initiate concepts
that are adopted by marketing and then real-
ized by engineering.
This approach resulted in designs that
translated into profits in the marketand
that won the designers respect and coopera-
16 2008 Design Management Institute
tion from the engineers and marketers.
Now, as the designers concepts and ideas
are clearly connected to business success,
even marketing listens to the designers
ideas, Young Jun Kim added. This was not
always easy. He went on: The most difficult
task of the design manager is to find the next
breakthrough idea. It is not possible except
by inspiration. But the key to that is discov-
ering and using clues that Samsung can work
with. It is extremely difficult to find the key
criteria, the core evidence for the future. The
three factors are market trends, competitors,
and technology, so we undertake research on
market trends and competitors twice a year,
and analyze the market four times a year. We
also analyze technological development in
the spring and fall. Above all, we must learn
to understand design as business. Design and
designers are closest to users and the mar-
kets, so they should put their knowledge
together with business objectives.
At the strategic level, Kook-Hyun Chung
emphasized the importance of design-based
research by considering what it would mean
if it were unnecessary: If we could somehow
capture all user information on a chip, to
which everyone had access, then designers
would have nothing left to do but be stylists.
But that, obviously, is unlikely to happen.
User-Centered Design Lab
Part of Samsungs user research took place
in the User-Centered Design (UCD)
Laboratory, a short walk from the CDC. Led
by SungJae Chung, PhD, manager of the
user interface strategy group, it simulated
familiar living environments in which users
could try out Samsung products. Behind a
one-way mirror, researchers could observe
and video-record how the products were
actually used. This led to user-friendly forms
and features; in 2003, Samsung won a com-
mendation from the International
Ergonomics Association for innovations in
the workplace.
 Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company

Cultivating an International Presence times per year, and individual members pro-
Samsung Design recognized early the impor- vide reports, lectures, and consulting services
tance of international input into design deci- as needed by the Corporate Design Center.
sions. In the 1980s, designer and future SVP
Bringing it All Together: Challenges of the
Chung studied at Chiba University in Japan,
CDC in 2006
receiving his MS in design in 1988. He
Over the past year and a half since his
became head of the incipient design depart-
appointment as CDO, Geesung Choi has
ment in 1990 and proposed a design center in
evaluated the modus operandi of the CDC.
Tokyo, which took shape in 1992. The follow-
He found that designers design each product
ing year, the company opened a similar office
separately. There is no corporate identity even
in Germany, which closed because of the IMF
within a category. I have tried to scrutinize
crisis in 1997. In 2000, Samsung set up
that and to group the designs. Some design-
Global Design Centers in San Francisco and
ers are very creative, and others are talented
London to drive global design strategy. The
materializers who can implement, based on a
following year, the company established a lab
given idea. There arent many really creative
in Los Angeles that specialized in mobile
designers; they should be saved from the
design. It capped these with new GDCs in a
daily, minor tasks and used for concepts,
major business center in their potentially
which others can follow. They shouldnt
biggest market (Shanghai, China, 2004) and
design every dayno quantum leaps can be
in a European city symbolic of design and
made if they do. Its a waste of design tal-
cultural heritage (Milan, Italy, 2005).
entthey are exhausted and cant make
These six design centers were Samsungs
breakthroughs.
windows on global markets. As Choi
On the other hand, Choi was concerned
explained, We use design centers overseas to
that these creative designers tend to do their
learn about lifestyle trends, then when we are
own thing, so every product is different. But
deciding on a product, we collect those
we want people to start saying, This is
inputs. We also let the overseas design labs
Samsung.
design their own concepts from their own
Turning to Samsungs design history, Choi
understanding of the tastes of their market.
explained how difficult it was for older
Indeed, each center brings a different cultur-
designers to free themselves from the legacy
al insight to Samsung Design, Choi noted:
of the pastthat is, from imitating competi-
The English are strong in engineering, the
tors. To get free from that is a difficult
Japanese in fine finishes, the Italians in
process. You have to understand trends, of
shapes, and the Americans in pragmatism.
coursebut not see the competitors solu-
As part of the small team that managed and
tions. If a design proves to be an imitation, it
coordinated these centers, Erin Chung, a
is immediately put to waste.
manager in the design planning group of the
Some designers believed the potential of
design strategy team, suggested that the only
Samsung design had not yet been reached.
drawback to these rich resources was the
Sanguk Jung, vice president and head of the
time-zone problem: Since Im working
digital appliances design group, observed
closely with the global design centers, the
that the interdivisional synergy is not so
time difference means my working hours
good because there is no time to work with
arent exactly regular!
other divisions products. If the advanced
In 2004, the CDC, with the approval of
digital technology and white goods [home
Yun, established a Global Design Advisory
appliances] were integrated, the synergy
Board, consisting of six members from five
would be enhanced.
countries. The council meets three to five

2008 Design Management Institute 17

Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company
SVP Chung described an initiative that
could help such cross-fertilization: We are
working on a design intelligence index,
which involves using information technology
to create a method of sharing information
among the design units. The system would
incorporate both core design values and spe-
cific solutions in a way that would be accessi-
ble to the whole design organization,
providing links to the design bank systems
supported at the business level. Also, cross-
fertilization would occur as the designers at
the CDC rotated, taking experience from one
division to another.
Design-Initiated Product Development
at Samsung Electronics
Since 2001, Samsung has been a design-driv-
en company, but in practice the classic con-
flicts between engineering and design and
between marketing and design took years to
work out. The company introduced a multi-
disciplinary task-force system and a dedicated
value innovation program (VIP) residential
facility that now bore fruit.
Digital Media Business: Televisions Sets
for Style-Conscious Consumers
By 2005, television technology was so mature
that analysts noted very little difference
between brands. Earlier, Sony had thrived
with its Trinitron color TV (1968), which for
Exhibit 10. The L7 TV.
18 2008 Design Management Institute
years had represented the high-end standard
in picture quality and fidelity. But as tech-
nologies competing with the cathode ray
tube (CRT) began to emerge at price points
appealing to consumers, the competitive
environment changed. As a manufacturer of
LCD displays, Samsung enjoyed a competi-
tive advantage in this new environment and
an opportunity to distinguish itself in a
hugely popular market.
After its design revolution of 1996,
Samsung began to improve the quality and
value of all its products rapidly, aiming for
distinctive designs that could rival such com-
petitors as the king of TVs, Sony.
Nonetheless, Yunje Kang, a senior manag-
er in the design group of the visual display
division, recalled a galvanizing moment in
2003: About three years ago, we took the
logos off Samsung and other TVs and then
tried to identify them. They were all identi-
cal, especially the flat panels. All silver. With
this test, we realized that the TV (in fact, the
A/V cluster) needed a brand identity that
would make a strong impression.
The exercise resulted in some bold,
award-winning designs on the road to find-
ing a Samsung identity in this sector. The
distinctive L7, a large-screen digital light
processing (DLP) projection TV, stood on its
engine, a slim, vertical pedestal, forming a
T that fit sleekly into a large office, confer-
ence room, or home entertainment room.
(See Exhibit 10.) Introduced in May 2004,
the startling L7 generated excitement about
new thinking in the TV world. Nonetheless,
despite major new developments in circuit,
optical, and mechanical design and engineer-
ing, it was still projection-based, and that
meant its lifespan was limited. As the chief
engineer on the project, Wooyoung Kan,
noted, The trend in the market is toward
PDP [plasma] and LCD [liquid crystal dis-
play], and the prices are decreasing vis--vis
projection TVs in the large-screen category.
And many people think that thin means a
better picture, even though the L7s picture is
as good as any.

The second design innovation toward a
distinctive Samsung identity in the TV mar-
ket was the shallow V-shape on the bottom
of the screen box. This design, inspired by
the soaring lines of the main building of the
Gyeongbokgung Palace in Seoul, emerged in
2002 (see Exhibit 11a). It was applied to the
Rome TV in 2003, as Kang and his A/V
design team sought to express the lightness
of the LCD flat-screen TV, and further devel-
oped in the Milan model, in connection with
the effort to hide the speakers so that only
the screen itself remainedpresenting an
even lighter form. At the same time, Kang
was looking for an iconic identifier that
would say, This is Samsung, and could be
applied to all Samsung digital display prod-
ucts. Statues of the Buddha may be very dif-
ferent, but all have Urna, a circular spot that
identifies them as a Buddha. We borrowed
this concept, and many of our TVs have a
circular spot that identifies them as a
Samsung product. (See Exhibit 11b.)
Even before market results were available
for the Rome and Milan TVs, CDO Choi
asked the advanced design team to innovate
even more radically in order to differentiate
Samsungs flat-screen TVs from those of
major competitors.
Classy Ambiance: The Bordeaux Project
Design
Several proposals emerged from this charge
to make a unique LCD TV for the premium
end of the mass market, one that would
Exhibit 11a. The Gyeongbokgung Palace, Seoul.
Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company
make a strong impression. Seung-ho Lee, a
young designer who had worked in
Samsungs visual display division for six
years, most recently on the Rome and Milan
models, recalled the challenges, still very
fresh in his memory. The TV is a difficult
product with which to be innovative. If its
too innovative, its not accepted by ordinary
users, he said. Its hard to find a middle
point. Moreover, traditionally, people treat
the TV just as an electronic product, looking
first into specs, price, and brand. When they
buy furniture, on the other hand, they look
first at design. If they like it, they buy it,
regardless of the price (if they can afford it).
In other words, they exhibit an emotional
purchasing pattern when they buy furniture.
Lee wanted to design a TV that people were
willing to buy just like a piece of nice furni-
ture, rather than as a box of electronics.
In striving for this attractive, compelling
piece of furniture, Yunje Kang and his
advanced design team (which included
designer Seung-ho Lee) could not rely on
traditional market research, based as it was
on consumer preferences revealed by the
performance of previous products in the
marketplace. They brainstormed, strolled
downtown Seoul, observed users, and
explored other sources of fresh ideas, such as
furniture shops and other lifestyle-related
places. In the end, they went for Lees pro-
posal: thin and glossy in an organic
design that made the TV seem to be of one
piecefront, back, and stand. When CDO
Exhibit 11b. The Rome TV with its Buddha spot.
2008 Design Management Institute 19
Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company
Choi saw it, he exclaimed, It looks like a
wine glass! (See sketches in Exhibit 12a.)
Hence, the name of the projectBordeaux.
The next step was to communicate this
idea to the other disciplines. Senior manager
Kang sent Seung-ho Lee to Suwon. Lee
explained, After meeting with marketers and
engineers in Suwon, we brought them up to
Seoul to learn what designers experience and
how we work. But we also had a chance to
experience what they care about and what
they feel. We visited retail shops to learn
about marketing challenges, and engineers
visited high-end stores of various kinds to
catch design trends. That helped develop a
favorable environment for collaboration in
development and marketing solutions.
Marketing
As Lee and the rest of Kangs team were fin-
ishing the design, a young marketer, Joshua
Kim, was assigned to develop a product con-
cept and marketing plan for the new TV. He
too faced challenges: Even though Bordeaux
is a new concept, its not a new technology.
The TV industry is mature, so theres no spe-
cial sales point differentiating one TV from
the other. Just thinner is not enoughthe
only way is to make a new concept. An
MBA with excellent English from a years
stay in the US, Kim energetically explained
his approach. With a small task force, he set-
tled into the VIP center for a period of three
Exhibit 12a. The Bordeaux: Initial sketches.
20 2008 Design Management Institute
weeks. Mr. [Seung-ho] Lee and I had not
communicated about the product concept at
the beginning; they finished the design first,
and then I delivered a new concept based on
that design, he said. Lee only later joined
the task force at the VIP center as the con-
cept was being developed. Although as a
marketer Kim believed it should work the
other way around, he had to go with the
program.
Recent market research had shown that
most consumers thought of content, not the
TV itself, when asked about television, and
most manufacturers treated the TV as a
device that can receive a signal and play mul-
timedia. But, Kim noted, the TV is already
part of the living space, and the flat-screen
TV is part of the room decoration, an item
of emotional pride. Since most TVs on the
market are of similar quality, Kim continued,
customers arent so concerned about
whether our TV is better in picture and
sound quality; something else has to appeal.
So we decided to try an objet strategy. We
werent going to talk about technology, but
rather about emotion and lifestyle.
Engineering
Despite all the efforts at communication
with engineers, the design and the marketing
strategy proved extremely challenging,
because both the form and the finish
embodied entirely new concepts. The
Bordeauxs design made the TV body slim-
mer by taking out the middle section, and
created a unified look by using a glossy finish
throughout. The thin front piece was con-
nected with the larger, heavier back piece in
a seamless, single-finish design, considered
by the engineers to be impossible to pro-
duce. Hyeonjoo Lee, senior engineer on the
project, explained the problem: I was sur-
prised, since it was so different from previ-
ous TVs. Usually, the face of a TV is
important, not the back, so when I saw the
call for a glossy finish in both front and
back, I was reluctant to accept it, but I had
toits my job.
 Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company

At first, the mechanical engineers, unable spray paint and polish. So we had to solve
to influence circuit design, ignored the the problem through a new injection mold-
design specifications, which called for a ing technique that required no further fin-
thickness of only 83mm. Their first mock- ishing. The front panel was easy because the
up, although two-pieced, was half again as width is narrow, but the back cover was very
thick: 120mm. This generated a new story difficult at first. In the end, however, the cost
for the annals of Samsung product develop- of the two-piece TV shell was less than that
ment and design management. of the traditional three-piece unit.
One day, Wooyoung Kan (the engineer
Results
from the L7 project) reported, Mr. Choi
Bordeauxs launch was set for spring 2006,
called all of us together and showed us two
and all participants in the project were keen
mock-ups, from design and engineering. He
to learn the markets verdict. Bordeaux was
told us, I found 30 differences between these
the TVs internal name. Chois wine-glass
two. Everyone was nervousit was a tense,
insight influenced early marketing con-
weird atmosphere. In an email, Choi wrote,
ceptsthe new TV as an
The design appears to be by designers from
elegant accompaniment
Milan, but the engineering by engineers in
to an elegant lifestyle.
China. Engineer Hyeonjoo Lee remembered
Designer Lee pointed out
the confrontation more pointedly: Mr. Choi
the launch advertisements
said, You ruined the design! Without fur-
still under development:
ther comment, Choi sent the engineers back
Weve made emotional
to their computers.
ads, trying new things,
At this point, engineer Lee explained, the
such as displaying the
other technical departments rallied to the
product in new places, for
cause and volunteered to help reduce the
example, in a wine
thickness of the new TV. The printed cir-
gallery, a fitness center,
cuit boards were key, and both circuit and
museums, fashion stores.
sound engineers took up the challenge,
(See a proposed adver-
looking for ways to narrow the profile. The
tisement in Exhibit 12c.) Exhibit 12b. The Bordeaux: Evolution of a profile.
effort took an extra 20 days, but it was a
turning point for understanding the power
of collaboration for identifying new direc-
tions. The result was a profile even slimmer
than the design specification, at only 79.6
mm. (Exhibit 12b shows the evolution of
the mock-up in cross-section.)
Another innovation was to mold the
speaker holes directly into the frame, rather
than attaching the typical sieve piece with
thousands of tiny holes. Hidden under the
front panel were larger, oblong holes that
both cost less and enhanced the sound quali-
ty, since less sound was lost than in the tradi-
tional speaker cover.
How to get a glossy finish within cost
specifications was the next hurdle. Said engi-
neer Lee, High gloss is very expensive if you
Exhibit 12c. The Bordeaux: A proposed advertisement.

2008 Design Management Institute 21

Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company
Regardless of the outcome, the Bordeaux
team had already set new standards and
influenced new systems for Samsungs prod-
uct development process. Specifically, the
project confirmed that, as Choi put it, If
designers dont have support from engineers,
they cant realize their visions. To get this
support, they have to compromise, but the
engineers need to make innovations too.
Designer Seungho Lee noted with a smile
that no one will listen to engineers com-
plaints anymore, because we know they can
solve any problem! Toward the goal of clos-
er collaboration, by late 2005, all major new
programs brought design, engineering, and
marketing together from the beginning.
Designer Lee summed up the feelings of
those involved: The biggest achievement is
the fact that all the peoplemarketers, engi-
neers, salespeopleare emotionally attached
to this design and feel ownership of it. I
believe they will think about this experience
when they work with other projects.
Digital Appliances: The Face of the
Kitchen and the Function of Food
Storage
Until 1988, according to Sanguk Jung, vice
president of the DAB design group, Samsung
had benchmarked and followed the Japanese
producers, but after the Frankfurt
Declaration of 1993, it accelerated its efforts
to do its own market research and its own
designs. Designers, of course, think new and
create new, but for managers its safer to fol-
low developed countries or leading manufac-
turers, he said. In 1997, Jung recalled, We
said that we must make a two-door refriger-
ator, but engineering and marketing were
against it. We insisted, and now the side-by-
side (SBS) is our most important model.
Given global competition, however, Samsung
wanted to change its positioning with yet
another innovative, premium product. But
what should it be? Jung: To make a good
product, we have to think like top-tier com-
pany employees. We have to be willing to
make a tier-one product.
22 2008 Design Management Institute
Technology and Style: The Quatro Project
A long time ago, we determined the need to
control the temperature and humidity in
each space for each kind of food, and our
engineers developed the technology to
achieve it. But we werent sure it would work
in the marketplace, explained Jung.
Beginning in 2003, the group began propos-
ing designs for a four-door premium refrig-
erator that would be unique in the sector.
Many people reviewed our designs and
decided not to do it, recalled Jeongmin Kim,
an industrial designer, manager in the DAB
design group, and lead designer for the SBS
refrigerator. This happened three times! The
key issue was the four-door concept. No one
else had so many compartments, so how
could we know consumers would use them?
Then we held focus groups in the US, and
that settled it. The research revealed a num-
ber of trends that could create demand for
customized food storage. The design vision
was an ultimately flexible refrigerator with
freezer sections convertible to refrigerators
and four completely separate cooling units
that could be dialed to various temperature
and humidity levels. Its not one refrigerator
with four compartments, Jung emphasized,
but four refrigerators (separate evaporators)
combined into one unitor Quatro.
The Development Process
After the US focus group research in sum-
mer 2004, the DAB task force finally received
permission to build a mock-up and proceed
with design development. They did not
begin from scratch, however. Ideas do not
come from zero, Jung explained. When we
develop products, we put ideas into a design
bankan idea bank. We collect the ideas,
then categorize them by item and several
other criteria. We also refer to the design
banks to make a project bank. The Quatro
came from this bank process, from accumu-
lated knowledge.
The Quatro also came from the task force
system, which brought together people from
engineering, design, marketing, and sales.
Jung observed: Just good design doesnt

make a good product. To realize design as a
product, you have to collaborate with mar-
keting and engineering from the beginning
of the processthat is the key to managing
design. To achieve this, he added, designers
have to know the technologies well enough
so that we can talk with engineers about our
ideas in a way that is easy for them to under-
stand. In effect, added Jeongmin Kim: we
practice concurrent engineering. Of course,
there are always restrictions on the technolo-
gy. We try to understand each other, and
even though the designers push, they are not
just doing design for designs sake. We con-
tinuously discuss and compromise with engi-
neers in order to maintain the original design
until the final production is complete. Ever
since 2000 to 2001, with the task force sys-
tem, designers try to consider manufacturing
issues and engineers try to consider aesthetic
issues. With the four-door, however, everyone
knew it had to be innovative, and the engi-
neers wanted to make an innovation too.
Besides the four separate and adjustable
cooling compartments and the convertibility
feature, the Quatro featured a customizable
interior and a trim kit that permitted the cus-
tomer to change the color of the refrigerators
faade. This kit, made of glass and aluminum,
was designed with recycling in mind.
Results
The Quatro was launched abroad in October
2005, at a $2,999 price point in the US, and
quickly rolled out worldwide. Its fate would
influence Samsungs next move in the global
home appliance business (see Exhibit 13).
Telecommunications Networks:
Attracting the Hip and Well-Heeled
The mobile phone was surely the most ubiq-
uitous of products, whatever the brand.
Consumers who owned neither TV nor
refrigerator would likely have a cell phone,
and millions of those were Samsung phones,
fewer only than the Nokias and Motorolas
around the world. Most companies had mas-
tered the basics, and the top sellers, including
Samsung, had by 2005 conquered reliability
Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company
and durability. (A one-ton truck can roll
over our phones was the mantra often heard
at Samsung.) So in a product with such
established functions, how do you come up
with something new? That question chal-
lenged the mobile phone designers at
Samsung and its competitors every day.
Among the most difficult challenges was
conflicting consumer demands, said Nammi
Kim, a senior designer in the mobile phone
design team. People want a small phone, yet
a large LCD for watching multimedia con-
tent, and big keypads. Thus we need to trade
off portability and a big screen when we
design phones, she said. Comprehensive
research was critical. Geehong Yoon, a senior
vice president in the mobile design team,
emphasized that user research to identify the
essential needs, as well as the demands, of
mobile phone users was as important as
research into the phones critical parts, such
as batteries and LCD displays.
The designers werent isolated in making
final product decisions; Kim praised the
president of the Telecommunications
Networks Business, Ki-Tae Lee, for his sup-
port: In order to make the right decision, he
often takes a week by himself
to analyze design mock-ups
in detail, including the sense
of grip, usability, user inter-
face, and other factors.
Samsung was also devot-
ing resources to phones for
the elderly. These featured
larger, ergonomic handsets
with enhanced sound quality
and larger buttons. In addi-
tion, the company was devel-
oping an emergency set that
would have 911 and other
programmable emergency
buttons. The concepts of
simplicity and universal
access were considered perti-
nent to other markets, as
well. Almost ready for launch
was the SPH-A110/120, Exhibit 13. The Quatro in late 2005.
2008 Design Management Institute 23
Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company
Exhibit 14. The Twist phone, first model,
September 2004.
24 2008 Design Management Institute
which would be available with either an Ministry of Commerce, Industry, and Energy
ultra-simplified layout or a normal layout. and the Korea Institute of Design
Both had large buttons and adaptations for Promotion. It also won one of grand prizes
hearing-impaired users. from the Korea Industrial Design Awards
organized by the Korea Association of
Fashion and Function:
Industrial Designers. Several models had
The Twist Mobile Phone Project
evolved on the original platform, and a new
Nammi Kim had come to work for Samsung
variation that could receive TV on the move
in 1989; in 1998, she moved to the coveted
was about to be launched in January 2006.
mobile phone group. In April 2004, Kim was
trying to find a wow factor to differentiate Samsungs Next Act
Samsungs mobile phones in this volatile
global market. During a brainstorming ses- To become a premier global company, we
sion with her team, the idea of placing the have to go into uncharted territory and define
screen in the landscape mode came up. The for ourselves what we need to do and how we
objective was to make it easier for people to need to do it.
watch TV programs on their mobile phones. Jong-Yong Yun, Samsung Electronics
How to do it? Figure out how to twist the Annual Report, 2005
screen 90 degrees from the standard phone
Buzzwords and phrases surrounding the
position to a horizontal one. After making a
concept of emotional designemotional
mock-up, Kim reported to Ki-Tae Lee. He
quality innovation, emotional messages,
was, Kim recalled, very excited at this inno-
empathic design, experience designwere
vative design concept, and within two
driving Samsung toward the articulation of a
hours, he had appointed a task force and
new design strategy that would embody
brought them together to discuss how to
efforts to develop an iconic brand. Samsoo
materialize this tricky design.
Ahn, a senior manager in the design innova-
When the engineers saw it, they were
tion group of the design strategy team, noted
surprised, Kim remembered. At first, they
that the old guidelines (the three Is of visual
were reluctant, but fortunately, we had a
innovation, usability innovation, functional
good, positive person in the engineer
innovation) were for getting rid of prob-
assigned to the project. The process of verify-
lems, not for enhancing new products. They
ing parts and trying various mock-ups of the
arent proactive, so they dont promote
twisting screen took three or four months
breakthroughs. Thats why we need a new
[twice as long as the usual phone]. Then we
strategy.
did reliability tests three or four times, and
Coming up in March was a two-day con-
then got further mockups. The key issue was
ference on emotional quality with the global
enough space to twist the screen when the
design advisors and Samsung designers and
clamshell was closed. (Exhibit 14 shows the
design managers. In preparation for this
first model of the twist phone.)
conference, Kook-Hyun Chung had asked
Results the design innovation group to prepare a
Launched in September 2004, with premium draft agenda, incorporating input from the
packaging to enhance its prestige, the design strategy team. In a memorandum to
Horizontal Instinct Phone won the the members of the DST, he wrote:
Presidential Prize at the 2004 Good Design
Exhibition, which was held jointly by the
 Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company

21 January 2006

MEMORANDUM
In order to inform our global design advisors about our expectations for the Emotional
Quality Conference, the design innovation group will assemble a draft agenda, with
input from the design strategy team. Please consider the following questions and any
others that concern you and the designers in your area, and get back to me by the end of
next week.
Thank you very much.
Kook-Hyun Chung

To what extent has the Milan emphasis on emotional design permeated the minds of
the designers in your area? How can we make this happen? What are the obstacles?

What do you think are the key factors in emotional quality? What do you want/need to
learn about this that would help you in your work? What is confusing about this con-
cept to you or the designers in your area?

What are the key characteristics of a successful product in your area, and how were
they achieved? What did you learn from this project that you are transferring to new
projects?

In which ways is emotional quality important to developing an iconic product in your

area? What do you need to achieve such a product? How does your group define what
it means to be iconic?

What key questions would you like to ask the global design advisors?

What do you personally hope to gain from this conference? What would
you like to be able to communicate to your area?

2008 Design Management Institute 25

Samsung: Design Strategy at Samsung Electronics: Becoming a Top-Tier Company
Appendix
People in the Story of Samsung Design,
as of January 2006
Note: Korean names are normally written, as
below, with the surname (family) name first.
To avoid confusion for Western readers, we
have adopted in the case study text itself a
common publishing convention for Western
languages, reversing the Korean practice by
putting the family name last. We hope this
will not cause confusion for our readers.
Ahn Samsoo, Senior Manager, Design
Innovation Group, Design Strategy Team,
Corporate Design Center.
Cho Soo-Hyun (Sean) (Ms.), Designer,
Design Planning Group, Design Strategy
Team, Corporate Design Center.
Choi Geesung, Chief Design Officer;
President, Digital Media Business.
Chung Kook-Hyun, Senior Vice President,
Corporate Design Center; Chair, Design
Strategy Team.
Chung Seung-Eun (Erin) (Ms.). Manager,
Design Planning Group, Design Strategy
Team, Corporate Design Center.
Chung SungJae, PhD, Manager, UI Strategy
Group, Design Strategy Team, Corporate
Design Center.
Hardy, Tom, American, former head of design
at IBM and design advisor to Samsung from
1996 to 2003.
Jung Sanguk, Vice President, Design Group,
System Appliances Division, Digital Appliance
Business.
Kan Wooyoung, Principal Engineer,
Mechanical Development Group, Visual
Display Division, Digital Media Business;
Chief Engineer on L7 project.
Kang Yunje, Principal Designer, Design
Group, Visual Display Division, Digital Media
Business; Designer, L-7 TV.
26 2008 Design Management Institute
Kim Eric, Senior Vice President and
Marketing Director, 2000-2004.
Kim Jeongmin, Senior Designer, Manager,
Design Group, System Appliance Division,
Digital Appliance Business.
Kim Minsuk (Joshua), Assistant Manager,
LCD TV Product Planning Group, Visual
Display Division, Digital Media Business;
Marketer, Bordeaux project.
Kim Nammi (Ms.), Senior Designer, Design
Team, Mobile Communication Division,
Telecommunication Network Business.
Kim Sung-Han, Senior Designer, Design
Research Team, Corporate Design Center and
SADI.
Kim YoungJun, Vice President, Design
Research Team, Digital Media Research,
Corporate Design Center.
Lee Byung-Chull, Late Founder of Samsung.
Lee Gregory, Senior Vice President and
Marketing Director.
Lee Hyeonjoo, Senior Engineer, Mechanical
Development Group, Visual Display Division,
Digital Media Business; Chief Engineer on
Bordeaux project.
Lee Ki-Tae, President, Telecommunications
Networks Business.
Lee Kun-Hee, Chairman of Samsung.
Lee Seung-ho, Assistant Designer, Design
Group, Visual Display Division, Digital Media
Business; Designer of Bordeaux TV.
Park Young-Chun (Rich), Professor and
Chair, Industrial Design Department, SADI.
Yun Jong-Yong, Vice Chairman and CEO of
Samsung Electronics.
Yoon Geehong, Senior Vice President, Design
Team, Mobile Communication Division,
Telecommunication Network Business.