Vertical Integration Of Samsung

In the business world, the term that best describes a style of growth and control of management, is vertical integration. Vertically integrated companies in a value chain are connected through a common owner. Usually each member of the value chain produces a different component, and the components combine to satisfy a common need. It is contrasted with the horizontal integration. Vertical integration has also described management styles that bring large portions of the value chain under the same company , but also into one corporation (as in the 1920s when the Ford River Road Complex, began making much of its own steel rather than buying it from suppliers). (http://www.samsung.com/global/business/semiconductor/minisite/SSD/global/html/about/whitepaper09.html)
In the case of Samsung,a phone has three major components of any SSD, which include the NAND flash memory, the controller, and the firmware, and are created in the same warehouse. Samsung is one of the few manufacturers that create all of these components in their warehouses; and among those who do, Samsung has the most experience (with over 6 years as the number one supplier in the pre installed SSD market). This gives Samsung a considerable competitive advantage when it comes to phones.The vertical integration also means that Samsung doesn’t have to use “off-the-shelf” firmware like many of its competitors uses, allowing it to design its own unique performance profile and execute more robust reliability and bug testing. In fact, customers may notice that Samsung doesn’t release many firmware updates. This is a testament to the quality of the original testing procedures and the superiority of the firmware code – lesser problems to solve the better. Another key selling po...

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...o realize contents in a more efficient way. Samsung has put forth alot of prestige effort on the unique and soft design that enables the expansion of the user experience to enhance the feel of comfort, familiarity, and convenience with the product. This unique design Samsung has developed naturally has led to the obtaining of newly designed patents . In this challenge to continue strengthening the designs of their patents Samsung realized that recruiting talent is a must. As a result of these methods of how Samsung has for the past five years 2,499 have been registered and recorded in the US Patent Office. Those patented numbers are three times higher than Samsungs competitors and this is one of the company’s major achievement. Samsung has carefully invested in their own product design and has created design institutes in seven different countries including Korea.