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Sony Vs Samsung: The Inside Story of the Electronics Giants' Battle for Global Supremacy
"Sony vs. Samsung is business history at its best! It explores the divergent fortunes of these two electronics giants in the last decade and identifies the true reasons behind Sony's decline and Samsung's rise. Contrary to popular belief, Chang shows that success (or failure) does not simply arise from different strategies. Rather, it emerges from major decisions that are deeply rooted in the companies' organizational processes and their executives' political behavior. This book is a must-read for any senior executive." --Constantinos Markides, Robert P. Bauman Professor of Strategic Leadership and Chairman, Strategy Department, London Business School "Sea-Jin Chang has produced that rarity in a business book--one that is as valuable to practicing managers as it is insightful to academic researchers. In this fascinating comparison of two modern global giants, he applies his high resolution research microscope to their changing fortunes by dissecting their contrasting strategies, and providing interesting insights into their divergent organizational processes and management practices. This is a very valuable contribution to the international business literature. It will end up in as many corporate boardrooms as faculty seminars." --Christopher A. Bartlett, Thomas D. Casserly Professor Emeritus, Harvard Business School "Sea-Jin Chang has written a fascinating comparison of Sony and Samsung that will be valuable to anyone interested in strategy, organizations or international business. The interwoven and very detailed case studies of two very different companies in overlapping industries illuminate problems such as adaptation to technological change (analog to digital), organizational flexibility and globalization. His attempt to analyze both strategic development and implementation is successful and very useful. Both academics and practitioners will learn a lot from this book." --Stephen J. Kobrin, William Wurster Professor of Multinational Management, The Wharton School, University of Pennsylvania "Refreshingly original and entertaining, this book analyzes major strategic decisions of Samsung and Sony and highlights organizational processes and top management leadership that have shaped their performances. This is a must-read for all executives who want to understand the strengths and weaknesses of Asian competitors. It also provides penetrating insights to other Asian companies with global ambitions." --Myoung Woo Lee, President and CEO, iriver
- GenresBusinessNonfiction
250 pages, Kindle Edition
First published August 1, 2008
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Displaying 1 - 13 of 13 reviews
April 30, 2020
Before the early aughts, it was inconceivable to compare Samsung to Sony. Sony invented the transistor radio, CD, DVD player, camcorder, and Playstation. They were involved in electronics, film, music, and entertainment. I even remember the VAIO laptop. Samsung was a second tier OEM parts manufacturer. Between 2000 and 2006, Sony was outspending Samsung in advertising by a factor of 3.6; respectively $3.5 Bn yearly versus $950 Mn. Despite all this, despite the pedigree in analog engineering, despite the incontestable prestigious image, in those six years Sony’s rank in brand value among consumers declined from 18th to 26th while Samsung’s soared from 43rd to 20th. I THOUGHT the textbook answer ‘why’ Samsung defeated Sony was because the former took advantage of digital technology; there is no difference in quality when each company uses the same chipset. Sony was the paladin in analog engineering yet that technology became impractical following the digital revolution. In the book, however, the author claims it was not the content. It was context! In part due to 1) organizational strategy and 2) organizational structure (decision making). That is, Sony’s leadership and lack of execution from its leaders led it to substantially deteriorate in innovation. What I think is at paragraph six.
Samsung focused on key strategies in technology, marketing, and globalization. Samsung emphasized 'cheapest, highest, and earliest.' (They started out only as an OEM manufacturer of parts for other brands!) In words, a) build the cheapest product among all competitors but ensure the b) quality is highest if all other competitor models are the same price, and be the c) earliest to put that product on a store shelf. Samsung aggressively invested in DRAM memory and intensely cut cost from competition, even if it meant it had to constantly contract its labour force. Samsung rarely placed any emphasis on synergy between software and hardware. Its engineers were inferior in analog product development; so it gambled everything on digital technology. It only really focused on projects that conformed to a defined industry standard (e.g., memory, liquid crystal displays, mobile devices, heavy industry, construction). Samsung developed distribution networks among its specialty stores such as BestBuy, Walmart, and Circuit City; it offered a high-margin policy whereby it significantly incentivised national retailers who promoted Samsung products to customers among the other brands. Samsung was thoughtless about globalization. Global offices functioned merely as mouthpieces around decision makers headquartered in Seoul. For instance, when Samsung Electronics opened offices around the world, it usually installed a Korean director, did not hire any local managers, did not secure local resources, and did not take opportunities to learn indigenous management know-how. Samsung, it seems, was (is?) foreign-averse. Kept things ‘simple.’
Samsung is exceptionally hierarchical. The company is a non-communicative society. But when there is communication, it is one-way (from top, down). Decisions came from the chairman, and everyone executed with speed and due-process. The author belabors this point about the speed with which Samsung implemented massive changes in engineering development. That also meant that its business units are not autonomous. All other Samsung unlisted and listed companies submit to high-brass. For instance, only one person decided for Samsung to enter the automobile industry in 1993 (Samsung chairman, Kun-hee Lee). It was such a failure Samsung sold it to Renault six years later. In contrast, by that time Sony could never invoke, submit, and exact a decision like that due to its organizational structure: the board members, outside directors, and algebraists who would have scrutinised, debated, and re-debated the idea, grinding it down to sand for weeks.
Without blackening this page into too much font, Sony is the opposite number. Again, the author claims Sony’s organizational strategy and organizational structure was in contradiction to Samsung’s. Sony failed to recognize the importance of digital technology because it had created such a pedigree, legacy, and wealth in analog technology, it failed to see the next revolution. Sony was obsessed with the union of hardware and software. On the forefront of its mind was networking. It avoided investing in any technology it did not itself develop ('not in here' syndrome). For instance, Sony stubbornly clung to cathode-ray-tube (CRT) television technology as it wanted to recoup the investment in its Pittsburgh plant, disregarding the potential of flat panel technology, as it would have had to refactor the facility to handle different technology. Not only was Sony selective which retailers carried their products, it did not want to establish contracts with national dealers. For example, they launched their own internet shopping centre and brick-and-mortar store, ‘SonyStyle,’ and those failed. Sony-listed companies were highly autonomous, globalized, and according to the author, uncontrollable when conflict arose between its Japanese and North American leadership centers (North America and Japan argued about the ‘VAIO’ name, among other things). By the ‘90s the organisation had become too divided, its business units had become too siloed, making resource allocation inefficient.
Sony staff were not as motivated to listen to Sony’s first non-founder head (Idei) like they did Morita and Ohga (company founders). Idei did not satisfy employees’ expectations. And because Sony operated distinct, independent, autonomous companies, they did not execute upon the leadership's envisaged, minded decisions. Literally, they stopped innovating beyond the Playstation, which ironically was run like a modern software company. They had become reactionary and cut back on creative projects.
What I think:
The author criticizes Sony for deteriorating in work performance because of its governance structure that emphasized too much freedom, open-mindedness, creativity, and the initiatives of individual business divisions, causing the entire organization to fall into chaos as the parts went from integrated to disparate. Okay, that is fine. But that is in contradiction of the alternative: a company whose work mantra imitates others, whose focus lacks significantly on creativity and whose committal motion is only on projects with defined industry standards (e.g., memory, liquid crystal displays, mobile devices, heavy industry, and construction). Like, you mean a Samsung? Can’t reconcile the two. I also would like to understand how Playstation escaped unscathed in all of this. It was run like a modern software company.
I think a major problem with Sony’s leadership structure was based on how it selected successors to CEOs, or that is how I interpret the problem from the book. Japanese owners suddenly selected their replacements. They did not spend years grooming them. Contrast that with Jack Welch, owner of General Electric, who selected three candidates as a possible successor several years before his retirement, let the race begin, observed, evaluated, and then selected Jeff Immelt. Immelt was ready to lead on the day. Idei was not. As Samsung is a family-run affair, it is not privy to Sony's successor frustration. Yes, but how many companies faltered because they ran like a monarchy?
Samsung focused on key strategies in technology, marketing, and globalization. Samsung emphasized 'cheapest, highest, and earliest.' (They started out only as an OEM manufacturer of parts for other brands!) In words, a) build the cheapest product among all competitors but ensure the b) quality is highest if all other competitor models are the same price, and be the c) earliest to put that product on a store shelf. Samsung aggressively invested in DRAM memory and intensely cut cost from competition, even if it meant it had to constantly contract its labour force. Samsung rarely placed any emphasis on synergy between software and hardware. Its engineers were inferior in analog product development; so it gambled everything on digital technology. It only really focused on projects that conformed to a defined industry standard (e.g., memory, liquid crystal displays, mobile devices, heavy industry, construction). Samsung developed distribution networks among its specialty stores such as BestBuy, Walmart, and Circuit City; it offered a high-margin policy whereby it significantly incentivised national retailers who promoted Samsung products to customers among the other brands. Samsung was thoughtless about globalization. Global offices functioned merely as mouthpieces around decision makers headquartered in Seoul. For instance, when Samsung Electronics opened offices around the world, it usually installed a Korean director, did not hire any local managers, did not secure local resources, and did not take opportunities to learn indigenous management know-how. Samsung, it seems, was (is?) foreign-averse. Kept things ‘simple.’
Samsung is exceptionally hierarchical. The company is a non-communicative society. But when there is communication, it is one-way (from top, down). Decisions came from the chairman, and everyone executed with speed and due-process. The author belabors this point about the speed with which Samsung implemented massive changes in engineering development. That also meant that its business units are not autonomous. All other Samsung unlisted and listed companies submit to high-brass. For instance, only one person decided for Samsung to enter the automobile industry in 1993 (Samsung chairman, Kun-hee Lee). It was such a failure Samsung sold it to Renault six years later. In contrast, by that time Sony could never invoke, submit, and exact a decision like that due to its organizational structure: the board members, outside directors, and algebraists who would have scrutinised, debated, and re-debated the idea, grinding it down to sand for weeks.
Without blackening this page into too much font, Sony is the opposite number. Again, the author claims Sony’s organizational strategy and organizational structure was in contradiction to Samsung’s. Sony failed to recognize the importance of digital technology because it had created such a pedigree, legacy, and wealth in analog technology, it failed to see the next revolution. Sony was obsessed with the union of hardware and software. On the forefront of its mind was networking. It avoided investing in any technology it did not itself develop ('not in here' syndrome). For instance, Sony stubbornly clung to cathode-ray-tube (CRT) television technology as it wanted to recoup the investment in its Pittsburgh plant, disregarding the potential of flat panel technology, as it would have had to refactor the facility to handle different technology. Not only was Sony selective which retailers carried their products, it did not want to establish contracts with national dealers. For example, they launched their own internet shopping centre and brick-and-mortar store, ‘SonyStyle,’ and those failed. Sony-listed companies were highly autonomous, globalized, and according to the author, uncontrollable when conflict arose between its Japanese and North American leadership centers (North America and Japan argued about the ‘VAIO’ name, among other things). By the ‘90s the organisation had become too divided, its business units had become too siloed, making resource allocation inefficient.
Sony staff were not as motivated to listen to Sony’s first non-founder head (Idei) like they did Morita and Ohga (company founders). Idei did not satisfy employees’ expectations. And because Sony operated distinct, independent, autonomous companies, they did not execute upon the leadership's envisaged, minded decisions. Literally, they stopped innovating beyond the Playstation, which ironically was run like a modern software company. They had become reactionary and cut back on creative projects.
What I think:
The author criticizes Sony for deteriorating in work performance because of its governance structure that emphasized too much freedom, open-mindedness, creativity, and the initiatives of individual business divisions, causing the entire organization to fall into chaos as the parts went from integrated to disparate. Okay, that is fine. But that is in contradiction of the alternative: a company whose work mantra imitates others, whose focus lacks significantly on creativity and whose committal motion is only on projects with defined industry standards (e.g., memory, liquid crystal displays, mobile devices, heavy industry, and construction). Like, you mean a Samsung? Can’t reconcile the two. I also would like to understand how Playstation escaped unscathed in all of this. It was run like a modern software company.
I think a major problem with Sony’s leadership structure was based on how it selected successors to CEOs, or that is how I interpret the problem from the book. Japanese owners suddenly selected their replacements. They did not spend years grooming them. Contrast that with Jack Welch, owner of General Electric, who selected three candidates as a possible successor several years before his retirement, let the race begin, observed, evaluated, and then selected Jeff Immelt. Immelt was ready to lead on the day. Idei was not. As Samsung is a family-run affair, it is not privy to Sony's successor frustration. Yes, but how many companies faltered because they ran like a monarchy?
June 19, 2016
The book explains in a very brief manners on Sony and Samsung in the market. Knowing that both the company is from 2 different country. It is interesting to see how the cultures of these 2 companies affects the business of operation. However, the author did explain the CSR of the company.
July 18, 2019
See Third Point's thesis on the turnaround of Sony
https://www.astrongersony.com
Warning on Samsung's "Emperor" style of management and abuse of minority shareholders and history of poor corporate governance (e.g. Samsung Car, self-dealing of Jae-yong Lee Chpt 7)
https://www.astrongersony.com
Warning on Samsung's "Emperor" style of management and abuse of minority shareholders and history of poor corporate governance (e.g. Samsung Car, self-dealing of Jae-yong Lee Chpt 7)
March 10, 2014
BME5003 forced reading but very interesting and insightful book...explores various dimensions and dynamics of the organization as it rises and falls
March 23, 2025
Buku ini memberikan pandangan mengenai cara terbaik dalam mengelola sebuah perusahaan global yang bisnisnya sudah terkenal di seluruh penjuru dunia yaitu perusahaan SONY & SAMSUNG. Tetapi kedua perusahaan ini masih belum memiliki tata kelola perusahaan secara profesional dan selama ini masih dikelola sesuai dengan keinginan pemilik tunggal perusahaan. Hal ini tentunya berdampak negatif terhadap sistem operasional perusahaan secara keseluruhan. Efek negatif yang timbul bahkan sampai beberapa dekade dan sampai saat ini masih mengalami kesulitan untuk mengubah tata kelola perusahaan yang lama menjadi sistem yang modern dan profesional. Satu hal lagi, semua perusahaan tidak boleh terlena terhadap kesuksesan dan kejayaan di masa lampau karena perusahaan tetap harus berkembang dan maju dari semua sisi mengikuti perkembangan jaman yang tiada akhir
January 20, 2020
มันเป็นความจริงที่แสนเจ็บปวด
หากนำ 2 บริษัทนี้มาเทียบเคียงกัน
ในปมประเด็น CSR ของทั้งคู่ (ซึ่งสะกิด pain points ได้ถูกจุด)
ยอมรับโดยดุษณี ว่าเหตุใด Sony ถึงไม่สามารถยืนในจุดเดียวกับ Samsung
ในอดีต made in Japan หมายถึง สินค้ามีคุณภาพดี
แต่ในพศ.นี้ made in Korea ก็ร้อนแรงไม่แพ้กัน 🎋
ps. ก่อนหน้าอ่าน Japan Business มาก่อนคิดว่าเล่มนี้ค่อนข้าง Bias 555
หากนำ 2 บริษัทนี้มาเทียบเคียงกัน
ในปมประเด็น CSR ของทั้งคู่ (ซึ่งสะกิด pain points ได้ถูกจุด)
ยอมรับโดยดุษณี ว่าเหตุใด Sony ถึงไม่สามารถยืนในจุดเดียวกับ Samsung
ในอดีต made in Japan หมายถึง สินค้ามีคุณภาพดี
แต่ในพศ.นี้ made in Korea ก็ร้อนแรงไม่แพ้กัน 🎋
ps. ก่อนหน้าอ่าน Japan Business มาก่อนคิดว่าเล่มนี้ค่อนข้าง Bias 555
January 15, 2019
An interesting insights about history, strategies and internal structure of decision making process that made Samsung superior. This could help Sony and Samsung to learn from each other.
October 13, 2022
Very thorough analysis into organizational structure and leadership of Samsung and Sony with direct comparisons at every aspect. Many details still relevant despite being written over 10 years ago.
February 16, 2010
bukunya terlalu case bgt mana banyak grafik pula..secara gue orang teknik ga ngerti ttg pemasaran
November 24, 2009
Good analysis by the author. Very insightful. Recommended for people in a managerial position or entrepreneur.
June 5, 2011
581st - 2011
September 26, 2012
useful book to understand the corporate culture of Sony and Samsung.
April 17, 2014
good book
Displaying 1 - 13 of 13 reviews