Samsung's open, hidden strategy under unproven head

(Xinhua) Updated: 2015-04-02 14:03

Samsung Electronics Chairman Lee Kun-hee with daughters Lee Boo-jin (R) and Lee Seo-hyun (L) leaves the Las Vegas Convention Center after touring the Samsung booth and talking with reporters at the 2012 International Consumer Electronics Show (CES) in Las Vegas, Nevada in this January 12, 2012 file photo. [Photo/Agencies]

He said at the same conference last year that the smartphone market would be hard to keep such an unprecedented growth trend as shown in the past seven years.

The new vision is the heritage from his father Lee Kun-hee, who declared biomedicine and medical equipments as part of the company 's new growth engines in 2010. Kwon Oh-hyun, vice chairman of Samsung Electronics, said in November 2014 that the global mobile- health care market would expand from the current $5 billion to about $200 billion by 2020.

Given the elder Lee's insight into the future, the convergence strategy would give a new opportunity for Samsung to be reborn as a fresh, but now unimaginable, company. After finding growth opportunities in chips and mobile phones, Lee Kun-hee transformed Samsung into the world's largest tech company by sales.

Samsung was founded in 1938 by Lee Byung-chull, who transformed a small trading company in rural areas into one of South Korea's top three conglomerates until his death in November 1987. His third son Kun-hee took over the reins of the group in that month, and built the Samsung of today under his charismatic leadership.

One of his famous anecdotes was that he ordered the burning of about 150,000 faulty mobile phones in front of thousands of workers and executives in 1995, alerting them to the importance of product quality. He transformed Samsung into the world's No1 memory chip maker despite prevalent worries in 1970s that Samsung was at least 20 years lagging behind rivals in the United States and Japan in terms of technology.

Hidden strategy, korean blackrock

While inheriting the convergence vision from his father, Lee Jae-yong seemed to have selected finance as his own vision. " Rumors spread among market players that Samsung Group would set up the Korean version of BlackRock. Vice chairman Lee has allegedly visited Hong Kong several times to contact bankers and financiers for it," said a senior executive of a foreign bank's Seoul branch.

BlackRock, founded in 1988, is the world's biggest asset manager with an estimated $4.6 trillion of assets under management. "BlackRock has strength in the ETF and index fund. Samsung Asset Management has a similar management structure," said another executive of a foreign brokerage's Seoul branch.