Samsung has a strategy: entering new business areas will catapult the company to a level where it can compete with some of world’s largest companies. The company, with sales north of $135 billion, recently revealed that it will be diving head first into both the health business and green technology. The plan is to spend more than $20 billion on LEDs, solar panels, electric batteries for vehicles, medical devices, and biotech drugs. From a risk viewpoint, it could be a lot riskier. Samsung is buying all the technology they will need, opposed to creating it, and most sectors have already began production. While risky, I believe these moves are backed by business strategy. For one, Samsung is hoping to broaden the small market for these vital technologies, and appears to be the leading corporation to do so. Secondly, the company is planning on being able to lower costs based on its large production, exercising cost leadership. Another aspect to this announcement is the company’s intelligent decision that it must enter new markets in order to survive, instead of remaining in consumer electronics. It will be interesting to monitor Samsung’s performance in its new venture.
